Employee Relations:

UNIT-1

Employee Relations:
Employee relations establish and maintain a favourable relationship among
employees. Study employee relations roles and responsibilities in detail.

Employee relations also refers to the efforts made by a corporation – or the HR department – to
manage such a relationship. Employee relations policies and programmes frequently formalise
these efforts.

Some of the popular employee relations examples are:

1. Workplace Conflicts – Employee conflicts and disagreements arise all the time. These are
frequently the outcomes of inadequate communication. Although an HR department will never be
happy to serve everyone, if disagreements emerge regularly, employee dissatisfaction will grow,
and the problems will only become worse until they are addressed.
2. Workplace Bullying – When a simple disagreement evolves into bullying, you have a severe
problem. Allowing this to happen at work will result in lower employee productivity, higher
absenteeism, and an unfavourable brand image (not to mention legal action). Take bullying
reports seriously and, if necessary, launch investigations.
3. Workplace Safety – If an accident occurs at work, the employer may be held liable for any
injuries, medical leave, or lost wages. Furthermore, the corporation will bear the hefty expense of
reduced manufacturing. A primary employee relations priority is promoting and promptly
addressing workplace safety issues.
4. Hour Issues – This is one of the important employee relations examples that you cannot
overlook. When employees often complain that their hours are not being counted correctly (or
when managers accuse employees of dishonest hour tracking), it’s time to go deeper into the
situation. Wage and hour infractions on the federal level are illegal and must be addressed.

Some of the important employee relations roles and responsibilities are as follows:

 Ensuring that the company’s treatment of employees is in line with its key business principles
and goals.
 Developing and implementing employee relations best practices and initiatives in collaboration
with top business stakeholders and HR departments.
 Dealing with employee complaints, grievance procedures and counselling in collaboration with
other stakeholders.
 Promptly and effectively investigate and resolve complex or crucial employee relations issues.
 Regularly collecting and analysing employee input at all levels, as well as changing people
programmes and policies to achieve better results.
 Participating in and/or leading continuous improvement projects.

Types of Employees Relations:-

1. Employer branding – It includes establishing a positive employer image. You must focus on
your brand values and knowledge in this area. To summarise, as a successful employer, you
must optimise your personality.
2. Recruiting— Here, you must concentrate on the mindset of the candidate looking for a job at
your firm. Examine their communication abilities, thoughts, and approach to the position they’re
looking for. Keep the recruiting process fun, fair, and simple while remaining professional.
Candidates will be at ease, allowing them to provide their best performance.
3. Onboarding – When a new employee joins your firm, you should treat them with respect. You
should introduce the candidate to your other employees. You may also host a welcome lunch or
a modest celebration for new employees.
4. Leadership– It is, as the title implies, a significant responsibility. The appropriate kind of
leadership can help the organisation succeed. Leadership requires someone generous, well-
behaved, honest, and professional. The entire company’s workforce has high expectations
of the person in charge of leadership.

5. Maintaining public relationships– It is one of the important types of employee relations that is
defined as the administration of all staff members’ relationships. You should always talk with all
employees before releasing any information or news about your organisation to the public.

Importance of Employee Relations:

1. Employee engagement: It can be defined as the extent to which the employees feel
passionate about their jobs and workplaces. A research study shows that 90% of the leaders
have the idea of how important employee engagement is however, only 50% of these
employers actually know how it can be expressed. A few tips, discussed below, can help
improve employee engagement.
 Review and update the employee engagement
 Promote open and honest communication to highlight issues
 Encourage continuous feedback and recognition
 Promote sharing of thoughts and feelings
 Encourage discussions
2. Employee satisfaction: Employee engagement also leads towards employee satisfaction.
Employees that are more engaged tend to experience employee satisfaction at a higher level
and vice versa.
3. Employee productivity: Similarly, employee engagement and employee satisfaction are
both crucial for ensuring employee productivity. Increased employee productivity ensures
increased profit and revenue to the business.
4. Employee retention: It has been observed that more employees are switching jobs these
days. It happens when employees feel isolated and frustrated in the company. Fortunately,
employee retentions can be ignored by adopting several ways, and developing good relations
with employees is one such example. With enhanced mutual relations, employees shall feel
satisfied and would not consider other opportunities. Therefore, realizing the importance of
employee relations will also lead towards employee retention.
5. Employee advocacy: The contact and social circle of the employee can open new avenues of
success to the organization. However, the connections of employees can only be reached if
the employee has the feeling of ownership of the company. It can only be ensured if the
management keeps their employees in the loop and share important content and details with
them.
6. The employee experience: Employee experience is very similar to employee satisfaction in
its context. Employee experience is mandatory to provide a healthy workplace. A better
employee experience can be made sure by promoting transparent and open communication
between management and employees.
7. Employee empowerment: The employees of business organizations want to own the
company they work for. Also, they want to have a certain level of say in the decision-making
process of the company. This refers to employee empowerment which requires the employees
to be able to take their own decisions to achieve their goals as well as fulfill their
responsibility in their own ways. A good communication strategy and employee relations are
all that are required to provide employee empowerment.

Employee Relations Management Tool:

1. Employee Benefits Platform

A strong benefits system that rewards hard work is important in the workplace as it allows
employees to feel valued. A good benefits system demonstrates a commitment to the
employee on a personal level. A commitment that is beyond the scope of their work and
acts as an incentive for them to work harder and smarter.

For example, Zest has an employee benefits platform that is sure to help improve employee
relations. The easy-to-use, online system allows employees to engage with their benefits,
anytime, anywhere, anyplace. It also as offers services that help to improve in-house
communication. This tool will allow you to foster better working relationships with your
employees.
2. Staff Feedback Surveys

Online surveys such as Survey Monkey are another useful tool you can use to help manage
your employee relationships. They will allow employees to voice their opinions, both positive
and negative, regarding the company and how it is run. When setting up a survey, you can
choose to ask specific questions. Alternatively, you can allow employees to enter their own
thoughts freely and without prompt.

Here are some great sample questions:

 Do you feel supported in the workplace?

 If there was something you could change about the office, what would that be?
 What is something we are getting right? What is something we are getting wrong?

It is vital that employees are able to express themselves at work, especially if they are
unhappy. Anonymised surveys give them this opportunity. They will not have to worry about
any repercussions that could occur if they speak out. Furthermore, as the survey is
completed online, employees may feel more comfortable discussing important issues that
could be difficult to discuss face-to-face.

We’d recommend sending out these surveys on a bi-monthly basis, alongside follow-up
emails detailing any changes you are going to make or implement as a result of the surveys.
This will help employees feel as though they are respected and listened to, especially if you
implement necessary changes speedily and with discretion.

3. Online Tracking and Training Software

Another way in which you can foster better relationships with employees is by providing
numerous online training opportunities. E-learning tools such as Learn Upon can help you
set up tailored online training for your employees in no time! This will allow them to develop
the skills they need to advance in their career, meaning they will also perform much better.
What’s more, the online tracking element means you will be able to see who is advancing
and who may need further support.

As a result, this is a useful tool in managing employee relationships. You can then offer
more focused guidance to those who need it. You can also pair them with another employee
who can guide them in the right direction. This will allow them to learn from each other and
develop their working relationship.
 4. Instant Communication

Good communication is a key element of any business and is often integral to a company’s
success. This means that each employee should feel entirely comfortable asking for help and
resolving issues in the workplace, as well as simply being able to check in with each other
on a day-to-day basis. Effective communication improves team morale and individual
wellness for staff at all levels of seniority – from interns to managers.

Diversifying the ways in which you communicate in the office is key. This is particularly
important in the age of remote working where different individuals prefer different methods
of communication, such as text, audio or face to face. Video conferencing tools such as
Zoom, Microsoft Teams or Skype are great for virtual meetings. They allow all collaborators
on a project to come together and can be useful for weekly team briefings. Alternatively,
instant messenger services such as Google Hangouts allow you to create that ‘corridor
meeting’ and ‘open-door’ vibe even if you’re not in the same physical space.

Core Issues of Employee Relations Management:

1. Effective Conflict Management

Regardless of the industry you belong to, conflicts are bound to happen as long as there’s
more than one person involved. They can arise between managers and team members or
amongst colleagues. Sometimes, employees could be having problems with some of the
company’s culture. Either way, the organization should have a way to manage these
conflicts.

Among the things the management could do is having a written handbook that employees
can refer to when they don’t know how to act during a given situation. When you have
everyone following the same guidelines, conflicts may be reduced. On many occasions,
conflicts usually arise when some employees don’t seem to follow the rules, especially if
they haven’t been spelled out openly prior.

2. Time And Attendance Concerns

Employees may sometimes have issues with the amount of time they work, while some
could be perpetual latecomers and absentee workers. Employee attendance goes hand in
hand with their productivity and performance. When one person is always tardy, other
employees need to work more to cover for the other’s lapses. This can leave them
demoralized if they feel that the company isn’t taking any steps to remedy the situation.

Here, strict attendance policies need to be set and enforced company-wide to improve
efficiency and productivity. The company can invest in clocking in devices or time tracking
software programs to ensure punctuality and productivity. This gives the human resource
and management teams to have verifiable information on employee attendance and hours
worked.

3. Adequate Safety At Work

Accidents can occur anytime, but employers should ensure they’ve taken preventive
measures to mitigate the risks present. Promoting safety for employees at work should be a
priority in every organization. Have signs and labels for directions and warnings. Ensure that
all safety equipment such as fire extinguishers is put in place. Undertake regular training on
safety and bring professionals to educate employees and share safety tips that may help
them be safe at work.

Create and enforce a safety policy that includes overtime rules so that some employees
don’t overwork themselves making them fatigued and prone to accidents at work. It also
helps to give employees small breaks within the shift to re-energize and help them to stay
focused.

If your employees feel unsafe at work, they can hate their work or absconding duties
altogether. But, if an employee suffers an injury at the work premises, the organization will
have to compensate the employee for it. So, keeping the workplace safe is a win-win for
each party.

