CHAPTER V

PERSONNEL MANAGEMENT PRACTICES -

DEVELOPMENT ACTIVlTlES
 CHAPTER V

PERSONNEL IUNAGEUENT PHACI'lCES- DEVELOPMENT ACl'lVITlES.

In the previous chapter, the procurement activities

like personnel policy, personnel planning, recruitment and
selection were analysed. In this chapter the development
activities of personnel management such as training,
transfer, promotion, compensation and employees' union
management relations are analysed.

TRAINING

Introduction

Once the employee is selected and inducted, he or

she must be trained to better fit into the job and the
organisation. Training is a vital activity next Only to
staffing .
Definition

David A.Decenzo and Stephen P.Robins describe training

as "a learning experience in that it seeks a relatively
permanent change in an individual that will improve his or
her ability to perform on the jobu1. Dubashi, P.R.

1. David A. DeCenzo and Stephen P. Robins - Personnel/Human

Resource Management - Prentice-Hall of India, New Delhi -
1989 - p. 240
defines training "as a process of improving the knowledge
skill and attitude of employees to achieve organisational
objectives. It is only through a systematic program of
training that necessary professional knowledge is
imparted, skills developed and attitudes attuned to work
situationw2. According to Edwin B. Flippo, " training is
the act of increasing the knowledge and skill of an
employees for doing a particular jobet3.

Dale S. Beach says that "training is the organised

procedure by which people learn knowledge and/or skills for
a definite purposew4. Michael Jucius defines training as
"a process by which the aptitudes, skills and abilities of
employees to perform specific jobs, are increasedu5.

For the purpose of this study training is considered as

an essential activity to increase the knowledge, skills,
abilities and attitudes so that the employee will perform
the job better than otherwise.

2. Dubbashi P.R. -
Strengthening of training facilities -
Souvenir of Cooperative Training College, Bangalore -
Cooperative Training College, Bangalore -
1983 - p. 1

3. Edwin B. Flippo -
Principles of Personnel Management
McGraw -
Hill Book Company, New Delhi -
1971 - p. 194

4. Dale S. Beach - Personnel : The Management of People at

Work
p. 244
-Macmillan Publishing Company, New York -1980 -
5. -
Michael Jucius Personnel Management -
Richard D. Irwin
Inc., - Hanewood, ~llinois,U.S.A 1955 -
p. 142 -
Training and Development

~ h o u g hthe terms, "trainingn and "development" are

sometimes used synonymously, they have different
meanings and scopes. Training is a short term process
utilising a systematic and organised procedure by which the
operative employees acquire the technical knowledge and
skill for doing a specific job. It refers to technical and
mechanical operations. It is designed for non managers for
doing a specific job, to meet the present need. The
initiative for training comes from the management.

Development, on the other hand, is a long term

educational process utilising a systematic and organised
procedure by which managerial personnel get conceptual and
theoretical knowledge. It is designed for the overall
development of managers to meet their long term
requirements. The initiative for development comes from the
individual himself.

Training and Education

Training is different from education too. Education is

concerned with increasing general knowledge and
understanding of the employees' total environment. Training,
on the other hand, is concerned with increasing the
technical knowledge and skill for doing a job. Education is
broader and theoretical while training is narrower and
pactical.

Need for Training

Training is not a luxury but a necessity. It is a kind

of investment. Edwin B. Flippo opines that "no organisation
has a choice of whether to train or not; the only choice is
that of methodu6. No one is a perfect fit at the time of
hiring. Training is necessary to bridge the gap between what
they are and what the job demands. In the absence of a
systematic and planned training, employees learn their job
by trial and error method or by observation. These methods
consume more time and energy, thereby increasing the cost of
training. Even then, there is no guarantee that the employee
will learn the best method of doing the job. In order to
have effective training at reduced cost, planned training is
a must.

Existing employees also require orientation training to

avoid becoming obsolescent; to make use of new technology;
to operate new machinery: to adjust with the new

6. -
Edwin B. Flippo Principles of Personnel Management -
McGraw - Hill Book Company, New Delhi - 1971 -
p.194
environment and to take up new jobs and responsibilities.
Training is a continuous process.

