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SWOT Analysis on Financial Management in CPCL
Financial performance is not only concerned with raising financial
resources but also their effective utilization towards achieving the
organization’s basic goals viz., maintenance liquidity and maximization
of profitability. In this regard an analysis over financial performance of
the organization is dealt with regard to financing decision, investment
decision and dividend decision.
How far the Financial Management of the study unit has
succeeded in its attempt to maintain liquidity and maximise profitability
by achieving a trade-off between risk and return in their financial
decisions has been analysed in this chapter. The financial performance
is analysed in the spheres of funds requirement decision, financing
decision, investment decision and dividend decision in addition to
liquidity versus profitability and risk and return trade off.
Liquidity vs profitability
The financial management is always faced with the dilemma of
liquidity vs. profitability. It has to strike a balance between the two.
Liquidity and profitability are very closely related. When one increases
the other decreases. Apparently, liquidity and profitability goals conflict in
most of the decisions.
84
Risk and Return
There is also a direct relationship between higher risk and higher
return. Higher risk on the one hand endangers the liquidity of the firm
and higher return on the other hand increases its profitability.
Liquidity
It refers that the firm has adequate cash to pay for its bills,
the firm has sufficient cash to make unexpected large purchases
the firm has enough cash reserve to meet emergencies at all
times.
profitability goal on the other hand, requires that the funds of the
firm are utilized so as to yield the highest return.
Liquidity Position of the Company
An analysis of liquidity is useful for both short-term credit and
internal management of a business firm. It may indicate the adequacy of
working capital and to what extent the organizations have under or over
invested its funds in manufacturing cycle.
“Technical solvency is related to the ability of a given business
unit to meet its currently maturing obligations”.
85
The liquidity position of a company can be assessed with the help
of the following ratios.
1. Current ratio
2. Liquid ratio
3. Absolute liquid ratio
Current Ratio
The current ratio of a firm measures its liquidity and thus it
reflects its short-term solvency, that is its ability to meet short-term
obligations. As a measure of short-term/current financial liquidity, it
indicates the rupees of current assets available for each rupee of current
liability/obligation. The higher the current ratio, the larger is the amount
of rupees available per rupee of current liability, the more is the firm’s
ability to meet current obligations and the greater is the safety of funds
of short-term creditors. Thus, current ratio, in a way, is a measure of
margin of safety to the creditors. The current ratio of the Company for
the period from 19987-99 to 2007-2008 is given in Table 3.1.
Formula:
Current Ratio = Current Assets / Current Liabilities
Standard Current Ratio = 2:1
86
Table 3.1
Current Ratio of the CPCL During the Study Period
Year Ratio Trend percentage
1998 – 99 1.23 100
1999 – 00 1.17 95
2000 – 01 1.98 161
2001 – 02 2.49 208
2002 – 03 2.19 178
2003 – 04 1.78 145
2004 – 05 1.76 143
2005 – 06 1.73 140
2006 - 07 1.92 156
2007 - 08 1.96 159
Source : Annual Reports of the company
It is clear from the Table 3.1 that the current ratio of the company
is well ahead of the standard ratio 2:1 in the years
2001-02 and 2002-03 whereas it is below the standard in all the other
years of the study period. The position well around the standard ratio
indicates that less money is invested in current assets than required.
Debtors of the company include the dues from the Indian Oil Corporation
Ltd., the holding company, which takes a lion’s share. Despite the fact
that there is accumulation of loans and debtors, the current asset
management of the company is good.
87
The variation in the ratio is around 60 per cent during the study
period. It is appreciated but highly fluctuating. Hence, it needs attention
of the current asset management of the finance department. The current
ratio of the company is illustrated with the help of a line diagram
Figure 3.1
Current Ratio of the CPCL During the Study Period
161
208
178
140
159156
143145
95
100
75
100
125
150
175
200
225
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Tre
nd
%
88
The Figure 3.1 shows that the variation in the current ratio is
around the standard ratio of 2:1
The current ratio is rather a crude measure of the liquidity of a
firm. The limitation of current ratio arises from the fact that it is a
quantitative rather than a qualitative index of liquidity. The term
quantitative refers to the fact that it takes into account the total current
assets without making any distinction between various types of current
assets such as cash, inventories and so on. A qualitative measure takes
into account the proportion of various types of current assets to the total
current assets. A satisfactory measure of liquidity should consider the
liquidity of the various current assets. Thus, the current ratio is not a
conclusive index of the real liquidity of a firm. It fails to answer
questions, such as, how liquid are the receivables and the inventory?
What effects does the omission of inventory have on the liquidity of a
firm? To answer these and related questions, an additional analysis of
the quality of current assets is required. This is done in acid test ratio or
quick ratio, which is given in Table 3.2.
Acid Test Ratio or Quick Ratio
Formula:
Quick Ratio = Quick Assets* / Current liabilities
Standard Quick Ratio = 1 : 1
* Quick assets = Current assets- stock
89
Table 3.2
Quick Ratio or Acid Test Ratio of the CPCL
During the Study Period
Year Ratio Trend percentage
1998 – 99 0.09 100
1999 – 00 0.17 189
2000 – 01 0.09 100
2001 – 02 0.05 56
2002 – 03 0.04 44
2003 – 04 0.23 256
2004 – 05 0.17 189
2005 – 06 0.19 211
2006 - 07 0.13 144
2007 - 08 0.18 200
Source : Annual Reports of the company
The Table 3.2 shows the quick ratio of the company. It is always
much less than the standard ratio 1:1. When comparing the current ratio
with quick ratio it can be interpreted that a large part of current assets of
the company is tied up in inventories and debts. Therefore the short-
term solvency position of the company is in the hands of sales and
collection departments. Unless they are effective and efficient, the
company cannot enjoy favourable short-term solvency position and its
liquidity position in the short run would be a big question mark. The
variation in the ratio is around 200 per cent, which is beyond the
standard limits. Compared to current ratio the high variation in the
90
liquidity ratio reveals that the liquidity position of the company is better
eventhough investment in stock is comparatively higher. Since the study
unit is an oil company which is inventory oriented and there is no short
term debts, the liquidity position is considered to be good.
The quick ratio of the company is explained with the help of a
diagram
Figure 3.2
Quick Ratio or Acid Test Ratio of the CPCL
During the Study Period
100
56
44
211
200
144
189
256
189
100
25
50
75
100
125
150
175
200
225
250
275
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Tre
nd
%
The Figure 3.2 shows that the quick ratio is always less than or
equal to the standard quick ratio 1:1.
91
Cash Position Ratio or Absolute Liquid Ratio
This ratio is the most vigorous measure of the company’s liquidity
position. This is another way of looking the variations of cash balances
with current liabilities. The absolute liquidity ratios of the company are
given in the Table 3.3.
Formula:
Cash and Bank Balances Cash Position Ratio = ------------------------------------------ Current liabilities
Standard Cash Position Ratio = 0.5 : 1
Table 3.3
The Cash Position Ratio of the CPCL During the Study Period
Year Ratio Trend percentage
1998 – 99 0.16 100
1999 – 00 0.26 165
2000 – 01 0.17 106
2001 – 02 0.09 62
2002 – 03 0.08 55
2003 – 04 0.38 240
2004 – 05 0.36 226
2005 – 06 0.47 296
2006 - 07 0.31 202
2007 - 08 0.36 227
Source : Annual Reports of the company
92
As stated in the Table 3.3, the cash position ratio is always much
less than the standard ratio of 0.5 :1. It is contrary to the company’s
position in relation to current ratio and quick ratio. The short-term debt
paying capacity of the company is very poor. Unless there is sufficient
overdraft facility for the company the chances of running into the
dangerous position of ‘technical insolvency’ cannot be ruled out. But the
study unit being a oil refinery, there is no scope for short term debts and
its repayments. The variation in the ratio is very high since the
coefficient of variation is around 200 per cent. Normally this is not a
good sign for its financial performance of any company but for this oil
refinery, where there is no need to have cash always, it is considerably a
good sign of liquidity performance.
The Cash Position ratio of the company is given in
Figure 3.3.
93
Figure 3.3
Cash Position Ratio of CPCL During the Study Period
106
55
296
227
100
165
240
226
202
62
25
50
75
100
125
150
175
200
225
250
275
300
325
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Tren
d %
The figure 3.3 shows that the cash position of the company is
very poor as it has been always less than the standard ratio 0.5:1.
94
Fixed Assets Ratio
This ratio helps to assess long-term liquidity position of the
company. It explains whether the firm has raised adequate long-term
funds to meet its fixed assets requirements. The fixed assets ratios of
the company are given in the Table 3.4.
Formula:
*Long term funds = Secured Loans + Unsecured Loans
Table 3.4
Fixed Assets Ratio of the CPCL During the Study Period
Year Ratio Trend percentage
1998 – 99 0.05 100
1999 – 00 0.05 100
2000 – 01 0.07 140
2001 – 02 0.03 60
2002 – 03 0.02 40
2003 – 04 0.01 20
2004 – 05 0.06 120
2005 – 06 0.06 120
2006 - 07 0.03 60
2007 - 08 0.05 100
Source : Annual Reports of the company
Fixed Assets Fixed Assets Ratio = --------------------------- Long term Funds* Standard Fixed Assets Ratio = 0.67 : 1
95
From the Table 3.4 it is understood that some part of the working
capital has been financed through long-term funds. Since fixed assets
ratio is more or less equal to the standard ratio of 0.67. The position of
the company is satisfactory but a declining trend at the end is not
advisable. The variation in the ratio is only around 10 per cent, which is
within the standard limits.
The Fixed Assets Ratio of the Company is given in Figure 3.4.
Figure 3.4
Fixed Assets Ratio of the CPCL During the Study Period
60
40
120
100
140
60
120
20
100
100
0
25
50
75
100
125
150
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Tren
d %
The figure 3.4 shows that the Fixed Assets Ratio is more or less
equal to the standard ratio of 0.67.
96
Overall Liquidity Position of the Firm
From the analysis over the liquidity of the company, it can be
understood that being oil refinery, the liquidity position of the company
both in short-term as well as in long-term are satisfactory. It needs
some improvement on the following lines :
1. Investment in current assets is to be improved.
2. Cash in hand and at bank are to be made adequate without
going for overdrafts often.
3. the sales and collection debts are to be geared up to
accelerate quick assets to a comfortable position.
Profitability of the Company
Profitability is an indication of the efficiency with which the
operations of the business are carried on. Poor operational performance
may indicate poor sales and hence poor profits. A lower profitability may
arise due to the lack of control over the expenses.
