HRM CASE STUDY

Seniors versus Juniors

By: Abhinav Arora
Roll No. 3

The case
Hi-Tech Electronics Limited was established in 1978 in Faridabad. It
produces and markets all types 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 companys policies and practices concerning human resource
management are top in the country. The companys salary
administration policies and practices were taken as guidelines not
only by the other companies but also by various wage boards and
pay commissions in the country. But this company has been
struggling a lot because of a minor problem relating to administration
of salary-benefits. The problem is stated hereunder:
The company employed nearly 400 young graduates and post
graduate engineers, just three years back. These employees formed
the cream of the companys present human resource. Of course, the
older generation of the companys employees also formed the cream
of the companys human resource while they were young. The older
employees occupied higher positions in all the departments,
including Human Resource Department.

The companys salary policy and benefits policy were formulated five
years back mainly on the basis of the older employees desire. As such,
salaries are fixed at very low level compared to other similar industries
and benefit schemes include an exhaustive list of benefits, including all
types of retirement benefits. The cost of retirement benefits would be
nearly 25 percent of the cost of the present staff of the company.
The young employees demand the management to pay immediately
whatever it can pay rather than providing extensive fringe benefits.
According to them, the pay-packet motivates them much more than
benefits which they get mostly in kind. But the older employees view that
fringe benefits benefit much more than currency, which taxes them
heavily. The company asked the personnel manager to settle the issue.
Questions:
1. What is the crucial issue in this case?
2. If you are the personnel manager of the company, whom do you
satisfy?
3. Is the companys basic benefit program in need of change?

Case Study Method

Problem.
Boundary Limits.
Case facts.
Possible solutions and their evaluation.
Selection of best solution.
Implementation plan.
Feedback.
Conclusion.

Problem
1. Seniors versus juniors.
2. Dissatisfaction among the junior employees.
3. Lower compensation packages (in hand) compared to the
industry.
4. Companys salary policy and benefits policy were formulated on
the basis of older employees desire.
5. Young employees were not considered by the older employees
during the formation of policies.
6. Young employees want their more part of the salaries in cash and
less in kind.

Boundary Limits
1. The case revolves around the salary and
benefits policy of the organization.
2. Policies of competing companies can be
viewed.
3. Case should be viewed from three point
of views which are:
Seniors
Juniors
Personnel Manager

CASE
Production and marketing
of all electronic goods.
Among top five in
technology.
Among top three in
marketing.
Salary policies are one of
the best in the country.
Recruited 400 young
employees three years
back.

Older employees in
higher positions.
Young employees in
lower positions.
Salary policy formulated
five years back.
Salaries fixed at lower
levels.
Lowest salaries
compared to industry.

CASE
Cost of retirement benefits 25% of cost of
present staff.
Young employees want this 25% to be
scaled down.
And want subsequent increase in salary in
cash.
For young employees cash = motivation.
For older employees cash = tax burden.

Possible solutions and their

evaluation
Solution1
Solution: Randomly interview young and older employees
about the expected composition of compensation
package.
Merits: Deals with the problems directly. It is possible to
interview everyone. Best possible solution can emerge.
Demerits: It is a time consuming exercise. Everyone thinks
differently therefore could lead to confusion. Process
itself could be biased.

Possible solutions and their

evaluation
Solution2
Solution: Study the best practices followed by the
competitors and create policies based on those policies.
Merits: Following the best practices in the industry will put
the organization in the league of the leaders in the
industry.
Demerits: Others policies may not necessarily work in our
organization.

Selection of best solution

By interviewing the employees they will also feel
like participating in the creation of policies. It will
boost employees loyalty towards the
organization.
By adopting the competitors policies we will be
able to compete against the leaders of the
organization.
Combination of both the above solutions is best
as it will deliver creative salary and benefit
structures while following the best practices.

Implementation plan
Form a interview panel.
Form a committee to study the best
practices followed by competitors.
Both work simultaneously.
Forming of the final blueprint of the
policies accordingly.

Feedback
Continuous monitoring of the implemented
policy.
Monitoring of employees performance.
Monitoring of relations between older and
young employees.
Taking official feedback from employees
wherever possible.

Conclusion
The problem in this organisation was of what
should be the composition of
compensation in cash and kind for older
and young employees, which is solved
adopting the combination of two possible
solutions.