Training not only increases productivity through

increase in the knowledge and skill of the employees, but
also enhances his self confidence, brings respect to the
employee from others and reduces the rate of errors. A

trained employee is less prone to accidents.

Taimni K. K. explains the objects of training of

cooperative employees. "The purpose of cooperative
employees' training and development is to make available
professionally competent managerial and other personnel
with appropriate knowledge and skills and abilities to a
cooperative system, so that it can function in an effective
manner. lt7 In this section, the various methods adopted by
the selected units for imparting training to their employees
are analysed.

Managerial Practice

Two types of training are available to cooperative

employees, They are internal training and external training.
There are many special training agencies to provide

7. Taimni K.K -cooperative Organisation and Management

W.A.F.M. Farmers' Welfare Trust Society, Krishak Bhavan,
-
New Delhi - 1976 - p. 203.
cooperative training to various cooperative personnel at
different levels. There are many Cooperative Centres for
junior personnel under the auspices of state Cooperative
unions. Besides, there are 16 Cooperative Training Colleges

in different parts of India and one National Institute

of Cooperative Management at Pune under the auspices of
National Cooperative Union of India for imparting training
to middle and top level managers in cooperatives.

All these institutions provide training in the

principles, law and practice of cooperation. This type of
training is useful and available only to managerial and
clerical staff. Such institutional training facilities are
not available to technical personnel engaged in processing
or production. They mainly depend on the informal on the job
training within the organisation.

The situation in the selected cooperative units is not

satisfactory. The Pondicherry Cooperative Training
Institution now renamed as the Pondicherry Institute of
Cooperative Management conducts a certificate course in
Cooperation. The duration of the course is 10 months. It
imparts education on the theory and law of cooperation.
It also provides practical training to their students so
that they can be employed as office clerks. But the pity is
that they are not given preference in the appointment of
clerks in the cooperative societies. The persons who have
neither this certificate nor any degree in cooperation
manage to get employment in cooperative societies as clerks.
Therefore, the Institute conducts a condensed course for
three months for the benefit of employees who are already
working in the cooperative societies. So, the training
needs of clerical staff are satisfied to some extent even
though they learn their job only from their superiors and
colleagues after appointment. Thus, they receive training in
the informal way through on the job training and by job
rotation.

The training needs of managerial and technical

personnel are met differently. The National Level
Federations look after this kind of training. The Chief
Executives are trained. But they are deputationists and the
training given to them in a particular society becomes a
waste if they are transferred. The Pondiche~ry Cooperative
Milk Producersf Union Ltd. alone has the advantage of having
its own Chief Executive who possesses the necessary training
both in technical and managerial duties.

In other societies, the training of technical

Personals quite inadequate. The employees are deputed for
training only when it is organised by an outside agency,
usually the respective National Level Federations.
 Table 5.1

Classification of Fhnployees on the basis of

Pre-Job Training
s1. Name of the Whether undergone Total
NO. Society Pre-Job Training
Yes No

1. The Pondicherry 6 7
Coop.Milk Producers1(46.15) (53.85)
Union Ltd.
2. The Indian Coffee - 25
Workers' Coop. (100.00)
Society Ltd.
3. The Pondicherry 15 48
coop. Sugar ~ i i l s
Ltd.
4. The Pondicherry 7 25
State Coop. Bank (21.88) (78.12)
Ltd.
5. The Pondicherry 8 9
Coop. Wholesale (47.06) (52.94)
Stores Ltd.

Total

Source : Compiled from the Questionnaire 11.

N.B. : Figures within brackets indicates percentage.

Table 5.1 gives particulars of employees who received

pre-job training also known as induction training. The above
table indicates the inadequacy of pre-job training
facilities to the employees of the cooperative sector in the
Union Territory of Pondicherry. In the case of The Indian
coffee Workers' Cooperative Society Ltd. the pre-job
training is nil. The employees are given on the job training
when they are casual workers prior to becoming regular
employees. It is very high in the case of The Pondicherry
cooperative Milk Producers' Union Ltd. and The Pondicherry
Cooperative Wholesale Stores Ltd. i.e.above 45%. The overall
percentage of employees who received pre-job training is
24% which is not satisfactory.