4. Wages, Pay Raises, And Benefits Issues

The reason people work is to get paid. But that’s not all; they always want to feel adequately
compensated. Employees often compare their pay with team members who are on the same
level as they are. They want to know why one employee received a pay raise and not them.
They also analyze holiday and overtime payments to check for underpayment.

Failing to address compensation package issues can lead to disputes with employees.
Worse still, others may sue the company for unequal pay. The first

thing is to ensure that each employee’s pay grade aligns with their job. Ensure that the company has a
compensation policy and pay guidelines for each level of employee. Everyone on the same level
should earn the same basic salary or wage. Also, have a procedure for a periodic employee evaluation

review to know when one stands a chance for a possible salary increase.

This issue should be sorted right at the employee onboarding stage when you can let the employee
know what and how you arrived at that amount. It gives an employee a clear understanding of what
they should expect as compensation for their services. Without this, you can expect low employee
retention rates.

5. Annual Leave Disputes

Each employee is entitled to annual leave, which is important for employees to recharge their
energies. However, each company has its guidelines, but they should be in line with the federal and
state labor laws. Be transparent about the leave entitlement and the application process.

Some employees may feel victimized if they’re denied leave, while others take their days off
without any issues. This can create tension, a sense of unfairness, divisions, and conflict at
the workplace.
Strategic Employee Relations Management:
INDIVIDUAL EMPLOYEE INVOLVEMENT :

Whether or not employees are involved and able to influence decision making collectively, there
remains scope for direct individual involvement. Interest in this area of activity has increased in
recent years, partly as a result of government interest and partly because employers have seen
involvement as a means by which employee commitment and organisational communication can be
improved. Involvement initiatives are particularly useful in an environment in which unions are
absent or marginal – because they can provide an alternative means whereby managers gain an
understanding of feelings and attitudes ‘on the shop-floor’. Direct forms of employee involvement
are not incompatible with collective forms such as are associated with trade union recognition.
However, they are generally initiated by employers and are often seen by critical writers as a
method that is used to discourage trade union growth. The suggestion is that if employees’ desire
for involvement can be partially satisfied using individual initiatives, they will be less inclined to seek
it through collective means. While it is clear from some surveys (for example IRS 1999) that some
employers specifically design employee involvement initiatives to weaken trade unions, a good
business case can be made on many other grounds.

The major reasons are as follows:

• Employees like to be involved and appreciate involvement initiatives.

• Employee involvement initiatives improve organisational commitment.

• Involvement makes change easier for employees to accept.

• Involvement increases levels of job satisfaction.

• Involvement is associated with lower levels of staff turnover.

In theory, therefore, employee involvement can potentially be seen as making a significant

contribution to improving organisational performance. He states that all that can be said with
certainty is that employees like the idea of involvement initiatives and prefer participative
management styles to those which are autocratic in nature. The evidence is too tenuous to be a base
for any firm claim that involvement leads to a change in employee attitudes or to improved
organisational performance. The claim is nonetheless persuasive intuitively, and can explain the
growth in direct involvement initiatives over recent years.

Team briefing :

Team briefing is an initiative that attempts to do a number of different things simultaneously. It

provides authoritative information at regular intervals, so that people know what is going on, the
information is geared to achievement of production targets and other features of organisational
objectives, it is delivered face to face to provide scope for questions and clarification, and it
emphasises the role of supervisors and line managers as the source of information. With goodwill
and managerial discipline, team briefing can be a valuable contributor to employee involvement, as
it deals in that precious commodity, information. Traditionally, there has perhaps been a managerial
view that people doing the work are not interested in anything other than the immediate and short
term and that the manager’s status partly rests on knowing what others do not know. For this
reason all the managers and supervisors in the communications chain have to be committed to
making it a success, as well as having the training that Holden refers to above. Team briefing gets
easier once it is established as a regular event. The first briefing will probably go very well and the
second will be even better. It is important that management enthusiasm and commitment do not
flag just as the employees are getting used to the process. During economic recessions there is a
boost to the team briefing process because so many managements have so much bad news to
convey. When you are losing money and profitability, there is a great incentive to explain to the
workforce exactly how grim the situation is, so that they do not look for big pay rises. Whatever the
economic climate, team briefing continues to be used widely and was found to operate in a majority
of organisations featured in the 1998 WER Survey (Cully et al. 1999).

Quality circles:

Originating in Japanese firms, quality circles comprise small groups of employees (10–15 maximum)
who meet regularly to generate ideas aimed at improving the Part V Employee relations 464 quality
of products and services and of organisational productivity. They can also be used as problem-
solving groups and as a means by which employee opinion is transmitted to senior management.
Some quality circles consist of staff who work together within a team or organisational function,
others are cross-functional and focus on interdepartmental issues. Not only, therefore, are quality
circles a potential source of useful ideas for improving systems and saving costs. They also give
people a welcome opportunity to contribute their thoughts and experience. A general positive
impact on employee attitudes should thus result.

News sheets:

Another common form of employee involvement occurs through the regular publication of in-house
journals or news sheets either in paper or electronic form. On one level they simply provide a means
by which information concerning finances, policy and proposed change can be transmitted by
managers to employees. This is a limited form of employee involvement which does little more than
improve the extent to which employees are informed about what is going on elsewhere in their
organisations. This will engender a perception of greater involvement and belonging, but does not
directly involve employees in any type of decision making. For that to occur the news sheet must be
interactive in some way. It may, for example, be used as a means by which employees are consulted
about new initiatives, or may provide a forum through which complaints and ideas are voiced.

Attitude surveys :

Regular surveys of employee opinion are very useful from a management point of view, particularly
where there are no unions present to convey to management an honest picture of morale and
commitment in the organisation. In order to be effective (that is, honest), responses must be
anonymous, individuals stating only which department they work in so that interdepartmental
comparisons can be made. It also makes sense to ask the same questions in the same format each
time a survey is carried out, so that changes in attitude and/or responses to initiatives can be tracked
over time. The major problems with attitude surveys are associated with situations in which they
reveal serious problems which are then not properly addressed. This can easily lead to cynicism and
even anger on the part of the workforce. The same is true of suggestion schemes. It is counter-
productive to involve employees if their contribution is subsequently ignored.

Teamworking :
Teamworking is a direct descendant of the concept of autonomous working groups, which had their
highest profile in the Volvo plant at Kalmar (now closed down), and a rather vague movement of the
1960s, called Quality of Working Life (QWL). At Volvo there were the twin aims of improving the
quality of working life and enhancing productivity. The QWL was directed mainly at making life more
tolerable, as the title implies, and it is difficult to see what impact it had. More recently teamworking
has become more comprehensive in its approach and its objectives. Teamworking aims to focus
work activity among small groups of about a dozen members, who are mutually supportive and who
operate with minimal supervision. Management sets performance targets (often after consultation)
and allocates tasks, but it is for the team itself to decide exactly how these are to be achieved. The
team organises its own activities, appoints its own leaders and works out for itself how to overcome
problems. Teamworking can thus be characterised as a form of worker control, even though it
operates within heavily prescribed limits. Managers refrain from giving day-to-day supervision, but
are on hand to give advice or more direct assistance where necessary. Disciplining staff, for example,
is a task carried out by managers and not by team members. Teamworking is often associated with
situations in which several regionally based teams compete with each other to meet or exceed
performance targets. Team-based remuneration then accounts for a proportion of the total pay
received.

INTERNATIONAL PERSPECTIVES :

Employee relations, more than other areas of HRM practice, varies considerably from country to
country. Although some analysts believe that there has been a degree of convergence in recent
years in response to increased global competition and new technologies, it is clear that substantial
differences remain. In important respects different countries have witnessed different responses to
the same environmental pressures (see Bamber and Lansbury 1998 for a summary of these debates).
Comparative studies undertaken in the industrialised countries reveal the continued effect of
different industrial relations traditions on contemporary practice. They also identify the importance
of historical experience and institutional differences in explaining the observed variations. The major
dimensions across which national systems vary are as follows:

• high union membership v. low union membership;

• single-employer bargaining v. multi-employer bargaining;

• interventionist government role v. non-interventionist role;

• adversarial tradition v. consensual (or social partnership) tradition;

• autocratic management style v. involving management style.

Strategy and Employment Policies:

1. Tailor The Policies to Organization

HR policies and procedures should be aligned with the organization’s vision, values, and
culture. The size of the organization and resources should be taken into account and ensure
that those policies are reflected in the organization.

For example, you can come up with policies that state that all employees should wear
personal protective equipment while working.
2. Discuss The New Policies

Discussing the new policies before implementing them is important because everyone will
have an opportunity to give their views and concerns. Having a discussion will create a clear
understanding of the policies and how they will be beneficial.

3. Communicate The Policies

Communication is very essential. HR policies handbook should be accessible to everyone

be it in softcopy, printed, or shared via email. The policies can also be displayed on notice
boards. New members in the company should be given the handbook to go through it and in
case of any inquiries, they can have their questions answered. HR policies can be translated
into various languages that will accommodate everyone to understand.

4. Training Programs

For you to know how to create and implement effective HR policies, then taking up training
on HR policies should be your priority. Having relevant skills and understanding how to
implement HR policies is effective, relevant, and sustainable.

5. Enforce The Rules

In case there is a violation of policies then steps to resolve it should be taken to resolve the
issue. An example is time management, if most members are not time-conscious then the
policy should be reviewed to address the issue.

6. Monitor and Review the Policies Regularly

Policies should be reviewed and updated regularly to ensure compliance with the law. For
HR policies to be valid, regular auditing should be conducted. This can be done annually but
for specific changes, the policies can be done often. For the policies to be updated, legal
amendments, changes in the market, technological advances, and business growth should
be kept in mind.

Employment Policies, Future Challenges:

1. Competition (attracting and retaining good talent)

Competition is not only the most important factor in business and client interactions but also
the most influential and threatening factor in HR. It is all the more difficult for small and
medium enterprises since they need to compete with big names and brands while recruiting
talent.

