Question

Hi-Tech Electronic Limited was established in 1998 in

Faridabad. It produces and markets all type of electronic goods. It

has been one among the top five companies as for the level of

technology and one among the top three companies regarding

marketing of the products. The company’s policies and practices

concerning human resource management are top in the country.

The company’s salary administration policies and practices were

taken as guidelines not only by the other companies but also

various wage boards and pay commissions in the country. But this

company has been struggling of salary and benefits. The problem

is started hereunder.

The company employed nearly 400 young graduate and post-

graduate engineers just three years back. These employees form

the cream of the company’s present human resource. Of course,

the older generation of company’s employees also formed the

cream of company’s human resource while they were young. The

older employees also formed the cream of company’s human

resource while they were young. The older employees occupied

higher positions in all the departments including Human Resource

Department. The company’s salary policy and benefits policy were

formulated five years back mainly on the basis of the older

employees desires. As such, salaries are fixed as very low level

compared to other similar industries and the benefit schemes

include an exhaustive list of benefits including all types of

retirement benefits. The cost of retirement benefits would be nearly

25% of the cost of the present staff to the company.

The young employees demanded the management to pay

immediately whatever it can pay rather than providing extensive

fringe benefits. According to them, the pay pocket motivates them much more than benefits which they get mostly in kind. But the

older employees view that fringe benefits much rather than

currency which taxes them heavily. The company asked the human

resource manager to settle the issue.

Questions :

1. What is the crucial issue in this case?

2. If you are the human resource manager of the company, whom

do you satisfy?​

Answer 1

Answer:

What is the crucial issue in this case?

Answer 2

1. The crucial issue, in this case, is that the company’s salary policy and benefits policies were formulated five years back mainly on the basis of the older employees' desires. That’s why salaries are fixed at a very low level compared to other similar industries and the benefit schemes include an exhaustive list of benefits including all types of retirement benefits. The young employees demanded the management to pay immediately whatever it can pay rather than providing extensive fringe benefits because according to them, the money motivates them much more than other benefits which are mostly in kind.

2. If I were the human resource manager of the company, I would have agreed with the younger employees. It is because as the year passes by everything in this world changes so company’s policies also need some updates from time to time depending on the current situation in the present world. Older policies were made keeping in mind the situation which was earlier, these policies won’t satisfy today’s employees. Thus it needed to be updated so that the employees stay motivated and work efficiently and effectively for the company.

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