The Table 5.2 indicates the number of employees who

received in-service training. It is also known as refresher

training or re-training. This kind of tralning is given to
the employees who have some years of experience to
understand the latest technological developments and new
inventions. The Pondicherry Cooperative Milk Producers'
Union Ltd. has trained 9 (69.23%) out of 13 employees while
The Pondicherry Cooperative Sugar Mills Ltd. has trained one
third of its total employees. The Indian Coffee Workersr
Cooperative Society Ltd. has not given any in-service
training to any of the 25 respondents. The refresher
training is poor in The Pondicherry State Cooperative Banks
Ltd. and The Pondicherry cooperative Wholesale Stores Ltd.
Out of 150 respondents, 40 (26.67%) have received refresher
training which may not be considered as satisfactory.
 Table 5.2

Classification of Employees on the basis of

In service Training
-
~ 1 . Name of the Whether undergone Total
NO. Society Inservice Training
Yes NO

1. The Pondicherry 8 5 13
Coop.Milk Producers'(61.54) (38.46) ( 100)
Union Ltd.
2. The Indian Coffee - 25 25
Workers1 Coop. (100.00) (100)
Society Ltd.
3. The Pondicherry 21 42 63
Coop. Sugar Mills (33.33) (66.67) (100)
Ltd.
4. The Pondicherry 7 25 32
State Coop. Bank (21.88) (78.12) (100)
Ltd.
5. The Pondicherry 4 13 17
Coop. Wholesale (23.53) (76.47) (100)
Stores Ltd.

Total 40 110 150

(26.67) (73.33), (100)

Source : Compiled from the Questionnaire 11.

N.B. : Figures within brackets indicates percentage.

These samples only indicate the scant importance they

have given to the employee's training by the Cooperative
societies in the Union Territory of Pondicherry.
 TRANSFER

The internal procurement of job may be done either by

transfer or by promotion. In this section, transfer is
analysed. Transfer simply means change of job within the
organisation. It may be within the section or from one
section to another or one branch to another. Transfer does
not alter the status, salary or responsibility of employee.
In some cases there may be differences in perks such as risk
allowance, house rent allowance, etc. It is an horizontal
movement. It may or may not involve change of place of work.

Definition

Yoder and others consider transfer as "a lateral shift

causing movement of individuals from one position to another
usually without involving any marked chanqe in duties,
responsibilities, skills needed or compensationn8.

A transfer may be either organisation initiated or

employee initiated. An organisation initiates transfer to
make the best use of the employees for higher productivity

8. Yoder D., Heneman H.G., Turnbull J.G. & Stone C.H

Handbook of Personnel Management and Industrial
-
- -
Relations McGraw Hill Book Company, New York
1958 -
p. 20.
-
or look after more Urgent duties of another for short
periods or to avoid monotony or to train the employee in
different sections of the organisation. An employee may also
be transferred as a punishment or to avoid inter-personal
conflicts. An employee initiated transfer may be due to his
desire to be nearer to his family, relatives and friends
or to a place where he could have better educational and
medical facilities to the members of his family or to work
under the supervisor whom he likes.

Transfers are mostly organisation initiated and the

employee may succeed in securing or avoiding a transfer so
long as the interest of the organisation is not affected.
A wrong transfer policy acts as a negative motivator and the
productivity of the organisation is affected. Above all the
interpersonal relation is also worst affected.