The profitability of the company can be ascertained by
1. ROI Ratio
2. EPS Ratio and
3. N/P Ratio.
97
Return on Investment Ratio
The profit being the net result of all operations, the return on
capital expresses all efficiencies or inefficiencies of a business
collectively. The return on capital invested is a concept that measures
the profit, which a firm earns on investing a unit of capital. It is a
dependable measure for judging its overall efficiency or inefficiency.
Formula
Table 3.5
Return on Investment Ratio of the CPCL
During the Study Period
Year Ratio Trend percentage
1998 – 99 14.19 100
1999 – 00 19.28 136
2000 – 01 12.43 88
2001 – 02 19.92 140
2002 – 03 16.17 114
2003 – 04 23.42 165
2004 – 05 24.85 175
2005 – 06 29.80 210
2006 - 07 21.10 148
2007 - 08 29.60 208
Source : Annual Reports of the company
Operating Profit Return on Investment Ratio = ---------------------------------- Capital Employed
98
From the table 3.5 it is clear that the return on investment has
increased from 14.19 per cent to 29.6 per cent during the study period.
In fact it has been doubled or even more than that. The variation in the
return on investment ratio reveals that the position is improving further
which is a conclusive proof for the effective functioning of the company
at present and its growth in the future.
The return on investment position of the company is illustrated
with the help of a figure 3.5
Figure 3.5
Return on Investment Ratio of the CPCL During the Study Period
208210
140
88
114
148
175
165
136
100
75
100
125
150
175
200
225
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Tre
nd
%
99
The figure 3.5 shows ups and downs in the return on investment
till 2002-03 and then steady increase till 2007-08 except during 2006-07.
Earnings Per Share (EPS)
In order to avoid confusion on account of the varied meanings of
the term “capital employed”, the overall profitability can also be judged
by calculating earnings per share with the help of earnings per share
ratio.
Formula
Total earnings available to equity share holders
Earnings Per Share = ------------------------------------------------------------ No. of equity shares
Table 3.6
Earnings Per Share of CPCL During the Study Period
Year Ratio Trend percentage
1998 – 99 8.78 100
1999 – 00 13.92 159
2000 – 01 9.72 111
2001 – 02 8.21 94
2002 – 03 4.28 49
2003 – 04 20.31 231
2004 – 05 26.86 305
2005 – 06 40.08 456
2006 - 07 32.29 368
2007 - 08 37.96 432
Source : Annual Reports of the company
100
Since the earnings per share is found more compared to return
on investment, with effect from 2005-06, it can be inferred that the
company is earning profit out of trading on equity. The Table 3.6 also
reveals that the company is capable of paying an attractive dividend, as
its Earnings per share is around 38 per cent of the face value of its
shares. The company has huge reserves even after paying dividend
during the study period. Thus, the EPS scenario of the company is good
at present and it may likely to be good in the future also.
101
Figure 3.6
Earnings per Share of the CPCL During the Study Period
49
456
100
159
231
305
368
432
94
111
25
75
125
175
225
275
325
375
425
475
525
1998-
99
1999-
00
2000-
01
2001-
02
2002-
03
2003-
04
2004-
05
2005-
06
2006-
07
2007-
08
Tre
nd
%
The Figure 3.6 shows that the earnings per share is more in the
year 2005-06 and 2007-08.
102
Net Profit Ratio
Net profit ratio indicates net margin earned on the sales of the
company. It helps in determining the efficiency with which the affairs of
the business are being managed.
Formula
Table 3.7
Net Profit Ratio of the CPCL During the Study Period
Year Ratio Trend percentage
1998 – 99 5.31 100
1999 – 00 7.36 139
2000 – 01 3.48 65
2001 – 02 2.07 39
2002 – 03 1.42 27
2003 – 04 5.65 106
2004 – 05 6.04 113
2005 – 06 5.73 108
2006 - 07 2.85 54
2007 - 08 3.00 56
Source : Annual Reports of the company
Net Profit Net Profit Ratio = ------------------ x 100
Sales
103
The table 3.7 shows that the net profit of the company is highly
fluctuating one. Commendable increase was found during 2004-05
However, when compared to sales, it has decreased considerably during
the study period. The profit of the company decreases very much
whenever there is marked increase in the sales. Decrease in the ratio
during the study period is an indication that there is a decline in the
operational efficiency of the company. Since the variation in the ratio is
around 50 per cent only, it can be concluded that the operational
efficiency of the company is satisfactory.
The net profit position of the company is explained with the help
of a chart.
Figure 3.7
Net Profit Ratio of CPCL During the Study Period
65
3927
56
108
54
113106
139
100
25
50
75
100
125
150
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Tre
nd
%
104
The figure 3.7 shows that there is a sharp decrease in the net
profit during the year 2002-03 which probing, it is found that higher
interest outgo and depreciation on account of full year impact of
operation of DHDS is the reason for the decrease.
From the analysis over the profitability of the company, it can be
understood that the profitability of the company is good in all the years.
Liquidity – Profitability Trade off An Evaluation
The analysis over liquidity and profitability of the company reveals
that there is a trade off between these two, as liquidity position of the
company is good and the profitability position of the company is also
good.
Fund Requirement Decision of the Company An Evaluation
The working capital required for the company is estimated under
operating cycle approach. To find out whether or not working capital has
been effectively utilized in making sales in the company, working capital
turnover ration is employed and shown in the table 3.8.
Formula
Working Capital Turnover Ratio = Net Sales / Working Capital
105
Table 3.8
Working Capital Turnover Ratio of the CPCL
During the Study Period
Year Ratio Trend percentage
1998 – 99 38.76 100
1999 – 00 66.61 172
2000 – 01 43.29 112
2001 – 02 34.94 90
2002 – 03 28.26 73
2003 – 04 135.92 351
2004 – 05 211.27 545
2005 – 06 25.23 65
2006 - 07 36.69 95
2007 - 08 55.24 142
Source : Annual Reports of the company
There should neither be excessive nor inadequate working
capital. Both the situations are dangerous. Being a capital intensive
organization, need for working capital of the study unit is very limited. It
is very high during the last two years. Excessive working capital means
idle funds, which earn no profit for the firm. Inadequate working capital
means shortage of working capital, which badly affects the regular
operations of the company. It may lead to technical insolvency. The
table 3.8 reveals that the company has achieved higher volume of sales
with relatively small amount of working capital. It is an indication of
106
operating efficiency of the company. Therefore, it can be concluded that
funds requirement decision of the company is satisfactory since it is a oil
refinery where the working capital requirements are very less.
The working capital ratio during the study period is explained with
a help of a chart 3.8.
Figure 3.8
Working Capital Turnover Ratio of the CPCL During the Study Period
100
172
351
545
95
65
142
7390
112
50
100
150
200
250
300
350
400
450
500
550
600
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Tre
nd
%
107
The figure 3.8 shows that the firm has excess working capital in
all the years of the study period, because of the following reasons, the
study unit is a working capital intensive concern, the price of raw
material – used it is volatile in nature during the study period.
Financing Decision of the Company – An Evaluation
The financial decision involves identification of the sources from
which the funds can be raised, i.e., the amount that can be raised from
each source and the cost and other consequences. Therefore whether
a proper balance has been kept by the company between the fixed and
non fixed cost bearing securities is to be analysed for which the following
ratios are calculated (i) Capital Gearing Ratio (ii) Debt Equity Ratio.
Capital Gearing Ratio
Capital gearing (or leverage) refers to the proportion between
fixed interest or dividend bearing funds and non-fixed interest or
dividend bearing funds in the total capital employed in the business. A
proper proportion between these two funds is necessary in order to keep
the cost of capital at the minimum. The gearing ratio is useful in
indicating the extra residual benefits accruing to the equity shareholders.
108
Formula:
Fixed interest bearing securities* Capital Gearing Ratio = ---------------------------------------------------------
Equity share holders fund
*Fixed interest bearing securities = Secured Loans + Unsecured
Loans.
Table 3.9
Capital Gearing Ratio of the CPCL During the Study Period
Year Ratio Trend percentage
1998 – 99 0.14 100
1999 – 00 0.09 64
2000 – 01 0.15 107
2001 – 02 0.15 107
2002 – 03 0.10 71
2003 – 04 0.27 193
2004 – 05 0.35 250
2005 – 06 0.54 386
2006 - 07 0.48 343
2007 - 08 0.52 371
Source : Annual Reports of the company
The company is trading on equity but capital gearing is found
very high. It is good for the study unit especially when the future return is
certain. Therefore, the profit available to the equity shareholders may be
certain and not subject to wide fluctuations. Eventhough the company is
109
depending much on outsiders for its funds requirements, yet it is not at
all dangerous. Both financial and operational leverage of the company
are also in its favour. The policy of the company in using outsiders
funds is not a permanent one as the variation in the ratio is around 45
per cent.
The capital gearing ratio of the company is illustrated with the
help of a figure 3.9.
Figure 3.9
Capital Gearing Ratio of CPCL During the Study Period
100 64
193
250
343
386371
71107107
25
75
125
175
225
275
325
375
425
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Tre
nd
%
110
The figure 3.9 shows that the capital gearing ratio is very high
during the year 2005-2006 because of the reason that the study unit
being oil refinery require more funds only during initial stages of rigging
oil wells. So instead of raising funds permanently in the form of shares
it used outside sources.
Debt Equity Ratio
The debt equity ratio is determined to ascertain the soundness of
the long-term financial policies of the company.
Formula:
Table 3.10
Debt Equity Ratio of CPCL During the Study Period
Year Ratio Trend percentage
1998 – 99 1.00 100
1999 – 00 0.87 87
2000 – 01 0.87 87
2001 – 02 0.93 93
2002 – 03 1.22 122
2003 – 04 1.53 153
2004 – 05 1.47 147
2005 – 06 1.20 120
2006 – 07 1.21 121
2007 – 08 .0.70 70
Source : Annual Reports of the company
Debt Equity Ratio = Debt / Equity
111
The table 3.10 shows the proportion of owners’ stake in the
business. It is always less than the borrowed funds. The domination of
borrowed funds is more in the last but two years of the study period. The
company is depending too much upon outsiders for its funds
requirements especially in the year 2003-04. Depending more on
outsiders’ funds results in trading on equity, which paves way for more
earning per share holder.
The debt equity ratios of the company are depicted in the figure
3.10.
