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MS-27   june-2011

MS-27 : WAGE AND SALARY ADMINISTRATION

1. Explain the Role of Compensation. Critically evaluate the current trends in compensation with suitable example.

2. Discuss the need, object, scope and coverage of the minimum wages Act, 1948. Describe the procedure for fixation and revision of minimum wages under the Act.

3. Explain the concept of job evaluation. Discuss any two methods of job evaluation and their merits and demerits.

4. Discuss what do you mean by performance linked reward system. Explain various steps involved in designing a performance linked reward system.

5. Write short notes on any three of the following

(a) Tax planning

(b) Time and piece rate system of wage payment.

(c) Downsizing

(d) Stock option

(e) Managerial compensation.

6. Read the following case and answer the questions given at the end.

The Indian Electric Company is a city based manufacturer of welding machines and motors. When Mr. Nirad Shah established the company in 1970, he was keenly aware of the importance of a highly motivated workforce, and how the company's success, in fact, depended on it. Therefore, Mr. Shah had to ensure that each employee would work as diligently as possible for the good of the organisation. Mr. Shah realised that the best way to motivate employees would be to link the company's reward and recognition system to its goals. To establish this nexus, Shah developed and implemented an incentive system. Its aim was to improve the company's overall performance by allowing contributing workers to share in the proceeds. The plan rewards employees for turning out quality products efficiently while controlling costs. The system includes the following components :

Paying by the Piece Rate : Production workers are paid according to the number of "pieces" or product units they produce that are not defective. If a customer sends a defective part back to the company, the employee who produced it must repair it on his or her own time.

Providing year - end Bonus : To reward workers further for their efforts, Shah introduced a year-end bonus system that gives all workers opportunity to nearly double their base wages. Workers get the bonus if the company's annual profit increases.

Providing Stock Options : Shah also provided his employees with the option of buying company's stock at a low cost. Employees are also given shares of the company's stock based on annual profits.

All the above financial incentive payments enabled the employees to earn more and helped to improve their morale and motivation.

Questions :

(a) Identify the salient issues of this case in general.

(b) What are the additional financial incentive schemes you suggest for sustaining the morale and motivation of the employees ?

(c) Suggest suitable non-financial incentives (informal rewards) for further improving the morale and motivation of the employees of Indian Electric Company.

MS-27   Dec-2007

MS-27 : WAGE AND SALARY ADMINISTRATION

Mr. C.S. Sharma joined in 1970 in Indian Institute of Technology a premier educational institution in the country, imparting higher level education in technology. His job demands higher level and latest knowledge, higher level teaching skill, and other skills in introducing and practicing different teaching methods and bringing

coordination between the institute and industry. The institute implemented the pay scales in 1976 recommended by the University Grants Commission which were at par with the pay scales of teachers in Universities and Colleges. The demands of the jobs in Universities and Colleges are quite low compared to those of the Institute.

The pay of Mr. Sharma. has been fixed at that level of Mr. Singh, who joined the Institute 1n 1974 as the University Grants Commission did not recommend any weightages for the teachers who put up less than five year's experience. Mr. Sharma was quite unhappy over the parity of salary of the teachers of the institute with the teachers from Universities and Colleges; and also with those having less than five year's experience. Hence he decides to quit

Questions :

(a) Do you justify the decision made by Mr. Sharma ?

(b) Do you suggest any measures to stop Mr. Sharma from quitting the job ?

(c) Do you think that there is something wrong with the Institute pay ptactices and the University Grants Commission's reconunendations ? If yes, what are they ? How do you rectify them ?

MS-27   Dec-2008

MS-27 : WAGE AND SALARY ADMINISTRATION

1. Enumerate wage theories. Explain any two of them with suitable examples. Briefly discuss limitations of economic theories.

2. What are the micro level considerations for evolving a compensation policy ? Explain with suitable example.

3. What are the objectives of Allowances and benefits ? Briefly describe various fringe benefits.

4. Discuss the types of performance linked reward schemes. Critically analyse the steps in designing a performance linked reward scheme.

