1-2.

Nature of
Industrial Relations:
Traditional & Changing
Perspectives
Debi S. Saini
Professor & ChairpersonHRM Area
Management Development Institute, Gurgaon

The issues discussed in this presentation are:

1. Conflict dynamics & different approaches of IR Mgt.
2. Working of an IR system: Dunlops

System Model

3. IR & related terms: IRLRER

4. Has Globalizations changed IR scene? How?
5. IR: ActorsIssuesInstitutionsProcedures
6. Traditional issues in IR
7. Frames of reference of IR: UnitaristPluralistMarxist
2

Two Main Components of this Course:

Management of Personnel/People
(Systems, effectiveness, engagement, productivity)

Management of Industrial Relations

(Conflict, interests, rights, peace)

Lately, the two perspectives are getting

merged into an integrated HRM framework
3

The Roots of
Industrial Conflict

Peace Requires: Balancing of Business Needs & People Needs

Business Needs

People Needs

High Earnings

Reward & gain sharing

Speed to Marketplace

Reasonable job security

Market Share
Product Quality
Customer Service
Customer Responsiveness
Low Costs
Efficiency/Productivity
Flexibility
Benchmarking
Responsive/Innovative
Future Oriented
Customer Satisfaction

People Needs
are Managed
differently in
Different Orgs.
IBM
Tata Steel
Ballarpur Industries
Hero MotoCorp
NDPL

Work-life balance
Flexibility
Empowerment
Welfare facilities
Social security
Learning Atmosphere
Respect for their Diversity
Growth opportunities
Recognition/ belonging
Participation/ Involvement
Management style

First know: Why Labour-Mgt. Conflict Occurs

Conflict is at the centre in organizational working

Why: Difference in interests, values, goals, attitudes

Industrial Conflict: a Complex & difficult issue

6

Mgts. differently handle conflict:

Positive or Negative
Meaning of Work

What does work mean to People: Two extremes

Positive (win-win)

Negative (loselose)

Work is interesting

Sheer Drudgery/unpleasant

Reflects good quality of life

A way to

Gives us meaning of life

Just a means

kill time
to living

(WM feels: meditating/ bldg. a temple)

Can we think of
some basic approaches to
managing
employer-employee relations?
9

Graziano: CEO killed

Maruti-Suzuki HR Chief burnt
HMSI Violence 2005
Tata Steel (35 K workers; no strike since 1958)
Classic Stripes: 3-6 best employer co.

How do we go about
understanding these issues?
10

Classic Stripes (Mfg.): Come Out of Control Mindset

http://classicstripes.com/manufacturing_plants.html

500 WM including contract WMMost are blue-collared

4 WM 25 yrs. ago (in 10 x 10): Built 44 acre campus in Vasai
3 plants now: Mumbai; Vasai; Hardwar No Union

Kishore Musale Charitable Trust:

Main

motto: dignity at work.

Believes

in: valuing every individual, giving people their due,

freedom, respect, opportunity backed by lots of training.

Classic Stripes: Some HR Initiatives contd

Won Safety & Environt. 2003 award (SIGA given to 5 cos. worldwide)
Kaizen Training: 2 hrs per month

A relationship committee: Meets twice in a month

Has a library with trade journals, magazines & books

DM: 1/3 Women workers; also physically-challenged

Shares with employees a %age of its annual profits

Tata Steel Ltd.: HRM Model

Sr. Mgt. work at less than 60% of market worth; dont leave
Meets need for dignity,

stability, security: No strike since 1958

Participation, paternalism

(kin employment),

family focus

Ethical working
CSR creates a sense of pride

in employees

Comparing two US Cos.: South West & American Airlines

On same day (May 2010): AG meeting of airlines: SWA & AA

--AA meeting was picketed by AA Pilots Assn.

--Southwest celebrated 37 yrs. of service by founder, Herb Kellehar

Paper carried picketing

news; same paper carried an ad:

Kellehar knew, knows & will always know that

the secret to bus. success, small or large, is to put people first.

Kellehar sees employees as my principal customer.

Understanding
Employee Relations
& related Terms?

15

15

2 Sets of Concerns for Employer & Employee

Employees as Individual
(Market operates here)

Employees as collective
(Class solidarity operates here i.e. Unions)

Org. needs: Employee retention & engagement, indl. peace

in both situations

Employee Relations, IR & LR

ER & IR both deal with all

aspects of employment relations

i.e. unionized & non-unionized [Today, Global focus: cooperationdecent

work]

But IRs key focus is unionized workers, &

ERs key focus is

ER: is ongoing

individualized workers

relations-building process with employees

through HR

practices & orgl. culture-bldg. efforts

for securing employee commitment/engagement

LR (labour Relations)

focuses exclusively on

employment relations in a unionized environment

(i.e. Unions & mgt.)

What does good ER Involve: Research?

1.

Dialogue & communication for trust & culture

2.

Partnership through involvement & feeling valued

3.

Proactive, not reactive efforts (Hero MotoCorp)

4.

Employee rights, fairness, just grievance mgt.

5. Employee discipline (Tata Steel; Classic Stripes)

18

18

Employee Relations

Employee

Partnership

Communication

& Employee
Involvement

for Trust bldg.

Proactive
Efforts

Employee
Rights/fairness/
Grievance mgt.

Employee

Discipline

Fig.: Key Dimensions of Employee Relations

Manifestations of Poor Employee Relations

Unionization
Poor Performance
Employee Absenteeism
Employee dissatisfaction & Turnover
Litigation

10

What do you
think is meant by
Industrial Relations?

21

Industrial Relations: Simply Speaking:

Industrial relations (IR)

is the process of

rule making

that mediates between divergent interests

of capital and labour

22

11

How can we view Industrial Relations

J. H. Richardson (Leeds University)

Industrial relations is
the art of living together
for purposes of production

Important
Some
regulation
is needed
in
all relations;
State
determines
the regulatory
framework
23

How can we view Industrial Relations contd

Hugh Clegg (Clegg & Flanders pioneers of Classical Oxford School of IR)
Industrial relations is a study of
workers and their unions,
employers and their associations,
and State & its institutions/agencies

concerned with regulation of employment.

24

Imp.: Different powers, roles, interests, duties of Actors

12

Is Globalization Syndrome
linked to
Industrial Relations: How?

25

What Does Globalization mean?

Global movement of capital
Global movement of businesses
Driven by principles of free market economy
& less obstructed people

movement

Across borders within companies

26

13

Globalization & Other Causes of Changes in Business

1. GLOBALIZATION Syndrome
2. Information Revolution/Internet
3. New Technology
4. Emergence of Service Industry
5. HR Philosophy:

Psychological Contract &

Focus on: Employee Relations
M. Thatcher has been named UKs most
effective prime minister of the 20th century
by BBC History Magazine 30 Aug, 2006, TOI

Globalization has led to:

Internl integration of economies

PSU reforms & privatization
Collaborations & jt. ventures
Dominance of market
rationality
Decline of welfare state
27

What is meant by:

IR Actors
IR Institutions
IR Procedures
IR Issues
28

14

Focus of the Discipline of IR

A. Characters (or actors) in IR
Union leaders
HR Managers
Conciliation Officers/ Mediators
Arbitrators/judges
Labour Courts/
Labour Lawyers/Management Consultants
Others
29

Focus of the Discipline of IR

B. IR Institutions
(permanent form of custom or law)

Unions
Employer associations
State/Labour Bureaucracy
ILCILO
Tribunal/Labour Court
Labour law
Higher judiciary
30

15

Focus of the Discipline of IR cond

C. IR procedures (aim at: Procedural justice)
Bargaining/Negotiation
Conciliation
Arbitration
Adjudication
Reference
Procedure for going on strikes/ lockouts
Inquiries/Disciplinary procedure
31

IR is studied by many academic disciplines

Economics
History
Law
Sociology

Political Science

Management
32

16

What do you think

are some of the key issues
in IR?