Figure 3.10
Debt Equity Ratio of the CPCL During the Study Period
8793
122
70
120
121
147
153
87100
50
75
100
125
150
175
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Tren
d %
112
The figure 3.10 shows that the debt finance of the company is
always higher than the equity and is increasing year by year due to
attain the stage of trading on equity. More over the funds required for
the study unit is only for rigging purposes. Once rigging is over then
there is no need for fixed capital. It the capital is borrowed once, then it
can be easily paid out without having effect on EPS on permanent basis.
Trade off Between Fixed and Non-fixed Cost Bearing Securities –
An Evaluation
An analysis over the capital gearing ratio and debt equity ratio of
the company reveals that the company is trading on equity but the
gearing is found very high. Since these ratios are very high, the
company is depending too much on outsiders’ funds. It is advisable and
can be considered as sound financial decision as the study unit is a
capital intensive one.
Formula:
Investment Decision of the Company – An Evaluation
The investment of the company in fixed assets and in current
assets is given in the Table 3.11.
Investment in assets = Fixed Assets / Current Assets
113
Table 3.11
Investment in Fixed and Current Assets of the CPCL
During the Study Period
Year Ratio Trend percentage
1998 – 99 0.15 100
1999 – 00 0.21 140
2000 – 01 0.13 87
2001 – 02 0.10 67
2002 – 03 0.06 40
2003 – 04 0.26 173
2004 – 05 0.28 187
2005 – 06 0.33 220
2006 – 07 0.22 146
2007 – 08 0.20 133
Source : Annual Reports of the company
From the table 3.11 it is clear that the investment in fixed assets
are much less than current assets during the study period. The
correlation coefficient between current assets and fixed assets is 0.71,
eventhough investing more in current assets would not yield high return
on investment. Still investing more on current asset is advisable for
refineries. Therefore the investment decision of the company is a sound
one.
The investment in current assets and fixed assets made by the
company during the study period is given in the figure 3.11.
114
Figure 3.11
Investment in Fixed and Current Assets of the CPCL
During the Study Period
100
140
173187
146
220
133
40
67
87
25
50
75
100
125
150
175
200
225
250
1998-
99
1999-
00
2000-
01
2001-
02
2002-
03
2003-
04
2004-
05
2005-
06
2006-
07
2007-
08
Tre
nd
%
The figure 3.11 shows that investment in current assets is found
increasing and is almost equal to investment in fixed assets.
Dividend Decision of the Company - An Evaluation
Since the company has declared dividend during the study period
due to poor profitability and expansion activities, it would be better to
study about the reserves and surplus position of the company, which is
given in the table 3.12.
115
Formula:
Table 3.12
Reserve and Surplus of CPCL During the Study Period
Year Ratio Trend percentage
1998 – 99 61.87 100
1999 – 00 72.19 117
2000 – 01 78.22 126
2001 – 02 82.75 134
2002 – 03 69.19 112
2003 – 04 86.72 140
2004 – 05 108.09 175
2005 – 06 134.51 217
2006 – 07 153.05 247
2007 – 08 158.52 256
Source : Annual Reports of the company
From the table 3.12 it can be understood that the reserves and
surplus have increased constantly and considerably every year. The
variation in the ratio is high. It is high time for the company to capitalise
these reserves at least by issuing bonus shares or bonds without
affecting its financial requirements. An amount of Rs.356.21 crore was
carried to Reserve and Surplus during the year 2007-08, thus totaling to
Rs.2,488.74 crore as at the end of the year 2008 as against Rs.2,132.53
crore during the year 2006-07. Thus the EPS scenario of the company
Reserve and Surplus = Reserve and Surplus / Share capital
116
is good at present and it may likely to be good in the future also. The
company has declared dividend for the past four years. Therefore
dividend decision of the finance management is proved satisfactory.
The reserves and surplus position of the company is explained
with the help of a chart 3.12.
Figure 3.12
Reserves and Surplus of the CPCL During the Study Period
126
134
112
256
217
247
175
140
117
100
75
100
125
150
175
200
225
250
275
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Tre
nd
%
117
The figure 3.12 shows that the reserves and surpluses of the
company are accumulating year by year and it has reached the
maximum in the year 2007-2008.
Dividend decision
The dividend decision of the firm is of crucial importance for the
financial managers since it determines the amount of profit to be
distributed among shareholders and the amount of profit to be retained
in the business (popularly termed as retained earnings) for the financing
of its long term growth. There is a reciprocal relationship between the
cash dividends and retained earnings. Larger dividends result in less
retained earnings. Less dividends result in larger retained earnings.
While taking dividend decision, the management obviously take into
account the effect of the decision on the maximization of the
shareholders’ wealth. In case payment of dividend helps the
management in achieving this objective, it would be advisable to pay
divided. In case the payment of dividend does not help in achieving this
objective, the management would be well advised to retain the profit and
use them for financing investment programmes. Thus, the dividend
decision is largely based on its impact on the value of the firm’s
shareholders’ wealth. The amount of dividend paid by the company
during the study period is given in the table 3.13.
118
Table 3.13
Dividend Paid by the CPCL During the Study Period
Year Dividend Trend Percentage
1998 – 99 27.50 100
1999 – 00 35.00 127
2000 – 01 30.00 109
2001 – 02 25.00 91
2002 – 03 20.00 73
2003 – 04 35.00 127
2004 – 05 50.00 181
2005 – 06 120.00 436
2006 – 07 120.00 436
2007 – 08 120.00 436
Source : Annual Reports of the company The table shows that the company has declared a dividend of
120 per cent on its paid up share capital for the year 2007-08. It is at
the same level as declared during the last two years 2005-06 and 2006-
07. The rate of dividend declared has been increased remarkably and
found more than four times during the last decade. The dividend
absorbed a sum of Rs.209.96 crores for the year 2007-08 out of its profit
after tax of Rs.565.27 crores.
119
Table 3.14
Dividend Payout Ratio of the CPCL During the Study Period
Year Dividend payout Ratio Trend Percentage
1998 – 99 33.78 100
1999 – 00 27.89 83
2000 – 01 37.61 111
2001 – 02 33.35 99
2002 – 03 46.77 138
2003 – 04 19.42 87
2004 – 05 21.00 62
2005 – 06 34.17 101
2006 – 07 42.37 125
2007 – 08 36.98 110
Source: Annual Report of the company The table shows that the dividend payout ratio has decreased
from 42.37 to 36.98 per unit during the year 2007-08. It means, the
profit after tax of the year has increased as the year of dividend declared
during the year remains the same. Hence, the dividend pay out ratio of
the company is appreciable.
The technique of funds flow analysis is widely used by the financial
analysis, credit granting institutions and financial managers in the
performance of their jobs. It has become a useful tool in their analytical
kit.
120
The funds flow statement helps the financial analyst in having a
more detailed analysis and understanding of changes in the distribution
of resources between two balance sheet dates.
A funds flow statement helps the analyst in finding out how the
management is going to allocate the scarce resources for meeting the
productive requirement of the business. The use of funds should be
phased in such an order that the available resources are put to the best
use of the enterprise. The funds should be managed in such a way that
the business is in a position of make payment of interest and loan
installments as per the agreed schedule.
The funds flow statement is a test of an effective use of working
capital by the management during a particular period. The adequacy or
inadequacy of working capital tells the financial analyst about the
possible precaution that the management should take for effective use
of surplus working capital or make arrangement in the case of
inadequacy of working capital.
121
Table 3.15 Funds Flow Statement of the CPCL During the Study Period (Rs. In Lakhs)
Source : Annual reports of the Company
Particulars 98-99 99-2k 2k-01 01-02 20-03 03-04 04-05 05-06 06-07 07-08
Current assets
7140.00 160071.36 233763.22 3677.98 14923.51- 53410.87 7505.09 157597.26 100447.01 16746.02
Current liabilities 14157.50 154445.67 221026.66 16733.15- 7270.98 47061.68 3019.96- 93009.10 31197.20 36384.70
Working capital 7017.50- 5625.69 12736.56 20411.13 22194.49- 6349.19 4485.19- 64588.16 69249.81 53130.72-
Sources of funds
Internal sources 17106.89 23181.31 17069.94 18804.75 13769.72 38928.64 51309.21 80738.67 53014.79 60690.09
External sources 36869.06 11101.70 37616.83 31847.82 23500.28 87500.48 135000.55 0.00 .00 5500.00
Total 53925.95 34283.01 54685.77 50652.57 37270.00 126429.12 186309.76 80738.67 53014.79 66190.09
Uses of funds
Investments 16399.38 16428.93- 78.35 104.89 1258.69 764.56- 1200.37- 0.00 9273.55 362.46
Increase in Fixed Assets 8221.99 35469.34 11953.42 12675.96 44182.83 104945.15 95959.03 19440.75 9325.42 22807.20
Repayment of loans 36378.45 9616.91 29917.44 15667.84 12952.61 15726.05 96036.23 3290.24- 35043.31 96876.07
Increase in current assets 7017.50- 5625.69 12736.56 20411.13 22194.49 6349.19 04485.13- 64588.16 69249.81 53130.72
Deferred revenue expenditure 6.37- 0.00 0.00 1792.75 1070.36 173.29 0.00 0.00 209.32 0.00
Total 53975.95 34283.01 54685.77 50652.57 37270.00 126429.12 186309.76 80738.67 53014.79 66190.09
122
A cash flow statement is a statement depicting change in the
cash position from one period to another. A cash flow is useful for short
term planning. A business enterprise needs sufficient cash to meet its
various obligation in the near future such as payment for purchase of
fixed assets, payment of debts maturing in the near future and expenses
of the business. A historical analysis of different sources and
applications of cash would enable the management to make reliable
cash flow projections for immediate future. It may plan out for
investment of surplus fund or meeting the deficits, if any. It helps in
efficient cash management, helps in internal financial management ,
discloses the movement of cash and discloses the success or failure of
cash planning.
123
Table 3.16
Cash flow statement of the CPCL During the Study Period (Rs. In Lakhs) Particulars 99-2k 2k-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08
Cash Flow from operating Actives
Profit Before Tax 27565 19169 14744 8889 48796 57226 93363 72337 88088
Adjustments 5028 22980 18962 22637 17226 34407 40122 43131
Operating profit before working capital
changes
38593 32902 37724 27851 71433 74452 127770 112459 131219
Changes in working capital 30130 - 38637 11919 73630 - 58463 37980
Cash generated from operations 48381 1739 31820 57981 32796 86371 54140 53786 169199
Adjustments (Tax) -5763 - 8524 1551 415 - 6879 -17140 -14609 23313 26400
Net cash flow from operating activities. 42618 10263 30268 57566 25917 63231 39531 30472 142799
Net cash flow from Investing activities. -10588 - 8991 - 12438 - 43312 - 102311 -82409 -17843 -17543
- 22230
Net cash flow from Financing Activities. -14036 - 27046 - 2390 6407 60710 13519 -21960
7837 -125490
Net change in cash and cash equivalents 17993 - 46301 15440 7847 -15683 342 273 5093 - 4921
Cash and cash equivalents end of the
year
28763 17537 -2097 16584 901 1243 970 6063 1142
Beginning of the year 10770 28763 17537 8738 16584 901 1243 970 6063
Net change 17993 46301 15440 7847 -15683 342 273 5093 -4921
Source : Annual reports of the Company.