5. Write short notes on any three of the following :

(a) Tax planning

(b) Equal pay for equal work

(c) Compensation policy

(d) Collective bargaining as a method of wage fixation

G) Voluntary Retirement Scheme (VRS)

6. Read both Case 1 and Case 2 giaen below and answer the questions given at the end of each ease.

CASE 1

A financial institution has just decided to open a branch at Bhimunipatnam, an exclusive resort located about 20 miles from Waltair, a large city. There is no bank at present in Bhimunipatnam. The financial institution is anxious to determine the appropriate wage for the clerical staff it expects to hire. Clerks in the city office at Waltair receive a starting wage of Rs. 1,000 per month. As a matter of company policy these wages rates have been set at mid point of the range

for financial institutions in Waltair.

     A survey at local business at Bhimunipatnam indicates that the'going rate' for

qualified clerical personnel varies between Rs.1200 - Rs.1,400 a month. This higher rate in Bhimunipatnam may be attributed, in par! to the substantially higher cost of living in this resort town the limited number of young people seeking employment and the fact that there are no other financial institutions in Bhimunipatnam. Banks in Waltair have traditionally paid lower wages than other businesses, on the ground that banks offer better working conditions and higher prestige.

Questions :

(a) What amount, should the financial institution fix as personnel ?

b) What factors should be considered in making the decision ?

MS-27   Dec-2009

MS-27 : WAGE AND SALARY ADMINISTRATION

1. Discuss the role of compensation. Explain the functions and responsibilities of compensation programme with suitable examples.

2. Discuss the scope and coverage of the minimum wages Act, 1948. Describe the procedure for fixation and revision of minimum wages under the Act.

3. Briefly explain any two methods of job evaluation and their merits and demerits.

4. Explain the need for payment of allowances and fringe benefits. Discuss the systems of payment of dearness allowance. Give examples of some popular fringe benifits practised by corporates.

5. Write short notes on any three of the following :

a) Downsizing

b) Pay Surveys

c) Executive compensation

d) Payment of wages Act, 1936

(e) The marginal productivity theory

6. Read the following case and answer the Questions given at the end :

A public sector consultancy organisation recruited Mr. Alok an expert in a particular field of technical specialisation with Ph.D. and other high qualifications at a senior level, one level below that of a director of the board. The company had a managing director and three functional directors on its board apart from government directors. Mr. Alok at the time of recruitment to the company was working as No. 2 in a Central Government Research Organisation. Since he failed to get selected to the No. 1 slot in that organisation for 'political reasons', according to him. He chose to join the public sector company at one grade higher than that held by him in the government.

After joining the company, Mr. Alok represented to the Management that he should be granted at least three advance increments since in the government research organisation where he had worked, he used to get extra honorarium to the extent of Rs. 50,000 per annum for undertaking outside consultancy work. The management of the company refused to grant the advance increment to him since they felt that Mr. Alok's request cannot be dealt with in violation and it will lead to similar requests from other senior managers in the company. After waiting for a few months, Mr. Alok submitted his resignation from the company. His superior, viz., the functional director concerned (Mr. Rajeev), advised the managing director that Mr. Alok was resinging because his request for higher salary has not been agreed to and that the matter needs review because it would be difficult to recruit another expert of the same calibre as Mr. Alok. The Managing director, however, accepted the resignation of Mr. Alok and ordered that the post be advertised for fresh recruitment. As the recruitment process was on, Mr. Alok on his own chose to withdraw his resignation and rejoined the company apparently on a tacit undertaking given by Mr. Rajeev that his request for higher salary would be reconsidered. The managing director reconsidered the request and approved the grant of three advance increments to Mr. Alok provided he would serve the company at least till the date of his superannuating, which was two years away. The decision was communicated to Mr. Alok.