The challenge does not stop at recruitment, but goes beyond to retention of employees and
offering the correct benefits, exposure, opportunities, and work environment. Solution:
Strong employer branding plays a crucial role in attracting the good talent to your
organization.

With the emerging impact of social media and platforms like Glassdoor and Google, it helps
to build a strong and positive brand presence on these platforms, because your prospective
employees are privy to anything and everything published here.

Being active in Corporate Social Responsibility (CSR) activities is not an obligation but a
privilege to many employers to give back to society. This passively helps set an emotional
platform for prospective employee–employer bonding.

Furthermore, having a structured onboarding process helps combat initial hiccups in an

employee’s experience in a new work environment, such as awkwardness to interact with
strangers, not knowing whom to approach for issues, concerns, or questions, not knowing
one’s key performance indicators for the job role, not knowing team members or the
immediate manager well enough, etc.

2. Job and Culture Fitment

Recruitment is the first step that can make or break the success of a prospective employee’s
journey in your organization. With expedited recruitment processes because of the growing
need for human capital, assessments for job and culture fit are being restricted to a few
rounds or hours of discussion, meetings, and interviews.

While this could be an advantage to speed up your recruitment process, the risk of incorrect
or inaccurate mapping of a candidate’s skills to the job role and organization culture persists.
This is leading to higher attrition rates and lower average employee tenure of organizations.

Solution: The first and foremost step to combat this challenge is accurate and effective
screening of candidates. It is important for an organization to have clarity on what exactly
they need in a candidate for a particular profile; identify forums/sites/avenues frequented by
people matching most, if not all, these requirements; and post their job openings there.

This would take care of most applications being the right fit for the job. Role-plays during
face-to-face discussions will ensure culture match assessments. Having probation periods or
contractual arrangements for roles ensures that the candidate and organization have
enough “secured” time to assess fitment and agreement.

3. Compensation and Benefits

With the cut-throat competition in today’s corporate world, it is becoming difficult for
organizations (especially small and medium enterprises) to keep up with the compensation
and benefits offered by big names.

Recruitment and retention then become extremely difficult. The increasing costs of benefits,
training, taxes, and other human capital investments pose an additional threat to
organizations’ progress and success.

The recent benefits being offered, in addition to attractive compensation packages, make it
challenging to keep pace in order to still be a strong contender among sought-after
employers.
Solution: Besides compensation structures meeting industry standards, it is important for
organizations to offer other attractive benefits. However, these cannot be at the cost of the
organization’s investment in human capital growing two-fold.

One way to ensure return on investment is to offer variable, performance-based components

to an employee’s compensation, thus keeping a check on performance-linked reward. A
strong reward and recognition program also serves as a good motivation and attraction to
perform.

With increasing healthcare costs, organizations can either choose to pass the costs to
employees (may be a hindrance in recruitment and retention) or bear the costs themselves.

In case of smaller organizations, offering other flexible and attractive benefits to combat
health-related concerns, such as extended vacation time, flexible timings, health camps and
well-being programs, transport benefits, etc., could be a good idea.

4. Change Management

Change in an organization is inevitable in the fast-paced, ever-changing corporate world

today. This change could be structural, economical, geographical, procedural, managerial, or
technological, the latter having the greatest influence and posing the biggest challenges to
HR.

HR faces major issues of reduced employee morale and satisfaction, self-doubt, attrition,
etc., during change. Employees not being able to adapt to change can lead to the failure or
death of an organization.

The inability to adapt to change could be because of various factors, such as employee
resistance to change, lack of necessary skill and training to adapt to change, sudden but
drastic requirements to change, etc.

It is thus imperative for an organization to foresee, plan/predict, and communicate change.

Solution: The most important practice to manage change positively is to predict it and
prepare your employees for it. Not everyone is open to sudden change.

Each employee would take different time to adapt to change of any kind. It is thus important
to communicate, clearly and transparently, about the change, the need for the change, the
benefit of the change, etc.

Further, communication should be regular before, during, and after the change to keep a
check on the progress with respect to the change. It is also important to provide the
necessary training and resources to upskill employees to handle changes in their work, job
role, or organization at large.

Providing the necessary training makes them feel more confident and capable of managing
the change, resulting in them accepting change more positively and openly. Another crucial
aspect to keep in mind is that the focus on employee growth and progression is evident to
them even during the change.

5. Continuous Learning and Succession Planning

Upskilling and continuous learning are extremely crucial to an employee’s growth and
success in an organization. These days, with the increasing demands of the business,
organizations are finding it difficult to foster an environment of continuous learning and
development and keep pace with the rising ambitions of employees, for the paucity of time.

With the need for rapid growth and progression, planning the succession and growth path for
all employees alike is becoming difficult. With lesser positions at the top, being able to create
an interest and attraction in those positions and providing ample opportunities is a big
concern for HR.

Solution: The basic principle to effective training and development is to identify trainings
relevant to the current or future role of an employee. Further, adopting a practical rather than
theoretical approach to training helps. For example, presentations and PPTs are now old
school.

Current affairs, case studies around these, role-plays, debates, etc. are the new and
effective ways of training. With the advancement of technology, online training spread over
longer durations and offered to employees from home helps address challenges of time.
Cross-training and cross-skilling can work for creating opportunities of lateral progression for
effective succession planning.

6. Performance Management and Alignment

While an organization may be able to provide the necessary training and development to its
employees, it is equally important for it to be able to track the impact of this training on the
performance of the employees.

Performance management and the related next steps, such as performance improvement
plans, are becoming difficult with the fast pace of business operations and the lack of time
for performance alignment.

Larger organizations also face challenges of helping employees understand how their job
roles and performance indicators align to and contribute to the achievement of the overall
organizational objectives.

Solution: Having a strong and defined, yet simple, performance framework is very important.
Key performance indicators should not be difficult to understand or manage and should be
directly related to the job role of the employee.

The employee should be able to directly relate his/her performance to the targets set for him
and should be able see how each achievement is contributing to the big picture.

Using Objective and Key Result software will help align individual goals to team goals and
team goals to organizational goals, showing related progress in each. Regular feedback
discussions also help the employee understand the direction of his/her performance and
make amends accordingly.

7. Diversity

While having a good ratio of diversity is a boon to an organization and is a good thing to
boast of, from an HR perspective, organizations face challenges managing this diversity in
age, gender, nationality, ethnicity, etc.

It is a big challenge to cater to and address the requirements and experience of employees
of different ages, genders, nationalities, or ethnicities. Further, maintaining employee
engagement and fostering effective communication among employees from different
backgrounds is difficult and leads to employee disagreements and souring relations.

Solution: To resolve conflicts arising out of this diversity, it is important to sensitize all
employees toward the cultures of different people they work with. Culture orientation as part
of the onboarding process is a prime step in the correct direction.

The organization’s values and work culture should give prime importance to team work and
promote a work environment of respect and understanding for peers. Team-building
activities aligning employees to a common objective help integrate employees of different
cultures and backgrounds.

Setting a set of organization values or standards of behavior within a workplace also helps
each employee understand his/her role, conduct, and behavior in an organization. While
adherence to policies and procedures is important, an organization needs to create a culture
that is welcoming and comfortable.

8. Leadership Development

In its efforts to provide the appropriate resources and training platforms to its employees, an
organization often overlooks the need for training and grooming of leaders in particular.

It is a common misconception that leaders have reached a stage where they do not need to
learn more and, if they do, that can be achieved through self-learning. Leaders are very
crucial factors influencing organizational success and employee satisfaction.

The lack of leadership grooming results in employer-employee conflicts and disagreements

and an unhealthy work environment, thus affecting employee morale and satisfaction, and
eventually, the organization’s goals.

Solution: It is extremely important that an organization devices a learning and development

strategy encompassing all levels within the organizational chart. Training, mentoring, and
succession planning for leaders should be given as much importance as it holds for other
employees.

While technical aspects can be self-learned, soft skills, such as having difficult
conversations, providing developmental feedback, conducting meetings, etc., need to be
taught through experience, exposure, and feedback.

To avoid the risk of losing leaders to ambition and other organizations offering bigger roles
with a larger scope, organizations should show leaders the path ahead and what the
organization foresees for them in the near future, financially and professionally.

9. Legislation (Labour Laws and Compliances)

With all labour laws becoming increasingly employee-friendly, it is a big challenge for
organizations, especially small and medium enterprises, to keep pace with these
requirements.

Further, because smaller organizations may not necessarily have a focused department for
HR, updating policies in accordance with changing laws is a big task, and an organization
could find itself in trouble if a lawsuit is filed for non-compliance.
These laws and legislations relate to not just employment contracts but also hiring practices,
employee benefits, payments, and the like. Further, because most of these acts and
legislations are grey, correct interpretation is important for ensuring adherence, yet not
overcommitting to employees.

Solution: Hiring statutory compliance agencies is a big advantage to an organization

because the organization not only saves time but also receives expert opinion and has all its
policies and guidelines in accordance with industry standards.

While these could come at a cost, it is still worth it compared to the cost for non-compliance,
which could include cost in case of a lawsuit and the cost of losing one’s brand image as an
employer. Regular audits of policies and guidelines and their amendment is a must. Further,
the HR department of the organization should be agile enough to adapt all its practices to
the changing laws of the market.

Last, but not the least, it is extremely important for not just HR but also each employee within
the organization to understand the laws governing employment and its related benefits and
aspects, and this can be made possible through regular awareness drives around these
topics.

10. Data Security and Integrity

With the world becoming digital and employees using mobiles and other such devices at
work, organizations face a high risk of data leaks and misuse. Prohibiting use of mobile
phones and other such devices at the workplace would not be a smart step, as it would work
against the organization being employee-friendly.

With this, organizations struggle to keep their data secure and balance data security and
integrity with employee flexibility and freedom. Employee data leak and misuse is as critical
as client data leak and misuse.

Data leaks impact company reputation and the future success of an organization. The buck
for data security and integrity stops at HR and is not the sole responsibility of IT. Solution: It
is the responsibility of HR to manage and maintain data security while not disturbing
employee freedom and privacy.