124
From the financial analysis, the financial strengths and
weaknesses of the company are assessed and are given in the table
3.17.
Table 3.17
Financial Strengths and Weaknesses of CPCL
During the Study Period
Strengths Weaknesses
1. Liquidity position of the
company both short term as
well as long term are good.
1. Depending too much on
outsiders funds
2. The Profitability of the
company is its strength and it
is improving further
2. Investing more on fixed assets
3. Effective and efficient working
capital management.
3. High fluctuations in the earning
of the company
4. Increasing EPS to the
investors.
4. Keeping too much reserves
and surplus
5. Market value of shares.
6. Satisfactory level of trading on
equity
7. Satisfactory funds and cash
flow position in the company
8. Encouraging level of value
added to the assets of the
company
9. Dividend pay out ratio is
satisfactory
Source : Compiled by researcher
125
The financial threats and opportunities of the company are also
identified and enlisted in the table 3.18.
Table 3.18
Financial threats and Opportunities of CPCL
During the Study Period
Threats Opportunities
1. Fluctuations of the oil price in
the world market.
2. Depletion of some projects.
3. Depreciation due to quick
obsolescence of fixed
assets
4. Competition from private
sectors
1. Encouraging new and
upcoming projects
2. Ever increasing trend in
the output prices
3. Quality of the output
Source : Compiled by researcher
126
SWOT Analysis on Human Resource Management
in CPCL
It is common knowledge that without a continuous development of
employees’ competencies no organization can survive today, let alone
grow or compete. To be effective every manufacturing organization
needs competent people in all areas whether there may be cost
reduction, reduction in delays, increased customers satisfaction, better
quality, prompt service, improved market image and so on. Human
competencies are even more critical for service organizations such as
banking, rural development, health and education where one has to deal
constantly with people. In short, al types of organizations, which want to
grow, diversify, renew, change, improve or stabilize need competent
employees. Human Resource Development (HRD) meets this need.
HRD is a process by which the employees of an organization are
helped in a continuous and planned way to:
(1) acquire or sharpen their competencies (knowledge, attitudes,
values and skills) required to perform various functions associated with
their present or expected future roles;
(2) discover and exploit their inner potentials for their own and/or
organizational development purposes;
127
(3) bring about an integration of individual and organizational
goals; and
(4) develop an organizational culture of trust, openness, team
work and collaboration.
A number of methods also called mechanism, instruments or
subsystems have been developed to set human resource development
process in motion. One can classify these methods into two:
a) Those used for developing managers and their dyads, teams
and interteams.
b) Those used for developing workers and their dyads, teams
and interteams
The most frequently used methods in the first category are
Communication Policies
Role Analysis
Performance Appraisal
Training
Potential Appraisal
Career Planning
Rewards
128
Because of the different levels of knowledge and job
requirements of works, HRD methods for them have to be different.
Important mechanisms successfully tried in their cases are
Human Relations Approach
Communication Policies
Training
Job Enrichment
Welfare, Counseling and Better Quality of Work Life
Grievance Mechanism
Industrial Relations
Participation (Quality Circles)
The mechanisms listed in the above two categories are not the
only mechanisms meant for the development of managers and workers,
many more mechanisms may be conceived for developing human
resources. In order to obtain synergic benefits of HRD, it is essential
that not one or two HRD mechanisms but as many of them as possible
are implemented in a systematic and comprehensive manner.
5.1 Designing a Human Resources Development System
The following points should be kept in mind in designing the HRD
system:
1. The system must focus on developing the total organization. It
should improve the organization’s diagnostic and problem-
solving capabilities and make the organization more open.
129
2. Various contextual factors and the existing culture of the
organization must be taken into account. Under contextual
factors one way is to include the size and technology of the
organization, the skill level of its people, top management’s
support to HRD and so on. A small organization can combine
several HRD mechanisms into one whereas a large
organization may require each mechanism to be dealt with
separately as a specialized sub-system within the HRD
system. Similarly, the type of work being done in the
organization and the technology followed in the organization
also influence the design of the HRD by emphasizing some
components of HRD much more than others. For example,
administration of bonus may need to be given special
consideration as a sub-system in an industrial organization but
not so in a university or government department. In
organizations where people’s skills are low the HRD needs to
be introduced slowly. Top management’s support determines
the amount of resources required for the introduction of HRD
and through this the design of the system. Availability of
experts help from outside ensures proper monitoring of the
system.
If the HRD is being designed as an intervention to change
the existing culture of the organization, it is necessary to do
enough careful planning monitoring and follow-up. It may be
130
helpful to do force field analysis of the facilitating and inhibiting
forces. After the force field analysis has been completed,
forces that are in favour of the change may be strengthened
while designing the system. For example, if the culture of an
organization favours informality, openness and objectivity, the
same can be strengthened by the proposed system.
3. Enough attention should be paid to building linkage
between the various sub-systems. These linkages can be
established in a number of ways depending upon the
components of the system. Following is an example of the
various linkages which may exist in a human resources
system which has four main sub-systems, viz., (i) planning
and administration, (ii) HRD, (iii) job and salary and (iv)
workers affairs. These linkages provide feedback to the
various sub-systems. For example, performance and potential
appraisal provide necessary leads for training. Training
provides necessary inputs for systems development and
research.
Mechanisms commonly followed for establishing linkages
and feedbacks are the setting up of standing committees for
various purposes (with membership from various sub-systems
and at various levels of the organization), task groups, and
adhoc committees for specific time-bound tasks. It is
explained with the help of a chart 4.1.
131
Chart 4.1
Organisation Structure
PLANNING & ADMINISTRATION HUMAN RESOURCE
DEVELOPMENT
In Formation Storage
& Retrieval
Manpower Planning
Recruitment
Placement
Promotion
Career Development
Training
Organisation
Development
Performance
Counselling
Performance Appraisal
Potential Appraisal
Job Analysis
Salary
Administration
Industrial Relations
Welfare
Worker Participation
Work Design
132
4. Mechanism for monitoring should also be provided for. A
periodical review may be planned for this purpose.
5. Various sub-systems should be introduced into the organization
in different stages. Rushing the introduction of all sub-systems
in one lot may limit the effectiveness of HRD. Each sub-system
should be planned carefully, with sequenced phases built one
over the other. This may include:
i) Geographical phasing: introducing the sub-system in a few
parts of the organization and slowly spreading it to other
parts,
ii) Vertical phasing: introducing the sub-system at one or a
few levels in the organization and expanding up or down
gradually.
iii) Functional phasing: introducing one phase of the sub-
systems, followed by other phases.
iv) Sophistication planning: introducing simple forms of sub-
systems, followed after sometime by more sophisticated
forms.
133
HRD in Indian Industry
Since the early 1970s when the concept of HRD first began to be
recognised by some organizations in India, a large number of
organizations in the country have begun to display an interest in HRD.
While many organizations appear to have simply relabeled their
personnel departments as HRD departments or HRD departments to
keep up with the fashions of the times, there are some which seem to
have done considerable work in setting up HRD systems. On the basis
of some studies done on this subject it can be inferred that the main
factors behind the setting up of a separate HRD function in any
organization are the philosophy of its top management and the nature of
its business. The more diversified the business of an organization and
the more the amount of faith and commitment of top management in
HRD, the greater is the tendency to set up separate HRD departments.
A minimal positive developmental climate is essential for success
of all HRD efforts. Some important features of a positive developmental
climate are as follows:
i) Openness or freedom to express one’s ideas and opinions,
ii) Collaboration or team spirit,
134
iii) Trust,
iv) Authenticity or positive correlation between words and
action,
v) Autonomy or certain degree of freedom of action for each
individual and
vi) An interest in confronting issues and solving them rather
than hiding them.
HRD efforts not only promote the above type of climate but also
depend on it for their success. Hence periodical surveys may be carried
out to examine changes occurring in this climate. Feedback from such
surveys could be used to change HRD activities in subsequent years.
The Centre for HRD at the Xavier Labour Relations Institute,
Jamshedpur, has prepared a questionnaire for finding out the HRD
climate of an organization. This questionnaire has 38 statements. The
employees have to give their assessment of the HRD climate in their
organization by rating their organization on each statement using 5 point
scale. A rating of 5 points scale indicates that statement is almost
always true; a rating of 4 points scale indicates that the statement is
mostly true; a rating of 3 points scale indicates that the statement is
sometimes true; a rating of 2 points scale indicates that the statement
135
is rarely true and a rating of 1 points scale indicates that the statement
is not at all true about the organization.
The Hawthrone experiments in the 1930s created a widespread
interest in informal organization. A set of evolving relationships and
patterns of human interaction within an enterprise are not officially
prescribed. It represents the unattended and unplanned modifications or
departures effected in the formal pattern of activities, relations and
behaviour. The formal organization represents the management’s
attempt to specify the ways in which things must be done. But, such
ways can be modified or altered by informal organization.
The results of the opinion survey administered among the
employees of CPCL is exhibited in the following pages.
INFORMAL MANAGEMENT
The opinion of the respondents towards the statement that the top
management of the organization goes out of its way to make sure that
employees enjoy their work is recorded in the table 4.1 in order to
assess the informal nature of the top management.
136
Table 4.1
Opinion regarding the Informal Management of the CPCL
During the Study Period
S.
No Opinion
No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always True 58 34 5 290
2 Mostly True 54 32 4 216
3. Sometimes True 26 15 3 78
4 Rarely True 18 11 2 36
5 Not at all True 14 8 1 14
Total 170 100 15 634
Source: Primary data
From the table 4.1 it is clear that 506 points scored out of 634
were in favour of the statement that the top management of the
organization goes out of its way to make sure that employees enjoy their
work. Nearly two third of the employees of CPCL accept it with high
degree. Hence it can be inferred that everything has been done in the
organization to make sure that employees enjoy their work. So, it is
proved that top priority is given to employee’s sentiments and not even
to rules and regulations in the CPCL.