     Mr. Alok once again felt insulted by being asked to agree to an unaceptable condition, viz., undertaking to continue in the company for two more years for the grant of additional increments to his salary. He thought he was fully justified in his case. He did not agree to the condition and after two months again submitted his resignation. Mr. Rajeev discussed the matter with the managing director. The managing director stated

that in return for the additional salary being granted to Mr. Alok which was not being given to any other senior manager of his status, he should display some commitment, to serve the company. Without such a commitment Mr. Alok might wait for an opportunity to look for greener pastures and leave the company after gaining a higher salary, vis-a-vis his other senior colleagues in the organisation. The other employees would feel that the Management can be blackmailed by the so-called experts into granting more benefits with the threat of resignation and the Management would lose its credibility. The managing director, therefore, decided to accept the resignation of Mr. Alok. But Mr. Rajeev and other functional directors of the company were not happy with the decision as

they felt that competitors of the company would gain by Mr. Alok's departure and, therefore, allowing Mr. Alok to quit would jeopardize the company's business interests.

Questions :

1.Do you agree with the Managing Director's approach to the problem ?

2. Do you think that Mr. Alok had reasons to be aggrieved or was he trying to exploit his expertise ?

3. What would be your solution to this case ?

MS-27   Dec-2010

MS-27 : WAGE AND SALARY ADMINISTRATION

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MS-27   Dec-2011

MS-27 : WAGE AND SALARY ADMINISTRATION

1.What are the micro level considerations for evolving a compensation policy ? Explain with suitable examples.

2. Explain the purpose and applicability of the payment of Wages Act, 1936. Discuss the

deductions authorised under the Act with suitable examples.

3. Explain the concepts of Basic wage, Dearness Allowance and Fringe benefits. Discuss the need and purpose of allowances and fringe benefits to be given to the employees.

4. Explain various types of incentives. Discuss the prerequisites of an effective incentive scheme citing suitable examples.

5. Write short notes on any three of the following :

(a) Stock options

(b) Executive compensation

(c) Pay surveys

(d) The marginal productivity theory

(e) Employee's Deposit-linked Insurance scheme.

6. Read the following case and answer the Questions given at the end.

The National Manufacturing Company reached an agreement with its Union on a production incentive scheme to increase production. The company had an unprecedented

demand for its goods and the Union agreed for the incentive scheme. The management was pleased with the assurance of the Union leader to personally undertake the task of implementing the scheme. The management promised to give him a free hand if he could increase the production. The Union did increase production to almost double the original level. As a result the Union gained importance. Any problem could be sorted

out by the Union by its direct access to the chief executive. The management staff as a result became wary of its interaction with the Union. Non-members of Union were discriminated by the union. Its members could get special favours like disposal of their grievances, promotions, and so on. The incentive scheme benefitted primarily the Union members. The scheme' was inequitable as some workers got disproportionately large incentives, some low and some no incentive at all. The second feature was that as the incentive was linked to the Consumer Price Index (CPI) the distortion got further accentuated. However, when the Union tried to misuse its new found powers the management struck back one day by taking disciplinary actions against all the leaders

and the union found all of a sudden that it was without a leader.

Another Union arrived on the scene and the leader had established a rapport with the chief executive and this new Union faithfully followed the tenets of the management but as a price extracted some benefits for its members exclusively. It had a say on all aspects of the management function like recruitment, selection, transfers, job classification, and so on. In return the Union saw to it that production became its exclusive responsibility and it had a hot line with the chief executive for any problem resolution. Again the management became wary that their path should not cross the path of the Union resulting in a confrontation. As the years passed, the Union started agitating for improvement in the wage scales. Because of the incentive scheme, the company found that any improvement in the basic wage would pose greater problems and the primary question before the management was to delink the CPI from the incentive scheme. The Union refused to delink the CPI from the incentive scheme as some of its members were earning an amount equal to, if not more than, the salary as an incentive itself. At the same time workmen with no incentive and being grade barred began to lose. And this resulted in discontentment amongst the workmen. But the dilemma could not be resolved and this led to an explosive situation. A third Union emerged on the scene and this led to intense inter-Union rivalry resulting in indiscipline, loss of production, and violence within the factory premises, as a result of which the company declared a lockout.