An organization should have regular audits for information security practices to keep a check
on all departments and their security measures to protect data within.

Employee awareness of data integrity standards and best practices, such as password rules,
desktop rules, phishing emails, etc., should be the prime focus. Furthermore, HR should
formulate strong data protection policies and procedures to educate employees regularly.

The off-boarding process of the organization needs to be robust and detailed, covering all
declarations and checkpoints related to intellectual property and confidentiality.

Organizations would benefit from employee integration, cooperation, and communication. No

organization has ever prospered with employees working in silos. Thus, HR plays a crucial
role in managing the biggest asset of an organization—its people.
Human Resource Management is extremely crucial to create a unique workplace culture and
eliminate employee uncertainties, giving the organization a competitive advantage.

Thus, it is extremely crucial for organizations to focus on the above challenges, relate them
to specific causes or effects within their own work culture, and devise ways and plans to
address these urgently.

Employees are the face of an organization, its strongest ambassadors, and it is HR’s
responsibility to ensure employee experience and satisfaction as well as professional
alignment and progress. It is thus time organizations realize that their strength lies in the
human resources and proactively take steps in the correct direction.

The Psychological Contract:

A psychological contract encompasses the informal beliefs, ambitions,

obligations, and expectations the employee and the employer perceives.
Essentially, it’s how both parties understand their relationship outside of
the written and signed employment contract and what they expect the
other party to provide. It’s typically built on the actions of everyone in the
organization, and it strongly influences how employees behave,
organizations respond, and how we manage the employee experience.

Types of psychological contracts:

Psychological
Description
contract type

Focuses on a transactional relationship between an employee and an organization,

Transactional
emphasizing the exchange of specific tasks and rewards. The contract is usually short
psychological
and task-oriented. Employees expect fair compensation for their efforts and complian
contract
with explicit job requirements.

Occurs during organizational changes or transitions, such as mergers, acquisitions, or

Transitional restructuring. It reflects the expectations and obligations that employees have during
psychological periods of change. Employees may expect security, support, and assistance in adaptin
contract new roles or environments. The contract is often temporary and subject to revision as
transition progresses.

Balanced Emphasizes a fair and equitable exchange between employees and organizations. It
 acknowledges both monetary and non-monetary aspects of the employment relationsh
psychological
such as work-life balance, professional development, and job security. This contract t
contract
aims to foster mutual commitment, trust, and a sense of well-being for both parties.

Focuses on building long-term relationships between employees and organizations. It

Relational involves implicit expectations, such as job satisfaction, organizational citizenship
psychological behaviors, and opportunities for growth and advancement. The contract emphasizes m
contract loyalty, trust, and the belief that the organization will fulfill employees’ career aspirat
and provide a supportive work environment.

UNIT-2

Concept:

Industrial Relations deals with the worker- employer relation in an industry. This relationship
emerges out of work-related interactions between management and workforce. It applies to both
government- owned and privately- owned organizations. State plays an important role in shaping
industrial relations as it makes laws and sets regulatory framework for labour. Government has
attempted to make Industrial Relations more healthy through various statutory and non-statutory
methods. Legal framework constitutes various labour legislations which provide basis for
management and workers not only for creating efficient work conditions but also for maintaining
good relationship. Industrial relations in a country are affected by various factors, the prominent
being political ideologies, economic factors, strength of trade unions, awareness level of workers,
and management beliefs. Workers have been the weaker of the two parties ever since the factory
system began. Industrial relations function with the objective to bringing equality and equity
between the two parties, i.e., workers and management. It helps in standardizing terms and
conditions of working within organization, within industry and across industries. Characteristics of
industrial relations of a nation are determined by social structure, attitudinal structuring, historical
background, political structure, economic patterns. Thus, the concept of industrial relations is
dynamic, which is dependent upon the pattern of society, economic system and political set-up of a
country. Besides, the workers and management, State is an important part of industrial relations
since it influences these relations substantially. Thus, industrial relations is tripartite in nature.
Industrial relations is multidisciplinary in approach. Understanding the origin and nature of industrial
relations involves the study of history. Government interventions can be understood through the
concepts of political science. Since industrial relations is governed by a legal framework and evolves
through the decisions of various lawsuits, law has important bearing on it. It integrates the concepts
of economics as it involves issues related to wages, benefits, social security measures; it involves
understanding the conflicts, disputes, formation of workers’ unions, which involves sociology; it also
involves negotiations, understanding attitudes, ensuring workers’ safety-which may involve
psychology and social psychology. In today’s networked world, changes, events and upheavals in one
country can have significant implications for industrial relations as well. Moreover, international
bodies like International Labour Organisation have an important impact upon labour related issues.
Thus the discipline of international relations also contributes towards understand industrial relations
today.

Employee relations has three actors:

The workers and their organisations;

Employers and their organisations;

The Government

Definition:

‘Industrial relations can be simply defined as management of labour problems in an industrial

society, or more operationally, as the theories, techniques and institutions for the resolution of
contending money and power claims in an employment relationship’.

OBJECTIVES:

 Improving the economic condition of worker.

 To safeguard the interest of labour and management.
 Securing mutual understanding and harmony between different players in industry.
 To avoid industrial conflicts and disputes to enhance efficiency.
 To maximise productivity for the growth of nation.
 To maintain industrial discipline.
 To establish and maintain Industrial Democracy, by ensuring workers’ participation in
management.
 To maintain industrial peace by bring down strikes, lockouts.
 Ensuring fair and reasonable wages to workers to improve their standard of living
 Evolving a healthy social order.
 Promotion and development of healthy labour-management relations.

APPROACHES:

1. System’s approach

2. Unitary approach

3. Pluralistic approach

4. Marxist approach

Dunlop’s system approach:

The systems approach of ER was developed by John Dunlop in 1958. Dunlop is regarded as father of
industrial relations. He proposed that industrial relations system is a separate subsystem of society.
There are three components of this sub-system. The interactions interrelationships of the three
components of this sub-system constitute industrial relations. The three components are: i.
Management (comprising managers) ii. Workers (as informal and formal organisations) iii. State
(government bodies and organisations concerned with the relationship between workers and their
organizations). The interactions and interrelationships between the three parties result into
establishment of rules and regulations that governs the work-related behaviours of management
and workers. These rules make the sub-system of industrial relations different from other sub-
systems of society and determine the existence of industrial relations and are the important output
of industrial relations. The three components of industrial relations are influenced by the forces of
environment, i.e, technological factors, economic factors, market structures and other societal
forces. Though management and workers have divergent interests yet they share some common
objectives. These shared objectives drive them to resolve conflicts and work together for achieving
the common goals. This provides stability to industrial relations system. There are certain inherent
drawbacks in Dunlop’s approach. It assumes the stability of factors of internal and external
environment.

i. It does not explain how will the system function under dynamic conditions. Dunlop’s
approach focuses on rule making institutions and the settlement of conflicts. It does not
examine the causes of conflicts.
ii. There is no agreement as to whether the central feature of an industrial relations system
should be considered as a network of rules or as a process that makes rule.
iii. Dunlop’s system concentrates on the process and ignores the role and impact of informal
groups formed at workplace thus discounting behavioural dynamics.

Unitary approach:

Unitary approach perceives organization as an integrated system working in harmony. All the
members of the organization share the same objectives, interests and purposes, working towards
the common goals. Such an organisation ‘strives jointly towards a common objective, each
contributing to the best of one’s ability. Every worker has a place in organization and willingly
accepts his responsibilities for benefit of all, following the leader appointed by the system. Unitarism
is based upon paternalistic approach and believes that there should be one source of authority in an
organization and others should work under this authority to achieve common objectives. It demands
loyalty of all employees. Management’s authority is regarded as legitimate and rational. Any
opposition to it (whether formal or informal, internal or external) is seen as unwarranted. Workplace
conflict is perceived as disruptive and therefore trade unions are deemed as unnecessary. It is
normal for employees to cooperate with management. Conflict is as viewed as temporary aberration
resulting from poor management of employees, or the mismatch between employees and
organizational culture. This approach has the strength that it emphasizes on the significance of
workers in the organization.

The approach has failed to consider different variables affecting IR within individual organizations
and the total industrial sector. This approach has been criticized on the basis that it is manipulative
and exploitative. Also, it is argued that conflict is inevitable to industry.
Pluralistic Approach:

Pluralistic perspective also known as the Oxford Approach views society as containing multiple but
related interests which must be maintained in equilibrium. On the same lines, organization is
perceived as being made up of significant and divergent subgroups, namely management and trade
unions. Since interests are opposing therefore conflicts of interest and disagreements between
management and workers/workers’ organisations over work-related issues and economic issues, like
distribution of profits as normal and inevitable. According to pluralistic approach, management
should be less authoritative and more cooperative as to maintain harmony. Trade unions are
deemed as legitimate representatives of employees. They should anticipate and resolve this by
securing agreed procedures for settling disputes. The focus is on the resolution of conflict rather
than its generation, In contrast to the unitary approach, the pluralistic approach considers conflict
between management and employees as rational and inevitable. Conflict is dealt by negotiations
and mutual discussions and is not viewed as undesirable and something to avoid. In fact, if divergent
views and conflicts are properly managed, it could lead to could lead to development and positive
change. Thus, managers should be practical in accepting conflict as natural outcome of relations
between management and workers. Industry has greater proclivity for conflict rather than harmony.
Conflict is an important component of pluralistic approach. A conflict situation enhances power of
trade unions as give them bargaining power in an effort to resolve the conflict. It is an essential
ingredient for the pluralist approach. The pluralistic approach perceives organizations as
combinations of competing interests, where the role of the management is to resolve differences
between the opposing interest groups. Trade unions as considered as legitimate representatives of
employee interests. Employees join unions to protect their interests and influence decision-making
by the management. Unions, thus, balance the power between the management and employees.
Stability in industrial relations is achieved through bargaining between management and unions.
Pluralistic approach advocates the presence of a strong union as necessary. Role of the State is to
guard society’s interests by enacting legislations and creating industrial tribunals that are responsible
for resolution of conflicts and disputes. The stress is on a negotiated order, a voluntary reconciliation
between opposing forces with minimal intervention from external agencies. Pluralist frame of
reference has been criticized on the grounds that an equilibrium in relations between management
and labour is difficult to attain and maintain. This is because neither management nor unions are
always able to assert equal influence. A society may be free but power distribution is not necessarily
equal among the competing forces. Therefore, some kind of State intervention has become
necessary to bring two parties involved in a conflict on equal terms. It over-emphasises the
significance of collective bargaining and gives inadequate weight to the role of the other influencing
factors in the determination of rules. Institutional factors are viewed as of paramount importance,
while variables such as technology, market, values, and ideology, are not given any prominence.