33

Traditional Problems/Issues in IR
1. Job satisfaction:

Job designWorking conditionssupervision

2. Negotiating Wage/salary/VRS/bonus/benefits
3. Alienation & discontent
4. Grievance management
5. Trade union, strikes, lockouts
34

17

Traditional Problems in IR
6. Industrial dispute settlement
7. Indiscipline, absenteeism & mobility
8. Labour Laws
9. Labour welfare/QWL
10. Communication
11. Joint consultation, participation, involvement
35

Three Basic Approaches

to looking at IR:
Pluralism, Unitarism, Radicalism

What are these?

36

18

Frames of Reference
in Industrial Relations
& New Issues in IR

37

Frames of Reference: Unitarism & Pluralism

Unitarism
1. Assumptions about Interests
Common interest/objectives

2. Assumptions about conflict

Inevitable, destructive: Be avoided
Caused by: Poor mgt/communication

3. Assumptions about trade unions

Unwanted intrusion

Pluralism
1. Assumptions about Interests
Mgrs. & employees have: different objectives

2. Assumptions about conflict

InevitableBe negotiated
Caused by difference of opinions/values

3. Assumptions about trade unions

Not the cause of conflict: Conflict inherent
Legitimate part of workplace relations

4. Assumptions about collective bargaining 4. Assumptions about Collective bargaining

CB generates workplace conflict

rather than resolve it

CB ensures fairer outcomes

Balances employee & mgt. power
38

19

III. Marxist (Radical/ Critical) Perspective

Market economies are social arrangements created by historical forces

Private property is a social construct, not created by nature

Owners of capital accumulate capital; take all or most of it
Power of ownership &

control cause WMs impoverishment

Classes struggle: for control of industry, economy & state

Differential access to education, media, government jobs

III. Marxist (Radical) Perspective contd

View of society based on post-capitalism is wrong
Capitalist profit is key influence on co. policy

Control enforced downwards by capitals agents

Surplus

value generation by capitalist

Employees socialized into accepting status quo

Class conflict is the source of societal change

Without conflict society will stagnate

40
Capitalism will collapse due to its inherent contradictions

20

III. Marxist Perspective

contd

CB: limited accommodation of fundamental divisions

Unions/IR instts. deal with marginal issues

Law

not independent referee

Industrial Justice: only if revolution

41

How do we Conceptualize
the Different Workings of
IR System?

42

21

Eight Broad Typologies of IR Models

I. Traditional II. Paternalistic
Pluralism
Pluralism
(German Pharma)

III. Ambivalent
Pluralism
(Most unionized cos.
Maruti-Suzuki Ltd.)

(Tata Steel/NDPL)

IV. Repressive
Pluralism
(Simran Foods Ltd.)

V. Coercive
Unitarism

VI. Ambivalent VII. Paternalistic VIII.

Unitarism
IBM type Unitarism
Unitarism

(Glaziano before the

violence; SMEs)

(Or manoeuvred
unitarism through law,
shenanigans,
paternalism, collusion
with bureaucracy)

(New Unitarism)
(Most Indian SMEs,
Flaxo Exports)

(Hero-Honda, Air Tel)

Debi Saini 2010

What can be Learnt from these two Sessions:

Conflict in industry is inevitable, given different interests
Variegated models of IR are practiced by different organizations

IR is a system

of rule-making

about gains of & power in industry

IR concept is changing into employee relations in new era

IR focuses on actors,

institutions, procedures

Unitarism & Pluralism are 2 broad approaches to IR

IR can be divided into 8 broad typologies
44

22

3-4. Traditional & Changing

IR Perspectives &
Emerging IR Strategies
Debi S. Saini
Professor of HRM
Management Development Institute, Gurgaon

This presentation focuses on the following issues:

1. Changing world of work; emergence of new thinking

2. New developments in industrial relations

3.

New Focus: union-substitution

& Employee Engagement

4. Strategic IR agenda & Re-orienting key actors in IR

2

Changes in
World of Work
and new pointers in IR

The Evolution of Employment Systems Since 1980s

The old system based on implicit job security is dead (Cappelli, 2000)
It is argued that the old system should be replaced by a new
equilibrium in which job security is replaced by something else

Eight Broad Typologies of IR Models

I. Traditional II. Paternalistic
Pluralism
Pluralism
(German Pharma)

(Tata Steel/NDPL)

III. Ambivalent
Pluralism
(Most unionized cos.
Maruti-Suzuki Ltd.)

IV. Repressive
Pluralism
(Simran Foods Ltd.)

V. Coercive
Unitarism

VI. Ambivalent VII. Paternalistic VIII.

Unitarism
IBM type Unitarism
Unitarism

(Glaziano before the

violence; SMEs)

(Or manoeuvred
unitarism through law,
shenanigans,
paternalism, collusion
with bureaucracy)

(New Unitarism)
(Most Indian SMEs,
Flaxo Exports)

(Hero-Honda, Air Tel)

Debi Saini 2010

New Developments
in
Industrial Relations
Shifts from
IR to Employee Relations

New Developments in Employee Relations

1. Changing role of state
2. Unions in crisis (bldg. cooperation)

3. New actors in IR: e.g. Consumers/society

4. Emergence of Cooperative bargaining
5. Emphasis on performance-related pay
6. Pressures on labour law rigidity
7. Changing role of ILO: Decent work
8. Employers Primacy on flexibility
9. IR impacted by HR philosophy

1. Changing Role of State

Welfare state: inefficient
Government as facilitator
Social justice to market & trickle down

Changed labour policies of states:

8

2. Union-dilution is Major Agenda: Causes

Shift: adversarial to cooperative IR:

Also called Individualized IR

States primacy to productivity

Service orgs.: white/gold-collar WM

Declining core; rising periphery WM

Influence of HRM

Employment of labour

Philosophy
law consultants
9

Globalization and Crisis in Unionism

Decline in Union Presence (density)

Decline in Union Influence (reach)

10

Tab. 1: Percentage of Trade Union members among Total

Workforce in Selected Industrialized Countries
Country

1970

1980

1990

1997

2003

Austria

63.6

59.6

56.2

46.6

35.2

Denmark

62.6

87.8

88.9

89.9

75.5

France

21.0

17.1

9.2

8.6

5.8

Germany

37.7

40.6

38.5

33.4

22.2

Italy

38.5

49.0

39.2

38.0

47.1

Netherlands

39.8

39.4

29.5

28.9

23.9

Norway

57.9

64.4

70.3

71.3

63.0

13.8

16.8

15.1

11.5

Sweden

66.6

78.2

82.4

86.4

78.0

UK

48.5

54.5

38.1

30.2

25.9

Spain

Source: Accessed on 12 January, 2006 from Cornell Institute of Industrial Relations (IR) Statistical Record on Trade union
Membership at http://www.ilr.cornell.edu/library/downloads/FAQ/UNIONSTATS2002.pdf

11

3. New Actors in IR

1. Multilateral IR: consumer/society

2. New issues:
Customer Creation and sustenance
Protecting environment
Gender issues
Safety promotion
Child labour abolition

3. Medias role in new issues

12

4. Emergence of Cooperative Bargaining

1. Shift: industry

level to unit level CB

2. Squeezing of bargaining zone

3. Pressure:

fear of corp. incompetence

Earlier: fear of corporate power

4. New clauses:Productivity linkage & Wage/benefits13cut

5. Emphasis on Performance-related Pay (PRP)

Flexible pay

Cost saving: a big concern

Competencies & results are imp.

