Theories of Employee welfare

Policing Theory According to this view, the factory and other industrial
workplaces provide ample opportunities for owners and managers of capital to
exploit workers in an unfair manner. This could be done by making the labour
work for long hours, by paying workers low wages, by keeping the workplaces in
an unhygienic condition, by neglecting safety and health provisions, and by
ignoring the provision of elementary human amenities, such as drinking water,
latrines, rest rooms and canteens. Clearly, a welfare state cannot remain a passive
spectator of this limitless exploitation. It enacts legislation under which
managements are compelled to provide basic amenities to the workers. In short, the
state assumes the role of a policeman, and compels the managers of industrial
establishments to provide welfare facilities, and punishes the non-complier. This is
the policing theory of labour welfare.

Religion Theory The religion theory has two connotations, namely, the investment
and atonement aspects. The investment aspect of the religion theory implies that
the fruits of todays deeds will be reaped tomorrow. Any action, good or bad. is
therefore treated as an investment. Inspired by this belief, some employers plan
and organise canteens and creches. The atonement aspect of the religion theory
implies that the present disabilities of a person are the result of the sins committed
by him/her previously. He/she should undertake to do good deeds now to atone or
compensate for his/her sins. There is the story of a big Jain employer who firmly
held the belief that the provision of welfare facilities for workers was outside the
duties of the management. Whatever he did provide was under government
compulsion and supervision. It so happened, however, that the children born to him
died as soon as they were born. Later, his own health suffered. He felt that, as a
compensation, or expiration or even as an investment in a good deed (punyam), he
should liberally contribute to the creche in the factory (as well as to other childwelfare institutions), and also to medical services for his workers. Consequently, in
this particular factory, there came to exist an excellent creche and a well-organised
dispensary.9

Philanthropic Theory Philanthropy means affection for mankind. The

philanthropic theory of labour welfare refers to the provision of good working
conditions, creches and canteens out of pity on the part of the employers who want
to remove the disabilities of the workers. Robert Owen of England was a
philanthropic employer, who worked for the welfare of his workers. The
philanthropic theory is more common in social welfare. Student hostels, drinking
water facilities, the rehabilitation of crippled persons, donations to religious and
educational institutions, and so forth are examples of philanthropic deeds.

Paternalistic Theory According to the paternalistic theory, also called the

trusteeship theory, of labour welfare, the industrialist or the employer holds the
total industrial estate, properties and the profits accruing from them, in trust. The
property which he/she can use or abuse as he/she likes is not entirely his/her own.
He/she holds it for his/her use, no doubt, but also for the benefit of his/her workers,
if not for the whole society. For several reasons, such as low wages, lack of
education, and so forth the workers are at present unable to take care of
themselves. They are, therefore, like minors, and the employers should provide for
their well-being out of funds in their control. The trusteeship is not actual and
legal, but it is moral and, therefore, not less real.

Placating Theory This theory is based on the assumption that appeasement pays
when the workers are organised and are militant. Peace can be bought by welfare
measures. Workers are like children who are intelligent, but not fully so. As crying
children are pacified by sweets, workers should be pleased by welfare works.

Public Relations Theory According to this theory, welfare activities are provided
to create a good impression on the minds of the workers and the public,
particularly the latter. Clean and safe working conditions, a good canteen, creche
and other amenities, make a good impression on the workers, visitors and the

public. Some employers proudly take their visitors round the plant to show how
well they have organised their welfare activities.
Functional Theory Also known as the efficiency theory of labour welfare, the
functional theory implies that welfare facilities are provided to make the workers
more efficient. If workers are fed properly, clothed adequately and treated kindly,
and if the conditions of their work are congenial, they will work efficiently.
Welfare work is a means of securing, preserving and increasing the efficiency of
labour.
Social Theory The social obligation of an industrial establishment has been
assuming great significance these days. The social theory implies that a factory is
morally bound to improve the conditions of the society in addition to mproving the
condition of its employees. Labour welfare, as mentioned earlier, is gradually
becoming social welfare.
Theories of Compensation
In order to understand which components of remuneration are more effective, we
need to understand the conceptual framework or theories or employee
remuneration. Three such theories are reinforcement and expectancy theories,
equity theory and agency theory.
Theories-of-Compensation
1. Reinforcement and Expectancy Theories
The reinforcement theory postulates that a behavior which has a rewarding
experience is likely to be repeated. The implication for remuneration is that high
employee performance followed by a monetary reward will make future employee
performance more likely. By the same token, a high performance not followed by a
reward will make its recurrence unlikely in future. The theory emphasizes the
importance of a person actually experiencing the reward.
Like the reinforcement theory, Vrooms expectancy theory focuses on the link
between rewards and behavior. Motivation, according to the theory, is the product
of valence, instrumentality and expectancy. Remuneration systems differ according
to their impact on these motivational components. Generally speaking, pay systems