When the plant reopened after four months, the Union in power lost its credibility and the new Union had the complete support of the workmen. In the meanwhile, the new HR Manager who joined the company during this period of strife found that a new approach to deal with the problem was very helpful. Normally in discipline and production seemed to return when a realistic approach of meeting the workmen for resolving problems and difficulties was made by HR Manager and the Plant Manager. Simultaneously contact with workmen led to the formation of committees to look after various matters relating to the canteen, working conditions, and welfare functions. The

management also withdrew at the instance of the HR Manager, charge-sheets which were in force for over two to three years. discretion by the old Union leaders was also rectified. This had an immediate effect and the workmen responded favourably and they even, admitted that there was somebody to look into the problems of the workmen. The new Union leaders was happy that the management could develop a rapport not only with the leader but even the workmen and hoped that it could expect the management to rectify the defect of not having revised the wage scales. But this was not an easy task as there were a lot of inequalities that the management wanted to set

   The Union, though agreeing with the management, would not agree for a cut in the

wages in any manner to set right the inequalities. The Union not only wanted to cling to the beneficial aspects of the incentive scheme but also insisted that the management somehow give an increase in the basic wages. The management was being drawn into a vicious circle of the incentive scheme being inequitable, but when the Union's attention was being brought to the high incentive categories it reverted to the low basic wage theme. The management remained in a quandry as regards how to convince the workmen, to win over the constituency of workmen, and make managers effective and regain supremacy in production.

Questions :

(a) Identify the problems and their causes in the case.

(b) Under the given situation, how are the problems to be remedied ?

(c) As a human resource manager, how do you deal with this case, especially then the Union is demanding a settlement ?

(d) Suggest various principles and strategies the management has to keep in mind while formulating a wage incentive scheme for the employees.

MS-26   June-2007

MS-26 : ORGANISATIONAL DYNAMICS

1. Define Role Analysis and discuss its needs and uses in an organisation. Briefly describe the process of Comprehensive Role Analysis (CRA) as a tool to define and clarify the boundaries of the focal roles.

2. Why do groups get formed ? What are the stages of group development ? Explain with suitable examples.

3-., What is Empowerment ? Describe the concept and role of Empowerment Audit in the day-to-duy functioning of an organisation, with suitable examples .

4- What is the concept and process of Organisational Learning ? Briefly discuss various mechanisms of Organisational Learning, with examples.

 

5. Write short notes on any three of the following

(i) The Psychological Approach to Alienation

(ii) Bases of Power

(iii) Cfoss cultural dynamics

(iv) social responsibility of an organisation

(v) Tenets of Strategic Alliances

6. Please read the case and answer the questions given at the end.

Donnelly Mirrors, a small company employing about 7'50 workers, manufactures practically all of the rear-view mirrors for all of the automobiles produced in America. Even though it is privately held corporation, it has developed a participative management style where the workers are actively and genuinely involved in the governance of the company. This may be one of the reasons why the company has been enjoying continuous success over the years.

The participative system started in 1952 and initially, the employees simply participated in cost saving efforts and they Shared those savings among themselves and with the company. The cost savings resulted from efficient use of labour, materials and machines. Emplo yees were assured that they would not lose jobs because of introduction of technologically advanced machinery or change in production methods. This resulted in reduced resistance for change on the part of employees.

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The employees became so involved in cost reduction efforts and activities that they started to volunteer various ways of improving operational efficiency including selection of equipment and machines. Various problem solving grcups were formed for various operational areas and in order to achieve efficient coordination among all the groups and activities, a linking-pin organizational structure was adopted, whereby, members of various groups make decisions relative to their own tasks and these decisions are presented to the next higher level of managernent for consideration.

There are no time clocks and even though workers get paid on a salary basis, their working times are not closely watchecl or scrutinized. There is sufficient group cohesion so 'that the workers do not take undue advantage of these relaxed rules. If a member is late or absent for a good reason, other workers in the group will cover his work. If someone misses work frequently, he becomes answerable to other group members. The group selects its own leader and together the members set their own production goals within the general framework of the objectives of the organization and are responsible for meeting such goals.