Knowledge pay in high-tech. industries

14

6. Pressure on Labour Law Framework

Pressure on Legislature
Do not allow union militancy; co. have to compete globally

Flexible workforce: withdraw Ch-VB of IDA

Keep away law of Employee Participation

Respect sanctity of managers rights

15

7. Change in ILOs Agenda

ILOs desire for adaptation, renewal, change

From adversarial C.B. to sophisticated compromise

Securing decent work for women and men everywhere

Common

purpose

For all three social partners

16

8. Flexibility: Key in New Era

What is labour flexibility?
The ability to adjust
the size and mix of labour inputs
in response to changes in product demand
so that org. doesnt have excess labour

Hard and Soft issues in Flexibility

17

9. HRM Philosophy & Psychological contract

It is a philosophy of people-mgt:
Identify & enforce behaviour
Aims: Competitive advantage
Focus on new interventions
PM & IR merged to produce positive energy
HRM strategy is the Single most imp. Consultancy Area
18

Working Towards
HPWS & Employee Cooperation
through
Neo-Unitarist & Neo-Pluralist
Strategies

19

Leaders need to Build World-Class Organization, an HPO

A High Performing Organization (HPO) is one that is

able to produce extraordinary
consistently

results &

displays the ability

to sustain performance over time

and over changing

circumstances.

10

Shifting Strategic Tools: McKenzies 7-S Framework

Developed by Peters & Waterman

7 elements or strategic tools in an org. that must be aligned for business to be successful

Shifts from Systems to People-centricity

Strategy

Structure

Style

Systems
Strategic
Framework
& Tools

Staff
Skills

Shared
Values

Range of Interventions are used for Org. Culture

A pat on those
who work with
you:
A symbol
of your care
for them

Luxurious facilities to, & Care for, employees

So that they do not have home worries

11

Union-Substitution Strategies
and
Employee Engagement

Neo-Unitarism through Union Substitution

Attractive
Reward strategy

Emp Involvement,
empowerment

Culture
Building, flexibility
Individual diversity

Design
satisfying jobs

Union
Substitution attempts
Through Progressive
HR

Investment in
HRD for WM
& managers

Maximize
opportunities

Strategic
Selection

Make workplace
funful & implement
Fair standards
24

12

Practicing Strategic IR
and Building
Developmental Agenda
for promoting New IR

25

Towards Developing Strategic IR Two Dimensions

I. Competency-building amongst mgt. & union

Management (at different hierarchical levels)

Unions

II. New

Approach to Developing Processes (OCTAPACE)

Openness
Confrontation
Trust
Autonomy
Proactivity
Authenticity
Collaboration
Experimentation

26

13

Re-orienting the Top Management

De-humanization often seen especially in larger bureaucracies

CEOs personal predisposition is critical

His beliefs about unionPeople policiesIR policiesMgt.

Top mgt. shapes org.

culture: Through: beliefs, actions, styles

Development of top

management should aim at:

Becoming aware of biases & prejudices

Learning to treat IR as important managerial business

27

Developing Middle Management

I. Its competency-building will include:
1. Knowledge about new issues in IR
2. Understanding customs/practices in dealing with WM/union
3. Knowledge about the legal framework of IR
4. Knowledge of history of union & its leadership
5. Knowledge about new economic environment/practices

II. Skills
1. Skills in diagnosing the problem
2. Skills in grievance resolution
3. Skills in negotiation
4. Skills in communication and inter-personal relations

III. Attitudes
1. Orientation to positive problem-solving
2. Positive belief-system about existence of union (if one exists)
3. Faith in participative decision-making

28

14

Development of Union Leadership

This requires sensitizing them to various issues:
General economic and industrial environment
New technology
Competitors and their HR
New

compulsions

practices

of mgt. & need for flexibility

Need for democratization within trade unions

29

Implementing HR Agenda for Workers

Creating developmental

Communication &

climate in general

internationalization HR

values/goals

Involve unions in cooperation with workers

Continuously communicating the HR action areas: EI

Create right

HR architecture

30
to implement intentions

15

What can one learn from this presentation?

New order is emerging in IR: called employee relations

Shifts from adversarialism to neo-pluralism or neo-unitarism

Shift from shenanigans to

Along with traditional issues, new

trust & cooperation

issues have emerged in IR

Flexibility is one of the most salient concerns of cos.

Govt. new

eco. agenda is moving from social justice to growth

HPWS through union-substitution & employee engagement

HR strategy: for top mgt.middle mgt.unionworkers

31

16

5. Trade Unions as Actors

in the HRM system:
Debi S. Saini
Professor of HRM
Management Development Institute, Gurgaon

Trade Unions as actors in HRM System

Objectives of this session are to discuss the following:
Nature and meaning of trade union
Role and functions of trade unions
Overview of the Trade Unions Act 1926
Rights & liabilities of a trade union
Issues in recognition of unions
De-unionization strategies of employers
What should Indian unions do to remain relevant in todays era
2

Meaning and Nature

of
Trade Unionism

Meaning of Trade Unions

Nature
Unions: A major component (actor) of IRS

Meaning:
An organization
formed by employees
to protect their interests
including improving working conditions
4

A Working Definition: (Salamon, 1998)

Any organization,
whose membership consists of employees,
which seeks to organize & represent their interests
both in the workplace and society
and in particular,
seeks to regulate the employment relationship
through the direct process of
collective bargaining with management

Union Goals and Philosophy

Business Unionism

Social (Reform) Unionism

Practice of unions
seeking to improve
the wages, hours,
and working
conditions
in a businesslike
manner

A characteristic of
unions seeking to further
members interests by
influencing the social,
economic, and legal
policies of
governments

Union Structure and Function

Local Unions
Basic unit of union
organization formed in a
particular plant or
locality

Industrial Unions
Includes the unskilled

and semiskilled workers

at a particular location

Craft Unions
Composed of workers who

possess the same skills or

trade

National/Intl. Unions
Many local unions are part
of a larger national or
international union
(e.g. ICFTU)
7

Trade Unions Act 1926

Trade Union under TUA: Definition

2 (h) Trade Union means
any combination, whether temporary or permanent,
formed primarily for the purpose of
regulating the relations between
workmen and employers,
or between workmen and workmen,
or between employers and employers,
or for imposing restrictive conditions on
the conduct of any trade or business,
and includes
any federation of 2 or more TUs:

T U Act 1926: Components

The Act consists of 33 sections: Deals with these:
Regis.Rights/liab.RegulationsPenalties/procedures

Extends to whole India: Provides registration/immunities

Act amended in 1948 to provide for recognition
But never notified by Government

Act amended in 2001: Checks multiplicity

Administered by appropriate government
10

Salient Features of TU Act 1926

1. Provides who can register a T.U.:
Any 7 or more WM employed in industry/ trade can
Later added: At least 10% or 100 whichever is less

2. Registrar of TUs: in each stateprocedure for regis. Appeal

3. Min. subscription: Rs. 1/ 3/ 12 p.a. (Rural/Unorganized/org. sectors)
4. Envisages general/political funds of a TU: Politicization
5. Outsiders permitted as TU members
6. Rights of TUs: Immunities to TU/members (Criminal/civil)
7. Obligation of TUs envisaged: Also to file returns

11

TU under the TU Act 1926

2 (h) Trade Union means
any combination, whether temporary or permanent,
formed primarily for the purpose of
regulating the relations between
workmen & employers, or between WM & WM,
or between employers and employers,
or for imposing restrictive conditions on
the conduct of any trade or business,
and includes
any federation of 2 or more TUs:

12

Role
of
Trade Unionism

13

Why Unions Evolved

1. Easy to fight for rights collectively
2. Innate people desire to seek protection
Desire increases with social/political/economic advancement

3. Unions as footholds to political parties

4. Employers find it easy to deal with groups
5. Countervailing power: social legitimacy
14

Unions: Broad Areas of Functions

Exercise of Power: Key Function
A TU is first & foremost
a medium of power (R. Hyman)

Sources of power:
Its resources
Negotiation skills
Collection strength
Political support
Unions do research on: economy, court cases

15

Determinants of Trade Unions Power

TUs power in labour movement, depends on:
Its SizeLeadership qualityAlliance between unions

TUs power towards Govt.:

Depends on Govts desire to support

Its power towards employers depends on:

Union densityEconomic, technological, political factors

16

Union Power used for Various functions

1. Economic Regulation
Protecting terms & conditions Fighting against PRP

2. Job Regulation
Joint rule-making WM dignity Attack on this by HRD/EI

3. Social change
Adopting political role: ILC, strikes, ILO, laws, advisory boards

4. Member services
Welfare servicesWM Educationorganizationinformation

5. Self fulfilment: Mechanism to individuals to

develop leadership
17

History of
Trade Unionism
In India

18

Early History of T. U. in India

Earliest TUs organized: Bombay, Calcutta, Madras
Industries: Cotton textiles, jute, railways

One of 1st lab orgs.: Bombay Mill Hand Assn.