differ most in their impact on instrumentality the perceived link between behavior
and pay. Valence of pay outcomes remains the same under different pay systems.
Expectancy perceptions often have more to do with job design and training than
pay systems.
2. Equity Theory
Adams equity theory says that an employee who perceives inequity in his or her
rewards seeks to restore equity. The theory emphasizes equity in pay structure of
employees remuneration.
Employees perceptions of how they are being treated by their firms are of prime
importance to them. The dictum a fair day work for fair day pay a sense of equity
felt by employees. When employees perceive inequity, in can result in lower
productivity, higher absenteeism or increase in turnover.
3. Agency Theory
The agency theory focuses on the divergent interests and goals of the
organizations stakeholders and the way that employee remuneration can be used to
align these interests and goals. Employers and employees are the two stakeholders
of a business unit, the former assuming the role of principals and the latter the role
of agents. The remuneration payable to employees is the agency cost. It is natural
that the employees expect high agency costs while the employers seek to minimize
it. The agency theory says that the principle must choose a contracting scheme that
helps align the interest of the agents with the principals own interests. These
contracts can be classified as either behavior-oriented (e.g. merit pay) or outcome
oriented (e.g. stock option schemes, profit sharing, and commission).
At the first sight, outcome-oriented contracts seem to be the obvious solution. As
profits go up, rewards also increase. Remuneration falls when profits go down.
Deferred Compensation
Portion of earned Income that is paid to the employee at a later date is named as
Deferred Compensation. This is usually practiced to defer tax to a future date when
the rate is lower.
Examples:-Retirement plan-Pension-Employee stock option

All these above mentioned plans deduct a proportionate monthly/quarterly/yearly

premium from the employees income and the portion is not covered under tax
deductible income for the current month/quarter/year. A relatively lesser tax
bracket covers these plans which are introduced whenever the plan matures. Pre
matured disbursement of these plans are penalized as per the tax norms
Types of Deferred Compensation:
Non qualified Deferred Compensation Plans (NDCP): NDCP generally means
that the employee would be paid on a pre-specified date in the future for the work
he has done in the present. The payment usually happens at the time of termination
of employment, death or disability. NDCPs are geared to defer the taxation to the
time when the employee is in a lower tax bracket
Qualifying Deferred Compensation: Qualifying Deferred Compensation plans
include plans for public education employers, non-government organizations, nonprofit organizations, state and local government organizations.
Evolution Of Indian Labour Legislations
Introduction:
The Indian Labour Legislations owe its existence to the British Raj. Most of the
labour legislations were enacted prior to Indias independence. The post
independence enactment of important legislations in the areas of employee security
and welfare derive their origin partly from the vision of independent Indias leaders
and partly from the provisions in the Indian Constitution and international
conventions like the International Labour Organization (ILO). The labour
legislations were also enacted keeping in mind the international standards on
Human Rights and United Nations Protocols.

Historical Perspectives On Indian Labour Legislations

Initial periods of imperialism were based on exploitation of the worker class. With
the emergence of ILO at an international level and with the inhumane treatment

meted out to workmen being replaced with an outlook of dignity of labour, the
whole scenario of labour legislations began in pre independence India.
After independence legislations related to worker welfare like Provident Fund Act,
Employee State Insurance Act, Payment of Bonus Act and Payment of Gratuity Act
were enacted with the intention of providing security and retirement benefits to
workmen.Over a period of time several amendments have been made to the
existing labour legislations as per the needs of the industry. The case in point is the
latest amendment to the Factory Act whereby women worker is allowed to work
between 7pm and 6am. Such amendments have been done after industry
associations like NASSCOM and ASSOCHAM recommendations to the labour
ministry. Now BPO and IT sector which employs a large women workforce during
its nightshifts benefits tremendously from this amendment to the Factory Act.
Following Table Timelines The Evolution Of HR Thoughts In India:
Period Developments Emphasis On PeopleOutcomes
1700 To1900s
Slavery due to imperialism,Exploitation of labor,Bonded labor,Master slave
relationship
1900 To 1920s
Workmen status defined by acts
Employer employee relationship established. Wages paid
Legal recognition of workmen. End of slavery.
1920s To 1947
Trade unions were organizing workers
Trade unions being recognised by workers and factory managers
Collective bargaining. Workers movements.

1947 To 1960s
Independent India believed in a socialist society.
Worker welfare by labour officers. Laws like EPF, ESIC, minimum wages, and
bonus act.
Beginning of labour welfare administration and personnel function
1970s To 1980s
Trade unions mgt conflicts COD, MOU, etc.
Productivity bargaining. Workers participation in management
Empowerment of workers upliftment of workers status and role.
1990s To 2000
Globalization, international markets, new economy.
Developing people as a key resource
HRD replaces personnel management
2001
Onwards
Advent of the Knowledge Era. Growth of service sector.
Rightsizing of organizations to compete globally.
Managing human assets with a long term strategic focus on development and
retention
People management need replaces HRD with HRM. Hr is aligned to business
goals. HRM to SHRM
HRD Human Resources Development