137
More Humanely Treatment
The opinion of the respondents as to whether the top
management of the organization believes that human resources are an
extremely important resource and that they have been treated more
humanely or otherwise is assessed in the table 4.2.
Table 4.2
Opinion of the respondents regarding Humanely Treatment of the CPCL During the Study Period
S. No
Opinion No. of Respondents
% Scaling Points
Score Points
1 Most Always
True
46 27 5 230
2 Mostly True 38 22 4 152
3. Sometimes True 34 20 3 102
4 Rarely True 31 18 2 62
5 Not at all True 21 13 1 21
Total 170 100 15 567
Source: Primary data
As shown in the table 4.2 it is understood that out of 567 points
382 points scored were strongly in favour of the statement that more
humanely treatment is ensured in the organization. It believes that
human resources are an extremely important source. Only 83 points
were scaled against it. As much as 49 per cent of the employees
accepted the existence of more humanely treatment in the organization.
138
Empowerment of the Subordinate
It is very essential to develop and empower the subordinates for
the development of a company. Development opportunities create a
sense of belongingness among the subordinates and boost their morale.
This would reduce labour turn over to a maximum extent, which in turn
will control the cost of labour to some extent. Therefore, developing
subordinates is nothing but strength to an organization. Hence, the
opinion of the employees regarding the development of subordinates in
the study unit is analysed in the table 4.3 in order to understand the
opportunities offered to them.
Table 4. 3
Opinion of the Subjects regarding the Empowerment of the
Subordinates of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always True 33 20 5 165
2 Mostly True 44 26 4 176
3. Sometimes True 28 16 3 84
4 Rarely True 39 23 2 78
5 Not at all True 26 15 1 26
Total 170 100 15 529
Source: Primary data
139
As shown in the Table 4.3, shows the opinion of the employees
regarding the opportunities and facilities offered to them by the
management for their development is revealed. Developing opportunities
are not appreciable as much as 54 per cent of the employees were not
wholeheartedly in support of the statement. Just 46 per cent of the
employees were of the opinion that the management is offering
adequate facilities for developing their subordinates. Hence, it can be
perceived that the opportunities are available for developing
subordinates in the study unit but they are limited and not up to the
expectation of majority employees.
Personnel Policies Facilitate Employee Development
These are general statements which guide thinking and action in
decision making. Sound personnel policies are deemed as an essential
base for sound personnel practice. They provide the base for
management by principle as contrasted with management by
expediency. In their absence, decisions are taken on an adhoc basis
which results many times in improper emphasis being given to
significant characteristics, criteria or circumstances of a problem.
In most companies personnel policies are generally found to
cover the following subjects:
(A) Recruitment and selection
(B) Training
140
1. Compensation
(C) Arrangement for work
(D) Employee services, and
(E) Industrial relations
How, in the opinion of the respondents personal policies of the
study unit facilitate employee development is assessed in the table 4.4.
Table 4. 4
Opinion regarding the Personnel Policies Facilitate Employees Development of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always
True
70 41 5 350
2 Mostly True 38 22 4 152
3. Sometimes True 26 15 3 78
4 Rarely True 20 12 2 40
5 Not at all True 16 10 1 16
Total 170 100 15 636
Source: Primary Data
The table 4.4 shows that 63 per cent of employees with 502 score
points out of 636 strongly agree that the personnel policies followed in
the study unit facilitate employee development. Only 22 per cent of
141
them were against it with a meagre scale points of 56. Hence, it can be
concluded that personnel policies of the company are framed in such a
way to facilitate employees development efficiently and effectively.
Willingness to Invest Resources for the Development of Employees
Human resource is an asset to any organization. Development
refers broadly to the nature and direction of change induced employees
through the process of training and education. The top management
should come forward to invest a considerable part of their time and other
resources to ensure the development of employees. The opinion of the
employees about their top management regarding their willingness to
invest their resources for developing employees is analysed in the
Table 4.5.
142
Table 4.5
Opinion of the Employees regarding Managements’ Willingness to
Invest Resources for the Development of Employees of the CPCL
During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always
True
63 37 5 315
2 Mostly True 45 27 4 180
3. Sometimes
True
39 23 3 117
4 Rarely True 14 8 2 28
5 Not at all True 9 5 1 9
Total 170 100 15 649
Source: Primary data
As shown in the Table 4.5 it is evident that there is strong
willingness in the study unit to invest in human resources. As much as
64 per cent of the employees strongly registered their opinion in favour
of it with huge scaling points of 495 out of 649 total points. Only 13 per
cent of employees disagree to it with just 37 points. Hence, it rightly
concluded that the study unit is very much willing to invest in its human
resources.
143
Seniors Help Juniors to Learn Their Job
The cordial relationship between seniors and juniors in the
organization is very essential for any organization to achieve its
objectives. It is the duty of the seniors to help the juniors in learning
their job. Similarly it is the responsibility of the juniors to solicit and
utilize the opportunity extended by the seniors. So how far the seniors
are helpful to the juniors in the study unit is envisaged in the
table 4.6.
Table 4. 6
Opinion of Employees regarding the Seniors’ Help Juniors to Learn
Their Job of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always True 50 29 5 250
2 Mostly True 30 18 4 120
3. Sometimes True 38 22 3 114
4 Rarely True 34 20 2 68
5 Not at all True 18 11 1 18
Total 170 100 15 570
Source: Primary Data
From the table 4.6 it can be understood that the seniors in the
CPCL help their juniors in learning their job. Out of 570 points, 370
points were scored in favour of the statement. Out of 170 respondents
80 were in favour of the statement and accept that the seniors are
helping them. Only 18 respondents were against it denying the fact that
144
senior help juniors in learning their job. Hence it can be concluded that
seniors in the organization help juniors to a maximum extent, yet the
expectations of the juniors are not fulfilled at full strength as 11 per cent
of the respondents are of the opinion that the statement ‘ Seniors help
juniors’ is not at all true.
Help to Acquire Competence
Learning a job is very easy but it is very difficult to acquire
competence. Competence cannot be acquired of their own. It should
come from experience especially from seniors who have gained
experience while doing their job. Unless seniors help juniors, it is quite
impossible for juniors to acquire competence over their job. The opinion
of the employees about how they were helped by their seniors to acquire
competence in their job is explained in the table 4.7.
Table 4. 7
Opinion of the Employees regarding Help to Acquire Competence of the CPCL During the Study Period
S. No Opinion No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always
True
51 30
5 255
2 Mostly True 41 20 4 164
3 Sometimes
True
36 21
3 108
4 Rarely True 26 19 2 52
5 Not at all True 16 10 1 16
Total 170 100 15 595
Source: Primary Data
145
From the table 4.7 it is clear that the seniors in the study unit help
their juniors in acquiring competence over the job. Competence is mostly
psychological based so help from seniors is very essential to acquire it.
As much as 419 score points were in favour of the statement. Only 16
respondents were against it. Hence, it can be concluded that the help
extended to juniors by seniors for acquiring competence over their job in
the study unit is appreciable.
Manager’s Belief towards Employees Behaviour
The higher officials should have good opinion over their
subordinates and in turn the subordinates should also have the same
tendency on their higher ups. There should be no scope for suspicion or
misunderstanding between them. Good belief is the cornerstone for
cordial relationship between managers and subordinates. The opinion
of the subordinates about their manager’s belief towards their behaviour
is given in table 4.8.
Table 4. 8
Opinion of Subordinates regarding Manager’s Belief towards Employees Behaviour of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always True 52 31 5 260
2 Mostly True 39 23 4 156
3 Sometimes True 46 27 3 138
4 Rarely True 17 10 2 34
5 Not at all True 16 9 1 16
Total 170 100 15 604
Source : Primary data
146
As shown in the table 4.8 out of 604 score points, 416 were
scaled in favor of good opinion. As much as 91 managers strongly
believe that the subordinates are good in their behaviour. Only 50 points
were scaled against it by 19 per cent of the employees in the study unit.
Hence the attitude of managers is very much in favour of their
subordinates.
Helping Each Other
Man is a social animal. He cannot live in isolation. To live
together as a society it is very essential to help each other. Helping
each other is a virtue. Such tendency is also very essential for achieving
the objectives of a group of persons and an organization. How far the
managers and subordinates in the study unit are helpful to each other in
achieving their common goal is shown in the table 4.9.
Table 4. 9
Opinion regarding Managers and Subordinates Helping tendency of the CPCL During the Study Period
S .
No Opinion
No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always
True
56 33
5 280
2 Mostly True 46 27 4 184
3. Sometimes
True
38 22
3 114
4 Rarely True 16 9 2 32
5 Not at all True 14 9 1 14
Total 170 100 15 624
Source :Primary Data
147
From the table 4.9 it is clear that out of 624 score points as much
as 464 points were scaled in favour of the fact that both the managers
and the subordinate are mutually helping each other. As much as 102
employees of the study unit strongly agree that they are mutually helping
each other. Only 14 employees strongly refuse that there is no mutual
helping tendency in the study unit. Hence, it can be concluded that
helping each other is found visible in the study unit.
Informal Nature of Employees
An informal organization is a social group of individuals which
comes into existence automatically, - as a result of the operation and
interaction of certain socio- psychological factors, among persons who
are working in various capacities within the four walls of the formal
organization.
Some of the important reasons responsible for the emergence of
informal organization are as follows.
1. Desire to socialize with others
2. Necessity for exchanging information
3. To release boredom caused by modern specialization
4. Need for collective action against the high handedness of
Management
5. Inborn leadership
148
6. Mutual protection under emergency situation
7. Consultation on work-matters
8. Common link or affiliation among a group of persons
The informal nature of the employees in the study unit is enquired
and presented in the table 4.10.
Table 4. 10
Opinion regarding the Informal Nature of Employees of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always
True
26 15 5 130
2 Mostly True 30 18 4 120
3 Sometimes True 46 27 3 138
4 Rarely True 26 15 2 52
5 Not at all True 42 25 1 42
Total 170 100 15 482
Source: Primary data
From the table 4.10 it is understood that out of 170 employees,
only 56 employees strongly accept that there is informal nature in the
study unit but the remaining 114 were against their opinion. Eventhough
there is mutual help among the employees, the socio psychological
factors governing informal nature in the organization like desire to
socialize with others, boredom and need for collective action against the
149
highhandedness of the management are not encouraging the
emergence of informal nature in the organization.
Conducive Psychological Environment
A minimal positive development climate is essential for the
success of all HRD efforts. Some of the important features of a positive
developmental climate are as follows.
