ITM SCHOOL OF MANAGEMENT

ITM UNIVERSE, GWALIOR (M.P.) 

       SUMMER TRAINING PROJECT REPORT 

IMPACT OF COMPENSATION AND PROMOTION PRACTICES ON EMPLOYEES PERFORMANCE 

FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR

THE DEGREE OF

MASTER OF BUSINESS AND ADMINISTRATION 

SUBMITTED TO 

ITM SCHOOL OF MANAGEMENT,

ITM UNIVERSE, GWALIOR (M.P.) 

SUBMITTED BY: 

SARIKA KETKAR M.B.A IIIRD SEM. (2008-2010)

ACKNOWLEDGEMENT:-

Practical experience is the best education & an opportunity to apply theoretical learning &

experience the result getting associated with organization like Bharat Heavy Electricals Ltd.

Experimental learning is more than a privilege, which cannot be expressed in words. I would like to take the pleasure by expressing my gratitude towards Mr. N.S.Rathore

(Executive- Human Resources) for allowing me to undertake the project & making available all

facilities for the successfully completion of the study.

I would also like to thank

Mr. K.K. Nair (Sr. Vice- President HR)

(SARIKA KETKAR)

DECLARATION:-

I, hereby, undertake that the project titled, “Impact of compensation and promotion

practices on employees performance," has been undertaken by. me and is an original

project.  

The findings of the study are based on the information collected by me during my

summer training.     

Ms.Sarika Ketkar

MBA III Semester

ITM-SOM, Gwalior

PREFACE

Today it is acknowledged and widely accepted facts that beside money, material and machinery

the success of an organization greatly depend upon the quality of a human resource.

In the wake of increasing competition and the opening of the economy, people have become the

pivot around which any successful organization rotates.

In the light of above, industrial safety function in an organization has become more important

tool for prolonged development.

To develop people to grow in their respective organization.

To help establishment retain their staff.

As a part of curriculum of my M.B.A II Semester I undertook my research project in BHEL

(Bhopal).

CONTENTS :-

CHAPTER 1 INDUSTRY PROFILE

CHAPTER 2 ORGANISATIONAL PROFILE

CHAPTER 3 NEED FOR THE STUDY

CHAPTER 4 LITERATURE OF SURVEY

CHAPTER 5 RESEARCH METHODOLOGY

CHAPTER 6 ANALYSIS OF THE STUDY

CHAPTER 7 FINDING AND SUGGESTIONS

BIBLIOGRAPHY

APPENDIX

CHAPTER :- 1

INDUSTRY PROFILE :-

Heavy Electrical Industry covers power generation, transmission, distribution

and utilization equipments. These include turbo generators, boilers, various

types of turbines, transformers, switchgears and other allied items. Majority of

the products manufactured by heavy electrical industry in the country, which

includes items like transformers, switchgears etc. are used by all sectors of the

Indian economy. Some major areas where these are used are the multi core

projects for power generation including nuclear power stations, petrochemical

complexes, chemical plants, integrated steel plants, non-ferrous metal units,

etc.

Sub-Sectors of Heavy Industry:-

Heavy Industry deals with the following 19 Industrial Sub-sector:

(i) Boilers

(ii) Cement Machinery

(iii) Dairy Machinery

(iv) Electrical Furnace

(v) Freight Containers

(vi) Material Handling Equipment

(vii) Metallurgical Machinery

(viii) Mining Machinery

(ix) Machine Tools

(x) Oil Field Equipment

(xi) Printing Machinery

(xii) Pulp an Paper Machinery

(xiii) Rubber Machinery

(xiv) Switchgear and Control Gear

(xv) Shunting Locomotive

(xvi) Sugar Machinery

(xvii) Turbines & Generator Set

(xviii) Transformers

(xix) Textile Machinery

The main players in field of heavy electrical manufacturing are:-

1. BHEL

2. Larsen

3. Suzlon Energy

4. BGR Energy

5. BEML

6. AIA Engineering

7. Alfa laval

8. Praj Industries

9. Shriram EPC

10. TRF

CHAPTER -2:-

ORGANIZATION PROFILE

INTRODUCTION

BHEL is the largest engineering and manufacturing enterprise in India in the energy

related/infrastructure sector today. BHEL was established more than 40 years ago ushering in then

indigenous Heavy Electrical Equipment industry in India, a dream which has been more than

realized with a well-recognised track record of performance. It has been earning profits continuously

since 1971-72 and achieved a sales turnover of Rs.14,525 Crore with a profit before tax of Rs. 2,564

Crore in 2005-06. BHEL has been paying dividends over a quarter century and in line with the

excellent performance during the financial year 2005-06, an all time high dividend of 145% has been

paid.