HRM Human Resources Management

SHRM Strategic Human Resources Management
HCM Human Capital Management
Labour Welfare / Industrial Relations
Relationship between the employer and the employee representatives i.e.: Unions,
for establishing working relationships and for regulating the working conditions
Personnel Management
The most effective use of people to achieve organizational and individual goals. It
believes more in control mechanisms than employee empowerment
HRD - Empower people by developing them for their current and future roles
HRM Leveraging the systems approach to the HR function. Integrating HR
functions with other organizational functions
SHRM Align the HR goals to the organizational goals
HCM Human Capital Management
From the above figure we see that today HCM encompasses Labour Welfare along
with its role of providing a strategic intent to Human Resources.
Role Of Indias Constitutional Framework On Indian Labour Laws.
The relevance of the dignity of human labour and the need for protecting and
safeguarding the interest of labour as human beings has been enshrined in ChapterIII (Articles 16, 19, 23 & 24) and Chapter IV (Articles 39, 41, 42, 43, 43A & 54) of
the Constitution of India keeping in line with Fundamental Rights and Directive
Principles of State Policy.
Under the Constitution of India, Labour is a subject in the concurrent list where
both the Central and State Governments are competent to enact legislations. This
categorization is listed as follows:

(A) Labour Laws Enacted By The Central Government, Where The Central
Government Has The Sole Responsibility For Enforcement
1. The Employees State Insurance Act, 1948
2. The Employees Provident Fund and Miscellaneous Provisions Act,
1952
3. The Dock Workers (Safety, Health and Welfare) Act, 1986
4. The Mines Act, 1952
5. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines
Labour Welfare (Cess) Act, 1976
6. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines
Labor Welfare Fund Act, 1976
7. The Mica Mines Labour Welfare Fund Act, 1946
8. The Beedi Workers Welfare Cess Act, 1976
9. The Limestone and Dolomite Mines Labour Welfare Fund Act, 1972
10. The Cine Workers Welfare (Cess) Act, 1981
11. The Beedi Workers Welfare Fund Act, 1976
12. The Cine Workers Welfare Fund Act, 1981
(B) Labour Laws Enacted By Central Government And Enforced Both By
Central And State Governments
13. The Child Labour (Prohibition and Regulation) Act, 1986.
14. The Building and Other Constructions Workers (Regulation of

Employment and Conditions of Service) Act, 1996.

15. The Contract Labour (Regulation and Abolition) Act, 1970.
16. The Equal Remuneration Act, 1976.
17. The Industrial Disputes Act, 1947.
18 The Industrial Employment (Standing Orders) Act, 1946.
19. The Inter-State Migrant Workmen (Regulation of Employment and
Conditions of Service) Act, 1979.
20. The Labour Laws (Exemption from Furnishing Returns and
Maintaining Registers by Certain Establishments) Act, 1988
21. The Maternity Benefit Act, 1961
22. The Minimum Wages Act, 1948
23. The Payment of Bonus Act, 1965
24. The Payment of Gratuity Act, 1972
25. The Payment of Wages Act, 1936
26. The Cine Workers and Cinema Theatre Workers (Regulation of
Employment) Act, 1981
27. The Building and Other Construction Workers Cess Act, 1996
28. The Apprentices Act, 1961
(C) Labour Laws Enacted By Central Government And Enforced By The
State Governments
29. The Employers Liability Act, 1938

30. The Factories Act, 1948

31. The Motor Transport Workers Act, 1961
32. The Personal Injuries (Compensation Insurance) Act, 1963
33. The Personal Injuries (Emergency Provisions) Act, 1962
34. The Plantation Labour Act, 1951
35. The Sales Promotion Employees (Conditions of Service) Act, 1976
36. The Trade Unions Act, 1926
37. The Weekly Holidays Act, 1942
38. The Working Journalists and Other Newspapers Employees
(Conditions of Service) and Miscellaneous Provisions Act, 1955
39. The Workmens Compensation Act, 1923
40. The Employment Exchange (Compulsory Notification of Vacancies)
Act, 1959
41. The Children (Pledging of Labour) Act 1938
42. The Bonded Labour System (Abolition) Act, 1976
43. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966
(D) There Are Also Labour Laws Enacted And Enforced By The Various State
Governments Which Apply To Respective States.
Impact Of International Labour Organization (ILO) On Indian Labour Laws
India is a founder member of the International Labour Organization, which came
into existence in 1919. At present the ILO has 175 Members. A unique feature of
the ILO is its tripartite character. The membership of the ILO ensures the growth of

tripartite system in the Member countries. At every level in the Organization,

Governments are associated with the two other social partners, namely the workers
and employers. All the three groups are represented on almost all the deliberative
organs of the ILO and share responsibility in conducting its work. The three organs
of the ILO are:
International Labour Conferences: - General Assembly of the ILO Meets every
year in the month of June.
Governing Body: - Executive Council of the ILO. Meets three times in a year in
the months of March, June and November.
International Labour Office: - A permanent secretariat.
The work of the Conference and the Governing Body is supplemented by Regional
Conferences, Regional Advisory Committees, Industrial and Analogous
Committees, Committee of Experts, Panels of Consultants, Special Conference and
meetings, etc.
International Labour Conference
Except for the interruption caused by the Second World War, the international
Labour Conference has continued, since its first session in 1919 to meet at least
once a year. The Conference, assisted by the Governing Body, adopts biennial
programme and budget, adopts International Labour Standards in the form of
Conventions and Recommendations and provides a forum for discussing social
economic and labour related issues. India has regularly and actively participated in
the Conference through its tripartite delegations.
Governing Body
The Governing Body of the ILO is the executive wing of the Organization. It is
also tripartite in character. Since 1922 Indian has been holding a non-elective seat
on the Governing Body as one of the 10 countries of chief industrial importance.