   The company has formed a committee comprised of representatives both from ernployees as well as management and the committee handles all personnel matters such as pay policies, fringe benefits and employee grievances. Since the wcrkers are represented in this committee, all decisions made by this committee are easily accepted by all, Pay scales are also recommended to the managemeht by this committee and these are consistent with the industry practices. As per pay policies, the company is guaranteed a return of 5.2%   on its investment and the balance of the profits is shared with the employees. If a 5.2% return is not achieved in a given year, the. deficit is compensated from the earning of the following year before any additional bonuses are given to the employees.

Because of its reputation for employee treatment, it attracts a large number of applicants for jobs, but because the turnover rate is very low, the company can select the best from this pool of applicants. The company is like a close-knit family and enjoys a reputation for productivity, quality and employee loyalty and dedication.

Questions

(a) Does the success of the company reflect a general statement that profit sharing and employee involvement in company affairs is highly motivating for employees ?

(b) How do you think that the group dynamics is at work in this organization ? How are the group goals integrated with the organizational goals ?

(c) Do you think there is enough group cohesiveness in this company so that the individuals would not violate group rules and norms ?

MS-26   June-2008

MS-26 : ORGANISATIONAL DYNAMICS

1. Discuss the process and stages for formation of groups in an organisation. Why is cohesiveness important for group effectiveness ?

2. Explain Burnout and identify the factors responsible for Burnout. Discuss individual and organisational interventions to cope with Burnout

3. Review the process of delegation and the forces leading to delegation. Cite suitable illustrations from organizational context.

4. Explain the importance of Business Ethics in the present day context. Discuss various ethical issues in management functions. Give examples.

5. Write short notes on any three of the following :

(a) Strategic alliances

(b) Cross-cultural issues

(c) Empowerment

(d) Role analysis technique

(e) Alienation

MS-26   June-2009

MS-26 : ORGANISATIONAL DYNAMICS BOOK solutions

MS-26   June-2010

MS-26 : ORGANISATIONAL DYNAMICS

1. Explain the group process in the organizational context, and differentiate between natural and created groups.

2. Discuss the notion of 'Power' in relation to organizational dynamics. Discuss the classification of power bases.

3. How is diversity management crucial in creating and maintaining organizational effectiveness ?

4. What are the facets of organisational culture ? Establish the linkage between Organizational Culture and Climate.

5. Write short notes on any three of the following :

a) Strategic Alliances

b) Causes and correlates of Alienation

c) Burnout

d) Transformational leadership

(e) Organizational Ethics

Read the following cases carefully and answer the questions given at the end.

6. The Roopchand Departmental Stores, New Delhi, has a separate section to sell winter garments. This section consists of two groups : permanent clerks and temporary clerks appointed during winter season. Unfortunately, this section has always witnessed a tug-of-war situation between permanent and temporary clerks. The story begins thus.

The permanent clerks, by virtue of their long and fruitful association in the Departmental

Stores, had developed intimate social relations among themselves. Usually, they take their lunch and tea together. They worked, like a well-knit group, in close proximity and not surprisingly, developed close relations even after the work is over. The slack period starting from April to September every year had given them wonderful opportunity to sit together, discuss about matters of common interest, peep into each other's minds and, if possible, solve their problems to mutual advantage. Presently all of them are unmarried