Formed in 1890: was a welfare organization

Gandhis satyagraha: Ahmedabad in 1917:

50% wage hike demanded: RejectionStrike
Gandhiji said: 35% fairWM pledged for strike
Gandhiji on fast after 3 weeks of strike: Accepted
This was 1st major union success: Fillip to unionism

19

Early History of T. U. in India contd

1st TU: Madras Lab Union (1918: by BP Wadia)
Organized WM of Binny Mills Ltd.

TLA: organized in 1920 by Ansuyaben Sarabhai

Madras Labour Union strike call in 1920
Suit for damages/injunction
Damages awarded: Rs. 75000, Union held a conspiracy

Binny Mills (Mad HC) case: led to TU Act in 1926

Unionism accepted also due to check spread of communism
20

10

Why Outsiders in Unions

1. Low union participation & lack of interest
2.

Poor earnings and lack of leisure time

3.

Political parties' attempt to widen base

4.

WMs need protection against ULPs

5.

Need for negotiators, legal knowledge

6.

Instability of workforce/illiteracy/fear of victimization

7.

Under-developed class-consciousness
21

Union Substitution
In the Era of
Globalization

22

11

Union-Substitution Policy of Larger Firms

Union substitution policies of some firms: IBM / Kodak
This is typical HRM model

Offering attractive package to employees

Competitive pay
Communication, involvement, info sharing
Induction programme to develop orgl. ethos
Training, career development
Commitment by providing satisfying work
For success, HRM model should:
Fit core values of the organization
Reflect integrated approach

23

Unions in Crisis: Causes

States covert primacy to productivity
Unitarist/individualized IR: gold-collar WM
Declining employmentautomation
Emergence of service organizations
New tech.white- & Gold-collar WM
Home working
Emergence of lean, mean, green organization
Taylorism to Toyotaism: flexible specialization
Decline in core; rise in peripheral workforce
Employment of labour law consultants
Unipolar world and Post-capitalist society

24

12

Change in ILOs raison detre

ILOs desire for adaptation, renewal, change
Adversarial tripartism to sophisticated unitarism
--through new paradigm:
Securing decent work for women and men everywhere

Unity of purpose of the three constituents

Four strategic objectives:
--Fundamental principles and rights at work
--Employment
--Social protection
--Social dialogue
25

What Should Unions Do

to Remain Relevant
in New Era?

26

13

Agenda for Unions in New Era

1. Need to retain political unionism in India
--Make Alliances with other union federations

2. Fight with state for rights of contract labour

3. Organize unorganized labour: SEWA/Gramin Bank
4. Workers education & skill development
27

Agenda for Unions in New Era contd

5. Cooperate with industry but be firm on rights:
--Accept HRM philosophy

6. Understand needs of workers in BPO/IT

--Try to provide them service that they need from a union

7. Focus on existing labour law enforcement

8. Curb brief-case trade unionism; improve image
28

14

10/1/2012

6. Legal Framework
Of
Industrial Relations
Professor Debi S. Saini
(debisaini@mdi.ac.in)

Management Development Institute, Gurgaon

Legal Framework of IR
Issues discussed in the presentation are:
Main laws affecting IR: IDAIESOATUA
IDA: Objectives, features, definitions
IR machinery: Conciliation, adjudication, Arbitration
IInd and IIIrd Schedules under the IDA
Standing Orders Act: Applicability & Features
TUA: Features, Rights & Obligations of union2

10/1/2012

Background
&
Salient Features of IDA

Principal Laws Affecting IR

Basically 3 laws affect IR:
1. The ID Act 1947
Lays down framework for ID resolution

2. The Industrial Employment (Standing Orders) Act, 1946

Promotes uniformity in employment. conditions

3. Trade Unions Act 1926

Registration of TUs & protection for CB
4

10/1/2012

The IDA: Structure & Background

Principal IR law: Applies to whole of India

IDA contains: 40 sections + 5 Schedules

Creates bodies: conciliatory/adjudicatory/administrative

Rules: ID (Central) Rules, 1947

80 Rules + Various formats provided
5

Main Features of the ID Act 1947

1. Provides framework of CB for non-mgrl. WM
Defines ID (S. 2k); workman as non-mgrl. (S. 2s)
Prohibits parties to indulge in ULPs (Sch. V)

2. Provides a consultative/arb./adj. IR model

Consult: WC; CO; BOC; Court of Inquiry (Ss. 36)
Voluntary arbitration of indl. disputes (S. 10-A)
Adj. machinery: LCITNT (one-member bodies)
Though both conciliators/adjudicators need training
6

10/1/2012

Main Features of the ID Act 1947 contd

3. Provides re-instatement by LC/IT (S. 11-A/17-B)
4. Provides two sets of lab. adm: Cent./State (S. 2a)
5. Ensures Govt.s major control in IR/indl. peace
6. Notice for changing the service conditions (Ss. 9-A/33)
7. Regulates strikes/lockouts (for

indl. Peace)

8 Restricts lawyers in concil. & adjudi. (S. 36)

7

Main Definitions
in the IDA:
Workman, and
Industrial Dispute

10/1/2012

Who is a Workman under IDA [Sec. 2 (s)]

Any person (including apprentice)
employed in industry
to do any of the following work:
Manual/unskilled/skilled/tech./operational/clerical/supervisory
for hire or reward (with express or implied terms)

But does not include:

One who is subject to Army Act/Air Force Act/Navy Act

Employed in police/prison service
Employed mainly in managerial/administrative capacity
Employed as supervisor but draws salary of Rs. 10000+
9

Who is a Workman under IDA [Sec. 2 (s)] contd

Person employed:
Contract of & for employment (Case: Dharagdhra Chemical Works)
Supervision & control
Former is an employee/WM; but latter is an independent contractor
Employer can require what/how; contractor only what is to be done

Designation not of great importance

Nature of duty is the essence
Mainly clerical & incidentally supervisory is clerical work & vice versa

Piece-rate can also involve masterservant relationship

10

10/1/2012

Workman contd.
Employed mainly in mgrl./administrative capacity
(Standard Vacuum Oil Co. v. Commissioner of Labour)

Held:
If an individual has officers subordinate to him
whose work he is required to oversee,
if he has to take decisions
and also is responsible for ensuring that
matters entrusted to him are efficiently conducted,
& an ascertainable section of work is assigned to him,
an inference of a position of mgt. would be justifiable
11

What is an Industrial dispute? (S. 2 k.)