BHEL manufactures over 180 products under 30 major product groups and

caters to core sectors of the Indian Economy viz., Power Generation &

Transmission, Industry, Transportation, Telecommunication, Renewable Energy,

etc.

The wide network of BHEL's 14 manufacturing divisions, four Power Sector

regional centres, over 100 project sites, eight service centres and 18 regional

offices, enables the Company to promptly serve its customers and provide them

with suitable products, systems and service efficiently and at competitive

prices. The high level of quality &

reliability of its products is due to the emphasis on design, engineering and

manufacturing to international standards by acquiring and adapting some of the

best technologies from leading companies in the world, together with

technologies developed in its own R&D centres.

BHEL has :-

Installed equipment for over 90,000 MW of power generation -- for Utilities, Captive and Industrial users.

Supplied over 2,25,000 MVA transformer capacity and other equipment operating in Transmission & Distribution network up to 400 kV (AC & DC).

Supplied over 25,000 Motors with Drive Control System to Power projects, Petrochemicals, Refineries, Steel, Aluminum, Fertilizer, Cement plants, etc.

Supplied Traction electrics and AC/DC locos to power over 12,000 kms Railway network.

Supplied over one million Valves to Power Plants and other Industries

BHEL's operations are organised around three business sectors, namely Power, Industry –

including Transmission,

Transportation, Telecommunication & Renewable Energy -and Overseas Business. This enables

BHEL to have a strong customer orientation, to be sensitive to his needs and respond quickly to the

changes in the market.

HIERARCHY:

CHAIRMAN & MANAGING DIRECTOR

BOARD OF DIRECTORS

EXECUTIVE DIRECTOR (unit head), REGIONAL HEAD ( power sector)

GENERAL MANAGER ( either functional or product head)

ADDITIONAL GENERAL MANAGER ( product if GM is functional & vice versa)

Sr. Dy GENERAL MANAGER

Dy GENERAL MANAGER

Sr. MANAGER

MANAGER

ENGINEER

SUPERVISOR

WORKER

SOCIAL RESPONSIBILITY:-

BHEL’s contributions towards Corporate Social Responsibility till date include adoption of villages,

free medical camps/charitable dispensaries, schools for the underprivileged and handicapped

children, ban on child labour, disaster/natural calamity aid, Employment for handicapped, Widow

resettlement, Employment for Ex-serviceman, irrigation using treated sewage, pollution checking

camps, plantation of millions of trees, energy saving and conservation of natural resources through

environmental management.

Global Compact PrinciplesAddressedIn BHEL ’ s `VALUES` Statement

♦ Zeal to Excel and Zest for change

♦ Integrity and Fairness in all Matter

♦ Respect for Dignity and Potential of individuals

♦ Strict Adherence to Commitments

♦ Ensure Speed of Response

♦ Foster Learning, Creativity and Team-work

PRODUCT RANGE:-

THERMAL POWER PLANTS GAS BASED POWER PLANTS HYDRO POWER PLANTS DG POWER PLANTS INDUSTRIAL SETS BOILERS BOILER AUXILIARIES Fan Air-Pre-heaters Gravimetric Feeders Pulverizes Pulse Jet and Reverse Air Type Fabric Filters (Bag Filters) Electrostatic Precipitators Mechanical Separators Soot Blowers Valves HEAT EXCHANGERS AND PRESSURE VESSELS PUMPS POWER STATION CONTROL EQUIPMENT SWITCHGEARS BUS DUCTS TRANSFORMERS INSULATORS High-tension ceramic insulators. CAPACITORS ENERGY METERS INDUSTRIAL ELECTRICAL MACHINES COMPRESSORS CONTROL GEAR THYRISTOR EQUIPMENT

Squirrel Cage Induction Mot Electrical Machine : Product Profile SQUIRREL CAGE INDUCTION MOTORSSLIP RING INDUCTION MOTORSSYNCHRONOUS MOTORSINDUSTRIAL TURBO & DIESEL ALTERNATORSVARIABLE FREQUENCY DRIVE MOTORS

Highly reliable class ‘F’ (Thermally utilised to class 'B') micalastic insulation system.

Low noise levels with means for further reduction.

Vibrostable frames and dynamically balanced rotors for minimal vibrations.

Motor shipped completely assembled for quick and easy installation.

Amplysized terminal boxes for easy connection.

Inductively brazed short circuit rings for enhanced reliability.

Motors can be designed for special conditions and applications on request.

Highly reliable class ‘F’ (Thermally utilised to class 'B') micalastic insulation system.

Low noise levels with means for further reduction.

Vibrostable frames and dynamically balanced rotors for minimal vibrations.

Motor shipped completely assembled for quick and easy installation.

Amplysized terminal boxes for easy connection.

Robust corrosion proof stainless steel sliprings ensuring life time use.