(a) Openness or freedom to express one’s ideas and opinions,
(b) Collaboration or team spirit,
(c) Trust,
(d) Authenticity or positive correlation between words and
action
(e) Autonomy or certain degree of freedom of action for each
individual, and
(f) An interest in confronting issues and solving them rather
than hiding them.
HRD efforts not only promote the above type of climate but also
depend on it for their success.
In an organization, management tries to coordinate various
factors of production in such a way that each factor contributes to its
maximum efficiency to achieve organizational goals. So far as non-
human factors i.e. materials and machines are concerned, their
150
efficiency depends largely upon the type of technology being followed by
the performance level of human factors efficient and effective, one has
to improve the performance level of human beings in the organization.
This performance is determined by two factors, viz. (i) level of ability to
do certain work; and (ii) level of motivation. Further, these two factors
are to be multiplied rather than added. Therefore the opinion of the
employees regarding conducive psychological environment is obtained
and recorded in the Table 4.11.
Table 4. 11
Opinion regarding the Conducive Psychological Environment of the CPCL During the Study Period
S . No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always
True
50 30
5 250
2 Mostly True 39 23 4 156
3 Sometimes
True
26 15
3 78
4 Rarely True 29 17 2 58
5 Not at all True 26 15 1 26
Total 170 100 15 568
Source : Primary data
From the table 4.11 it can be perceived that out of 170
respondents, 89 were strongly in favour that there is conducive
psychological environment in the organization. Of the remaining, only
55 were against it. Only 26 strongly object that there is no conducive
151
psychological environment in the study unit. Hence it can be concluded
that there is conducive psychological environment in the study unit but
the level of motivation is the reason for the objection against it.
Seniors Guide Juniors For Future Responsibilities
It is the responsibility of the seniors to guide their juniors so as to
enable them to accept the future responsibilities in the organization.
How far the seniors in the CPCL guided their juniors is explained in the
table 4.12.
Table 4. 12
Opinion of the Employees regarding Seniors Guide Juniors for
Future Responsibilities of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always
True
46 27
5 230
2 Mostly True 46 27 4 184
3 Sometimes
True
31 18
3 93
4 Rarely True 21 12 2 42
5 Not at all True 26 16 1 26
Total 170 100 15 575
Source : Primary Data
152
As shown in the table 4.12 as much as 92 employees with 414
scale points strongly agree that their seniors guide them well to accept
the future responsibilities. Only 26 employees were against it. Hence it
can be concluded that the role played by seniors in guiding their juniors
in the study unit is appreciable.
Efforts to Utilize the Potential of the Employees
It is the duty of the top management to take efforts to identify and
utilize the potential of their employees for the betterment of the
organization. So, the opinion of the employees is recorded in Table 4.13
to analyze the efforts taken by the top management in this regard.
Table 4. 13
Opinion regarding the Efforts to Utilize the Potential of the Employees of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always
True
46 27
5 230
2 Mostly True 34 20 4 136
3 Sometimes True 28 16 3 84
4 Rarely True 40 24 2 80
5 Not at all True 22 13 1 22
Total 170 100 15 552
Source : Primary data
153
Table 4.13 shows that the efforts taken in the study unit to utilize
the potential of the employees is appreciable. As much as 47 percent of
employees strongly agree to it with 366 points out of the total score
points of 552. There is also an equal objection to it by 37 per cent of the
employees. However, it is acceptable that regular efforts have been
taken by the study unit to utilize the potential of the employees though
not in full but to a maximum extent possible.
Promotion Based on Suitability
A promotion takes place when an employee moves to a position
higher than the one formerly occupied. His responsibility, status and pay
also increase. In many companies only vertical promotions are made
under which the employees are promoted from one rank to the higher
rank in the same department. Horizontal promotions are also allowed in
some companies under which employees may be promoted to higher
ranks in other departments as well. The requirement of a sound
promotion scheme is such that it must provide for a uniform distribution
of promotional opportunities throughout the organization. Whether
promotion in the study unit is based on suitability or not is shown in the
table 4.14.
154
Table 4. 14
Opinion of the Employees regarding the Promotion Based On Suitability of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always
True
42 25 5 210
2 Mostly True 44 26 4 176
3 Sometimes
True
38 22 3 114
4 Rarely True 27 16 2 54
5 Not at all True 19 11 1 19
Total 170 100 15 573
Source : Primary data
As shown in the table 4.14 it can be understood that out of 573
points scored on the opinion about promotion based on suitability 386
were strongly in favour of the fact that the promotion in the study unit is
based on the suitability. Another 114 points by 22 per cent of the
respondents were though not against it but accept it. So it can be
concluded that the promotion policy of the organization is acceptable to
the employees and appreciable to general conditions.
Reward For Good Work
The work performance of the employees whether be acquired,
modified or sustained, it must be rewarded (reinforced). However,
reward should be distributed cautiously or discreetly.
155
Good work must be rewarded to motivate the workers positively.
The reward may be either monetary or even non monetary one. How
does the study unit recognize and reward good works done by its
employees for any contribution made by them is analyzed in the
table 4.15.
Table 4. 15
Opinion of the Employees regarding the Reward for Good Work of
the CPCL During the Study Period
S.
No Opinion
No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always True 46 27 5 230
2 Mostly True 40 24 4 160
3 Sometimes True 40 24 3 120
4 Rarely True 26 16 2 52
5 Not at all True 18 9 1 18
Total 170 100 15 580
Source : Primary Data
The table 4.15 shows that 51 per cent of the employees strongly
accept that the every good work is properly rewarded in the study unit.
390 out of 580 points scored were strongly in support of this fact. Only
70 points were scored against it. Hence, it can be concluded that there is
156
reward for every good work done in the study unit to motivate the
employees positively.
Special Care of the Supervising Staff for Appreciation
It is the duty of the supervisory staff to take special care to
appreciate the subordinate whenever they do any good work in the
organization. So the opinion of the employees about their superiors in
this regard is given in Table 4.16.
Table 4. 16
Opinion regarding the Special Care of the Supervising Staff for Appreciation of the Employees of the CPCL
During the Study Period
S.
No Opinion
No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always
True
38 22
5 190
2 Mostly True 40 24 4 160
3 Sometimes
True
36 21
3 108
4 Rarely True 30 18 2 60
5 Not at all True 26 15 1 26
Total 170 100 15 544
Source : Primary Data
From the table 4.16 it is clear that the supervisory staff take
special care to appreciate their subordinates whenever some good
innovative work is carried out in the study unit. As much as 350 points
157
were scaled by 78 employees in favour of this statement. Whereas, 56
employees scaled against it with 86 points. So it can be concluded it is
true that the supervisory staff in the study unit were asked to take
special care to appreciate their subordinates whenever necessary and
they are also doing it appreciably.
No Favouritism in Performance Appraisal
The performance appraisal method should be free from
favouritism and nepotism. The system make the employees feel that
they have been treated in a supportive manner and the system is open
and participatory. Therefore, the opinion of the employees is analyzed in
Table 4.17 to assess whether there is any favouritism in the
performance appraisal in the study unit or not.
Table 4. 17
Opinion of the Employees regarding No Favouritism in Performance Appraisal of the CPCL During the Study Period
S.
No Opinion
No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always
True
46 27
5 230
2 Mostly True 36 21 4 144
3 Sometimes True 48 28 3 144
4 Rarely True 20 12 2 40
5 Not at all True 20 12 1 20
Total 170 100 15 578
Source : Primary data
158
The table 4.17 shows that out of 578 points scored 374 points
given by 48 per cent of the respondents were strongly in favour of the
fact that there is no favoritism in the performance appraisal followed by
the study unit. Even among the remaining employees only 60 points
were scored against it. So, it can be rightly stated that no favoritism
exists in appraising the performance of the employees in the study unit.
Perception about Each Other
In order to ensure coordination and cooperation among the
employees, people in the organization should not have any free
conceived notion about each other. There should be no room for
preconceived notion among the employees about each other. Whether
the employees of the study unit is accepting to it or not is registered in
the table 4.18.
Table 4. 18
Opinion of the Employees regarding the Perception about Each Other of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always
True
56 33
5 280
2 Mostly True 46 27 4 184
3 Sometimes
True
36 21
3 108
4 Rarely True 16 9 2 32
5 Not at all True 16 10 1 16
Total 170 100 15 620
Source :Primary data
159
The table 4.18 shows that out of 170, 60 per cent employees
were of the opinion that there was no fixed mental impression about
each other in the study unit. Only 19 per cent of them scaled just 48
points against it. So, it can be concluded that there is no preconceived
notion or fixed mental impression about each other in the study unit.
The reason behind is that the management is used to conduct
performance appraisal at regular intervals and alley the different
perceptions among the employees.
Encouragement to Creative Ideas
A progressive forward and democratic – minded leader, always
encourages initiative on the part of their subordinates. Though
encouraging initiative, the leader can help the organization avail of the
hidden and latent talents of their subordinates.
Table 4.19
Opinion of the Employees regarding the Encouragement to Creative Ideas of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always
True
45 26
5 225
2 Mostly True 42 24 4 168
3 Sometimes
True
21 13
3 63
4 Rarely True 32 19 2 64
5 Not at all True 30 18 1 30
Total 170 100 15 550
Source : Primary Data.
160
It is clear from the table 4.19 that there is strong encouragement
for eliciting new, innovative and creative ideas from the juniors in the
study unit, CPCL. As much as 393 points were scored in favour of it.
Only 94 points were against it. Out of 170 respondents 87 strongly
agree that the superiors encourage very much the subordinates for their
creative and innovative ideas. Hence, it can be concluded that creative
ideas of the juniors are very much appreciated and encouraged in the
study unit.
Mistakes – Stepping Stone for Improvement
When an employee makes a mistake, his supervisors treat it with
good understanding and help him to learn from such mistakes rather
than punishing him or discouraging him. So, the opinion of the
employees of the study unit is recorded in Table 4.20 to understand
whether the supervisors help them to learn from their mistakes or not.
161
Table 4. 20
Opinion of the Employees regarding Mistakes – Stepping Stone for Improvement of the CPCL During the Study Period
S.
No Opinion
No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always True 39 23 5 195
2 Mostly True 36 21 4 144
3 Sometimes True 38 22 3 114
4 Rarely True 29 17 2 58
5 Not at all True 28 17 1 28
Total 170 100 15 539
Source :Primary data
The table 4.20 shows that there is a helping hand whenever
juniors or subordinates committed mistakes in their work. As much as
44 per cent of the employees with 339 points (out of 539 scored) were
infavour of this statement. Only 86 points were against it. So, it can be
perceived that the employees are protected from their mistakes by the
seniors through rectifying them whenever necessary.