Indian employers and workers representatives have been elected as Members of

the Governing Body from time to time.
The Governing Body of ILO functions through its various Committees. India is a
member of all six committees of the Governing Body viz. (i) Programme, Planning
& Administrative; (ii) Freedom of Association; (iii) Legal Issues and International
Labour Standards; (iv) Employment & Social Policy; (v) Technical Cooperation
and (vi) Sectoral and Technical Meetings and Related issues.
The International Labour Office
The International Labour Office, Geneva provides the Secretariat for all
Conferences and other meetings and is responsible for the day-to-day
implementation of decisions taken by the Conference, Governing Body etc. Indians
have held positions of importance in the International Labour Office

International Labour Standards - ILO Conventions:

The principal means of action in the ILO is the setting up the International Labour
Standards in the form of Conventions and Recommendations. Conventions are
international treaties and are instruments, which create legally binding obligations
on the countries that ratify them. Recommendations are non-binding and set out
guidelines orienting national policies and actions.
The approach of India with regard to International Labour Standards has always
been positive. The ILO instruments have provided guidelines and useful
framework for the evolution of legislative and administrative measures for the
protection and advancement of the interest of labour. To that extent the influence of
ILO Conventions as a standard for reference for labour legislation and practices in
India, rather than as a legally binding norm, has been significant. Ratification of a
Convention imposes legally binding obligations on the country concerned and,
therefore, India has been careful in ratifying Conventions. It has always been the
practice in India that we ratify a Convention when we are fully satisfied that our

laws and practices are in conformity with the relevant ILO Convention. It is now
considered that a better course of action is to proceed with progressive
implementation of the standards, leave the formal ratification for consideration at a
later stage when it becomes practicable. We have so far ratified 39 Conventions of
the ILO, which is much better than the position obtaining in many other countries.
Even where for special reasons, India may not be in a position to ratify a
Convention, India has generally voted in favour of the Conventions reserving its
position as far as its future ratification is concerned.
Core Conventions of the ILO: - The eight Core Conventions of the ILO (also called
fundamental/human rights conventions) are:
Forced Labour Convention (No. 29)
Abolition of Forced Labour Convention (No.105)
Equal Remuneration Convention (No.100)
Discrimination (Employment Occupation) Convention (No.111)
(The Above Four Have Been Ratified By India).
Freedom of Association and Protection of Right to Organised Convention (No.87)
Right to Organise and Collective Bargaining Convention (No.98)
Minimum Age Convention (No.138)
Worst forms of Child Labour Convention (No.182)
(These Four Are Yet To Be Ratified By India)
Consequent to the World Summit for Social Development in 1995, the abovementioned Conventions (Sl.No. 1 to 7) were categorised as the Fundamental
Human Rights Conventions or Core Conventions by the ILO. Later on, Convention
No.182 (Sl.No.8) was added to the list.

As per the Declaration on Fundamental Principles and Rights at Work and its
Follow-up, each Member State of the ILO is expected to give effect to the
principles contained in the Core Conventions of the ILO, irrespective of whether or
not the Core Conventions have been ratified by them.
Under the reporting procedure of the ILO, detailed reports are due from the
member States that have ratified the priority Conventions and the Core
Conventions every two years. Under the Follow-up to the ILO Declaration on
Fundamental Principles and Rights at Work, a report is to be made by each
Member State every year on those Core Conventions that it has not yet ratified.
Source: Ministry of Labour GOI.
Role Of The National Commission On Labour
Labour legislations have also been shaped and influenced by the recommendations
of the various National Committees and Commissions such as First National
Commission on Labour (1969) under the Chairmanship of Justice Gajendragadkar,
National Commission on Rural Labour (1991), Second National Commission on
Labour (2002) under the Chairmanship of Shri Ravindra Varma etc. and judicial
pronouncements on labour related matters specifically pertaining to minimum
wages, bonded labour, child labour, contract labour etc.
The First National Commission on Labour was constituted on 24.12.1966 which
submitted its report in August, 1969 after detailed examination of all aspects of
labour problems, both in the organised and unorganised sector. The need for setting
up of the Second National Commission on Labour was felt due to vast changes
occurring in the economy during the last three decades especially in the nineties
due to globalization, liberalization and privatization.
The Second National Commission on Labour was given two point terms of
reference:
i) To suggest rationalization of existing laws relating to labour in the organised
sector; and

ii) To suggest an umbrella legislation for ensuring a minimum level of protection to

