An Empirical Study of Grievance Settlement and Labour Management Relationship of Apparel Industry in Sri Lanka

Prasadini N. Gamage
Department of Human Resources Management, University of Kelaniya E-mail: prasadinigamage@yahoo.com

Gayani V. Hewagama
Department of Human Resources Management, University of Kelaniya E-mail: ghewagama@hotmail.com

Abstract
This paper empirically investigates the effectiveness of grievance settlement procedure and analyses, its impact on Labour Management Relationship in apparel industry in Sri Lanka. Continuous challenges faced by the apparel industry in Sri Lanka have compelled them to rethink their strategies in Labour Management Relationship. Effective grievance handling has become a vital aspect in maintaining a harmonious & a productive Labour Management Relationship. The objectives of the study are, to identify the effectiveness of the grievance settlement procedure, to examine the Labour Management Relationship & to test the relationship between the grievance settlement procedure and its impact on Labour Management Relationship of the selected firms of apparel industry in Sri Lanka. The data was collected from a randomly selected sample of 60 executive level employees in six apparel firms located within Colombo District. A structured questionnaire was administered to collect data. Labour Management Relationship was assessed by using the four dimensions: cooperation, participation, understanding, and dispute settlement. The effectiveness of the grievance settlement procedure was analyzed using seven established characteristics, namely; formal procedure, speedy settlement, acceptance, settlement at lowest level, perceived justice, simplicity and training. The data was analyzed using Pearson Correlation Coefficient and Mean Values. The findings of the study reveal a positive significant impact of the effectiveness of the grievance settlement on Labour Management Relationship in apperal industry in Sri Lanka. Key words: Grievance Settlement, Labour Management Relationship

Introduction
The practice of Labour Management Relationship (LMR) in Sri Lanka dates back to the days when organizations commenced to employ workers to achieve their objectives.

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(Opatha, 2005). Under the colonial administration, workers perceived that they were being exploited and consequently started to get organised collectively. (Zakaria & Opatha, 2000) Formation of Trade Unions & Collective Bargaining rights have been recognized after introducing the Trade Union Ordinance of 1935 in Sri Lanka. One of the important aspects of collective agreement is the grievance procedure. It provides a mechanism and a process for managing workplace conflict arising out of the contract between employer and employee. Many scholars' practitioners consider conflict resolution through grievance procedures to be major accomplishment of industrial relations. (Peterson, 1992 as in Peterson & Lewin, 2000) Harmonious LMR is essential for socio economic development of a country and affects not merely the interest of the employer and employee, but also the entire community.

Grievance Settlement Procedure (GSP) & Its Significance

A Grievance is "any discontent or dissatisfaction arising from feeling or a belief of injustice felt by an employee or a group of employees in connection with the work environment". (Opatha, 1994) The use of grievance procedure is intended to serve the needs of both employers and employees. (Nurse, 2006) It is therefore important for organizations to employ effective GSP to address the grievances raised by the employees in the interest of prompting justice and to avoid disputes. GSP in an organization is intended to provide "peaceful" means for resolving conflicts and promoting effective labour management relations. From the employees perspective grievance settlement systems provides an opportunity for the use of "voice mechanism, thereby creating upward communication channels to management and the workers and their unions can asset and protect job rights under contract. (Nurse & Devonish, 2007). Management too benefit from effective grievance settlement. Research evidence shows that Grievance Settlement contributes to the quality of Labour Management relations climate within the workplace. (Ichniowski & Lewin, 1987; Peterson and Lewin, 2000) Union and management decisions to adopt or

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not adopt grievance procedures can be viewed as one alternative among a range of bargaining choices and human resources practices (Ichniowski & Lewin, 1987). In other words, grievance procedures may be traded off for wages, benefits, work rule changes, or other conditions of employment. (Peterson & Lewin, 2000). One of the cardinal principles of effective grievance management is that worker must be aware of and have unencumbered access to well defined procedure that are easy to understand & use. (Nurse & Devonish, 2007). Effective grievance management should ensure the "voice" of employees i.e., the opportunity to be heard in the organization. GSP provides a formal avenue for employee voice and is thus available for resolving work place conflicts. An efficient & responsive grievance settlement system handles workers' complaints in a timely manner and ensures decisions for resolving grievances are made in timely manner. (Nurse & Devonish, 2007) Mere existence of GSP will not assure the successful handling of employee grievances and certain characteristics should be presented in these procedures for its success. Speedy settlement, acceptance, low cost, settlement at the lowest level, proper communication, simplicity as some of the important characteristics of effective grievance handling practices Opatha, (1994). A study conducted by Adikaram & Rupasiri (2007) established four characteristics of effective grievance handling procedure, promptness, fairness, simplicity, and acceptability. Nurse & Devonish, (2007) states six major characteristics namely: existence of adequate opportunities for airing complaints, fair handling of workers' complaints, timeliness of grievance/complaint handling, timeliness of grievance resolution, and adequate stages of the grievance management process and adequate procedures for handling workers' complaints are deemed important for effective grievance systems. For the purposes of this study, seven major characteristics have been identified important for effective GSP: Formal Procedure, Speedy Settlement, Acceptance, Settlement at lowest level, Perceived Justice, Simplicity and Training.