Induction resistance brazing of rotor joints.

Heat treated epoxy bandaging to prevent distortion in rotor winding due to centrifugal forces.

Motors can be designed for special conditions and applications on request.

Synchronous Motors

Highly reliable class ‘F’ (Thermally utilised to class 'B') micalastic insulation system.

Low noise levels with means for further reduction.

Vibrostable frames and dynamically balanced rotors for minimal vibrations.

Motor shipped completely assembled for quick and easy installation.

Amplysized terminal boxes for easy connection.

Brushless exciter for maintenance free operation

Motors can be designed for special conditions and applications on request.

Variable Frequency Drive MotorsHighly reliable class ‘F’ (Thermally utilised to class 'B') micalastic insulation system.

Low noise levels with means for further reduction.

Vibrostable frames and dynamically balanced rotors for minimal vibrations.

Motor shipped completely assembled for quick and easy installation.

Amplysized terminal boxes for easy connection.

Brushless exciter for maintenance free operation

Motors can be designed for special conditions and applications on request.

Located in the Piplani area, BHEL Bhopal spans its operations in a diverse range of fields. From

power and transmission to power utilization and renovation and maintenance of various power

plants, Bharat Heavy Electricals Limited in Bhopal is a renowned industrial unit

The services unit of BHEL Bhopal include troubleshooting, erection and commissioning and

renovation and overhauling. The troubleshooting operations at the Bhopal unit of Bharat Heavy

Electricals Limited comprises of a wide range of specialized fields such as: high stator winding temperature noise problem oil leakage from bearings rotor float problem excessive wear of brushes tripping of machine on earth fault temperature rise in anti-friction bearings temperature rise in sleeve bearings low insulation resistance (IR)/PI value of motor winding

The prime products manufactured at the BHEL division of Bhopal include slip ring induction

motors, squirrel cage induction motors, variable frequency drive motors, industrial turbo and diesel

alternators and synchronous motors.

The operational facilities that are found inside the huge industrial space of Bharat Heavy Electricals

Limited in Bhopal are : press shop winding core and assembly shop machine shop testing facilities coils and insulation shop

The installed capacity of Bharat Heavy Electricals Limited at Bhopal is 1000 nos per annum and the

annual sales turnover of the unit is around US $ 25 million. Equipped with 25000 sq mt of total area

and a manpower of more than 25000, BHEL Bhopal is a known and recognized name which is

considered as the best name in the arena of generations systems and power utilization.

Producing high voltage equipments and machineries for various industrial needs, BHEL Bhopal

symbolizes one pf the biggest commercially viable venture of Madhya Pradesh.

Chapter- 3:-

NEED FOR STUDY

A number of researchers have established the relationship between HR practices and employee

performance but they mainly discuss developed countries. Little evidence is available about

relationship between HR practices and employee performance from developing countries

This study examines the relationship between three HR practices i.e. compensation,

promotion and performance evaluation and perceived employee performance .

The results of the study indicate a positive relationship between

compensation and, promotion practices and employee perceived performance while performance

evaluations practices are not significantly correlated with perceived employee performance.

The need to revise compensation practices and define clear career paths to

enhance the performance of teachers.

A number of researchers have reported that HR practices are positively linked with

organizational and employee performance (e.g. Guest, 2002; Harley, 2002; Gould-Williams,

2003; Park et al., 2003; Wright et al., 2003; Tessema and Soeters, 2006). The focus and thrust of

these studies have been towards developed countries. Little research has been done to test the

HR-performance link in developing countries like Pakistan. Aycan et al. (2000) termed Pakistan

as ‘under-researched’ country in the field of HRM practices.

The present study is an attempt to test the relationship between HR practices and employee

performance in a developing country i.e. Pakistan among university teachers. Pakistan is one of

the countries where literacy rate is very low. Apart from other factors teacher performance can

be considered a major reason for low literary rate. So far none of the Pakistani universities is

ranked among top universities of the world. Government of Pakistan is also emphasizing the

growth and development of university teachers with various initiatives. In this situation it is

important to find out the determinants which can enhance the teachers’ performance in Pakistani universities. The objective of this research is to facilitate the decision makers in universities

across Pakistan to follow the HR practices which can improve the performance of University

teachers The present study could be helpful to human resource managers of public and private

sector universities in Pakistan for formulation and development of HR practices that will

ensure high level of teachers’ performance resulting in increased achievement and learning

among students.

CHAPTER -4 :-

Literature of the study:-

The significant number of identified immediate and management system causes (root causes),

indicates many linked issues requiring further evaluation. In order to understand which

recommendations would prevent reoccurrence it was decided to go deeper to the causes issues.