Managerial Practice

Among the five selected cooperatives, transfer is not

a big issue except in the case of The Pondicherry State
Cooperative Bank Ltd. which alone has the entire Union
Territory as its area of operation. In The Pondicherry
Cooperative Milk Producers' Union Ltd. the main office
and factory are situated at Aiyankuttipalayam, 10 K. M.
away from Pondicherry. Most of the employees are
working here. There is a small marketing section and Cattle
Fodder Development section in Pondicherry town. So, transfer
is not a serious problem. In The Indian Coffee Workers'
cooperative Society Ltd. though there are branches, the
employees are not transferred unless they desire. In The
Pondicherry Cooperative Sugar Mills Ltd. all the employees
are working in the same place viz., Lingareddipalayam, a
village 25 K.M. away from Pondicherry town. In The
Pondicherry Cooperative Wholesale Stores Ltd. all the
branches are situated in Pondicherry town and its suburbs.
So, transfer is not a serious issue.

The Union Territory of Pondicherry consists of four

regions geographically scattered. Pondicherry and Karaikal
regions are in Tamil Nadu on the east coast. Mahe region is
in the west coast, 7 K.M. south of Tellicherry, in Kerala.
Yanam region is situated 40 K.M south of Kakinada, in Andhra
Pradesh. Transfers within the region o r transfer from
Pondicherry to Karaikal and vice versa is not seriously
objected to by employees of The Pondicherry State
Cooperative Bank Ltd. But transfer to Mahe and Yanam is
seriously resisted as it involves change of climate,
language, food habits and long distance from Pondicherry
to which most of the employees belong.
 So, The Pondicherry State Cooperative Bank Ltd. had
evolved a transfer policy in the form of MOU with the
employees in respect of transfers to Mahe and Yanam
regions. Every employee will have to serve one of these two
regions for one year in each grade. The transfers will
be effected during the last week of May. It is strictly
followed and the employees have no grievance in this regard.
But with regard to transfer within Pondicherry and between
Pondicherry and Karaikal regions, the transfer policy has
not been finalised. It is believed that the same will be
done shortly. Hence, the transfer policy and practice of all
the selected cooperative societies are satisfactory.

Introduction

Employees of every organisation should be provided with

opportunities to obtain promotion since personal advancement
is undoubtedly one of the best inducements for people to
stay with an employer. Promotion is one of the internal
sources of recruitment. If an employee is transferred from
one post to another with an increase in responsibilities,
status and emoluments it is known as promotion. A promotion
reduces the cost of recruitment, rewards a good employee,
functions as one of the motivating factors of employees and
enhances their morale and productivity. A promotee has
already acquired the knowledge of the objectives of the
organisation and familiar with the work environment. It will
take little time and effort to prepare him for his new job.

Definition

Scott and others are of the opinion that "a promotion

is the transfer of an employee to a job which pays more
money or that enjoys some preferred statusn.' According to
them promotion involves either increase in responsibilities
or emoluments but need not necessarily be both. But Pigors
and Myers feel that "if the job does not involve greater
skill and responsibility and higher pay, it should not be
considered as a promotion. A promotion without an increase
in pay but only in responsibilities, is known as a dry
promotionv.lo

Rudrabasavaraj, M. N. agrees with Pigors and Myers and

defines promotion as "an upward movement or advancement of
an employee in the organisation, to another job which

9. Scott, Walter Dill, Robert C. Clothier and William R.

- -
Spriegel Personnel Management Tata McGraw-Hill
Publishing Company Ltd., New Delhi -
1986 - P.178
-
10. Paul Pigors and Charles Myers Personnel Administration
A Point of View and Method -McGraw-Hill International
Book Company, New Delhi - -
1981 P.303
commands better pay or wages, better status or prestige,
higher challenges, responsibilities and opportunities".ll
For the purpose of the study, it is assumed that a promotion
means an upward advancement in rank, status, responsibility
and pay.

Criteria for Promotion

Promotions may be based purely on seniority or purely

on merit or on merit cum seniority. Promotions based on
purely on seniority is simple to be adopted, unbiased and
avoids disputes between employees and the organisation.
But it does not encourage hard work or acquiring additional
qualification. Even if the employee does only the minimum
work, he is sure to be promoted when his turn comes up.

Promotions based on merit is exactly contrary to

promotions based purely on seniority. The merits of
promotion on seniority are demerits of promotions on
merit and vice versa. The difficulty in this method is
determination of what constitutes merit and its measurement.
There are chances for favouritism and nepotism by the
and meritorious employees merely because they have no

11. Rudrabasavaraj M.N. -

Personnel Administration Practices
in India -
Vaikunth Metha National Institute of
Cooperative Management, Pune - 1969 - P.28
influence or opposed the management for their wrong
policies.