the workers in the unorganised sectors;
The Commission submitted its Report to the Government on 29.06.2002. The
Commission has comprehensively covered various aspects of labour and given
recommendations relating to review of laws, social security, women & child
labour, wages, skill development, labour administration, unorganized sector etc.
The recommendations of Second National Commission on Labour inter-alia,
included (i) introduction of umbrella legislation for workers in the unorganized
sector and agricultural labour, (ii) emphasis on up-gradation and development of
skill of workforce by training/retraining of workers, (iii) encouragement of small
scale industries, agri-business and rural sector for higher employment generation,
(iv) bringing attitudinal change and change in the mindset and work culture where
the employer and the worker work as partners with emphasis on participative
management, (v) consolidation of social security legislations and establishment of
social security system, (vi) abolition of child labour , etc.
The Ministry of Labour had held consultations and interactions with the workers
representatives, employers organizations, experts, professionals etc. The
recommendations of the Commission were discussed in the 38th Session of Indian
Labour Conference held on 28-29 September 2002, a National Seminar on
Unorganized Sector Workers held on 7-8 November 2002, Tripartite Committee
meeting held on 18-19 February 2003, and Consultative Committee Meetings of
Ministry of Labour held on 07.02.2003 and 30.4.2003. The recommendations had
again been discussed in the 39th Session of Indian Labour Conference held on 1618 October, 2003. While carrying out the amendments in labour laws, the
recommendations of Second National Commission on Labour are also taken into
consideration.
Source: The Planning Commission of India
Indian Labour Laws Review By ASSOCHAM

Even after 17 years of globalization, India has yet to dismantle Inspector Raj for
SSI sector where the numbers of inspectors have rather increased from 20 to about
40 by end of 2008, according to The Associated Chambers of Commerce and
Industry of India (ASSOCHAM). Incidentally, liberalized and Reformed `Red
Books now provide for 50% curtailment in numbers of inspectors for other sector
but SSIs which generate large employment, contribute substantially to exports
cover 38% and manufacturing is highly regulated by inspectors and cause
maximum harassment to them, ASSOCHAM analysis further unveils. The
Chamber cited an example of food processing industry which used to be regulated
by 100 inspectors 17 years ago, their numbers have reduced to 46. The unified
Food Law which is composition of 9 laws, enacted in 2007 is primarily responsible
for hugely reducing the number of inspectors for food processing industry for
which the credit should go to the Ministry of Food Processing and its Minister,
Subodh Kant Sahay.
The Factory Act of 1948 would provide for taking mandatory licensing even if an
entrepreneur wanted to commence manufacturing at tiny scale, today there is no
such condition and this happened mainly because of transition process of
liberalization remained industry-friendly, pointed out the ASSOCHAM. Another
case for example is again food processing industry in which before enactment of
Unified Food Law, the industry would be subjected to multiple inspectors such as
Weighing Inspector and Inspectors for ISI, Corporation, Health, Hygiene and even
Medical etc. Today, these sectors are examined by not more than 2 inspectors. On
the contrary, the SSI sector which would brave as many as 20 inspectors over 17
years ago is now subjected to inspectors monitoring whose number have gone
beyond 40, says the ASSOCHAM analysis. 17 years ago is now subjected to many
other inspections which include one separate inspector to monitor their register of
employees, accounts, balance sheet and on taxation fronts particularly the service
tax inspector. Likewise, many more areas were added in which the SSI sector is
subjected to tedious inspections.
However, the SSI sector continues to remain under the tight grip of inspector raj
which was supposed to be come out with advancement of liberalization. This did

not happen because most of states govern the SSI sector and governments never
took especial initiatives for reducing the number of inspectors. The analysis is
based on feedback coming to Chamber Secretariat directly from its members, be it
manufacturing, food processing and SSIs. Even obtaining of licence is no longer
required to commence industrial operations in any sector other than those enlisted
in the sensitive list which include defence, strategic alliances and to some extent
telecom, civil aviation and insurance. This change has taken place as government
brought about various notifications and amendments in some sense to prototype
laws. The SSI sector which would go through inspections from excise, customs,
banks, insurance, PF, PPF and record inspectors, 16 years ago is now subjected to
many other inspections which include one separate inspector to monitor their
register of employees, accounts, balance sheet and on taxation fronts particularly
the service tax inspector. Likewise, many more areas were added in which the SSI
sector is subjected to tedious inspections.
Besides, the Factory Act 1948, Minimum Wages Act 1948, Payment of Bonus Act
1965, Employment Exchange Compulsory Notification of Vacancies Act 1959, Air
(Prevention & Control of Pollution) Act 1981 jointly provide empowerment to
government departments and various state governments to still regulate the SSI
sector.
Fishbone (Ishikawa) Diagram
Also Called: CauseandEffect Diagram, Ishikawa Diagram
Variations: cause enumeration diagram, process fishbone, timedelay fishbone,
CEDAC (causeandeffect diagram with the addition of cards), desiredresult
fishbone, reverse fishbone diagram
The fishbone diagram identifies many possible causes for an effect or problem. It
can be used to structure a brainstorming session. It immediately sorts ideas into
useful categories.
When to Use a Fishbone Diagram

 When identifying possible causes for a problem.