Schuler, Randall S., Rogocsky Nikolai , Understanding Compensation Practice Variations Across

Firms: The Impact of National Culture.,Journal of International Business Studies; 1998 1st Quarter,

Vol. 29 Issue 1, p159-177, 19p, 2 Charts. Says that:

With operations spread worldwide, firms that find themselves competing in a global marketplace are

looking at the implications of the admonition, "When in Rome. . .." This raises the question: "Do

cultures of countries have an impact on the generally accepted methods of managing human

resources?" The answer to this question is the focus of this article. By developing culture-specific

propositions for four categories of compensation practices based on status, performance, social

benefits and programs, and employee ownership plans, we seek to determine the extent to which

Hofstede's four dimensions of culture are associated with specific compensation practices. Support is

found for most of the propositions. The implications of the finding for the management of human

resources by multinational firms are discussed.

De Grip, Andries, Sieben, Inge, The effects of human resource management on small firms’

productivity and employees’ wages, Applied Economics; 5/20/2005, Vol. 37 Issue 9, p1047-

1054, 8p, 2 Charts.

This paper analyses whether employees and firms differently benefit from particular human resource

(HR) practices. The focus is on small firms that may be badly informed on the impact of HR

practices on firm performance. In this study on Dutch pharmacies, it is found that firms do not

reward employees’ skills according to their contribution to firms’ productivity, as (1) employees are

over-rewarded for their sector-specific skills and under-rewarded for the productivity enhancing

effect of their computer skills and (2) employees’ work experience positively affects their wages but

does not have real productivity effects. Moreover, it is found that training employees in case of

vacancy problems seems to be an adequate HR practice, since it increases productivity without

affecting the average wage level. The opposite holds for offering higher wages to newly recruited

employees. Furthermore, we find that only the employees benefit from performance evaluation

interviews, whereas employing many employees by temporary contracts appears to have a negative

effect on productivity, without affecting the wage level. [ABSTRACT FROM AUTHOR]

Donald P. Schwab and Lee D. Dyer, The motivational impact of a compensationsystem on employee performance

Graduate School of Business and Industrial Relations Research Institute, University of

Wisconsin-Madison, USA

New York State School of Industrial and Labor Relations, Cornell University, USA

Received 19 March 1972.  Available online 26 August 2004.

Using expectancy theory as a frame of reference, a review of the literature indicated that the

impact of perceptions about compensation systems on employee performance has not been

adequately tested. Through the design and analysis employed in the present study, an effort was

made to more appropriately examine this issue. Objective performance data and information

about three perceptual variables (valence of pay, instrumentality, and expectancy) were obtained

from a sample of 124 incentive-paid blue collar workers. The results offered some support for the

hypothesized relationships. Valence and expectancy were significantly related to performance

while instrumentality was not. An additive combination of the three variables explained a

significant proportion of the variance in performance (R = .39). The hypothesized interaction

among the variables, however, did not significantly increase the variance explained.

Christopher D. Ittner, Richard A. Lambert and David F. Larcker, The structure and

performance consequences of equity grants to employees of new economy firms, Accounting

Department, The Wharton School, University of Pennsylvania, Steinberg Hall - Dietrich

Hall 3620 Locust Walk, Philadelphia, PA 19104-6365, USA

Received 12 January 2002; 

revised 15 January 2002. 

The paper examines the determinants and performance consequences of equity grants to senior-

level executives, lower-level managers, and non-exempt employees of “new economy” firms. We

find that the determinants of equity grants are significantly different in new versus old economy

firms. We also find that employee retention objectives, which new economy firms rank as the

most important goal of their equity grant programs, have a significant impact on new hire grants,

but not subsequent grants. Our exploratory performancetests indicate that lower than expected

grants and/or existing holdings of options are associated with poorer performance in subsequent

years.

Donna L. Street, and Sandra Cereola , Stock option compensation: impact of expense

recognition on performance indicators of non-domestic companies listed in the U.S., a

Department of Accounting, School of Business Administration, University of Dayton,

Miriam Hall RM409, 300 College Park, Dayton, OH 45469-2242, USA

James Madison University, USA.

The IFRS 2, Share-based Payment, requires that companies recognize the fair value of employee

stock options as an expense. To ascertain the impact recognition will have on companies

domiciled in countries subject to accounting standards issued by the IASB’s liaison standard

setting partners, this research examines the pro forma stock option disclosures provided in Form

20-F by Australian, British, Canadian, French, German, Japanese, and Irish companies.

The findings indicate the average impact of expense recognition on diluted EPS will be

approximately 40% and will be material at a 5% level for the majority of the companies. The

impact varies significantly by country. On average the annual expense recognized will be

approximately 15% of beginning stockholders equity. For the majority of the companies, the

charge will represent less than 1% of beginning equity. Again the impact varies significantly by

country.