Promotions on the basis of merit cum seniority is ideal

in that it combines the merits of both the systems and
avoids their demerits provided the merit and seniority
are blended at optimum proportions and the merit is well
defined, publicised and decided without favouritism. In this
section the promotional policy of the societies are
critically analysed to find out their merits and demerits.

Uanagerial Practice

In all the selected cooperative societies, the

promotions are based purely on seniority. There is no
scope for direct recruitment to any higher post. All the
higher posts are filled in by promotion from within the
organisation. Though this is highly satisfactory to senior
employees, this policy is not encouraging to junior
employees with higher qualifications than the minimum
prescribed in the Recruitment Rules. But the management is
helpless in this regard as it is in accordance with the
agreement with the employees' unions.
 COMPENSATION

The employees use their knowledge, skill, time and

energy for achieving the objectives of the organisation.
The reward for their contribution is known as compensation.
Compensation is aimed at obtaining and retaining a work
force. The term compensation refers to the whole of benefits
received by an employee on account of his employment. It may
be either direct or indirect. Wages and salaries of
employees and other allowances such as dearness allowance,
house rent allowance, risk allowance to cashiers, washing
allowance, etc., which are paid along with wage or salary
are the components of direct compensation. Bonus is also
treated as direct compensation as it is now treated as
delayed wages as against incentive for increased production.

Benefits like residential quarters, free medical,

educational and transport facilities, life, accident and
health insurance, subsidised canteen, employer's
contribution to Provident Fund, promise to pay gratuity and
pension at the time of retirement come under indirect
benefits.

Definition

Compensation is a part of a transaction between

employee and employer that results in an employment
contract. Edwin B. Flippo defines compensation as, "the
adequate and equitable remuneration of personnel for their
.
contribution to organisation objectives" l2 The compensation
should be adequate to attract best employees, motivate and
retain them in the organisation.

Problem of Fixing Equitable Compensation

Though fixation of compensation is most vital and

sensitive, it is sophisticated and a most difficult problem
of personnel administration. From the employees point of
view minimum standard of living, cost of living, the
knowledge, skill and experience required for the job, wages
paid in other organisations, the status and authority of
the employee in the same organisation should be considered.
The organisation will have to consider its capacity to
pay as compensation constitutes a major item of cost of
production. It should also consider the compensation paid
to other employees in the same organisation, in the same
rank as well as lower and higher ranks.

The problem is enormously complicated by such variable

factors as the supply of and demand for employees, the
firm's ability to pay, the bargaining capacity of labour

12. Edwin 8 . Flippo- Principles of Personnel Management -

McGraw - Hill Book Company, New Delhi - 1971 - p.7

197
organisations, cost of living and Governmental Legislation.
Therefore, it is extremely difficult to evaluate the present
system of compensation.

The evaluation of adequacy of compensation in the

selected cooperative societies may either be done by
comparison among themselves or by comparison with the
private and public sectors. Since the selected sample units
are heterogeneous in character, the compensation cannot
be compared among themselves. It is also not possible to
compare the compensation of employees in the cooperative
sector with that of private and public sectors for the same
reasons.

The principles of cooperation and exploitation of any

kind are contradictory to each other. It is expected that
cooperatives will pay better compensation to their employees
when compared to other organisation as cooperatives are
expected to be model employers. So, the present study deals
with the policy of the selected cooperative societies in
fixing the compensation and whether it is fair and adequate
when compared to other organisations.