Especially when a teams thinking tends to fall into ruts.
Fishbone Diagram Procedure
Materials needed: flipchart or whiteboard, marking pens.
1. Agree on a problem statement (effect). Write it at the center right of the
flipchart or whiteboard. Draw a box around it and draw a horizontal arrow
running to it.
2. Brainstorm the major categories of causes of the problem. If this is
difficult use generic headings:
Methods
Machines (equipment)
People (manpower)
Materials
Measurement
Environment
3. Write the categories of causes as branches from the main arrow.
4. Brainstorm all the possible causes of the problem. Ask: Why does this
happen? As each idea is given, the facilitator writes it as a branch from
the appropriate category. Causes can be written in several places if they
relate to several categories.
5. Again ask why does this happen? about each cause. Write subcauses
branching off the causes. Continue to ask Why? and generate deeper
levels of causes. Layers of branches indicate causal relationships.
6. When the group runs out of ideas, focus attention to places on the chart
where ideas are few.

Fishbone Diagram Example

This fishbone diagram was drawn by a manufacturing team to try to understand the source of
periodic iron contamination. The team used the six generic headings to prompt ideas. Layers
of branches show thorough thinking about the causes of the problem.

Fishbone Diagram Example

For example, under the heading Machines, the idea materials of construction shows four
kinds of equipment and then several specific machine numbers.
Note that some ideas appear in two different places. Calibration shows up under
Methods as a factor in the analytical procedure, and also under Measurement as a cause
of lab error. Iron tools can be considered a Methods problem when taking samples or a
Manpower problem with maintenance personnel.

Mintzberg's 5 Ps of Strategy

About the 5 Ps
Mintzberg first wrote about the 5 Ps of Strategy in 1987. Each of the 5 Ps is a different
approach to strategy. They are:
1.

Plan.

2.

Ploy.

3.

Pattern.

4.

Position.

5.

Perspective.

By understanding each P, you can develop a robust business strategy that takes full
advantage of your organization's strengths and capabilities.
In this article, we'll explore the 5 Ps in more detail, and we'll look at tools that you can
use in each area.

1. Strategy as a Plan
Planning is something that many managers are happy with, and it's something that
comes naturally to us. As such, this is the default, automatic approach that we adopt
brainstorming options and planning how to deliver them.
This is fine, and planning is an essential part of the strategy formulation process.
Our articles on PEST Analysis , SWOT Analysis and Brainstorming help you
think about and identify opportunities; the article on practical business planning
looks at the planning process in more detail; and our sections on change
management andproject management teach the skills you need to deliver the
strategic plan in detail.
The problem with planning, however, is that it's not enough on its own. This is where
the other four Ps come into play.

2. Strategy as Ploy
Mintzberg says that getting the better of competitors, by plotting to disrupt, dissuade,
discourage, or otherwise influence them, can be part of a strategy. This is where
strategy can be a ploy, as well as a plan.
For example, a grocery chain might threaten to expand a store, so that a competitor
doesn't move into the same area; or a telecommunications company might buy up
patents that a competitor could potentially use to launch a rival product.
Here, techniques and tools such as the Futures Wheel , Impact Analysis
andScenario Analysis can help you explore the possible future scenarios in which
competition will occur. Our article on Game Theory then gives you powerful tools
for mapping out how the competitive "game" is likely to unfold, so that you can set
yourself up to win it.

3. Strategy as Pattern
Strategic plans and ploys are both deliberate exercises. Sometimes, however, strategy
emerges from past organizational behavior. Rather than being an intentional choice, a
consistent and successful way of doing business can develop into a strategy.
For instance, imagine a manager who makes decisions that further enhance an already
highly responsive customer support process. Despite not deliberately choosing to
build a strategic advantage, his pattern of actions nevertheless creates one.
To use this element of the 5 Ps, take note of the patterns you see in your team and
organization. Then, ask yourself whether these patterns have become an implicit part
of your strategy; and think about the impact these patterns should have on how you
approach strategic planning.
Tools such as USP Analysis and Core Competence Analysis can help you with
this. A related tool, VRIO Analysis, can help you explore resources and assets (rather
than patterns) that you should focus on when thinking about strategy.

4. Strategy as Position
"Position" is another way to define strategy that is, how you decide to position
yourself in the marketplace. In this way, strategy helps you explore the fit between
your organization and your environment, and it helps you develop a
sustainable competitive advantage .

For example, your strategy might include developing a niche product to avoid
competition, or choosing to position yourself amongst a variety of competitors, while
looking for ways to differentiate your services.
When you think about your strategic position, it helps to understand your
organization's "bigger picture" in relation to external factors. To do this, use PEST
Analysis , Porter's Diamond , and Porter's Five Forces to analyze your
environment these tools will show where you have a strong position, and where you
may have issues.
As with "Strategy as a Pattern," Core Competence Analysis , USP Analysis ,
andVRIO Analysis can help you craft a successful competitive position. You can
also useSWOT Analysis to identify what you do well, and to uncover opportunities.

5. Strategy as Perspective
The choices an organization makes about its strategy rely heavily on its culture just
as patterns of behavior can emerge as strategy, patterns of thinking will shape an
organization's perspective, and the things that it is able to do well.
For instance, an organization that encourages risk-taking and innovation from
employees might focus on coming up with innovative products as the main thrust
behind its strategy. By contrast, an organization that emphasizes the reliable
processing of data may follow a strategy of offering these services to other
organizations under outsourcing arrangements.
To get an insight into your organization's perspective, use cultural analysis tools like
theCultural Web , Deal and Kennedy's Cultural Model , and the Congruence
Model .