Marxist Approach:

This approach is based on the ideology of Karl Marx. Also known as the ‘Radical Perspective’, the
Marxist approach is based on the proposition that the economic activities of production,
manufacturing, and distribution are majorly governed by the objective of profit. Marxism questions
the power relationships of society. The theory is based on premise that industrial relations represent
class conflict and is more of market relations. It proposes that the mode of wealth creation by
capitalists determine the social relations at work and general character of society. The Marxist
approach is primarily based on power relationship between management and labour and is
characterised by the struggle of both the classes to gain supremacy so as to exert greater influence
over the other party. it ascribes that the conflict is the product of the capitalist society which is
based on classes. Labour and capital have essentially different interests in an organization, and these
interests are conflicting. Both the parties get affected as an outcome of confrontation between
conflicting interests. The objective of management is to enhance productivity by gaining control over
the labour. The wages of the labour are seen as a cost and, therefore, management makes attempt
to minimize it. Labour is viewed as a means of generating profit. Workers endeavour for maximum
possible wages to improve their standard of living and resort to pressure tactics like strike to get
their demand accepted. Systems like bargaining, participation, cooperation do not offer permanent
solution for resolving the labour-management conflict. It can be solved by uprooting capitalistic
system. Marxists view conflict as an essential feature of capitalism, a system where the society is
divided between those who own and control the means of production and those who offer their
labour to carry out production. Though plularists also consider conflict as inevitable but they differ
from Marxists as they consider conflict as a natural process in any industry anywhere. Marxists
believe that class-conflict is essential for social change to take place and trade unions are nothing
but response of labour towards exploitation by capitalist. It acts as a weapon to bring radical a social
change to improve the position of labour in the society. While pluralists argue that state intervention
is necessary to protect the overall interest of society, Marxists believe that state intervention is
supportive of capitalist’s interest rather than that of worker. The main drawback of Marxist
approach of industrial relations is that it has a narrow focus as it only takes into account the
relations between capitalist and labour in explaining industrial relations.

FACTORS AFFECTING IR:

Internal Factors

These are the factors within the organization. These pertain to management and workers/ trade
unions of workers

i) Management related factors :

Attitudes of management towards workers and trade unions Management belief in
industrial democracy Concern of management for worker welfare Style of leadership, i.e.,
autocratic, participative etc.
Effectiveness and capability of managers and supervisors in resolving grievances and
handling disputes.
Management concern for worker welfare Clarity of management policies related to work
and workers.
ii) Workers related factors :
Union attitudes towards management Inter union rivalries in case of more than one union .
Readiness of workers to work ,Union leadership.
Readiness to comply with policies Bargaining power of trade unions

External Factors:

 Influence of political parties on trade unions.

 Economic factors, for example, inflation, economic downturns etc.
  Success of collective bargaining at national, local or plant level  State interventions.
 Labour laws of the nation.
 Regulatory framework.
 Effectiveness of dispute settlement machinery.
 Employment situation nationally or locally Legal framework within which ER exists.

ISSUES AND CHALLENGES:

There are various issues and challenges for industrial and employment relations in India that have
emerged after the introduction of structural changes under economic reforms and as a result of
advancements of technology. Economic reforms have changed the business environment in various
ways. There have been a number of changes in regulatory environment, aspirations of workers,
expectations of employers. Thus, industrial relations system needs to adapt to these changes .Firms
are changing their mode of working to meet the competition. Big firms are downsizing their
operations for cost cutting and using contracting and sub-contracting to bring down costs. As a
result, workers are being retrenched and laid off. Part-time and casual workers are employed for
cost cutting. Unorganised sector is expanding, while organized sector is getting smaller in size. Due
to casualization of labour, job insecurity is increasing. Adoption of technology in business operations
and automation of processes is another reason for retrenchment of labour and job insecurity. Usage
of technology in production and other business processes makes training of workers essential.
Technology and modern methods of working are making jobs redundant. Management must make
efforts to educate and train workers on usage of technology driven machines and processes so as to
prevent job obsolescence. Multiskilled workers are required in the modern day firm. The influence
voice of international community on various aspects of business, including labour issues is increasing
through international bodies like WTO, ILO, IMF. Mangement cannot ignore the demand and
concern of such forces. The traditional industrial relations system and its institutions and practices
were most suited to the tasks of protecting and promoting the interests of workers with secure
permanent employment. The trend is towards increasing casualisation of labour, the restructuring
process, and technology changes/ upgradation have made the problems of unemployment of labour
more widespread and acute. The growing emergence of start- ups has added a new dimension to
labour issues. The number of micro, small and medium-sized firms have increased. Most of these
firms remain beyond the purview of labour legislation and the organizations of labour in these
scattered units are weak and ineffective. Growing globalization of economy means greater
opportunities for foreign firms to start operations in India. They need to understand and implement
labour laws in India and understand workers’ expectations to maintain harmonious employee
relations. As more and more workers are getting educated, they are becoming aware and conscious
of their rights. Also, there is a growing concern about human rights and prevention of exploitation of
labour. Thus, management must take all the measures to ensure fair and proper working conditions.

TRADE UNIONISM:

Concept, structure and function.

The role and importance of trade unions has declined in many countries over time, with certain
exceptions of African and Latin American countries where membership increased. The factors
responsible for this include the structural changes in the economy, increasing competitiveness in
business and accompanying management endeavours to reduce labour costs, the emergence of non
union enterprises, in formalization of economy and falling employment in organised sector,
particularly in the public sector; outsourcing of jobs and increase in part-time and causal workers,
and the changing workforce composition including gender diversity. The slow response of the
unions to the fast changing environment has also been a factor in their decline. In countries like
Denmark, Sweden and Belgium, unions play an important roles in labour related issues and
therefore they have suffered less of a membership loss then in other countries. In fact, trade union
membership is lower for people in non-standard or precarious types of employment, such as
temporary and own-account workers or workers in the informal and gig economy.

Trade Unionism in India:

Trade union movement in our country has a century-long history. The first quarter of
the present century saw the birth of the trade union movement, but the seeds of the
movement were sown much earlier. The AII India Trade Union Congress (AITUC) was
set-up in 1920 with the objectives of representing workers’ interests, to co-ordinate the
activities of all labour organizations in the country, and to spread the message about the
need for union movement.

Then a landmark in the history of labour movement was the enactment of the Trade
Unions Act, 1926 unlike 1920s, the 1930s were not favorable to the trade union
movement. By 1924, there were 167 trade unions with a quarter million members.

Then the aftermath of Independence was not good for unions. The hopes of workers to
secure better facilities and wages from the national government were not realized. There
was large-scale unrest and strikes and lock-outs multiplied.

Trade Unions Act, 1926:

Trade Unions Act, 1926 provides for the registration of the Trade Unions with the
Registrars of Trade Unions of their territory. Any seven or more members of a trade
union by submitting their names to the registrar of trade unions and otherwise
complying with the provisions of the Act with respect to registration may apply for the
registration of the Trade Union under the Trade Unions Act. The Act gives protection to
registered trade unions in certain cases against civil and criminal action.

Trade Union Structure:

The basic unit of trade union organisation in India is an establishment or a plant. Most
unions in the country are of the industrial type. Craft unions in the country have been
formed only in a few isolated cases. General unions in the country are confined mainly
to particular localities. The hierarchy of trade union organisation in the country in an
ascending order is primary unions (industrial craft, or general) at the bottom, state or
regional level industrial federations and industry-level federations in the middle and
central federations of trade unions/central trade unions organisations at the apex.

a. Primary Unions:

Primary unions are the basic units of organisation in the country.

These are broadly of three types:

i. Industrial,

ii. Craft and

iii. General.

i. Primary Unions of the Industrial Type:

Majority of trade unions in India are industrial unions formed at the plant or
establishment level. Most of them get themselves registered under the Trade Unions Act,
1926. Many of them become affiliated to some regional, state or industry level
federations, and through them or independently, to a central federation of trade unions.
However, a vast bulk of them prefers to maintain their independent existence.

It is the primary level industrial unions which play the most significant role in
negotiations with the employers and in reaching agreements/settlements covered under
the Industrial Disputes Act, 1947. Even where a collective agreement is reached at the
industry or other higher levels, it has to be formally re-contracted in the form of
settlement with the plant level union to ensure its legal enforceability.

ii. Primary Unions of the Craft Type:

Craft unions of the type having wide coverage, as have been in existence in the USA or
the UK, are a rare phenomenon in India. Craft unions have been formed only in a few
industries or employments such as railways and heavy engineering industries where
crane and railway engine drivers have set up their own unions. The Indian Pilots’ Guild
is an example of craft union at the industry level. The government’s policy in the country
has been to discourage the formation of craft unions.

Of late, a number of unions based on particular occupations such as those of salesmen,

teachers, physicians, engineers and so on have increasingly come into existence.
Employees of some locally concentrated occupations such as auto, bus and truck drivers,
scavengers and binders have also formed their unions in different parts of the country.
Most of these unions are not registered under the Trade Unions Act, 1926 and generally
do not come under the coverage of the Industrial Disputes Act, 1947.

iii. Primary Unions of the General Type:

Local workers engaged in a variety of establishments, shops, crafts and other

employments and facing common basic problems have also combined to form general
unions in different towns and cities of the country. Such unions have been formed
mainly at the local level and under common leadership.