In the case of office employees in the selected sample

units, the compensation is on a par with that of Government
servants except in the case of bonus. The rate of bonus is
higher in cooperatives and there ifi no ceiling. In the case
of technical staff, each unit is following its own norms.
The Pondicherry Cooperative Milk Producers' Union Ltd.
follows the norms given by the Dairy Development Corporation
which is mainly based on ANAND pattern. In the case of
Coffee House, the pay structure is determined by themselves,
since it is an industrial society. In the case of The
Pondicherry Cooperative Sugar Mills Ltd. the technical
employees are paid on the basis of norms fixed by Sugar Wage
Board,constituted by the Directorate of Sugar in Tamil Nadu.
The norms for compensation of State Cooperative Bank Ltd. is
decided by NABARD. In the case of Pondicherry Cooperative
Wholesale Stores Ltd. the norms are decided by NAFED.

Therefore the researcher followed a different technique

to find out the adequacy of the compensation of the
employees by asking opinion of the employees themselves. In
Questionnaire 11, three questions were asked to compare
their pay and allowances with the pay and allowances of
other Cooperative Societies, Government and Private Sector.
Their replies are given in Tables 5.3, 5.4 and 5.5.

out of 150 respondents, 103 (68.67%) feel that the

Compensation is equal to or more than the compensation of
their counterparts in the private sector. It is a favourable
trend.
 Table 5.3

statement of Comparison of Compensation of the Employees

in the Selected Units with the Private Sector
S1. Name of the Higher Equal Lower Total
No. Society
1. The Pondicherry 7 4 2 13
Coop. Milk ProducersJ(53.88) (30.77) (15.38) (100)
Union Ltd.
2. The Indian Coffee 4 14 7 25
Workers' Coop. (16.00) (56.00) (28.00) (100)
Society Ltd.
3. The Pondicherry 20 20 23 63
Coop. Sugar Mills (31.75) (31.75) (36.50) (100)
Ltd.
4. The Pondicherry 18 9 5 32
State Coop. Bank (56.25) (28.13) (15.62) (100)
Ltd.

5. The Pondicherry 3 4 10 17
Coop. Wholesale (17.65) (23.53) (58.82) (100)
Stores Ltd.

Total 52 51 47 150
(34.67) (34.00) (31.33) (100)

Source : Compiled from the Questionnaire 11.

N.B. : Figures within brackets indicate percentage.

Table 5.3 gives the comparison of compensation

between the employees of the selected units and in the
Private Sector.
 Table 5.4

Statement of Comparison of Compensation of the Employees

in the Selected Units with the Public Sector
-
S1. Name of the Higher Equal Lower Total
No. Society

1. The Pondicherry 2 6 5 13
Coop.Milk Producers1(15.38) (46.16) (38.46) (100)
Union Ltd.
2. The Indian Coffee 2 16 7 25
Workers' Coop. ( 8.00) (64.00) (28.00) (100)
Society Ltd.
3. The Pondicherry 8 18 37 63
Coop. Sugar Mills (12.70) (28.57) (58.73) (100)
Ltd.
4. The Pondicherry 20 8 4 32
State Coop. Bank (62.50) (25.00) (12.50) (100)
Ltd.
5. The Pondicherry - - 17 17
Coop. Wholesale (100.00) (100)
Stores Ltd.

Total 32 48 70 150
(21.33) (32.00) (46.67) (100)

Source : Compiled from the Questionnaire 11.

N.B. : Figures within brackets indicate percentage.

As per the above Table, 80 (53.33%) out of 150

employees feel that their compensation is equal to or better
than their counterparts in Government service. This is also
a healthy trend.
 In Table 5.5, the compensation of the employees in the
selected cooperative societies is compared with that of
their counterparts in other cooperative societies. Out of
150 employees 117 (78%) feel that their pay is equal to or

more than their counterparts in other cooperatives. All the

Table 5 . 5
Statement of Comparison of Compensation of the Employees
in the Selected Units with the other Cooperatives

S1. Name of the Higher Equal Lower Total

NO. Society

1. The Pondicherry 1 8 4 13
Coop.Milk Producers' (7.69) (61.54) (30.77) (100)
Union Ltd.
2. The Indian Coffee - 17 8 25
Workers1 Coop. (68.00) (32.00) (100)
Society Ltd.
3. The Pondicherry 20 29 14 63
Coop. Sugar Mills (31.75) (46.03) (22.22) (100)
Ltd.
4. The Pondicherry 20 12 - 32
State Coop. Bank (62.50) (37.50) ( 100
Ltd.
5. The Pondicherry - 10 7 17
Coop. Wholesale (58.82) (41.18) (100)
Stores Ltd.