Using the 5 Ps
Instead of trying to use the 5 Ps as a process to follow while developing strategy, think
of them as a variety of viewpoints that you should consider while developing a robust
and successful strategy.
As such, there are three points in the strategic planning process where it's particularly
helpful to use the 5 Ps:
1.

When you're gathering information and conducting the analysis needed for
strategy development, as a way of ensuring that you've considered everything
relevant.

2.

When you've come up with initial ideas, as a way of testing that that they're
realistic, practical and robust.

3.

As a final check on the strategy that you've developed, to flush out

inconsistencies and things that may not have been fully considered.

Using Mintzberg's 5 Ps at these points will highlight problems that would otherwise
undermine the implementation of your strategy.
After all, it's much better to identify these problems at the planning stage than it is to
find out about them after you've spent several years and millions of dollars
implementing a plan that was flawed from the start.

Key Points
The 5 Ps of Strategy were created by Henry Mintzberg in 1987. Each of
the 5 Ps stands for a different approach to strategy:
1.

Plan.

2.

Ploy.

3.

Pattern.

4.

Position.

5.

Perspective.

As a Plan, strategy needs to be developed in advance and with purpose. As

a Ploy, strategy is a means of outsmarting the competition.
With strategy as a Pattern, we learn to appreciate that what was successful
in the past can lead to success in the future.
With Position, strategy is about how the organization relates to its
competitive environment, and what it can do to make its products unique in
the marketplace.
Perspective emphasizes the substantial influence that organizational culture
and collective thinking can have on strategic decision making within a
company.
Understanding and using each element helps you develop a robust,
practical and achievable business strategy.

Labor welfare

Some of the major categories of labour welfare are: (1) Intra-mural Facilities (2)
Extra-mural Facilities (3) Statutory Facilities (4) Mutual Facilities and (5)
Voluntary.
It is very difficult to classify the welfare activities into certain broad categories.
(1) Intra-mural Facilities:
The facilities provided inside the factory are known as intra-mural facilities. These
facilities include activities relating to minimisation of industrial fatigue, provision
of safety measures like fencing and covering of machines, good layout of the plant
and machinery, sufficient lighting conditions, provision of first aid appliances
etc.Provisions of such facilities are also obligatory in all industrial establishments
all over the world.
(2) Extra-mural Facilities:
Facilities offered to the workers outside the factory are known as extra-mural
facilities. They include better housing accommodations, indoor and outdoor
recreation sports, educational facilities etc. The provision of these facilities is
voluntary. Earlier, due attention was not given to the provision of extra-mural
facilities to the workers but now it is realised that these facilities are very important
for the general welfare and upliftment of the workers.
(3) Statutory Facilities:

Under this category, welfare facilities are provided according to the labour
legislations passed by the Government. The nature and coverage of these facilities
vary from country to country. Again these facilities may be either intra-mural
facilities or extra-mural facilities. These facilities must be provided by all the
employers and cannot be ignored. Any contravention of the statutory provisions
shall render the employer punishable under the Act concerned.
The National Commission of Labour has divided all the statutory measures
under two distinct heads:
1. Facilities which have to be provided irrespective of the size of the establishment
e.g., drinking water.
2. Facilities which are to be provided subject to the employment of a specified
number of persons, e.g., creches.
(4) Mutual Facilities:
These facilities are usually outside the scope of the statutory facilities. These
activities are voluntarily undertaken by the workers themselves for their own
interest. As such the employer has no say in it.
(5) Voluntary:

The facilities which are voluntarily provided by the employers come under this
category. Hence these are not statutory. No doubt, the activities under this category
ultimately lead to increase in the efficiency of workers.
Transcript of OD Cycle
Cross-dimensional Design of Intervention
This cross referencing of various variables of intervention was exactly what some
of the early founders attempted to do by classifying types of OD intervention in a
three-dimensional model.
A second cube was developed by Blake and Mouton (1985), the consulcube is
considered to the be the most comprehensive overview elements of interventions
included;
Consulcube Model
Level and Types of Intervention
Types of Intervention
1. Level of System
The OD Cycle
INTERVENTION
The term OD intervention refers to the range of planned activities that clients and
OD practitioners design and execute together during the course of an Organization
Development programme for the purpose of improvement.
Composite Definition
Intervention is to: enter into an existing systemwith a structured and planned
activitydirected at a targeted person, or group, or inter-groups or an entire
organizationto disturb the status quo and to shift the system towards a different
state with the goal of improvement and development
Schmuck and Miles (1976)
They were the first to devise a three-dimensional model , a cube which encouraged

practitioners to think about the interaction between three things: a) the diagnosed
problem; b) the focus of attention; c) the mode of intervention.
Kind of Intervention,
Focal Issues, and
Unit of Change
Reddy (1994) focuses on the process work completed by consultants, primarily
within a team or group environment, although it can be applied more widely. The
three dimensions of the Reddy Cube are:
Reddys Cube
Focus of Intervention
Type of Intervention
Level of Intensity
Level of System=Unit of Change
Levels of System
1. Intra-personal Level
---focus is on the individual.
2. Interpersonal Level
---focus is between the individuals.
3. Intra-group Level
---many subgroups within the same unit
4. Intergroup Level
---two units within the same division
5. Intra-unit Level
---various sub-units within the same function
6.
Inter-unit Level
---different divisions
7.Bounded System Level
---whole organization needs to adjust