Any dispute or difference
between : employers & employers
employers & WM
WM & WM
which is connected with
employment, non-employment,
terms of employment, or conditions of labour
12

10/1/2012

Industrial dispute contd

Existence of dispute is central: demand+ rejection
Who can espouse the dispute:
Substantial no. of WM themselves or a union (even minority)
About 20% WM held as substantial
Community of interest is important (Rationale: CB promotion)

Individual dispute per se is not ID unless espoused as collective

Except termination disputes (Sec 2A)

Who can be Any person

--can even be a non-workman, if community of interest
13

Authorities Under
the IDA

10/1/2012

Authorities under the IDA

I. Preventive/Conciliatory Mechanism
1.

Works Committee (Section 3)

To be constituted in industries with 100 or + WM
to promote measures for amity and good relations
& to that end comment on matters of common interest

Role as agreed by ILC:

Conditions of workSafetyWelfare fundRecreation
Adjusting of festival holidaysThrift & savings--Education
15

Authorities under the IDA contd

2. Conciliation Officer (S. 4)
Can be appointed for an area or industry
Duty: Promoting the settlement of indl. disputes

3. Board of Conciliation: Constitution & Duty (S. 5)

Chairman + 2 or 4 members
Members represent both parties equally
Appointed by govt. on recommendation of parties
Duty: Promoting settlement
16

10/1/2012

Authorities under the IDA contd

4. Court of Inquiry (S. 6)
To enquire into any matter connected or relevant to an ID
When appointed: App. Govt. appoints it as occasion arises
May consist of one independent person or more as specified
where 2 or more persons mentioned one to act as chairperson
Rationale: legitimacy to genuineness of claim
Also: in U.K.: Court of inquiry

USA: Fact finding boards

17

Authorities under the IDA contd

II. Adjudicatory Mechanism
5. Labour Court (LC) (Section 7)
App. Govt. may constitute one or more labour court/s
Done for adjudicating ID of any matter in 2nd Schedule
Or for performing such other functions, as specified
Constitution: Shall consist of One person only

Qualifications:
HC Judge/ADJ 3 yrs./Jud. Off. 7 yrs.
Or P.O. of LC under a State Act 5 yrs.
18

10/1/2012

Authorities under the IDA contd

6. Tribunal (Sec 7-A) (Also called Indl. tribunal or IT)
App. Govt. may constitute one or more IT
Done for adjudicating any matter in Schs. II/ III
Constitution: Shall consist of One person only
Qualification: HC Judge/ADJ for 3 years
App. Govt. can appoint 2 assessors to assist IT
19

Authorities under the IDA contd

7. National Tribunal (Sec 7-B)

Cent. Govt. may constitute one or more NT
Done for adjudicating IDs, which involve
Qs. of national importance
or WM in more than one state are likely to be affected
Constitution: Shall consist of one person only
Qualification: High Court Judge
C. Govt. may appoint two assessors to assist
20

10

10/1/2012

After section 9B of the principal Act, for Chapter IIB, the

following Chapter shall be substituted, namely:
CHAPTER IIB

Grievance Redressal Machinery: Setting up of Grievance Redressal Machinery

9C. (1) Every indl. establishment with 20 or + workmen to have one or +
Grievance Redressal Committee for the resolving individual grievances.
(2) It shall consist of equal no. of members from the employer & workmen.
(3) Chairperson: From employer & WM alternatively on rotation every yr.
(4) Total no. of members of this Committee shall not exceed 6
Provided: one woman member if has 2 members; and if more than it will
increase proportionately.

21

After sec. 9B of the principal Act, for Chapter IIB, the

following Chapter shall be substituted, namely: Contd
(5) Shall

not affect WMs right to raise ID on same matter under IDA

(6) May complete proceedings: in 30 days on receipt of a written application.

(7) The workman may prefer an appeal to the employer
--Who will decide within within 1 month of receipt
--And send a copy of his decision to the workman
Amendment of section 11
(8) This sec. not to apply to workmen for whom there is an established Grievance Redressal Mechanism in the establishment concerned..

22

11

10/1/2012

Major Schedules
in the
IDA

THE SECOND SCHEDULE

1. Propriety/legality of an order passed under SOs
2. Application & interpretation of standard orders (SOs)
3. Discharge/dismissal of WM including re-instatement
4. Withdrawal of any customary concession/privilege
5. Illegality of a strike or lockout
6. All matters other than those specified in 3rd Schedule
24

12

10/1/2012

THE THIRD SCHEDULE

1.

Wages, including period & mode of payment

2.

Compensatory & other allowances

3.

Hours of work and rest intervals

4.

Leave with wages & holidays

5.

Bonus, profit sharing, PF & Gratuity

6.

Shift working other than as per standing orders

7.

Classification by grades

8.

Rules of disciplines

9.

Rationalisation

10. Retrenchment of WM & closure of establishment

11. Any other matter that may be prescribed

25

Trade Unions Act 1926

13

10/1/2012

T U Act 1926: Components

The Act consists of 33 sections: Deals with these:
Regis.Rights/liab.RegulationsPenalties/procedures

Extends to whole India: Provides registration/immunities

Act amended in 1948 to provide for recognition
But never notified by Government

Act amended in 2001: Checks multiplicity

Administered by appropriate government
27

Salient Features of TU Act 1926

1. Provides who can register a T.U.:
Any 7 or more WM employed in industry/ trade can
Later added: At least 10% or 100 whichever is less

2. Registrar of TUs: in each stateprocedure for regis. Appeal

3. Min. subscription: Rs. 1/ 3/ 12 p.a. (Rural/Unorganized/org. sectors)
4. Envisages general/political funds of a TU: Politicization
5. Outsiders permitted as TU members
6. Rights of TUs: Immunities to TU/members (Criminal/civil)
7. Obligation of TUs envisaged: Also to file returns

28

14

10/1/2012

Trade Union under TUA: Definition

2 (h) Trade Union means
any combination, whether temporary or permanent,
formed primarily for the purpose of
regulating the relations between
workmen and employers,
or between workmen and workmen,
or between employers and employers,
or for imposing restrictive conditions on
the conduct of any trade or business,
and includes
any federation of 2 or more TUs:

29

Industrial Employment
(Standing Orders)
Act, 1946

15

10/1/2012

IE (SO) Act: Preliminary & Objectives

The Act seeks to regulate:

Classification of WMDischarge/dismissalShifts
Disciplinary actionAttendanceHolidays provides terms & condns

Preamble:
to define with sufficient precision
the conditions of employment
and to make the said conditions known to WM

What are St. Orders: Rulesrelate to matters in the schedule

Major features:
precision of working conditionsmake the condns. known
give WM a voice in themuniformity of conditions
regulation of: recruitment, leave, shift, discharge, dismissal

31

IE (SO) Act: Salient features

1. Application:
Every est. with 100 or +WM; App. Govt. can extend: estab. 50 or +WM
Cent. Government has extended to estab. employing 50 or +

2. Clarify to WM: empl. conds. relating to matters in schedule

3. Meaning of certain major terms:
Wages/WM, same as in IDA
App. Govt. same except controlled industry

4. Cert. Off. can modify/add to SOs & adjudicate

Fairness, reasonableness

5. App. Govt. empowered to frame: Rules, model SOs

32

16

10/1/2012

IE (SO) Act: Salient features contd

6. Appellate Auth. provided for to hear/decide appeal
7. Provides for subsistance allowancesuspension
8. Provides for temporary application of SOs
9. Penalties providedFines only; no imprisonment
10. Model St. orders framed by Central Govt.
33

17

10/15/2012

7. Managing Discipline:
Legal Issues
Professor Debi S. Saini
Management Development Institute
Gurgaon

Disciplinary Action for Misconduct by WM

Objectives of this session are to discuss the following:

What is meant by misconduct?

What acts of misconduct are mentioned in SOs?

How Broad Steps are involved in Disciplinary Action?

Who can be an Enquiry Officer; what points to be kept in mind?

What points are involved in considering WMs reply?

What considerations decide appointing an Enquiry Officer?

What considerations are kept in mind in conducting an inquiry?

What are the principles of natural justice?

What punishments can be given for a misconduct?

2

10/15/2012

Discipline aims at
=

Teaching &
Culture bldg.

not

Punishment

What is Misconduct?
Difficult to define
Not defined in the IDA

It can be an act as well as an omission

Generally: An act unbecoming of an employee
Many times: It is a habitual act
It spoils employeremployee relationship

Industrial Employment (Standing Orders) Act 1946

Provides for Model Standing Orders
Acts of misconduct laid down in: Model Standing Orders 4

10/15/2012

Broad Steps
in
Disciplinary Action

Broad Steps in Disciplinary action

I.

Preliminary Enquiry

II.