Total

Source : Compiled from the Questionnaire 11.

N.B. : Figures within brackets indicate percentage.
selected units are bigger in size with higher capacity
to pay. This is also a healthy trend.

The pay scale of the Managing Director of The

pondicherry Cooperative Milk Producers' Union Ltd. is
Rs. 4500 - 5700 plus all allowances on a par with Government

Officials. The pay scale of Secretary to Government of

Pondicherry is Rs. 3700 - 5300. Further the Managing
Director is also eligible for bonus and exgratia payment
without any ceiling. But Government servants are not
eligible for bonus if their salary including allowances
exceeds Rs. 2500 per month. This ceiling has been removed
for the Group C and D staff from this year.

The total salary of the Assistant General Manager in

The Pondicherry State Cooperative Bank Ltd. is more than
that of the General Manager who is a deputationist from the
Cooperative Department in the rank of Deputy Registrar. It
is also observed that many of the middle level Managers are
income tax assesses. This really proves that the Cooperative
Sector is acting as a model employer with regard to payment
Of compensation irrespective of their ability to pay.
 EMPLOYEES' UNION MANAGEUENT RELATIONS

A trade union may consist of employees belonging to the

same category such as Pondicherry Cooperative Sugar Mills
Ltd. Field Staff Welfare Association. A trade union may also
be formed for the benefit of all the employees of the same
organisation like Pondicherry Cooperative ilk Producers'
welfare Association. An organisation may have a single union
or multiple unions. Again the union office bearers may be
workers of the organisation or outsiders. Some unions may
have political linking while others may not. Each
system is having its merits and demerits. It is better to
have one union for each organisation with its leaders
from the employees of the organisation without any political
affinity.

Harmonious employee-employer relationship is essential

for the effective functioning of any organisation.
Cooperatives are not exceptions. Mutual respect and
Understanding qo a long way in promoting the objectives of
an organisation. But the interests of employees and employer
differ. Employees desire to have maximum compensation and
best working conditions to improve their standard of living.
on the other hand, the employer wants to pay compensation as
low as possible to reduce cost and increase profit.

peculiar Position of Cooperatives as Employer

This kind of conflict of interests should not exist in

cooperatives. The principles of cooperation and exploitation
are contradictory to each other. Both the cooperatives and
trade unions stand for saving the working class from
exploitation, at least theoretically. The first cooperative
society was started by the Rochdale pioneers to protect the
poor working class people against the rich capitalists.
The definition of cooperation itself says that it is for the
promotion of interest of all, whether a member or not. In
industrial cooperatives, like The Indian Coffee Workers1
Cooperative Society Ltd. Pondicherry, the members are
employees. In other words, the employees and the management
are one and the same. Goel and Goel had correctly observed
that "employer-employee relationship in cooperatives is
distinct from the private sector as the latter is interested
in the maximisation of profits, while the former is
interested to serve its members".14

14. Goel S.L. and Goel B.B. -

Administration of Personnel in
-
Cooperatives sterling Publishers Private Ltd.,
New Delhi - 1979 - P. 105.
m f inition

Dale Yoder has defined, A trade union is a continuous

association of workers which is formed with the purpose of
protecting the interest of workersw15 In the opinion of
Edwin B. Flippo a labour union is, "an organisation of
workers formed to promote, protect and improve, through
collective action, the social, economic and political
interests of membersw.l6

The relation between employees' union and management is

analysed in this section, in terms of the number of unions
for each society and their political affiliation. The method
and number of agitations made during the last five years and
the reasons for the same are analysed. The number of man
hours lost due to agitation.