8. System Network Level

---a number of organizations
9. Total System in its Environment Level
2. The Targeted Area of Change
3. Task Focused or process Focused
4. Structured versus Unstructured Intervention
5. The Channel through which the Intervention is Delivered
6. Sized of the Group
7. Tools and Techniques that we use to execute our Intervention Strategy
Consulting interventions
Types of consultancy intervention
Heron (1990) identified two approaches, authoritative and facilitative, that are
further divided in six generic behavioural intervention models.
Authoritative intervention
Prescriptive, provide specific advice and direction to the client typical behaviour:
directing, advising, recommending, suggesting
Informative, provide instruction, knowledge and information to the client typical
behaviour: telling, interpreting, demonstrating, giving feedback
Confronting, challenges client behaviour or attitude through direct feedback typical
behaviour: disagreement, asking challenging questions, raising awareness,
contradicting
Facilitative intervention
Cathartic, help client to express and overcome strongly held thoughts and emotions
typical behaviour: releasing tension, using humour, stretching, empathising
Catalytic, help client to reflect, discover and learn things for themselves typical
behaviour: reflecting, questioning, probing, summarising

Supportive, develop the confidence and self-belief of client typical behaviour:

valuing, affirming, appreciating, expressing concern
A range of approaches and styles that can be used by consultants in different
interventions
The consulting continuum adapted from Lippitt & Lippitt (1994)
The consulting continuum adapted from Lippitt & Lippitt (1994)

Edgar Scheins 3 types of intervention (1988)

Expert consulting style
The consultant uses his knowledge and expertise to diagnose and solve a clients
problem. In this style a directive and prescriptive approach is required. This style is
very attractive if clients want a fast and focused solution with minimal
involvement from their side. Often the clients organisations culture is not taken in
account; makes the client rely on the consultant and therefor very dependent on the
consultant.
Process consulting style
The consultant guides and advices the client. There is the assumption that the client
herself has the necessary capabilities to address the problem. In this style the
helping is emphasised and the client generates her own solutions. This increases
the clients ownership and long-term sustainability.
Doctor/patient style
The consultant knows that there is something wrong and is given the power to
make a diagnoses and subscribe a solution. In this style the goals is to define the
problem and define realistic solution(s).
Blake and Moutons Consulcube (1976)
This approach has three main focuses

Kind of interventions:
Acceptant: gives client a sense of worth, value acceptance, support
Catalytic: helps client to generate information for clearer perception
Confrontation: clients value discrepancies, beliefs and assumptions
Prescriptions: client told what to do for solving the problem
Theories and principles: teaches behavioural science theory so that the client can
diagnose the problem on his own and solve them as well
Focal Issues:

Power/authority
Morale/cohesion
Norms/standards o Goals/objectives
Theories of change
Individual ,Group,Intergroup,Organization.Larger social system
Reddys intervention cube (1994)
This intervention mainly focuses on the work that process consultants do with
groups and contains of the following levels:
Focus of intervention
Group,Interpersonal,Individual
Type of intervention
Cognitive,Skill and activity,Behaviour
description,Emotional/reflective,Interpretive
Level of intensity
Low,Medium,High

Schmuck and Miles OD cube (1976)

This approach helps the consultant to focus on the interaction between those
dimensions.
The three defined dimensions are:
The diagnosed problem
Focal Issues
Theories of change
How do you select suitable approaches to meet the nature and type of your
consultancy intervention
Based on the paper of Spindler and Steger (2011) it is clear that the three styles as
described by Schein (expert, process, doctor/patient), cannot be seen as separate
roles a consultant has during an intervention. In practise the role of a consultant
will be a mixture of these styles.
There is off-course still a difference in the type of intervention. There are clients
that only need hands to solve an already defined problem/solution, no real Schein
defined style is needed here. What more often the case is that clients think they
have determined the problem and are looking for help to solve this. Here the
consultant needs to be aware that he doesnt get stuck in the deriving solutions
pitfall and coming to the conclusion during the intervention that he cannot bring
the client the wanted solution.
Another very important factor in choosing the right approach is how much client
involvement there will be during the intervention. If there is minimal of no client
involvement or there is less time a patient/doctor approach will be the most likely
to have the best results.
If the consultant doesnt have the detailed specific knowledge to determine and
solve the problem on his own, the process approach will be the right way to go
forward.
The type of approach is also depending on the branch you are in. In the financial
services area f.e., the client expect from the consultant to have a good

understanding of the branch (at least as a generalist, but depending on the kind of
assignment even as a specialist) and there partner up in the problem analysing,
solving and implementing.