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Labour Management Relationship (LMR) & Its Significance

LMR can be defined as the perceived degree of how well labour unions and managers in an organization feel and behave towards each other (Opatha, 2005). Favourable LMR is important and necessary for achieving individual, group and organizational performance. LMR should be geared to creating the climate appropriate to securing the cooperation necessary for productivity growth. If grievance handling is effective there will be consideration of worker grievances, reassurance of a fair hearing, prompt settlement and less possibility of converting small problems into larger problems such as strikes and these conditions will lead to a favourable LMR (Ivancevich, 1998). According to a study done by Opatha (2005) established that there is a positive association between GSP and LMR of union officials of manufacturing firms in Sri Lanka.

Research Issue & Objectives

There are theoretical explanations (Peterson and Lewins, 2000, Ichniowski & Lewin, 1987, Opatha, 2005), in respect of the relationship between systematic use of Grievance Settlement & its relationship towards the LMR of the organizations. It seems that there is a gap in empirical knowledge available, particularly in Sri Lankan context, testing the relationship between effectiveness of GSP and its impact on LMR. The paper focuses on addressing the following five research questions: 1. Is there a positive relationship between the effective GSP and the perceived degree of LMR of executive level employees of apparel industry in Sri Lanka? 2. Is there a positive relationship between effective GSP and union management co-operation of executive level employees of apparel industry in Sri Lanka? 3. Is there a positive relationship between the effective GSP and understanding between parties of executive level employees of apparel industry in Sri Lanka? 4. Is there a positive relationship between the effective GSP and participative decision making of executive level employees of apparel industry in Sri Lanka?

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5. Is there a positive relationship between the effective GSP and dispute settlement of executive level employees of apparel industry in Sri Lanka? Hence the objectives of the study are, to identify the effectiveness of the GSP of executive level employees of apparel industry in Sri Lanka, to examine the perceived degree of LMR of executive level employees of apparel industry in Sri Lanka and also to identify the relationship between the GSP and dimensions of LMR namely: union & management co-operation, understanding between parties, participative decisions making & dispute settlement of executive level employees of apparel industry in Sri Lanka

Research Frame Work

Relevant schematic diagram is shown in figure: 01. Characteristics of effective GSP are labeled as the independent variable of the research. LMR is labeled as dependent variable of the research. Figure 1: Schematic Diagram of the Research Framework

Independent Variable & Its Dimensions

According to research findings of Opatha, (1994), Peterson and Lewins, (2000), Adikaram & Rupasiri (2007), Nurse & Devonish, (2007), certain characteristics are important for effective grievance settlement. For this study, seven major characteristics are used to test the effectiveness of GSP namely; Formal Procedure, Speedy settlement, Acceptance, Settlement at lowest level, Perceived Justice, Simplicity and Training.
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Table 1: Working Definitions of Dimensions of Effective GSP

Dimension Formal Procedure: Definition Presence & use of grievance procedure provides a formal avenue for employee voice and is thus available for resolving work place & organizational conflicts. (Peterson and Lewin's, 2000) This refers to the time that elapses between the time a complaint is issued and the time any action by management is initiated and the length of time spent in reaching a formal resolution for a grievance raised. (Nurse & Devonish, 2007) Grievance systems should also specify employees' rights to representation and allow for appeal against decisions with which they disagree. (Nurse & Devonish, 2007) The extent to which the parties are able to resolve contractual disputes at the lowest possible level and without intervention of a third party is an important indicator of effective grievance handling. (Knight, 1986) Perceived fairness of grievance handling suggests that when employees perceive the procedures attached to the system as fair and just, they are more likely to perceive outcomes as fair even when those outcomes are not in their favour. (Peterson and Lewin's, 2000) Simplicity of the GSP is established by studying the aspects such as whether a clear definition is presented as to what grievance is, the number of steps involved in the procedure and whether the procedure is clear to employees. (Adikaram & Rupasiri , 2007) Supervisors' behaviour and attitudes are important determinants of grievance activity (Peterson and Lewin's 2000), it is important to train supervisors, managers on grievance handling so that they will acquire better knowledge and skills on how to handle grievances effectively.