In many cases, employers of these establishments or employments also combine to form

a united platform to deal with these unions. In India, there is absence of general unions
at higher levels of the types prevalent in the USA and the UK. These unions often
organise strikes and demonstrations for pressurising not only their employers but also
the government and local authorities in pursuance of their demands.

b. Industrial Federations:

In certain organised and developed industries such as iron and steel, cotton textiles,
railways, banking, insurance, plantations, cement and engineering, and ports and docks,
federations of trade unions have, come to be set up at the industry level. Examples of
such unions are as follows – Indian National Iron and Steel Workers’ Federation, All
India Railway men’s Federation, All India Bank Employees’ Federation and Indian
National Textile Workers’ Federation.

The number of industrial federations submitting returns under the Trade Unions Act,
1926 was 29 in 2007, while a number of registered federations fail to submit returns in
time, and some of them do not submit returns at all. A few industrial federations have
also been set up at the regional and state levels. Examples of such unions are as follows
– Rashtriya Mill Mazdoor Sangh in Maharashtra and Chini Mills Workers’ Federations
of Bihar and U.P. Most of the industrial federations are affiliated to one central
federation or the other, but some of them have preferred to remain independent.

Establishment of central wage boards for quite a few organised industries during the
1960s gave a boost to the formation of such federations in the country. Formation of
industrial federations has contributed to the growth of industry-wide negotiations, but
in a limited manner.

Agreements reached at the industry level are usually endorsed and re-contracted at the
plant/establishment level in the form of settlements in order to secure their legal
enforceability. Besides, when the question of representation of unions at an industry
level tripartite forum arises, the government generally consults the central federation
having the largest membership in that industry and not the relevant industrial
federation. Industrial federations generally have loose control over their affiliates.

c. Central Federations of Trade Unions/Central Trade Union Organisations:

Central federations of trade unions/central trade union organisation are at the apex of
union organisation in the country. The first central federation of trade unions, namely
the All India Trade Union Congress (AITUC), was formed in 1920 on the initiative of
eminent Congress leaders active in the nationalist movement. However, as the
federation subsequently came under full control of the communists, the leaders of the
Indian National Congress established the Indian National Trade Union Congress in
1947.

Subsequently, quite a few central federations of trade unions came to be set up at

intervals. These included Hind Mazdoor Sabha (HMS, 1948), United Trades Union
Congress (UTUC, 1948), Bharatiya Mazdoor Sangh (BMS, 1955), Centre of Indian Trade
Unions (CITU, 1970), National Labour Organisation (NLO, 1972), followed by UTUC-LS,
NFITUC, TUCC, AICCTU and AIUTUC during years to follow. Most of these central
federations are affiliated to a national-level political party of their preference.
Recognition of a trade union:

1. Where there is more than one union, a union claiming recognition should have been
functioning for at least one year after registration. Where there is only one union, this
condition would not apply.

2. The membership of a union should be at least 15 per cent of the workers in the
establishment concerned. Only those should be counted as members who have paid their
subscriptions for at least three months during the period of six months immediately
preceding the reckoning.

3. A union may claim to be recognized as a representative union for an industry in a

local area if it has a membership of at last 25 per cent of the workers of that industry in
that area.

4. When a union has been recognized, there should be no change in its position for a
period of two years.

5. Where there are several unions in an industry or establishment, the one with the
largest membership should be recognized.

6. A representative union for an industry in an area should have the right to represent
the workers in all the establishments in the industry; but if a union of workers in a
particular establishment has a membership of 50 per cent or more of the workers of that
establishment, it should have the right to deal with matters of purely local interest; for
example, the handling of grievance pertaining to its own members.

All the other workers, who are not members of that union, may operate either through
the representative union for the industry or seek redressal directly.

7. In case of trade union federations which are not affiliated to any of the four central
organizations of labour, the questions of recognition would have to be dealt with
separately.

8. Only unions which observe the Code of Discipline would be entitled to recognition.

Rights of Recognized Unions:

The question of the rights of unions recognized under the Code of Discipline vis-a-vis
unrecognized unions was discussed at the 20th Session of the Indian Labour Conference
(August 1962). While a decision on the rights of unrecognized unions was deferred for
future consideration, it was agreed that those which were granted recognition under the
Code of Discipline should enjoy the following rights-
1. To raise an issue and enter into collective agreements with employers on general
questions concerning the terms of employment and the conditions of service of workers
in an establishment or, in the case of representative union, in an industry in a local area;

2. To collect membership fees or subscriptions payable by members to the union on the

premises of the undertakings;

3. To put up, or cause to be put up, a notice board on the premises of the undertaking in
which its members are employed and affix, or cause to be affixed, thereon notices
relating to meetings, statements of accounts of its income and expenditure and other
announcements which are not abusive, indecent or subversive of discipline or otherwise
contrary to the Code;

4. For the purpose of prevention or settlement of an industrial dispute:

(a) To hold discussions with the employees who are members of the union at a suitable
place or paces in the premises of an office/factory/establishment as mutually agreed
upon;

(b) To meet and discuss with an employer, or any person appointed by him for the
purpose, the grievances of its members employed in the undertaking;

(c) To inspect, by prior arrangement in an undertaking, any place where a member of

the union is employed;

5. To nominate its representatives on the Grievances Committee constituted under the

grievances procedure in an establishment.

6. To nominate its representatives on joint management councils; and

7. To nominate its representatives on non-statutory bipartite committees, for example,

production committees, welfare committees, canteen committees, house allotment
committees, etc. set up by management.

The rights referred to above would be without prejudice to the privileges enjoyed by the
recognized unions at present, either by agreement or by usage.

The functions of trade union :

It can broadly be divided into two categories – protective or militant and positive or
ministrant. The protective functions aim at securing certain benefits from the employer
through collective bargaining, strikes, go- slow tactics or work-to-rule. ‘Gheraos’ may
also be included in this category. The positive functions include the support given to
members during strikes, temporary unemployment and some benefits such as
educational facilities, recreational and other services.

The functions of trade unions are again classified into intramural and extramural. The
former regulate hours of work, provision of rest houses, continuity of employment,
safety, sanitation and other welfare facilities within the factory premises whereas the
extramural look after the welfare of the workers in respect of their education, recreation,
housing etc. It seems that the functions of trade unions are both militant and fraternal
in nature.
Trade Unions secure better wages for their workers and a part of the increased
prosperity of industry for their members in the form of bonus. They ensure stable
employment for workers and attain better conditions for the workers. Unions train up
their workers to facilitate understanding of technological advances.

It is no mean function for a trade union to foster a sense of self-respect and dignity
among its members. Trade unions promote national integration, influence the socio-
economic policies of the community through active participation in their formulation at
various levels. Thus, they instil in members a sense of responsibility towards industry
and the community.

The functions of trade unions are not identical in all the countries. In advanced
countries problems confronting labour are different than those of developing countries.
As such, trade unions, too, are to change their functions to suit the needs of the workers
of that country.

In the capitalist system, it is a truism that trade unions are friends, philosophers and
guides of the workers. No system – rather, nothing – in this world is an unmixed
blessing; trade unions are no exception but, on the whole, the role they play is
commendable.

Changing Role of T.U:

The role of trade unionism in India has been significantly changing over the years. One
example that could be cited is that of the case in Mumbai, where almost all the textile
mills in the city closed because of the unreasonable demands made by trade unions
under Datta Samant.

India has the advantages of- (a) growing both long staple and short staple cotton and (b)
a huge domestic market. But battling militant trade unions, on the one hand, while
coping with price controls imposed by unimaginative governments and textile quotas
imposed by foreign governments, on the other, proved too much for our textile industry.

The textile industry did not have the necessary financial and managerial resources, and
it failed to modernize and remain competitive in terms of quality and cost. So ultimately
it declined and became terminally ill.

Trade unions are a legitimate system for organizing workers and to voice their rights
and grievances. Without them companies would become either too paternalistic or too
dictatorial. Responsible unions help to create a middle path in the relationship between
management and labour while maintaining the responsibilities of the former and the
dignity of the latter.

Fortunately today, workers have become better informed and aware of the economic
forces that impact their industry. The media has helped to create much greater economic
awareness. So it is not so easy to mislead them. Managements too have become more
sensitive and skilled in handling relationships with employees.
This is true of even family-owned and managed businesses. TVS in the South is a prime
example of how a large family-managed industrial group has successfully managed its
relationship with employees through enlightened management. There are more such
examples in other parts of the country.

As the skill levels and educational qualifications of employees advance, the role and
significance of trade unions tend to diminish. This is because- (a) employees are able to
represent their own case and (b) managements are more sensitive to the needs of
individual employees, whose intellectual skills become almost uniquely valuable.

This is already happening in the sunrise industries based on brainpower such as IT and
telecommunications. Another phenomenon in these modern industries is that employees
have greater opportunity and tendency to move from one company to another, not only
because of better terms of employment but also because of their yearning to learn new
skills.

This phenomenon is facilitated by the fact that there are plenty of employment
opportunities in IT and it is a young industry. That is why one does not notice any union
flags in the Silicon Valley of India/Bangalore’s Electronic City.

The privatization or corporatization of many public services such as electricity and water
supply has accelerated this shift. Hopefully the same shift in the character and role of
trade unions will happen in India — even in places like Kerala and West Bengal, as
employment starts to move to more intellect-based activities and public sector
industries are privatized. Responsible trade union leaders with a long-term vision will
adapt their policies to suit the new realities.