Issuing charge sheet or show cause

III. Considering workmans reply to the show cause

IV. Appointment of an Enquiry Officer
V.

Conducting the Domestic Enquiry

ParticipantsProcedureProceedingsReport

VI. Perusal of Enquiry report by employer

VII. Second show cause, if applicable
IX.

Punishment Order
6

10/15/2012

I.Preliminary
Enquiry

I. Preliminary Enquiry

It is a fact-finding exercise

Object: To know whether charge sheet be issued

Charges dropped: If authority satisfied

Only prima facie assessment, not conclusive

It shows employers fair intention

8

10/15/2012

II. Charge Sheet

Issuing Charge Sheet

What is a charge sheet?

A memorandum of allegations

Containing charges against the workman

What is its Purpose?

To tell the WM the nature of charges against him

So that he gets an opportunity to defend himself

And offer an explanation

10

10/15/2012

Issuing Charge Sheet contd

What should a charge sheet contain?

Details of allegations

Not necessary to mention: witnesses, documents relied

Charges be in form of allegations: It is reported

11

Specimen a Charge Sheet

From:
Name of appointing Officer
Designation
Address of the Officer
To
Name of the employee
Category & Other Particulars

Charge Sheet
Memo no.
18 October, 2011
It has been reported,
1.
That on 17th October, 2011 at about 3 p.m., you Shri Mukesh Kumar (category,
etc. ) Asstt. Fitter along with Shri Naresh Chauhan (category, etc.) mounted the
roof of the Labour Office and hoisted two flags atop the said building and shouted
slogans saying that workmen must unite under the flag to raid the office of the
manager and kick the said manager until death. You are therefore prima facie
guilty of acts subversive of discipline.
12

10/15/2012

Specimen a Charge Sheet contd

2.

That on the same day at about the same time when the Asstt. Mgr. Shri R.L.
Kaushal who was on duty and was present at the spot, requested you not to
behave in that manner and provoke other workmen to resort to violence and
further to remove the said flags from the roof of the aforesaid buildings, you and
the aforesaid shri Shekhar Singh abused him in filthy terms such as imposter,
pet dog of the management, black sheep, etc., and threatened to murder him
on the spot if the flags hoisted on the roof were removed. You are therefore prima
facie guilty of insubordination and acts subversive of discipline. The acts alleged to
have been committed by you constitute acts of misconduct under clauses
of the Standing Orders and would warrant either your dismissal from the service
or any other major punishment.

You are therefore, required to submit, within four days from the date of receipt of this
charge sheet , a written statement of reply to me stating whether you desire to be
heard in person.
If you fail to submit your explanation within the prescribed time limit it will be
presumed that you have no explanation to offer and as such the matter may be
disposed off ex parte without further references to you.
13

Specimen of a Charge Sheet contd.

If you desire to inspect any document or documents for preparation of your written
reply to the charges, you will contact Shri (mention name and designation of the
officer) immediately on receipt of the charge sheet. He is being instructed to
arrange for your inspection of documents without least delay.
3. Since the charges against you are of grave and serious nature you are hereby placed
under suspension with immediate effect pending enquiry and final decision in the
matter. During the period of suspension you will be entitled to subsistence
allowance as per provisions of law (or standing orders).
Signature (Manager/ employer/ Administrator)
Designation
Date
Note: 1. separate charge sheet has to be served on each delinquent. There should be
separate domestic enquiry in respect of each delinquent.
2. Delete if there is no standing orders.
3. Delete if suspension is not necessary or if the workman has already been
14
suspended.

10/15/2012

Rules as to Framing/Issuing Charge Sheet

Language: be understandable to workman

Refer to: SOs/Service rules/period & time of commission

Who can issue: Appointing authority/authorised person

If past misconduct relied: Mention it in charge sheet

15

Rules as to Framing/Issuing Charge Sheet contd

Time given for reply

Be reasonable: 4 to 7 days; extend if workman asks for it

Service of charge sheet

Get WMs signature on a duplicate copy
If he refuses to take it, have it endorsed by two witnesses
Send it by registered post
If still refuses: publish it in a daily of wide circulation

Refusal to accept: a misconduct

Tearing it in front of server: a serious misconduct

16

10/15/2012

III. Considering
the Workmans
Reply
17

III. Considering the Workmans Reply

If WMs reply unsatisfactory

Employer informs WM about holding inquiry

Suspension pending enquiry

Should be conferred by standing orders
If not: full wages during suspension pending enquiry

If WM accepts guilt: Mgt. can take action

Should convey penalty in writing

Subsistence allowance
If not paid, enquiry vitiated
18
Case: Re.1 a day paid: Held inadequate, inquiry vitiated

10/15/2012

How much subsistence allowance?

Provided in Industrial Employment (SO) Act

Rate: 50% of wages for first 3 months; 75% for rest

SOs can provide it at a better rate

To be given even in orgs. having 50 WM

19

IV. Appointment
of
Enquiry Officer
20

10

10/15/2012

IV. Appointment of Enquiry Officer

Who is he?
Can be an officer of the establishment
Can be an outsider, including a lawyer

When disqualified?
If has a bias
Has personal interest
Is an eye-witness
21

Employer to Notify Inquiry Officer Appointment

Employer to notify WM about inquiry

If he does not do so, inquiry is vitiated

Rationale of employers obligation:

WM gets time to prepare his self-defence
WM can arrange matching skill

What should this notice contain?

Information about Enquiry Officer
Information about: date, time, place
22

11

10/15/2012

V. Conducting
the
Enquiry
23

V. Conducting the Enquiry

A. Rules as to conducting enquiry
1. Enquiry Officer to read out charge
Explain the charge, ask if he understands

2. Allowing WM to have a representative

Usually, a co-worker or TU leader allowed
Allow advocate only if SOs provide for it
[J. Ahmadi in Crysant Dyes & Chemicals v. RN Tripathi (1993, SC)]

Earlier, advocate was allowed to represent WM if:

WM illiterate or Mgt. rep. a skilled person (LL.B; conducts enquiry)
24

12

10/15/2012

Rules as to conducting enquiry contd

3. Hold enquiry in WMs presence
Unless WM refuses to participate

4. Employer to bring material evidence on record

Material witnesses on record
Copies of documents: Late coming (Muster roll); false medical (Dr.)

5. Examining employers witness first, WMs later

6. Observing principles of natural justice
7. Giving a copy of findings to WM
25

V. Conducting the Enquiry contd

B. Examining Witnesses
Examining mgt. witnesses first
In ACC (1963) case, WMs witnesses examined first
Held: Procedure vitiated
British School: watchman asked 50 Qs. firstHeld vitiated

Procedure of examining employers witnesses

Examining the witness in front of both parties
Cross-examining the witness
If WM does not want to cross-examine, record this fact
Witnesses be called one by one
Dont examine one witness in front of another
In the end, both parties and witness sign proceeding

26

13

10/15/2012

B. Examining Witnesses contd

Procedure of examining WMs witnesses: same
Give full opportunity to defend to WM
Allowing oral evidence
Witnesses and documentary evidence
Taking WMs signature on proceedings

Urdu case: WM wrote: all written is wrong

Held: Employer should have engaged a language expert
27

V. Conducting the Enquiry contd

C. Principles of Natural Justice: Mainly 3
1. Hear the other side (audi altrem partem)

2. No one shall be a judge in ones own cause

3. Reasoned decisions
28

14

10/15/2012

V. Conducting the Enquiry contd

Receipt of findings copy by WM & employer
If findings copy not given: Held, enquiry is vitiated
In Ramjans case (1991, SC) it was so held
Findings copy be given even if SOs dont provide

Format of Enquiry Report

Introduction
Charges
Gist of evidence: WM and Employer
Findings based on reason
29

VI. Perusal
of Report
by the
Authority
30

15

10/15/2012

VI. Perusal of Report by the Authority

Authority decides action after perusing report

Authority neednt accept findings;

but give reasons

31

VII. Second
Show Cause
in Some cases
32

16

10/15/2012

VII. Second Show Cause in Some Cases

To be given if SOs provide for it

If not provided, enquiry vitiated

Contents:
Mention proposed action with a copy of report
State why action should not be taken