The findings indicate that absent requirements that stock compensation expense be recognized, a

material upward bias will be reflected in performance indicators of many non-U.S. companies

and cross-border comparability will be impaired. Since our analysis is based solely on data for

the year 2000 for companies domiciled in seven countries, future research will be needed to

ascertain the impact of expense recognition on a broader range of companies reporting under

IFRS 2.

Rajiv D. Banker, Seok-Young Lee and Gordon Potter , A field study of the impact of a

performance-based incentive plan ,

a Carlson School of Management, University of Minnesota, Minneapolis, MN 55455, USA

b Department of Management, Sungshin Women's University, Seoul, South Korea

c School of Hotel Administration, Cornell University, Ithaca, NY 14853, USA

Much management accounting research focuses on design of incentive compensation contracts.

A basic assumption in these contracts is that performance-based incentives improve employee

performance. This paper reports on a field test of the multi-period incentive effects of a

performance-based compensation plan on the sales of a retail establishment. Analysis of panel

data for 15 retail outlets over 66 months indicates a sales increase when the plan is implemented,

an effect that persists and increases over time. Sales gains are significantly lower in the peak

selling season when more temporary workers are employed.

Danny Miller and Jangwoo Lee, The people make the process: commitment to employees,

decision making, and performance

a Chaire MacLean-Hunter, Ecole des Hautes Etudes Commerciales, 3000 Cote Sainte

Catherine Road, Montreal, QC H3T 2A7, Canada

b Columbia University, New York, NY, USA

c Department of Economics and Business, Kyungpook National University, Taegu, South Korea

This study argues that a well designed decision making process will have its most positive

impact on company financial performance when it is carried out by a capable, motivated and

dedicated workforce. Prior research has determined that such a workforce can be developed via

an organization’s commitment to its employees (OCE) in the form of ample training and

compensation, fairness, and meaningful personal consideration. We argue that OCE will enhance

financial performance where it is able to improve the quality of a decision making process that

emphasizes ample information processing, collaboration, and initiative. Conversely, these three

dimensions of decision making are expected to be of little value where OCE—and hence a

capable and motivated workforce—are lacking. These expectations were borne out in our study

of Korean companies. Specifically, we found positive associations between return on assets and

the interactions between OCE and information processing, collaboration, and initiative,

respectively. We found also that these interactions contributed the most to return on assets in

uncertain environments, where effective information processing, collaboration and initiative

were especially important.

Anastasia A. Katou and Pawan S. Budhwar, Causal relationship between HRM policies

and organisational performance: Evidence from the Greek manufacturing sector,

a Teaching Fellow in HRM and OB, Department of Marketing and Operations

Management, University of Macedonia, 540 06 Thessaloniki, Greece

b Professor of International HRM, Aston Business School, Aston University, Birmingham B4 7ET, UK

Blending insights from the contingency theory, the resource-based view, and the AMO theory,

the purpose of this paper is to investigate the HRM-performance causal relationship in the Greek

context. The empirical research is based on a sample of 178 organisations operating in the Greek

manufacturing sector. Using structural equation modelling the results of the study revealed that

the ability to perform (resourcing and development), motivation to perform (compensation and

incentives), and opportunity to perform (involvement and job design) HRM policy domains are

moderated by business strategies (cost, quality, innovation), and additionally, the motivation to

perform is further moderated by managerial style and organisational culture. Further, the results

indicate that the impact of HRM policies on organisational performance is fully mediated by

employee skills, attitudes, and behaviour. The paper concludes that although the motivation to

perform HRM policy domain causes organisational performance, through employee attitudes, it

may be supported that organisational performance positively moderates the effectiveness of this

HRM policy domain, raising thus the question of reverse causality.

Longden Jenniffer, Pitt Michael, Riley Mike, Tucker Matthew, Towards sustainable

construction: promotion and best practices Construction Innovation: Information, Process,

Management, Vol. 9 Iss: 2, pp.201 – 224.

Purpose – The purpose of this paper is to understand what factors best promote or prevent

sustainable construction practices and establish the consistency of how sustainability is

measured.

Design/methodology/approach – A literature review considered the impact of the industry to

sustainability and identified what action and initiatives are already in place. Through this, the

main drivers, barriers, measures and benchmarks were identified. The opinions of building

surveying professionals were sought and analysed.

Findings – The paper suggested that fiscal incentives/penalties and regulations help to drive

sustainable construction. Such financial implications are consistent with “affordability” being the

biggest barrier highlighted. The majority of respondents believed the industry is taking some

account of sustainability issues, but identified that more needs to be done.

Originality/value – Sustainable development is an integral part of the lives and affects all aspects

of business operations. This paper provides an in-depth insight into the level of sustainable

development within the construction industry, identifying implications for both the demand and

supply side.