Objectives of the Industrial Disputes Act 1947

The Industrial Disputes Act, 1947, was enacted by the Indian Parliament to regulate relations
between employers and employees with the disputes arising out of their respective rights. The
main objects of the Act are:

(i) to maintain or restore industrial peace in cases of industrial disputes

(ii) to provide for the settlement of industrial disputes by conciliation or arbitration and matters
connected in addition to that; and

(iii) to provide for matters incidental thereto

Key Elements of Industrial Disputes Act 1947

The Act has been amended in its various provisions several times since it was enacted. The primary
purposes of the Act are to:

 Provide machinery for settlement of disputes between employers and employees

 Ensure the continued production, supply and distribution of goods and services by
industries
 Protect the rights and interests of employees
 Encourage settlement of industrial disputes by conciliation or arbitration
  Protect workers against discharge and discrimination on the grounds of participation in
lawful activities during the pendency of any proceeding before an authority under this Act
 Provide for publication of particular material regarding settlement of industrial disputes

Provisions of the Industrial Disputes Act 1947

The Act empowers the Central Government to appoint one or more persons as conciliators whose
duty is to inquire into any industrial dispute regarding which a reference has been made to him by
the appropriate government and report thereon to effect a settlement thereof. It also provides for
the constitution of Labour Courts and their jurisdiction.

It is umbrella legislation to deal with all labour problems in India.[1] The Act provides for
conciliation, adjudication and penalties for contravention of any provision contained therein.

A dispute may be defined as the difference or disagreement between one or more employers and
one or more employees about any question concerning terms and conditions of employment
(including wages) or work done by them during a collective bargaining process

 The Act prohibits strikes in specified essential services which are immune from any
industrial disputes
 A conciliator appointed under this Act can impose a penalty if he is satisfied that there has
been a failure to comply with a direction issued by him or a settlement arrived at through
the conciliation proceedings
 When a conciliator imposes a penalty under this Act, he shall intimate to both parties
concerned the amount of liability charged on each party and the reasons for such
correction
 No suit or other legal proceeding shall lie against the Government of India or any officer
thereof in respect of anything which is in good faith done or intended to be done in
pursuance.

What does unfair labour practice include?

Unfair labour practices are acts prohibited under the Industrial Disputes Act,1947. Under the Act,
an employer cannot take any action against a worker to exercise their rights.

The main objective is to provide for the settlement of industrial disputes and provide for matters
connected to that or incidental thereto.

Unfair labour practise includes-

(i) refusal to renew a contract or termination of services

(ii) reduction of wage or change in service conditions without due notice

(iii) victimization for past lawful trade union activities; and

(iv) dismissal or otherwise discriminating against an employee for having lawfully acted to further
his interests.
The code of discipline:

The code of discipline in industrial relation is very essential because in

today’s world industrial disputes and grievances are become very common in
industrial setups and these disputes not only crippling the growth of the
industry but also affect the growth of the country’s economy. Here in this
article, we have discussed about code of discipline in industrial relations.

To resolve the dispute and make dispute settlement more open, fair, and
inclusive we need a code of discipline which mention all the does and do not
activities for workers, employer, management and trade union, fine and
penalty, and grievance handling mechanism that accepts by both workers
and employers.

Importance of Code of Discipline:

The code of disciple is very important for the efficient and effective functioning of
the organization. It provides a solid foundation for the organization day to day
work.

The importance of the code of discipline is as follows-

 It maintains and promotes long-term peace and order in the industry.

 It promotes checks and balances at all levels of management and
employment.
 It protects the industry from unnecessary work or delay.
 It facilitates the settlement of disputes and grievances.
 It facilitates the free growth of trade unions which is very crucial for the
protection of workers’ rights.
 It is very essential the eliminate all forms of violations of rules and
regulations governing industrial relations.
 It discourages all unfair labour practices such as discrimination and
victimization of any employee.
  It encourages taking prompt action to settle industrial disputes and
grievances and implementation of settlements, awards, decisions, and
orders.
 It discourages all indiscipline actions or acts like violence, casteism,
communalism, provincialism, intimidation, or personal deformation.

Grievance Management:

Organisations are a part of society and employee has certain expectations which must be
fulfilled by the organisation where he is working. Due to different social background and
various psychological factors employees occasionally have to be uncomfortable or
aggrieved about certain managerial decisions, practices or service conditions.

In some cases, the employees have complaints against their employers, while in others it
is the employers who have a grievance against their employees. For smooth selling of the
organisation, it is necessary to pay immediate attention on these grievances and
complaints.

A grievance can be defined as an employee’s dissatisfaction or feeling of personal

injustice relating to his or her employment relationship. This feeling does not have to be
expressed to become a grievance or neither does it have to be true or correct. A feeling
that arises from imaginary conditions or from incorrect reasoning is still a grievance if it
causes a feeling of injustice.

A grievance may take any one of the following forms:

(i) Factual,

(ii) Imaginary, and

(iii) Disguised.

(i) Factual:

Factual grievances arise when legitimate needs of employees remain unfulfilled, e.g.,
wage hike has been agreed but not implemented.

(ii) Imaginary:

When an employee’s grievance is because of wrong perception, wrong attitude or wrong

information. Though it is not the fault of management, the responsibility for their
redressal still rents with the management.

(iii) Disguised:
An employee may have dissatisfaction for reasons that are unknown to himself. If he or
she is under pressure from family, friends, relatives, neighbours, he or she may reach
the work spot with a heavy heart. If a new recruit gets a new table and cupboard, this
may become an eye shore to other employees who have not been treated like wise
previously.

Causes of grievances in industrial organizations:

(i) Grievances Resulting from Personal Maladjustment:

(a) Over-ambition

(b) Excessive self-esteem

(c) Impractical attitude to life.

(ii) Grievances Arising from Management Policy:

(a) Wage payment

(b) Job rates

(c) Leave and overtime

(d) Seniority and promotion

(e) Role ambiguity

(f) Disciplinary action

(g) Absence of employee development plan

(h) Transfer.

(iii) Grievances Resulting from Working Conditions:

(a) Strained employer-employee relationship.

(b) Unfavourable physical conditions such as excessive heat, low temperature, excessive
humidity etc.

(c) Tight production standards.,

(d) Non-availability of proper tools, machines and equipment for doing the job.

(e) Changes in schedules or procedures.

(f) Mismatch between the job and the worker.

Most common grievance procedure:
Ist Step:

The first step involves a presentation of the employee’s grievance to the immediate
supervisor because he is the first step of the ladder. If the organisation is unionized, a
representation of the union may also join him. This step offers the greatest potential for
improved labour relations. The large number of grievances are settled at this stage but
grievance, which are related to the issue of policies of the organisation are beyond the
limit of supervisor, then the aggrieved moves to next step.

IInd Step:

If the employee is not satisfied with decision of 1st step or fails to receive an answer
within the stipulated period, he shall, either in person or accompanied by his
departmental representative if required, present his grievance to the head of department
designated by the management for the purpose of handling grievance. (A fixed time shall
be specified during which of any working day, aggrieved employee could meet the
departmental head for presentation of grievances).

The departmental head shall give his answer within three days of presentation of his
grievance. If the action cannot be taken within that period, the reason for the delay
should be recorded.

IIIrd Step:

If the decision of the departmental head is unsatisfactory the aggrieved employee may
request for forwarding of his grievance to the Grievance Committee which shall make its
recommendations to the manager within seven days of the employee’s request. If the
recommendations cannot be made within the time limit, the reason for such delay
should be recorded. The unanimous recommendations of the grievance committee, the
views of the members and the relevant papers shall be placed before the manager for
final decision.

In either case, the final decision of the management shall be communicated to the
concerned employee by the personnel officer within three days from the receipt of the
Grievance Committee recommendations.

IVth Step:

If the decision of the management is not communicated to the employee within

stipulated period or if it is unsatisfactory for him, he shall have right to appeal to the
management for revision., if he so desires,he shall have the right to take a union official
along with him to facilitate discussion with management. Management shall
communicate its decision to him within a week of the presentation of the employee’s
revised petition.
Vth Step:

If no agreement is possible, the union and the management may refer the grievance to
voluntary arbitration within a week from the date of the receipt by the employee of the
management’s decision.

The formal conciliation machinery shall not intervene till all the steps in the model
grievance procedure have been exhausted. A grievance shall be presumed to assume the
form of a dispute only when the final decision of the top management in this respect is
not acceptable to the employee.

UNIT-3:

Tripartism and IR:

Tripartite means composed of or split into three parts, or refers to three parties.

Tripartism is a system of labour relations in which the state, employers, and workers are
autonomous yet interdependent partners, pursuing common interests and participating in decisions
affecting them in a binding spirit of mutuality and reciprocity.

This can take place at either or both macro and micro levels.

Tripartite forums evolve norms or standards in the form of guidelines.

There are a number of tripartite bodies which operate at the Central and State levels.

INTERNATIONAL LABOUR ORGANIZATION:

The ILO is a UN agency that sets international labour standards and promote social protection and
work opportunities for all. The ILO has 187 member states: 186 of the 193 UN member states plus
the Cook Islands are members of the ILO.

ORIGIN:

The ILO was founded in 1919, in the wake of a destructive war, to pursue a vision based on the
premise that universal, lasting peace can be established only if it is based on social justice. The ILO
became the first specialized agency of the UN in 1946.

STRUCTURE OF THE ILO:

The ILO consists of

i. The International Labour Conference (ILC)

ii. The Governing Body
iii. The International Labour Office (ILO)

ILC is the apex body of ILO which makes labour policies for international labour.
The ILC holds its sessions at a frequency not less:
 than once in a year
 the delegates from three group's viz, the government, the employer's and the
workers attend ILC sessions in the ratio of 2:1:1 respectively
 each representative has a vote
 the representatives from the government are mostly ministers, diplomats and
officials.

The Conference is empowered to appoint Committees to deal with different matters

relating to labour during each session.

Examples of such committees are –

• the Selection Committee

• the Credential Committee

• the Resolution Committee

• the Drafting Committee

• the Finance Committee etc.

All committees except Finance Committee are tripartite in nature.

FUNCTIONS:

• Formulate International Labour Standards

• Fix the amount of contribution to be paid by the member states

• Decide budget and submit the same to the Governing body

• Study the labour problems submitted by the DG and assist in their solutions

• Appoint committees to deal with different problems during its sessions.