Polished Approach of Communicating Employee’s Weaknesses
In general every employee is subject to some weaknesses while
executing his work. It is the duty of the superior to identify the
weaknesses and communicate the same to the employee. While doing
so, the way of communication is very important. There should be no
162
question of threatening the workers. They should not feel that the
communication is rude and harsh. The opinion of the employees in this
regard is recorded in the table 4.21.
Table 4. 21
Opinion regarding the Polished Approach of Communicating Employee’s Weaknesses of the CPCL During the Study Period
S.
No Opinion
No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always
True
50 29
5 250
2 Mostly True 44 26 4 176
3 Sometimes True 38 22 3 114
4 Rarely True 21 13 2 42
5 Not at all True 17 10 1 17
Total 170 100 15 599
Source : Primary Data
From the table 4.21 it is clear that 55 per cent of the employees
accepted that the weaknesses of the employees were communicated to
them without hurting their feelings. It is true that there is no threatening
even at the time of informing the weakness of the employees.
Therefore, it can be concluded that employees’ weaknesses were
handled politely and the communication process in the study unit is
found satisfactory.
163
Employees Feedback
A feedback to the employees means letting the employees to
know how well he has done his job or where he stands with his
superior’s performance appraisal. It tells him what he can do to improve
his present performance and go up in the management hierarchy. The
appraisal thus facilitates self- development. It also makes the
employees aware of his key performance areas. When performance
and behaviour feed back is given to employees, whether they take it
seriously and use it for development or not is analyzed in the table 4.22.
Table 4. 22
Opinion regarding the Employees Feedback of the CPCL During the Study Period
S.
No Opinion
No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always
True
58 34
5 290
2 Mostly True 54 32 4 216
3 Sometimes
True
26 15
3 78
4 Rarely True 18 11 2 36
5 Not at all True 14 8 1 14
Total 170 100 15 634
Source : Primary data
164
As shown in the table 4.22 as much as 66 per cent of the
employees strongly accept that the behaviour feed back given to
employees, is very much essential for development. So, it can be
concluded that the employees are positive in their approach as for as the
feed back is concerned.
Employees Interest In Finding Their Strengths and Weaknesses
Employees in this organization are interested to find out their
strength and weakness from their supervising officers and/or colleagues.
The opinion of the employees is given in the table 4.23 to know how for
they are interested to understand their strength and weakness.
Table 4. 23
Opinion regarding the Employees Interest In Finding Their Strengths and Weaknesses of the CPCL During the Study Period
S . No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always True 47 28 5 235
2 Mostly True 43 25 4 172
3 Sometimes True 38 22 3 114
4 Rarely True 25 15 2 50
5 Not at all True 17 10 1 17
Total 170 100 15 588
Source :Primary Data
165
From the table 4.23 it can easily be understood that the
employees in the study unit, CPCL, are very much interested in finding
out their strengths and weakness. As much as 90 employees strongly
accept it with as much score points of 407 out of 588. Only 25
employees show less interest in identifying their strengths and
weakness. So, it can be concluded that the employees in the study unit
are very particular about their behavioral assessment especially in
finding their weakness and strengths while carrying out their work in the
organization.
Opinion of Employees regarding Training
Training is the art of increasing the knowledge and skill of an
employee for doing a particular job. It is concerned with imparting
specific skills for particular purposes. It improve work performance and
minimize wastage.
166
Table 4. 24
Opinion regarding the Employees Training of the CPCL During the study period
S .
No Opinion
No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always
True
53 31
5 265
2 Mostly True 49 29 4 196
3 Sometimes True 37 22 3 111
4 Rarely True 17 10 2 34
5 Not at all True 14 8 1 14
Total 170 100 15 620
Source : Primary Data
As shown in the table 4.24, 102 out of 170 employees in the
organization take the training seriously. For 60 per cent of the
employees training is a very serious affair. As much as 461 points
scored were in favour of it. And just 48 score points out of 620 were
against it. Since the study unit is a technical industry, training is taken
as a serious matter and the employees have also understood it is the
right way.
Training Facilities
It is always essential for an organization, whether big or small, to
have a comprehensive training and development policy which should
incorporate details on the following points.
167
1. The place of training in company management
2. The objectives which are to be covered in the company’s
training
3. Determination of training and development needs.
4. Selection of trainees.
5. Training methods for operatives and executives.
6. Evaluation of training programme.
Therefore, how far the study unit has provided for the opportunity
to carry out training is enumerated and exhibited in table 4.25.
Table 4. 25
Opinion of the Employees regarding the Training Facilities of the
CPCL During the Study Period
S.
No Opinion
No. of Respondents
% Scaling Points
Score Points
1 Most Always True 43 25 5 215
2 Mostly True 39 23 4 156
3 Sometimes True 38 22 3 114
4 Rarely True 30 18 2 60
5 Not at all True 20 12 1 20
Total 170 100 15 565
Source: Primary Data
168
The table 4.25 states that ample training opportunities were
offered for employees in the study unit. Nearly 50 per cent of the
employees accept that adequate opportunities are available for under
going training. Only 30 per cent of them are of the opinion that the
opportunities for training are not adequate. Hence, it can be concluded
that the study unit is offering adequate opportunities to provide training
to its employees. Yet, there is demand for further training, it is observed
at the time of study.
Need Based Training
Once the need for training has been identified in terms of the gap
between the current and desired level of proficiency of each individual
the second step lies in stating the areas that need training. Areas need
training are generally classified into: knowledge, skill, attitude, habits
and understanding.
169
Table 4. 26
Opinion of the Employees regarding the Need Based Training of
the CPCL During the Study Period
S.
No Opinion
No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always True 38 22 5 190
2 Mostly True 34 20 4 136
3 Sometimes True 28 17 3 84
4 Rarely True 40 23 2 80
5 Not at all True 30 18 1 30
Total 170 100 15 520
Source : Primary Data
The table 4.26 shows that the training in the study unit is given for
timely needs. 72 out of 170 employees strongly accept it. Another 70
employees strongly disagree that the training is a need based one.
Since the points scored in favour of the statement that the training is a
need based one are 326 out 520, it can be concluded that the training
offered in the study unit is for genuine needs only.
Trusting Each Other
It is essential to have mutual trust among the employees to
achieve the common objectives is an enterprise. Mutual trust enhances
the level of team spirit among the employees which is very essential for
conducive organizational climate. How far the employees in the study
170
unit trust each other is assessed through the opinion survey response is
given in table 4.27.
Table 4. 27
Opinion of the Employees regarding Trusting Each Other of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always True 56 33 5 280
2 Mostly True 46 27 4 184
3 Sometimes True 36 21 3 108
4 Rarely True 16 09 2 32
5 Not at all True 16 10 1 16
Total 170 100 15 620
Source : Primary Data
The table 4.27 states that 60 per cent of the employees in the
study unit strongly trust each other as 464 points out of 620 score points
were in favour of it. Only 19 per cent of the employees with 48 score
points were against it. Hence, it can be concluded that trusting each
other is a common practice in the study unit.
Freedom to express the Ideas with superiors
It is very necessary to establish an effective machinery of
communication to manage the affairs of the concern effectively.
Communication machinery must establish a two way traffic i.e. it must
provide the liberty to both parties – management and workers – to
171
convey their ideas, orders, opinions and grievances. An effective
communication is a must to coordinate the efforts of various employees
and the management. The opinion of the employees in respect of their
freedom to express their feelings are enumerated in the
table 4.28.
Table 4. 28
Opinion of the Employees regarding the Freedom to Express their ideas with Superiors of the CPCL During the Study Period
S.
No Opinion
No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always True 41 24 5 205
2 Mostly True 31 18 4 124
3 Sometimes True 36 21 3 108
4 Rarely True 34 20 2 68
5 Not at all True 28 17 1 28
Total 170 100 15 533
Source : Primary Data
It is stated in the table 4.28, that 42 per cent of the employees
with 329 scoring points agree that there is freedom for the employees to
express their ideas with the superiors. Whereas 37 per cent of them
disagree that there is freedom to express their feelings with their
superiors. Hence, it can be understood that majority of the superiors are
flexible to allow their subordinates to express their ideas.
172
Superior’s Freedom to Express their Feelings with Subordinates
Many superiors suffer from superiority complex, and would not
like to talk to subordinates or otherwise communicate with them –
thinking it below their dignity to do the same. In such situations not only
does the work of the organization suffer, but also the subordinates feel
frustrated and degraded.
Table 4. 29
Opinion of the Employees regarding the Superior’s Freedom to Express their Feelings with Subordinates
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always True 50 29 5 250
2 Mostly True 38 22 4 152
3 Sometimes True 37 22 3 111
4 Rarely True 24 14 2 48
5 Not at all True 21 13 1 21
Total 170 100 15 582
Source : Primary Data
The table 4.29 shows that 51 per cent of employees accept that
the superiors take freedom to express their feeling with their
subordinates. Only 27 per cent of them are with reservation in
expressing their feelings. So, it can be understood from the table 4.29
that the superiors in the study unit are mostly free to express their
feelings with their subordinates especially on the matters related to their
work.
173
Encouragement to Undertake Responsibility
Initiative is the freedom to propose a plan and execute it. The
management must encourage subordinates to take initiative in thinking
out plans and execute them. This can be done by extending
opportunities and also freedom to contribute their excellence.
The opinion of the employees regarding how management
encourages them to do things on their own is explained in the
table 4.30.
174
Table 4.30
Opinion of the Employees regarding Encouragement to Undertake
Responsibility of the CPCL During the Study Period
S.
No Opinion
No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always True 44 26 5 220
2 Mostly True 38 22 4 152
3 Sometimes True 39 23 3 117
4 Rarely True 28 17 2 56
5 Not at all True 21 12 1 21
Total 170 100 15 566
Source : Primary Data
As shown in the table 4.30 it is true that nearly 50 percent of the
employees were encouraged to take initiatives on their own. It is
accepted by 82 out of 170 employees that there is encouragement for
taking initiatives on their own. Eventhough just 29 percent of the
employees disagree to it, it can be understood that the employees are
encouraged whenever they do work on their own and without direction
from high command.
175
Discussing the Problem Openly
The problems relating to the well-being of an organization are to
be discussed openly among the employees to attain solutions easily.
How far this strategy is being practical in the study unit is stated in the
table 4.31.