Ghada El-Kot, Mike Leat, (2008) "A survey of recruitment and selection practices in

Egypt", Education, Business and Society: Contemporary Middle Eastern Issues, Vol. 1 Iss:

3, pp.200 - 212

Purpose – The paper's aims are to ascertain whether there is evidence of Egyptian organisations

using recruitment and selection practices which are context specific and whether different

practices are used for different job types; whether responsibility for recruitment and selection is

shared between HRM specialists and line management; and whether there is evidence of

increasing devolution of this responsibility to line managers.

Design/methodology/approach – Data were collected between May and July 2007 and produced

108 usable questionnaires. The questionnaire was adapted from the Price Waterhouse Cranfield

project on HRM in Europe.

Findings – There is some evidential support for the influence of the Egyptian national context

upon the practices used, with different practices, including the number of techniques being used

for the recruitment and selection of different job types. There is evidence of substantial sharing

of this responsibility with line management through consultation and of an increased devolution

of responsibility to line management.

Research limitations/implications – Investigating recruitment and selection practices with the influence of ownership and by organisational size is needed to pursue whether there are

significant associations between these variables.

Practical implications – Organisations moving into Egypt would not appear to be confronted

with substantial resistance to the adoption of new methods and techniques for recruiting and

selecting staff or the adoption of different methods for different job types, neither with resistance

if they wish to involve line management in the decision-making process.

Originality/value – The influence of the Egyptian national context upon the recruitment and

selection practices used is an important issue for organisations to know the best recruitment and

selection methods.

Coy A. Jones, Mary A. Lemons, Procedural justice in promotion decisions: using

perceptions of fairness to build employee commitment, Journal of Managerial Psychology

Volume:16, Number: 4, Year: 2001 , pp: 268-281.

Although companies spend millions of dollars each year in their attempts to comply with fair

employment laws, many firms continue to have problems with employees who perceive unfair

treatment in promotion decisions. Procedural justice refers to the perceived fairness or equity of

the procedures used in making decisions regarding the distribution of rewards, such as

promotion. Previous research indicates a positive relationship between procedural justice and

organizational commitment, but these findings relate to the effect of unfair selection decisions on

organizational commitment, instead of specifically focusing on justice perceptions in promotion

decisions. Because employee perceptions of unfairness may result in negative consequences for

organizations, the purpose of this study was to examine the significance of procedural justice in

promotion decisions in predicting organizational commitment. Regression analysis results

indicate a significant main effect of the perceived fairness of the promotion-decision system on

organizational commitment. Implications for research and practitioners are discussed.

James J. Cordeiro, Pracheta Mukherjee, D. Donald Kent, (2006) "Non-parametric

assessment of CEO compensation practices", Management Research News, Vol. 29 Iss: 5,

pp.242 – 251.

Purpose – The purpose of this research is to present an alternative to the vast majority of studies

on chief executive officer (CEO) compensation practices in the USA which have relied on

multiple regression analysis and its variants.

Design/methodology/approach – The paper points out the shortcomings of traditional parametric

approaches (such as regression analysis) to the analysis of CEO compensation practices and

suggest non-parametric alternatives.

Findings – Using tests for concurrent validity, the paper demonstrates how non-parametric

assessment may be successfully applied to the analysis of CEO compensation practices.

Originality/value – Because of the novelty of this approach, the findings should be of value to

those academics and practitioners interested in the evaluation of CEO compensation practices.

John O. Okpara, Pamela Wynn, (2007) "Human resource management practices in a

transition economy: Challenges and prospects", Management Research News, Vol. 31 Iss:

1, pp.57 – 76.

Purpose – The purpose of this study is to examine the extent to which organizations in Nigeria

use various human resource management (HRM) practices, and the perceived challenges and

prospects of these practices.

Design/methodology/approach – A combination of quantitative and qualitative research

methodswas employed to gather information. Specifically, data were collected from 253

managers in selected firms. Descriptive data analysis is presented with respect to the use and

execution of HRM practices such as recruitment, selection, performance appraisal and training

and development. In addition, information was collected and analyzed with regard to the

challenges and prospects of HRM.

Findings – This study provides significant current information on HRM knowledge and practices

in Nigeria. The findings reveal that HRM practices, such as training, recruitment, compensation,

performance appraisal and reward systems, are still in place. However, issues of tribalism, AIDS,

training and development and corruption are some of the challenges identified that need to be

addressed.

Research limitations/implications – The study was limited to 12 companies in ten cities. A

broader geographic sampling would better reflect the national profile. Another limitation could

stem from the procedure used in data collection method (drop off and pick up). However,

extreme measures were taken to protect the identity of the respondents.

Practical implications – The study identified challenges and prospects of HRM in Nigeria.