• Elect the president

• Select members of the Governing body

• Develop policies and procedures

• Seek advisory opinion from International Committee of Justice

• Confirm the powers, functions and procedures of Regional Conference

GOVERNING BODY
 It is also a tripartite body.
 It implements the decisions of the ILC with the help of the ILO. It consists of 56
members in the same ratios of 2:1:1, i.e. 28 representatives of the government, 14
of the employers and 14 of the workers.
 Out of the 28 representatives of the government, 10 are appointed by the members
of the States of Chief Industrial Importance and remaining 18 are delegates of the
governments. Industrial population is the criteria for Chief Industrial importance.
  India is one of the 10 states of Chief Industrial importance.
 The tenure of the office of this body is 3 years.
 It meets frequently in a year to take decisions on the programmes of the ILO.

FUNCTIONS:
• Coordinate work between ILC and ILO
• Prepare agenda for each session of the ILC
• Appoint the Director General of the office
• Scrutinize the budget
• Follow up with member states in regard to implementation of the conventions and
recommendations adopted by the ILC
• Fix the date, duration, schedule and agenda for the Regional Conferences
• Seek as and when required, advisory opinion from the ICJ with the consent of the ILC.

INTERNATIONAL LABOUR OFFICE

• This is the secretariat of the ILO in Geneva and is the third major organ of the ILO.
• The DG of the ILO is the Chief Ex. Officer of the Secretariat appointed by the Governing
Body.
• He also serves as the Secretary General of the ILC.
• His tenure is for 10 years and extendable by the Governing Body.
• DG is assisted by two Deputy DGs, six Assistant DGs, one Director of the International
Institute of Labour Studies and one Director of the International Centre for Advanced
Technical and Vocational Training, Advisors, Chief of Divisions from 100 nations.

FUNCTIONS:
• Prepare briefs and documents for agenda of ILC
• Assist the governments of the States to form labour legislation based on recommendations
of the ILC
• Bring out publications relating to industrial labour problems of international nature and
interest
• Carry out functions related to the observance of the conventions
• Collect and distribute information on international labour and social problems.

Conventions and Recommendations:

The ILO Conventions cover a wide area of social and labour issues including basic human
rights, minimum wages, industrial relations, employment policy, social dialogue, social
security and other issues. ILO Conventions concerning gender-specific issues have a long
history. As early as 1919, at the year when the ILO was founded, the Organization adopted
the first two Conventions on women (No.3 on maternity protection, and No.4 on night work
for women). Convention No.3 was several times revised - for the latest time in the year of
2000 (Convention No. 183).
In the present day society it has been argued that protective measures for women can have a
negative impact by denying them entry into certain jobs and contributing to a gender-
segregated labour market. In the case of maternity protection, these measures are necessary to
protect the reproductive role of women. However the maternity benefits increase the cost of
employing women and therefore discourage their employment. This is why the revised
variant of the Convention on maternity protection places an emphasis on the payment of
maternity benefits from social security funds and restricts the circumstances in which an
employer can be held individually liable to pay them (Convention 183, article 6).

 1919 Maternity Protection Convention (#3)

 1919 Night Work Women Convention (#4)
 1951 Equal Remuneration Convention (#100)
 1958 Discrimination (Employment and Occupation) Convention (#111)
 1965 Workers with Family Responsibilities Recommendation (#123)
 1975 UN International Women’s Year
 1976 - 1985 UN Decade for Women: Equality, Development and Peace
 1979 UN Convention on the Elimination of All Kinds of Discrimination Against
Women
 1981 Workers with Family Responsibilities Convention (#156)
 1994 Part-Time Work Convention (#175)
 1996 Home Work Convention (#177)
 1998 Job Creation in Small and Medium-Sized Enterprises Recommendation (#189)
 1999 Worst Forms of Child Labour Convention (#182)
 2000 Maternity Protection Convention, revised (#183)
In the early 1950s, emphasis shifted to the promotion of equality in employment
between men and women, and, more recently, to recognition that equality implies
sharing of family responsibilities between men and women.

Convention No.100 and Recommendation No.90, of 1951, laid down the guiding
principles of equal remuneration for work of equal value regardless of sex. In 1958,
Convention No. 111 and Recommendation No. 111 were adopted to establish the
principle of non-discrimination on a number of grounds including sex, with regard to
access to vocational training, access to employment, and terms and conditions of
employment.

In 1965, Recommendation No.123 on Workers with family responsibilities was

adopted, covering measures that should be taken to enable women workers to fulfil
their various responsibilities harmoniously and without discrimination. Later, the
conviction gained ground that any change in the traditional role of women should be
 accompanied by a change in men’s role and should be reflected in their greater
participation in family and household duties: the Workers with Family
Responsibilities Convention No 156, and accompanying Recommendation No. 165,
were adopted in 1981. These instruments apply to men as well as women with
responsibilities for dependent children or other members of their immediate family
and, are intended to facilitate the employment without discrimination as a result of
existing private duties.

The Part-Time Work Convention No. 175 and Recommendation No. 182 adopted in
1994, aim at the equal treatment of full- and part-time workers, the latter consisting
mainly of women. The Home Work Convention No. 177 and Recommendation No.
184, adopted in 1996, will contribute to improving the situation of millions of home-
workers, a large majority of whom are women.

Convention No.182 and Recommendation No. 190, aiming at the prohibition and
elimination of the worst forms of child labour, also have a gender component, calling
for account to be taken of the special situation of girls.

As it is seen in the table of the basic Conventions concerning gender issues all the ten
countries of the region covered by the Subregional Office have ratified Conventions
No. 100 (On Equal Remuneration) and 111 (On Discrimination in Employment and
Occupation). The Russian Federation is the only country of the region that ratified
another basic tool of the gender equality – Convention No. 156 on Workers with
Family Responsibilities. The revised Maternity Convention (No. 183) has been
recently ratified by the Republic of Belarus (2.10.2003 – it is not yet indicated in the
table as the official date of the ratification will be the date of the registration of this
fact in the ILO Headquarters).

Workers participation in Management:

Workers’ participation in management is an essential ingredient of Industrial democracy. The

concept of workers’ participation in management is based on Human Relations approach to
Management which brought about a new set of values to labour and management.
Traditionally the concept of Workers’ Participation in Management (WPM) refers to
participation of non-managerial employees in the decision-making process of the
organization.
Objectives of Workers Participation in Management:

 To raise level of motivation of workers by closer involvement.
 To provide opportunity for expression and to provide a sense of importance to workers.
 To develop ties of understanding leading to better effort and harmony.
 To act on a device to counter-balance powers of managers.
  To act on a panacea for solving industrial relation problems.

Specific of Purpose of Workers' Participation:

1. It helps in managing resistance to change which is inevitable. For the growth and development of
industry, changes have to be welcomed, otherwise the organization will stagnate and be left behind. If
the need for change is jointly felt by all partners of production its acceptance can be high. Workers'
participation in change strategy can facilitate acceptable solutions with a view to secure effective and
smooth implementations of decisions.
2. Workers' participation can encourage communication at all levels. Since both partners of
production are involved in the decision-making there will be fewer changes of distortion and/ or
failure in communicating the decision.
3. Joint decision- making ensures the there will be minimum industrial conflict an economic growth
can be free form distracting strife.
4. Workers' participation at the plant level can be seen as the first step to establishing democratic
values in society at large.

Forms of Participation:
Different forms of participation are discussed below:

Collective Bargaining:
Collective bargaining results in collective agreements which lay down certain rules and conditions of
service in an establishment. Such agreements are normally binding on the parties. Theoretically,
collective bargaining is based on the principle of balance of power, but, in actual practice, each party
tries to outbid the other and get maximum advantage by using, if necessary, threats and counterthreats
like; strikes, lockouts and other direct actions. Joint consultation, on the other hand, is a particular
technique which is intended to achieve a greater degree of harmony and cooperation by emphasising
matters of common interest. Workers prefer to use the instrument of collective bargaining rather than
ask for a share in management. Workers’ participation in the U.S.A has been ensured almost
exclusively by means of collective agreements and their application and interpretation rather than by
way of labour representation in management.

Works Councils:
These are exclusive bodies of employees, assigned with different functions in the management of an
enterprise. In West Germany, the works councils have various decision-making functions. In some
countries, their role is limited only to receiving information about the enterprise. In Yugoslavia, these
councils have wider decision-making powers in an enterprise like; appointment, promotion, salary
fixation and also major investment decisions.

Joint Management Councils and Committees:

Mainly these bodies are consultative and advisory, with decision-making being left to the top
management. This system of participation is prevalent in many countries, including Britain and India.
As they are consultative and advisory, neither the managements nor the workers take them seriously.
Board Representation:
The role of a worker representative in the board of directors is essentially one of negotiating the
worker’s interest with the other members of the board. At times, this may result in tension and friction
inside the board room. The effectiveness of workers’ representative at the board depend upon his
ability to participate in decision-making, his knowledge of the company affairs, his educational
background, his level of understanding and also on the number of worker representatives in the Board.

Workers Ownership of Enterprise:

Social self-management in Yugoslavia is an example of complete control of management by workers
through an elected board and workers council. Even in such a system, there exist two distinct
managerial and operative functions with different sets of persons to perform them. Though workers
have the option to influence all the decisions taken at the top level, in actual practice, the board and
the top management team assume a fairly independent role in taking major policy decisions for the
enterprises, especially in economic matters.

Levels of Participation:
Workers’ participation is possible at all levels of management; the only difference is that of degree
and nature of application. For instance, it may be vigorous at lower level and faint at top level.
Broadly speaking there is following five levels of participation:

1. Information participation: It ensures that employees are able to receive information and
express their views pertaining to the matters of general economic importance.

2. Consultative participation: Here works are consulted on the matters of employee welfare
such as work, safety and health. However, final decision always rests at the option of management
and employees’ views are only of advisory nature.

3. Associative participation: It is extension of consultative participation as management here

is under moral obligation to accept and implement the unanimous decisions of employees.

4. Administrative participation: It ensure greater share of works in discharge of managerial

functions. Here, decision already taken by the management come to employees, preferably with
alternatives for administration and employees have to select the best from those for implementation.

5. Decisive participation: Highest level of participation where decisions are jointly taken on the
matters relation to production, welfare etc. is called decisive participation.