33

Punishments

34

17

10/15/2012

Punishments
Minor Punishments
1. Oral reprimand
2. Written reprimand
3. Loss of privilege
4. Fines
5. Punitive suspension
35

Punishments contd
Major Punishments
1. Withholding of increments
2. Demotion
3. Discharge
4. Dismissal
36

18

10/15/2012

Dismissal & Discharge: Difference

Dismissal

Discharge

1. A punishment for misconduct

1. Not always a punishment

2. Stigma attached to dismissal

2. Considered less severe punishment

3. No notice required

3. Agreed or reasonable notice required

4. Employer can withhold his

contribution of bonus, gratuity

4. Usually entitled to these

5. Disciplinary proceedings
to be held

5. May or may not be held

Can give notice as per SOs

6. Done on basis of notions

of propriety

6. In cases done on basis of

equity & good conscience
37

19

10/26/2014

9. Employee Involvement
as
HR Strategy
Professor Debi S. Saini
(debisaini@mdi.ac.in)
Management Development Institute, Gurgaon

HRM and Employee Involvement

Objectives of this session are to discuss the following:

EI & EP: Nature & Types of EI: Downward & Upward

EI as an instrument of

Co. newsletter & Team Briefing: Top down EI

Team working/suggestion scheme/attitude surveys & EI tools

employee engagement

QCs: Nature/merits/prerequisites; TQM: Nature/features/themes 2

10/26/2014

EI and EP: Recent Thinking contd

Thatcherism led to Globalization

Japanization in HRM was seen attractive

Shift from Collective bargaining to HRM: EI a key theme

HRM/New IR aim to Build

employee

commitment3

How is EI Linked to Japanese Mgt. Practices

Japan exemplary in participatory practices
Impact of Confucius: leadership theorist
Cooperation and harmony

Confucius
551 to 479 B.C.

Social hierarchy through benevolent leader

Leader to act in interest of followers: Young to respect sr.

Export of Japanization to other countries esp. UK

Used partly to water down pluralist UK attitude
4

10/26/2014

HRM Philosophy & Employee Involvement

HRM/excellence movement in 1980s: EI
Tom Peters: People are most valuable asset

HRM: Mgrl. aversion to EP in generalBut EI helps

EI reflects: managerial

strategies for productivity

Not for building a participatory society

5

What is Noticeable in People Mgt. Today?

Shift from Taylorism: i.e. indl. revolution model of HR mgt.
Taylorism reflects: ControlDisciplineSanctionsDirection

As in music, even in business there is a Shift to involvement/teams

EI seeks to intertwine trust

The idea: Help

& responsibility

& take others along with you

10/26/2014

Employee Participation
and
Involvement: Historical

Michael Salamons Distinctions

Industrial Democracy:
Worker control

Employee Participation:
Influences decision making

EI: contribution, understanding,

commitment & Engagement

10/26/2014

Nature
of
Employee Involvement

Meaning of EI and EP
Employee Participation: Refers to
State or collective-employee initiatives in promoting

collective representation of employees

in organizational decision-making
possibly in face of employer resistance
(Hyman & Mason, 1995)

EP includes financial participation & profit sharing

10

10/26/2014

Meaning of EI and EP
Employee Involvement

EI is a strategic

device used by mgt.

in promoting employee commitment

& the cooperation of the workforce

through information given directly
(not representatives)
11

Employee Involvement
&
Engagement:
What Does Research Say?

12

10/26/2014

EI and Productivity
Improved
Communication
and Coordination

Employee
Involvement
Intervention

Improved
Productivity
Improved
Motivation

Improved
Capabilities

Cummings & Worley, 8e (c)2005 Thomson/South-Western

Types of
Employee Involvement

14

10/26/2014

Types of Employee Involvement

Downward communicationtop-down
I. In-house journals/company newsletters
II. Team-briefing sessions

Upwards problem-solving forms

Communication
is key

III. Team

Working
IV. Suggestion schemes & problem-solving grs.
V.

Attitude surveys

VI. QCs

The synergy
of team

VII. TQM

15

II. Team Briefing

16

10/26/2014

II. Team Briefing (TB): What is it?

A device

to involve everyone in the organization

level by level in face

to face meetings
organized by line managers
to present, receive, discuss info.
approved by top management
on a regular basis
by providing a two-way communication

Team-briefing session

Aimed to replace casualism, & inject order in system

It was viewed as productivity breakthrough of 1990s
Social
events
are particularly reported to promote employee ownership
(Fortune
magazine)
17

II. Team Briefing (TB) contd

TB seen as a key

Changed focus

ingredient of the new IR/HRM

In 1980s: bad news to convey;

Now: maintain initiative

Organization:

Covers all levels

between 4 to 15 in each gr.
run by immediate leader of group at each level
leader
beparticularly
properly trained
briefedemployee ownership
Social
events are
reportedand
to promote
18

10/26/2014

II. Team Briefing (TB) contd

Subjects:
Explains new and changed policiesExplaining co. plans
Telling progress in aspects of organizational functioning
People: appointments, personnel matters
Feed back to topProvides for two-way communication

Timing & duration:

At least once a month for incharges

Once in 2 months for others

Social
But
events
meetare
only
particularly
if something
reported
to say
toDuration
promotebe
employee
about 20-30
ownership
Mnts.
19

III. Team Working

20

10

10/26/2014

B. Upward Forms of Communication

III. Team Working [originated in Japan]

Focus: problem-solving in a GroupTeam Size:7-10

It is a recent

Not as widespread as TQM; but its influence spreading

It requires task

initiative in EI

flexibility & job rotation

Training in: team culture/inter-personal skills/communication

21

IV. Suggestion
Schemes

Creative ideas needed

22

11

10/26/2014

IV. Suggestion Schemes: What is it?

A method providing established procedure

for submitting

& evaluating ideas

so as to recognize meritorious

ideas
Products of creative ideas

without discouraging unacceptable ones

23

Employee Suggestion Scheme at Maruti-Suzuki

Maruti-Suzuki has employee suggestion scheme

Received about

229,000 suggestions in 2010-11

--Saved about Rs 1.6 B. in 2010-11 by implementing it

Saved Rs

2 B. in 2009-10

It claims use of transparency

at all levels
24

12

10/26/2014

V. Attitude Surveys

25

V. Attitude Surveys (AS)--What it is:

It is a questionnaire survey of employees
On a one-off or regular basis
Which is designed to discover their views
About a variety of factors connected with work
AS presumes: WM want their views implemented

13

10/26/2014

V. Attitude Surveys (AS)

contd

Opinions are taken on a wide range of issues

Job satisfactionjob specificationCo. org. & mgt.

Used by large no. of orgs.

Some use them very regularly: IBM

Enlightened orgs. make imp. changes in policy

Cussons (UK, soap mfrs.) introduced equal opportunity policy
Also, it did training program to tackle employee harassment

I. Quality Circles

28

14

10/26/2014

VI. Quality Circles: What it is

A voluntary group of employees
holding meetings
to search

solutions

for work-related problems

VI. Quality Circles

Members usually from a single

deptt., similar work

Usually 6-12 members + supervisor

Member trained: Meetingteam bldg.presentation skills

A QC may be a part of the TQM programme
QC implements its recommendation where practicable
When implemented,

QC monitors the process

15

10/26/2014

Merits of QCs

1. Improve communication
2. Increase job satisfaction

3. Stimulate personal growth

4. Increase employees sense of involvement

5. Enhance leadership skills

VI. Quality Circles

contd

Popular in 1980s, not as much today

Positive impact on productivity

But incidentally, little

effect on satisfaction

Many Problems led to Dilution of Their Effectiveness

Inadequate training
Not truly voluntary

Indifference of management
Not really empowered to decide

32

Source: www.freequality.org/beta%20freequal/fq%20web%20site/Training/ Classes%20Spring%202002/Quality%20Circles.ppt

16

10/26/2014

VII. Total
Quality
Management

33

Definition of Total Quality Management

A total company wide

effort

that includes employees, suppliers, customers

that seeks continuously to improve
of products

quality

and processes

to meet customers

needs/expectations

(Dean & Evans, 1994)

17

10/26/2014

What does TQM Pre-suppose?

