SWOT Analysis on Financial Management in...

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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


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


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


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


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


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


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


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



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


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


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


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


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


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



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


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


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


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


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


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



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


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


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


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


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


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


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


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


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





Total 170 100 15 567


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






Total 170 100 15 529


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





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


S. No

Opinion No. of

Respondents %

Scaling Points

Score Points

1 Most Always

True

63 37 5 315


3. Sometimes

True

39 23 3 117



Total 170 100 15 649


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






Total 170 100 15 570


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


3 Sometimes

True

36 21

3 108



Total 170 100 15 595


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



3 Sometimes True 46 27 3 138



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


3. Sometimes

True

38 22

3 114



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





Total 170 100 15 482


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


3 Sometimes

True

26 15

3 78



Total 170 100 15 568


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


3 Sometimes

True

31 18

3 93



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





Total 170 100 15 552


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


3 Sometimes

True

38 22 3 114



Total 170 100 15 573


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






Total 170 100 15 580


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


S.

No Opinion

No. of

Respondents %

Scaling

Points

Score

Points

1 Most Always

True

38 22

5 190


3 Sometimes

True

36 21

3 108



Total 170 100 15 544


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





Total 170 100 15 578


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


3 Sometimes

True

36 21

3 108



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


3 Sometimes

True

21 13

3 63



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






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





Total 170 100 15 599


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


3 Sometimes

True

26 15

3 78



Total 170 100 15 634


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






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





Total 170 100 15 620


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






Total 170 100 15 565


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






Total 170 100 15 520


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






Total 170 100 15 620


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






Total 170 100 15 533


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






Total 170 100 15 582


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






Total 170 100 15 566


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






Total 170 100 15 602


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






Total 170 100 15 548


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






Total 170 100 15 539


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.

179

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






Total 170 100 15 561


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

180

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






170 100 15 536


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

181

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


S.

No Opinion

No. of

Respondents %

Scaling

Points

Score

Points






170 100 15 634


182

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.

183

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






170 100 15 567


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

184

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






170 100 15 590


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.

185

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.


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.

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