Table 4. 31
Opinion of the Employees regarding Discussing the Problems Openly of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always True 52 31 5 260
2 Mostly True 42 25 4 168
3 Sometimes True 38 22 3 114
4 Rarely True 22 13 2 44
5 Not at all True 16 09 1 16
Total 170 100 15 602
Source : Primary Data
The analysis carried out in the table 4.31 envisages that the
employees in the study unit discuss openly with their superiors and
seniors or fellow workers whenever they were posed with some
problems. As much as 56 per cent of the employees with 428 score
points accept it. Only 22 per cent employees with 60 score points
disagree to it. Hence, it can be concluded that the employees in the
study unit exercise open discussion whenever problem erupts in it.
176
Pointing out the Career Opportunities
It is necessary to point out the career opportunities to the
employees as it motivates them to feel free about the future and enables
them to work better. The opinion of the employees as regard to
information on career opportunities is enumerated in the table 4.32.
Table 4. 32
Opinion of the Employees regarding Pointing out the Career
Opportunities of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always True 44 26 5 220
2 Mostly True 40 23 4 160
3 Sometimes True 26 15 3 78
4 Rarely True 30 18 2 60
5 Not at all True 30 18 1 30
Total 170 100 15 548
Source : Primary Data
The table 4.32 shows that almost 50 per cent of the employees by
scaling with 380 points accept that the career opportunities are pointed
out clearly in the study unit. Only 168 points were against it. So, it can
be concluded that the career opportunities are well designed and
delivered to the employee in the study unit.
177
Preparing Juniors for the Future
Creation of a reservoir of trained replacements will increase the
stability of the organization in the sense that organization will be able to
sustain its effectiveness despite the loss of key personnel. It is very
essential for the seniors in an organization to develop their juniors for
assuring their positions in the future.
Table 4.33
Opinion of the Employees regarding Preparing Juniors for the
Future of the CPCL During the Study Period
S.
No Opinion
No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always True 39 23 5 195
2 Mostly True 36 21 4 144
3 Sometimes True 38 22 3 14
4 Rarely True 29 17 2 58
5 Not at all True 28 17 1 28
Total 170 100 15 539
Source : Primary Data
From the table 4.33 it can be perceived that seniors in the study
unit help juniors very much in preparing juniors for the future. Of the total
170, 75 employees scaled with 339 points that the seniors develop
juniors to enable them to suit to the future. Only 34 per cent of the
178
employees disagree with the fact with a meager score of 86 points only.
Hence it can be perceived that the seniors in the study unit help juniors
in preparing them for the future.
Delegation of authority
Delegation is an authorization to a subordinate manager to act in
a certain manner independently. Delegation takes place when a superior
grants authority and assigns responsibility to a subordinate. It does not
imply reduction in authority of superior. He retains authority even after its
delegation. Delegation does not mean abdication of responsibility. The
overall responsibility attached to the superior’s position cannot be
delegated so as to relieve him from his obligation. He remains
responsible even after delegation.
The opinion of the employees is recorded in the table 4.34 to
know to the extent of authority delegated in the study unit.
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Table 4. 34
Opinion of the Employees regarding Delegation Of Authority of the
CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always True 43 25 5 215
2 Mostly True 39 23 4 156
3 Sometimes True 38 23 3 114
4 Rarely True 26 15 2 52
5 Not at all True 24 14 1 24
Total 170 100 15 561
Source: Primary Data
The table 4.34 states that 48 per cent of the employees strongly
agree that there is delegation of authority in the study unit. Only 29 per
cent disagree to it. It is true that superiors in the study unit delegate
their authority willingly and subordinates accept it without any hesitation.
Hence, it can be concluded that high level of delegation is in existence in
the study unit.
Using Delegation as an Opportunity
Delegation reduces the burden of the manager by assigning
routing duties or work to his subordinate and leaving him free to look
after more important matters. Delegation is a method by which the
subordinates can be developed and trained to take up higher
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responsibility. Some employees have a fear of criticism for their
inefficiency or mistakes that may be committed in the delegated
responsibilities. The employees should came forward to use the
delegation process an opportunity to develop themselves and to
establish structural relationship through out the organization whether or
not the subordinates in the study unit use delegation as an opportunity
and not as a threat is stated in the table 4.35.
Table 4. 35
Opinion of the Employees regarding Using Delegation as an
Opportunity of the CPCL During the Study Period
S . No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always True 41 24 5 205
2 Mostly True 32 19 4 128
3 Sometimes True 35 21 3 105
4 Rarely True 36 21 2 72
5 Not at all True 26 15 1 26
170 100 15 536
Source : Primary Data
The table 4.35 envisages that the delegation is not a threat in the
study unit but it is an opportunity for the juniors as 43 percent of the
employees strongly accept it with 333 scaling points. Only 36 percent of
the employees are against this fact with only 98 scaling points. Hence, it
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can be concluded that the juniors use delegation as an opportunity in the
study unit and not considered as a threat.
High Team Spirit
There should be a team spirit among workers i.e. workers should
feel their joint responsibility. Efforts should be made let the workers
should feel that their work as a team can only accomplish the goals of
the organization. For this, employees should be educated so that they
may extend their cooperation to the organization. In order to assess the
level of team spirit that exists in the study unit, the opinion of the
employees is recorded in the table 4.36.
Table 4.36
Opinion of the Employee regarding High Team Sprit of the CPCL
During the Study Period
S.
No Opinion
No. of
Respondents %
Scaling
Points
Score
Points
1 Most Always True 58 34 5 290
2 Mostly True 45 26 4 180
3 Sometimes True 40 24 3 120
4 Rarely True 17 10 2 34
5 Not at all True 10 6 1 10
170 100 15 634
Source : Primary Data
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The table 4.36 shows that as much as 60 per cent of the
employees in the study units strongly agree that the team spirit is very
high in the study unit confirm it with a minimum of score of 470 points to
its favour. Just 16 percent of the employees are against it with 44 score
points. Hence, it can be concluded that there is team spirit with high
magnitude in the study unit. So, esprit de corps principle of
management is very effectively followed in the study unit.
Saving Mental Energy for the Future
The work system should be designed in a way such that the
subordinates need least concentration on routine and regular works
without wasting their mental energy. Their mental energy should be
diverted for the future challenging assignments. The opinion of the
employees regarding how the work system enable them to have their
mental energy for the future is given in the table 4.37.
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Table 4. 37
Opinion of the Employees regarding Saving Mental Energy For The Future of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always True 48 28 5 240
2 Mostly True 40 24 4 160
3 Sometimes True 29 17 3 87
4 Rarely True 27 16 2 54
5 Not at all True 26 15 1 26
170 100 15 567
Source : Primary Data
As shown in the table 4.37 it is clear that as much as 52 per cent
of the employees agree that there is vast scope for the employees to
save mental energy for the future. Eventhough 31 per cent of them
scale against it but with only a meager score of 80 points. So, it is rightly
concluded that the organizational set up is such that which help to save
the mental energy of the employees in the study unit.
Job Rotation Facilitates Employee Development
The major objective of job rotation training is the broadening of
the background of employee in the organization. If an employee is
rotated periodically from one job to another job, he acquires a general
background. It provides a general background to the employees training
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takes place in actual situation , competition can be stimulated among the
rotating employees and it stimulates a more co-operative attitude by
exposing a man to other fellow’s problems and view points. Whether or
not job rotation facilitates employee development is assessed in the
table 4.38 on the basis of the opinion of the employees.
Table 4. 38
Opinion of the Employees regarding Job Rotation Facilitates Employee Development of the CPCL During the Study Period
S. No
Opinion No. of
Respondents %
Scaling Points
Score Points
1 Most Always True 46 27 5 230
2 Mostly True 44 26 4 176
3 Sometimes True 36 21 3 108
4 Rarely True 32 19 2 64
5 Not at all True 12 7 1 12
170 100 15 590
Source : Primary Data
It is evident from the table 4.38 that the job rotation system
followed in the study unit facilitates employee development as 53 per
cent of the employees agree to it with a score of 406 points out of 590.
Only 26 per cent of them disagree to it with meagre score of 76 points.
So, it can be rightly stated that the job rotation system adopted in the
study unit strongly facilitates the development of the employees.
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From the above analysis of the opinion survey on Human
Resource Development Climate in the study unit, the strengths and
weakness in the Human Resource management are identified and
threats that are likely to take place in the near future and the
opportunities that are to be available to over come such threats are also
assessed and summarized in the tables 4.39 and 4.40.
Table 4.39
Strengths and Weaknesses on Human Resource Management in CPCL
Sl.
No
Strengths Weaknesses
1. High level informal management 1. Developing the subordinates
2. Humanely treatment 2. Trusting each other
3. Effective personnel policies 3. Freedom to express the
feeling to the superiors.
4. Conducive psychological environment.
4. Preparing juniors for the
future.
5. Promotion polices. 5. Delegation of Authority.
6. Reward for good work 6. Opportunity for training
7. Effective communication 7. Encouragement to creative ideas.
8. Training 8. Career opportunities.
9. High team sprit 9. Out side training.
10. Job rotation facilitates employee development
11. No favoritism in performance Appraisal.
Source : Compiled by researcher
186
The table 4.39 reveals that conducive physiological Human
Resource Development climate in the study unit is its strengths. The
personnel policies like the promotion, job involvement and performance
appraisal are adding to the strength. There is team sprit and also
humanely treatment in the organization. Effective communication
ensures high level informal management. But there is lack of interest on
the part of the top management in developing the subordinates, treating
each other and preparing them for the future. Delegation of authority
also needs attention. There is need for improving training opportunities
and extending encouragement for new ideas outsource training is also
identified as a weakness. To conclude the strengths of the study unit
are remarkable eventhough there are some weaknesses in the human
resource section.
Table 4.40
Threats and Opportunities on Human Resource Management in CPCL
Sl. No
Threats Opportunities
1. Outside leadership in labour union
1. New projects in the nearby areas.
2. Political interference 2. More potentiality for future employment and development
3. Automation and replacement of labour
3. Foreign projects under collaboration
4. Ratio of internal promotions to external recruitment.
4. Availability of well educated and qualified manpower.
5. Training in foreign countries.
Source : Complied by researcher
187
From the table 4.40 it can be perceived that the variation in the
ratio of internal promotions to external recruitment will be a threat to
study unit as there is only limited scope in the organization for
developing the juniors to the future needs but this threat can be avoided
as there is scope to recruits plenty of educated people. Political
interference can not be considered as a threat as long as Human
Resource Development policies of the study unit are good and
acceptable to all.