Organizations should employ requisite HRM practices to achieve excellent organizational

performance. Furthermore, the government may create policies to promote the above practices,

since, in the long term, achieving organizational excellence will reflect positively on the

economy. All these may be facilitated through proactive organizational and national human

resource development initiatives.

Originality/value – The significance of the present study stems from the fact that very few

studies have explored the impact of human resource challenges and prospects in Nigeria. The

results provide additional insights into HRM practices in Nigeria, a sub-Saharan African country.

A region that has been neglected by management researchers and has therefore been less

researched. Also, the insights gained from this study contribute to the future development of this

line of research, particularly in a non-Western country like Nigeria.

Ahmed A. Al-khabash, Ali A. Al-Thuneibat, (2008) "Earnings management practices from

the perspective of external and internal auditors: Evidence from Jordan", Managerial

Auditing Journal, Vol. 24 Iss: 1, pp.58 – 80

Purpose – The purpose of this paper is to provide evidence concerning the existence of earnings

management (EM) from the perspective of external and internal auditors in Jordan.

Design/methodology/approach – A specially designed questionnaire was distributed to a sample

of both external and internal auditors. To analyze the data of the study, t-tests and ANOVA were

used.

Findings – The results of the study showed that external auditors believe that management

engages significantly only in legitimate EM that either increases or decreases income. However,

internal auditors believe that management engages in legitimate practices that only increase

income. In both cases, there were significant differences between their views. There is no

significant difference between large and small companies regarding EM practices. However, the

characteristics of internal governance structure have a significant effect on illegitimate EM,

whereas no significant effect was found on legitimate EM.

Practical implications – The paper provides many recommendations, including the need to

strengthen and reinforce the internal governance structure of companies and train external and

internal auditors regarding EM techniques and measures of detection.

Originality/value – The originality of the study is that it provides evidence about EM practices

from the perspective of both external and internal auditor in a developing country.

Seraina C. Anagnostopoulou, (2008) "R&D expenses and firm valuation: a literature

review", International Journal of Accounting and Information Management, Vol. 16 Iss: 1,

pp.5 – 24

Purpose – The purpose of this paper is to provide a comprehensive review of the literature on

R&D expenses and subsequent firm valuation and to briefly highlight some gaps and

implications for future research.

Design/methodology/approach – The approach is a review of studies on R&D and valuation

between 1978 and 2007. The valuation issues have been grouped into general topics identified

among the overall volume of research: economic characteristics, actual and forecast firm

performance, capital structure, risk, and other topics which do not fit into the previous categories.

Findings – The paper provides a comprehensive assessment of the literature findings on a

variation of valuation topics useful for internal and external users of financial statements of firms

intensive in R&D investments. It sheds light on certain literature limitations and thus guides the

users of financial statements regarding to which issues they should pay attention when analysing

the financial statements of firms intensive in R&D.

Research limitations/implications – Existing research on R&D and valuation focuses mainly on

the USA and UK and therefore raises issues of generalisation of the results.

Practical implications – The paper provides a useful guide for the users of financial statements

of R&D intensive firms, since it provides information on possible consequences of these

expenses regarding a variety of valuation issues.

Originality/value – The paper fills an information gap by addressing a range of valuation issues

on R&D and offers relevant information guidance to the users of financial statements.

Sims, Robert H; Schraeder, Mike, Expatriate compensation: An exploratory review of

salient contextual factors and common practices, Career Development International,

Volume 10, Number 2, 2005 , pp. 98-108(11).

Purpose - This study aims to examine important situational factors impacting expatriate

compensation and common practices utilized in compensating expatriates.

Design/methodology/approach - A synthesis of literature was reviewed, leading to the

identification of numerous situational or contextual factors impacting expatriate compensation. A

review of extant literature also identified several customary approaches to expatriate

compensation. Findings - A variety of factors can directly affect expatriate compensation, with

three primary approaches an organization should consider. These factors include host-country

cost of living, housing, dependent education, tax implications and health care - factors most often

incorporated as a component of one of the primary approaches to compensation discussions:

destination-based approach, the balance-sheet approach, and the international headquarters

approach. Practical implications - This article was intended to enhance understanding of

expatriate compensation by collectively examining not only the "how" (primary approaches) but

also the "why" (salient contextual or situation factors) firms should consider when determining

how to assemble an appropriate package. Originality/value - Presenting the factors and practices

together makes an important contribution to the literature on expatriate compensation by

addressing not only the "how" (customary approaches) of expatriate compensation, but also the

"why" (salient contextual factors).

Narendar Sumukadas, (2006) "Employee involvement: a hierarchical conceptualisation of

its effect on quality", International Journal of Quality & Reliability Management, Vol. 23

Iss: 2, pp.143 - 161

Purpose – The purpose of this article is to study the effect of employee involvement (EI)

practices on quality comprehensively.