That everyone in organization understands
The expectations of the customer
And meets the expectations every time

Based on Presumption of two Achievable Results

Lower the cost of operations

Improve the quality delivered

And thus attract the customer

35

Working of
Employee Involvement

36

18

10/26/2014

Factors Impacting Working of EI

1. Mgts willingness to concede some prerogatives
2. Training of mgrs/WM in group-working skills
PresentationLeadershipAssertivenessProblem-solving

3. Provision of proper feedback mechanisms

4. Taking action to implement group decisions
5. Realize: Conflict helps developing initiative

Reality of EI at Global Level: Lessons

Contradiction in mgrs projections & practices

Control by top mgt; Resist power shift to WM

EP and even EI perceived as a power challenge
Japanese practices possible if workforce compliant
And, also it works in situation of high-unemployment

19

10/26/2014

Reality of EI at Global Level: Lessons contd

EI used only for efficiency of organization

Dilemma: how much power to give for creative energy

Undermining of managerial prerogatives not tolerated

New technology, TQM, culture change are used for control

How To Overcome EI Challenges?

Cultural Differences
EI works better in low power-distance cultures (e.g.Japan)

Management Resistance
Solution: Train mgrs. as facilitators

Unions Resist; see it as dilution of rights/power

Solution: Promote trust and involvement
40

20

11. Transformational
Leadership Development:
the Essence of SHRM
Dr. Debi S. Saini
Professor & ChairpersonHRM Area
Management Development Institute, Gurgaon-122007

McGraw-Hill/Irwin

Copyright 2008 by The McGraw-Hill Companies, Inc. All rights reserved.

Issues discussed in this Session:

Linking leadership with SHRM
Film analysis: Transformational Competencies

Transactional & Transformational leaders

People & Task concerns: GRID Theory
Changing perceptions through leadership dev.

Cooperation/Engagement
Is the essence of Strategic HRM:
Need to Change Peoples Perception

The above realities necessitate

Developing
Transformational Leadership
for Employee Engagement

Learn to Lead Change in Chaotic Comptt.:

Jack Welch--From a Cost-cutting Butcher to Change Master

Jack Welch took GE

from a 13 B. to 500 B. Company
in 20 years
5

Leaders Focus on Culture & Outcome; not Rules

Welchs 7 Point Program for
Mgt by Leadership
GE Market
Capitalization

1. Develop business vision

2. Culture to achieve vision
3. Flatten the organization
4. Eliminate bureaucracy
5. Empower individuals
6. Raise quality & efficiency
7. Eliminate boundaries

Sam Pitroda
espoused a mission
for the masses of India
He became the architect of
the telecom revolution in India

Great Leaders Inspire;

Create Enthusiasm
Enthusiasm is Highly contagious

He led changes
in structure & culture
at a massive scale
to provide a tele-network
of global standard

 Without doubt, the

the 2nd

head of HR should be

most important person

in any

organization.

from the point of view of CEO,

the HR director should be at least equal
--Jack Welch

to CFO.

What do you Think are

the Leadership Qualities
Shown by
the Successful Jailor

Transformational Leadership Involves:

1. VisionOrgl.; individual
2. Team-building
3. Trusts
4. Results/task balancing
5. Charisma (see him in sky as well)
6. Risk-taking
7. Paternalism/Care (Indian context)
8. Credibility/integrity
9. Listening/Communication
10. Empathy
11. Good human-being
12. Guiding/Counseling
13. Change master
14. Servant leadership

15. Transparency
16. Diversity mgt.
17. Idiosyncratic passion
18. Admits failure
19. Social responsibility
20. Inter-personal skills
21. Inspires
22. Leads by example
23. Compassion
24. Empowers/delegates
25. Tact
26. Emotional intelligence
27. Metrics:

Who is a Transformational Leader?

Burns (1978)

A transformational leader is one

who looks for potential motives in followers,
seeking to satisfy higher needs,
and engages the full person of the follower
TL: inspires their followers
to go beyond the calls of duty
and acts as mentor

Who is a Transformational Leader?

The goal of transformational leadership
is to transform people & orgs. in a literal sense
to change them in mind and heart;
enlarge vision, insight, and understanding;
clarify purposes;
make behavior congruent with beliefs, principles, or values;
and bring about changes that are
permanent, self-perpetuating, & momentum building.
Steven Covey, Author of 7 Habits of Highly Successful People

What do Transformational Leaders do?

Since late 1970s (James Burn), a New leadership model talked

1. Vision, look for potential motives inspire Ideas &

create shared dreams

2. Integrity: Honest & credible; acts out of conviction

3. Charisma: Uses emotion for faith, loyalty, pride, TRUST

4. Empower: Helps others develop, delegates challenging work

5. Symbolism:

Identifies heroes,: celebrates excellence

6. Proactive Communication: orally & with body language

7.Desired culture: TeachBe InnovativeBuild leadersUse Metrics

Transformational & Transactional Leadership: Difference

Category

Transactional

Transformational

Source of power

Rank, position

Character, competence

Follower reaction

Compliance

Commitment

Time frame

Short-term

Long-term

Rewards

Pay, promotion, etc. Pride, self-esteem, etc.

Supervision/Control

Important

Less important

Counseling focus

Evaluation

Inspiration/Development

Where change occurs

Follower behavior

Follower attitude, values

Where leadership found

Leaders behavior

Followers heart

Let us Look at
these two Situations:
Task & People Need:
GRID
1
5

R.R. Blake & Jane S. Mouton Leadership Grid

High

9
8

1,9 Country Club Mgt.

Team Management

9,9

Work
accomplishment
is
from
committed people; interdependence
through a common stake in org.
goals leads to relation of trust/respect

Thoughtful attention to the

needs of people for satisfying
relationships leads to a comfortable, friendly org.
atmosphere and work tempo

Concern for
People

Middle of the Road Mgt.

Adequate org. performance is possible

through balancing the necessity to get
out work with maintaining morale of
people at a satisfactory level.

4
3

Low

5,5

Impoverished Mgt.

required work done is appropriate

Authority-Compliance

Exertion of minimum effort to get

to sustain org. membership.

1,1
1

Low
Source: Robert R. Blake and Jane S. Mouton.

Efficiency in operations results

from arranging conditions of work
in such a way that human elements
interfere to a minimum degree. 9,1

Concern for Production

High

Interpersonal Orientation

Task Orientation

Solicits opinions

Disseminates info.

Recognizes others positions/ideas

Ignores others positions/ ideas

Flexible, open communication

Rigid communication

Listens carefully

Interrupts others

Makes requests

Makes demands

Focus: Feelings, emotions, needs

Focus: Data/info. on tasks

Productivity through personal skills

Productivity through tech. skills

Mostly communicates orally

Mostly communicates in writing

Maintains open-door policy

Maintains closed door policy

Be an Emotionally Intelligent Leader

They manage interpersonal relationships & build networks (teams)
[D. Golemans 5 components of EI leaders]:

Self-awareness

Self-regulation
Motivation

What is EI
EI is the ability
to identify, assess, & control
the emotions
of oneself, of others, & of grs.

Empathy (Understand & share feelings of another)

Social skills

Daniel Goleman, Ph.D.

(inter-personal)

What Have we Focused on in This Session?

HR must facilitate cooperation through Leadership
Transformatl. leadership is most used framework

Leaders must inspire, care, be fair, honest, measure

Leading is different from managing
Important to balance task/people needs in managing

SHRM is difficult to implement without transfl leadership