with the exception of two. The temporary clerks were school girls who are normally appointed before the commencement of winter. Often, they have complained about their work in the Winter Garments Section and two of the clerks even desired transfer to some other section after a short stay. The reasons are quite obvious : The permanent clerks bothered little about helping the newcomers. If the newcomer is not able to strike a deal with a customer, often, the permanent clerks joined hands in making uncharitable criticism before the Section-in-charge. Being small in number, the temporary clerks could not resist the frequent onslaughts, which are at times irritating and insinuating. The temporary clerks had very little scope to blow off their "steam". In this heated atmosphere, the determination of commission on sales remained a contentious issue. The permanent clerks had, through an informal understanding, agreed not to boost up sales. They feared, inherently, that fluctuations in sales would lead to fluctuation in employment. At the same time, they could not tolerate the sight of a temporary sales person pocketing a fair-share of commission. They always felt that the temporary ones do not deserve any commission, because they have not contributed anything on a continual basis for the development of the Department. Suffering from an inflated ego, they also believed that they had the right temperament and skill to boost up sales. Thus, in every way, the temporary sales clerks are inferior to them. Recently an unhappy situation has developed when one of the temporary clerks is able to make a substantial sale to one of her acquaintances. Now, the permanent clerks began to make a hue and cry regarding the commission payment. The poor sales clerk came to the Assistant Sales Manager with tears after having been scolded bitterly by the permanent clerks for having sold a few sweaters in their absence.

The temporary clerks were always anxious to show good performance so as to earn a position in the department. To prevent this, the permanent clerks used to furnish false information about garments' quality, negotiable price etc. Whenever the temporary clerk sought the help of a senior in selling the garments to the customer, the latter would take over and claim the commission on sale herself. The temporary clerks were often assigned

to insignificant tasks like arranging displays, rearranging garments, bringing garments from stores, etc., and were prevented from striking it rich with customers. At every stage the temporary ones are taken for a ride by the permanent clerks.

Questions :

a) Explain the behaviour of permanent clerks in the Winter Garments Section from group point of view.

b) What action strategies would you evolve to improve the situation ?

 

7. Sonia was the head of the marketing services division at the Triumph Management Group Head office based in Bangalore. On face it appeared Sonia was very lucky as she had it all - a high profile job with a big company, high pay along with stock options, a likeable enthusiastic team of co-workers. On the personal front Sonia's husband was a senior financial specialist with a multinational firm and they had a daughter who was going to a reputed school with a good housekeeper to look after the daughter and home.

On the job front, Sonia was liked not only by her colleagues but by her subordinates as well as her superiors for her total commitment to the task assigned to her, communication abilities and pleasant personality. The board of the Triumph Management Group were deliberating on the merging of this company with their sister concern Trident Value Group so as to gain strategic competence. After this decision was tentatively communicated there seemed to be visible certain working conditions leading to manager's level of perceived stress. The most stressful organizational change events were the frequent changes in instructions, policies and procedures, facing unexpected crises and deadlines and sudden increase in the activity level or pace of work.

     Sonia realised that stress was affecting her team's performance because many of her

managers complained about work overload, absence of a proper feedback and only communication was received when performance was found to be unsatisfactory, along with role conflict and ambiguity. Sonia, at her level tried to address these issues by frankly telling her subordinates that the management had not given clear guidelines on how the organizational changes were going to affect this firm's employees.

So till such instructions were received, they (employees) continue to work as per the current requirement. She also advised them to do regular physical exercise and ensure a proper intake of balanced diet so as to reduce stress.

Very soon Sonia also started feeling that stress was affecting her performance. She recalled the turn of events after receiving oral information on the managements decision to elevate her to the post of Vice President (marketing). She had made two presentations of two important issues to the board during the past 1.5 months. And they were reasonably good based on the feedback received from her superior. Sonia remembered

that at the time of the presentation though 'keyed up', her presentation had revealed a lot of enthusiasm, energy and confidence. She had been able to answer almost all the questions put forward to her by the board members.

     But after the presentations, Sonia started feeling that at the work place, her schedule was dominated by one crisis after another. On most of the days when she came home it was very late, giving her hardly any time to talk and play with her daughter or talk to her husband. Many of her work days started at 7 a.m. and continued till almost 10 p.m. She longed for quality time specially to be with her family and also pursue her passion of playing the 'Veena', her favourite musical instrument. Finally one fine day Sonia presented her resignation letter to her superior quoting "personal reasons" as the reason for leaving.

Question for discussion :

1. How do you perceive the working environment, contributing to the rising level of stress in the organisation ?

2. What methods of stress management would you suggest to the organisation in the above case, to reduce stress at the individual employee level and organisational level ?

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