Design/methodology/approach – This paper views the EI domain as sets of related practices

interacting within a hierarchy. Using survey data, the paper tests a model of higher order

practices building on a foundation of lower order practices to affect quality.

Findings – The results support a hierarchical conceptualisation of EI practices. Some practices

are found to be more effective than others, yet even the less effective EI practices serve a

supportive purpose.

Research limitations/implications – The model was analyzed from a predictive perspective, using

a relatively small sample. Rather than simply identifying some EI practices as more effective

than others, it is important to view the practices as being interrelated.

Practical implications – Cherry-picking only the most effective EI practices may not work.

Managers must first install a foundation of less effective practices.

Originality/value – EI is recognised as an important enabler of quality management initiatives.

Yet, much of this support is based on normative and untested prescriptions. This paper provides

such a test. The paper models the entire EI domain, as sets of related practices rather than a

hodgepodge of sporadic individual practices. Further, the paper presents a unique

conceptualisation of an EI hierarchy.

Cheryl Zobal, (1998) "The “ideal” team compensation system - an overview: Part I", Team

Performance Management, Vol. 4 Iss: 5, pp.235 – 249

Teams have become a popular way to organize business because they offer companies the

flexibility they need to meet the demands of the ever changing business environment. While

many companies have been quick to organize their workforce into teams, they have not been as

eager to implement team-based compensation systems. The problem is that if team-based

organizations continue to utilize old, individually-oriented pay systems, they will not realize

fully the benefit of highly cooperative and motivated work teams. The purpose of this paper is to

examine the ÒidealÓ team compensation system. To do this, the paper will first review the basics

of both teams and compensation and then explore the ideal team compensation system

from three levels - framework, critical elements, and other, operational considerations. Given the

scope, this entire review will be divided into two separate articles. This article, Part I, provides

information through the ideal team compensation system framework.

Fitsum Ghebregiorgis, Luchien Karsten, (2007) "Employee reactions to human resource

management and performance in a developing country: Evidence from Eritrea", Personnel

Review, Vol. 36 Iss: 5, pp.722 - 738

Purpose – This paper seeks to examine employee reactions to human resource management

(HRM) and performance. It placed employees on a centre stage in analysing HRM to provide

theoretical insights.

Design/methodology/approach – To explore the theme, a survey of 252 employees drawn from

eight organisations was conducted. Furthermore, on-site interviews were carried out with

managers, thereby contributing to the generalisability of the findings.

Findings – The findings from the study indicate a positive attitude of employees to HRM

practices, such as promotion from within, staffing, equal employment opportunity, quality of

training, reasonable compensation and paid vacation and sick days. Moreover, the evidence also

shows that productivity has been increasing while employee turnover, absenteeism, and

grievances are low. However, the evidence also reveals that training was not integrated in a

planned way to employee career development.

Research limitations/implications – The present study adds to a growing literature that helps the

understanding of HRM policies and practices in a developing country context. Future research

would benefit from additional research in this area in other geographical settings to better

understand the generalisability of the findings reported.

Originality/value – In contrast with previous research, which has predominantly been conducted

from a managerial perspective, this article deals with employee perceptions. This emphasises the

importance of exploring employee reactions towards HRM practices, policies and other aspects

of firm life.

Richard S. Allen, Ralph H. Kilmann, (2001) "The role of the reward system for a total

quality management based strategy", Journal of Organizational Change Management, Vol.

14 Iss: 2, pp.110 - 131

This study examines the impact of reward practices on the relationship between an

organizational strategy based on the principles of total quality management (TQM) and

perceptions of firm performance. Major findings include: higher levels of firm performance were

significantly correlated with greater use of TQM practices, but not with greater use of quality

rhetoric in either formal strategic documents or informal strategic discussions; the use of

extrinsic reward practices – including profit sharing, gainsharing, employment security, and

comp time – exhibited a significantly positive moderating effect on the relationship between

TQM and perceived firm performance. Regarding implications for practitioners, it is insufficient

to include quality rhetoric in the formal and informal strategy. As the anecdotal literature has

often advocated, the current research provides empirical support that management must “walk

the talk” with regard to TQM efforts. Further, in order to realize even higher levels of firm

performance, an organization should utilize reward practices which specifically complement its

TQM-based strategy.

CHAPTER -5 :-

RESEARCH METHODOLOGY:-

CHAPTER - 6:-

ANALYSIS OF THE STUDY:-

CHAPTER - 7:-

FINDINGS AND SUGGESTIONS:-

FINDINGS:

RESULT:-

SUGGESTIONS:-

BIBLIOGRAPHY:-

1: www.google.com

2: www.wikipedia.com

3: journal of industrial safety BHEL.

International Review of Business Research PapersVol. 4 No.2 March 2008 Pp.302-315