In The Pondicherry Cooperative Milk Producers' Union

Ltd. there are two employees' unions. Both have political
affiliations. One is affiliated to CITUC (CPM) and the
other to AITUC (CPI). In both cases leaders are from
Outside the organisation. During the last five years there

15. Dale Yoder - Personnel Management and Industrial

Relations - Printice-Hall of India, New Delhi 1972 - -
p. 159.
16. -
Edwin B. Flippo Personnel Management - McGraw - Hill
Book Company, New Delhi - 1984 p. 425-
was no dispute between the unions and the management. This
is mainly due to fair compensation and adequate bonus paid
by the Milk Producers' Union.

In The Indian Coffee Workers' Cooperative Society Ltd.

there are two unions. One is affiliated to AITUC and the
other to INTUC. In both cases, leaders of the union are
employees of the society. During the last five years ending
March, 1994, there had been no dispute at all. The main
reason is that management and employees are the same in the
society. Though, the society has not paid any dividend on
share capital, it is paying fair wages, and bonus over and
above the rate recommended by the Registrar of Cooperative
Societies. They are also doing many labour welfare measures.
But recently, the casual workers belonging to INTUC are
agitating for regularisation. This is not considered for two
reasons, namely, first they are not regular workers and
secondly,the agitation took place after the period of study.

In The Pondicherry Cooperative sugar Mills Ltd. there

are as many as 11 unions. Among them, six unions are
having political affiliations having the leaders from
outside. The other five unions are based on their jobs and
are having the employees as their leaders. In this mill
also, there has been no agitation during the period of
study due to fair compensation and higher bonus.

In The Pondicherry State Cooperative Bank Ltd. there

is only one union and all the employees are its members. The
leadership of the union is within the organisation. The
union is not having any political affiliation. These
characters of the union is due to higher education of
employees and their greater perception of the objectives of
the union. This is highly satisfactory.

In The Pondicherry Cooperative Wholesale Stores Ltd.

there are 3 unions and all of them are politically
affiliated. The leaders of the union are from outside.
During the period of the study, there was dispute only once
for revision of salary. There was no actual strike but
strike notice was issued. Before the actual date of strike,
the dispute was solved through mutual discussion.

It is heartening to note that during the period of

study, harmonious relationship existed in all the selected
five cooperative societies. Before actually analysing the
reasons for this highly favourable situation, it is better
to examine the similar studies made earlier.

The National Cooperative Union of India conducted a

survey of 45 trade unions in cooperative sector in 1977.
The survey revealed that out of 45 trade unions, 15 had
adopted militant measures like strikes, hunger strikes,
gheroes, etc., to force the management of concerned
cooperative institutions to press their demands. There were
26 strikes in 15 unions during a period of 3 years.17

Jyothi S.S. conducted a research in the early

eighties in Human Resource Management in cooperative
sector and concluded that unionism is still generally
weak in cooperative sector. The union-management relations
were generally cordial not necessarily because the employees
were satisfied and their morale was high, but essentially
because their bargaining power was limited.18

Sivaprakasam. P conducted a research in Personnel

Management in Central Cooperative Banks in lndialg. During
the period of five years from 1983 - 84 to 1997 -88 many
strikes took place and as a result of these agitations,

17. National Cooperative Union of India -

Employer-Employee
Relationship in Cooperative Sector - Report of the
National Workshop, New Delhi 1977 -p.4 -
18. Jyothi S.S. - Human Resources Management in Cooperative
Sector -Inter India Publication -
New Delhi - 1986 -
p. 282
19. Sivaprakasam P. -
Personnel Management in Central
Cooperative Banks in India -
Kanishka Publishers,
New Delhi -
1993 -
p. 169.
about 2000 mandays were lost to the Banks. These
agitations were settled by means of bi-parte and tri-parte
negotiations with the interventions of labour officer and/
or Registrar Of Cooperative Societies.

When compared with the above three studies, the

employees' union management relation is very cordial not
due to lack of bargaining power but because of the
efforts of Management, Registrar of Cooperative Societies
and Government. Pondicherry being a small Union Territory,
the Hon'ble Minister for Cooperation himself usually
interferes, grants satisfactory awards to the employees and
thus avoids any industrial agitation in the cooperative
sector. This is a highly favourable point in personnel
management practice in cooperative sector of this Territory.