Speedy settlement

Acceptance

Settlement at lowest level:

Perceived Justice

Simplicity

Training

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Dependent Variable & Its Dimension

Four dimensions have identified to measure the LMR: union & management co-operation, understanding between parties, participative decisions making & dispute settlement. This support the research findings of Opatha, (2005) & 10 item harmony dimensions of Dastmalchian et al (1991). Table 2: Working Definitions of Dimensions of LMR Dimension Union Management Cooperation (UM Co) Definition The degree to which the employees having positive outlook on union management relationship, having an environment for a constructive dialogue between the union and the management in terms of issues relating employment & the union contributes to the overall productivity of the organization. (Researchers) Giving due respect for both parties goals & objectives, conditions of the employment are viewed as fair by the employees, a sense of fairness associated with the union management dealings and trade union is given due recognition by the management. (Researchers) Degree of encouraging giving suggestions and allowing participating in making decisions which affect workers (Researchers). The collective agreement is regarded as fair by employees and taking proactive action by the management to avoid possible conflicts.(Researchers)

Understanding Between Parties (UBP)

Participative Decisions Making (UBP) Dispute Settlement (DS)

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Hypotheses
According to the research framework & research questions five hypotheses were developed. H1: The effectiveness of GSP is positively correlate with the LMR of executive level employees of apparel industry in Sri Lanka H2: The effectiveness of GSP is positively associated with the union & management co-operation of executive level employees of apparel industry in Sri Lanka H3: The effectiveness of GSP is positively linked with understanding between parties of executive level employees of apparel industry in Sri Lanka H4: The effectiveness of GSP is positively correlated with the participative decision making of executive level employees of apparel industry in Sri Lanka H5: The effectiveness of GSP is positively associated with the dispute settlement of executive level employees of apparel industry in Sri Lanka

Study Setting, Design and Sampling

The study needs more reliable and original data to test hypotheses therefore the study population was limited to Colombo District and six apparel firms have been selected as the sample of the study, using random sampling technique. The selection of the apparel industry in Sri Lanka was due to many reasons. The apparel manufacturing firms in Sri Lanka plays a vital role in providing significant contribution to country's GDP, export earnings and employment. The Industry sector, which accounts for about 28% of GDP of Sri Lanka, has its highest output contribution with the manufacturing sub-sector (including apparel firms) accounting for a share of 17.7% of the total GDP in 2007. Textile, wearing apparel & leather products which was the major sub-sector of the export oriented industries, accounting for 43% of total export earnings of the country, in 2007. (Central Bank Annual Report of Sri Lanka, 2007).

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The data was collected from a randomly selected sample of 60 executive level employees in six apparel firms located within the Colombo District. A structured questionnaire & interviews were conducted to collect data. The effectiveness of grievance settlement is operationalised into seven dimensions and 22 questions used to evaluate these seven dimensions. The LMR is operationalised into 04 dimensions and 15 questions administered to measure the dimensions. To assessed the LMR of the organizations, 10 items harmony dimensions of Dastmalchian et al (1991) used with modification. The responses to the questions were elicited on a 7-point Likert type scale.

Validity & Reliability

Validity can be defined as the degree to which an observation or a measurement corresponds to the construct that was supposed to be observed or measured. (Dunn, 2001) The questionnaire provides coverage by embodying an adequate number of questions that represent variables of interest ensuring the content validity of the instrument. Reliability refers to a measure's the stability or consistency across time (Dunn, 2001). The internal item consistency reliability was examined with Cronbach's Alpha test. The results of Cronbach's Alpha test are given in the table 03, which suggest that the internal reliability of each instrument was satisfactory. Table 3: Reliability of Instruments
Instrument Speedy settlement Acceptance Settlement at lower level Perceived Justice Simplicity Training Union & Management Co-operation Understanding between parties Participative Decisions Making Dispute Settlement at work Cronbach's Alpha 0.838 0.738 0.821 0.901 0.889 0.917 0.702 0.823 0.733 0.769

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Results
There are five hypotheses in this study. To test the hypotheses the following statistical techniques were used; Pearson Correlation Coefficient, Mean Values and Multiple Correlation Matrices. H1: The effectiveness of GSP is positively correlated with the favourable LMR of executive level employees of apparel industry in Sri Lanka To test the first hypothesis average mean values were calculated related to all the dimensions of GSP & LMR of the firms under the study. Table 4: The average mean values of dimensions & overall mean value of variables
Instrument Formal GSP Speedy settlement Acceptance Settlement at lower level Perceived Justice Simplicity Training Effectiveness of GSP Union & Management Co-operation Understanding between parties Participative Decisions Making Dispute Settlement Perceived degree of LMR Average Mean Values 5.03 5.01 5.12 5.26 5.31 5.25 5.23 5.17 4.10 4.75 5.43 5.63 4.98

According to the average mean values of each dimension of GSP, all dimensions were equally important since significant difference did not exist among the mean values. Overall mean of 5.17 indicates the effectiveness of GSP of the sample firms which was satisfactory. In the 7-point Likert scale the result of 5.17 positioned in the agreeable

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range (between 5 & 6 range). Hence these findings indicate that GSP of sample firms was effective. LMR dimensions of participative decision making & dispute settlement were the most prominent variables that affect the LMR, having mean values of 5.43 & 5.63. Overall mean of 4.98 was above average which shows that the LMR was favorable in selected apperal firms. To test the first hypothesis correlation value of the two means were obtained & depicted in the Table 05. Table 5: Correlation Value of the GSP & LMR

** Correlation is significant at the 0.01 level (2-tailed).

Pearson Correlation Coefficient was calculated at in order to find out relationship between two variables of the sample. The Correlation coefficient value was 0.747 and it was significant at the 0.01 level. It implies that it is 99% confident that there was a positive significant association between effectiveness of GSP and Labour Management Relationship of the selected firms in the apparel industry in Sri Lanka. Hence the first hypothesis of this study was justified. H2: The effectiveness of GSP is positively associated with the union & management co-operation of the selected firms

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Table 6: Effectiveness of GSP vs. Union Management Co-operation

** Correlation is significant at the 0.01 level (2-tailed).

The relationship between two variables of effectiveness of GSP & union management co-operation of the sample, the correlation coefficient value was 0.547 and it is significant at the 0.01 level. It implies that there is a significant positive association between effectiveness of GSP and union management co-operation, of the selected firms. Hence, the second hypothesis of this study was accepted. H3: The effectiveness of GSP is positively correlated with understanding between parties of the selected firms Table 7: Effective GSP vs. Understanding between parties

** Correlation is significant at the 0.01 level (2-tailed).

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The relationship between two variables of effectiveness of GSP & understanding between parties of the sample the correlation coefficient value was 0.587 and it is significant at the 0.01 level. It implies that there is a positive significant association between two variables hence, the third hypothesis of this study was accepted. H4: The effectiveness of GSP is positively correlated with the participative decision making in the selected firms Table 8: Effectiveness of GSP vs. Participative decision making

** Correlation is significant at the 0.01 level (2-tailed).

Effectiveness of GSP & participative decision making of the sample is positively correlates with the correlation coefficient value at 0.607 and it is significant at 99% confidence level. The relationship the two variables under the sample was significant hence fourth hypotheses was justified. H5: The effectiveness of Grievance settlement procedure is positively correlated with the dispute settlement of the organization

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Table 9: Effective GSP VS Dispute settlement

** Correlation is significant at the 0.01 level (2-tailed).

Table 9 illustrates the statistical results related to the final hypothesis of this study. The correlation coefficient between Effective GSP & dispute settlement was 0.723 at the 0.01significant level. There is 99% confident that there is a positive association between effective GSP vs. dispute settlements of the sample hence final hypotheses was justified. Table 10: Multiple Correlation Matrices for all LMR Variables
Correlations
                 

 

 

  

  

     

      

  

     

    

   

  

      

    

  

  

  

** Correlation is significant at the 0.01 level (2-tailed).

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The above Multiple Correlation Matrices demonstrates relationship between effective GSP and other dimensions of dependent variable; union & management co-operation, understanding between parties; participative decisions making & dispute settlement in the sample of the study. This shows that some LMR variables were correlated with each other, showing that collinearity seemed to exist at 0.01 significance level. For example union & management co-operation positively correlated with the understanding between parties & dispute settlement. Dispute settlement and participative decision making has a strong positive relationship between variables.

Recommendations
The study found empirical evidence to support the hypothesis that effective GSP is positively & significantly correlate with favourable LMR of the executive level employees of the apparel industry in Sri Lanka. Also these findings were consistent with the study done by Opatha (2005). The study found the empirical evidence to support that all the seven dimensions are equally important for effectiveness of GSP in selected firms in of apparel industry in Sri Lanka. These findings are similar with the results of the indirectly related studies done by Peterson and Lewins, (2000), and Adikaram and Rupasiri (2008). The model developed by this study has been substantiated empirically and hence it could be used as an explanatory model of the relationship of effectiveness of GSP & LMR that will contribute to the knowledge in the field of human resources management and industrial relations. This study is also important for managers in apparel industry in Sri Lanka as the findings can be used to develop a set of managerial actions to enhance the GSP & LMR in the apparel firms in Sri Lanka.

References
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