The concept of IR means the relationship between employees and

management in the day-today working of industry. In the wider

sense, set of functional interdependence involving historical,
economic, social psychological, demographic, technological,
occupational, political and legal variables.

According to International Labour organization(ILO) IRs deal with

either the relationship between the state and employers and
workers organisations or the relation between the occupational
organizations themselves. Thus concept of IRs has been extended
to denote the relations of the state with employer, workers and
their organizations. The subject therefore includes individual
relations and joint consultations between employers and work
people of their work place, collective relations between employers
and their organizations and trade unions and part played by the
State in regulating these relations.
 Characteristics of IR

IR out come of employment relations in an industrial

enterprise.
IR develop the skills and methods of adjusting to and
cooperating with each other.
IR system creates complex rules and regulations to maintain
harmonious relations
The Government involves to shape the IR through laws, rules,
agreements, awards etc.
The important factors of IR are employees and their
organizations, employer and their associations and
government
 Objectives of IR

To promote and develop congenial labour management relations

To enhance the economic status of the worker by improving wages , benefits
and by helping the worker in evolving sound budget.
To regulate the production by minimising industrial conflicts through state
control
To socialize industries by making the government as an employer
To provide an opportunity to the workers to have a say in the management
and decision making
to improve workers strength with a view to solve their problems through
mutual negotiations and consultations with the mngt
To encourage and develop trade unions in order to improve the workers
strength
To avoid industrial conflict and their consequences. And
to extend and maintain industrial democracy
 Three Factors of IR
Workers and their organizations- no. of workers, working age, educational
background, family background, psychological factors, social background,
culture, skills, attitude towards others work etc. Workers orgn. Play their role
more prominently in TU. Main purpose of TU is to protect the workers
economic interest through collective bargaining and by bringing pressure on
mngt. Through economic and political tactics. TU factors include leadership,
finances, activities etc.
Employers and their organizations- crucial factor in IR. He employs the
workers, pays wages and various allowances, regulates the working relations
through various rules, regulations and by enforcing labour laws. He expects
the worker to follow the rules, regulations and laws. He expects them to
contribute their resources to the maximum. The difference between the
demands of workers and employers results in industrial conflicts.
Government- plays balancing role as the custodian of the nation. Govt. exerts
its influence on IRs through its labour policy, IRs policy, labour laws and
process of conciliation and adjudication by playing the role of mediator etc.
 Approaches to IR
Psychological Approach- According to psychologists, issues of Irs have their
origin in the differences in the perceptions of mngt, unions and rank and file
workers. The perpetual differences arise due to differences in personalities,
attitudes, etc. Similarly, factors like motivation, leadership, group goals versus
individual goals etc, are responsible for industrial conflicts.
Sociological Approach- industry is a social world in miniature. Organizations
are communities of individuals and groups with differing personalities,
educational and family backgrounds, emotions sentiments etc. These
differences in individuals create problems of conflict and competition among
the members of industrial society.
Human relations Approach- HRs are made up of living human beings but not
machines. They need freedom of speech, of thought, of expression, of
movement and of control over their timings. This approach implies that
relationship between employee and employer as between two human beings.
The term human relations include the relationship during the out of
employment situations.
 Gandhian Approach- M.Gandhis views on Irs are based on his
fundamental principles of truth, non-violence and non-possession.
Under the principle of non-violence and truth, Gandhi meant a peaceful
co-existence of capital and labour.
Trusteeship implies co-operation between capital and labour. Gandhi
advocated the foll, rules to resolve industrial conflicts-
Workers should seek redressal of reasonable demands through
collective action.
TU should decide to go on strike taking ballot authority from all
workers and remain peaceful and use non-violence methods.
Workers should avoid strikes to the possible extent
Strikes should be resorted to only as the last resort
Workers should avoid formation of unions in philanthropic
organizations.
Workers should take resources to voluntary arbitration to the possible
extent where direct settlement failed
 Dunlops Approach- John T.Dunlop in his book on Industrial Relations
System presented an analytical framework of IRs. The purpose of his
presentation was to provide tools of analysis to interpret and to gain
understanding of the widest possible range of industrial facts and
practices.
Actors of IRs include workers at all levels of an enterprise and their
associations specialized govt and private agencies and employers and
their associations. The rules include the regulations and laws that
govern the relationship the three actors. The ideology is a Philosophy
or a systematised body of beliefs and sentiments held by the actors.
The contextual factors are the environmental factors of technology and
market that interact with each other and influence the IRS. the locus
and distribution of power in the larger society, of which the particular
IRs complex is a sub-system. The relative distribution of power among
the actors influences the IRs pattern.
 Dunlops Approach to IR

IR system Ideology

Actors Rulers

Tech.Fact Mar.Fact.
Contextual Fact Locus and Dist. power in Wider
Society
 Interactive outcome of HRM approach- HRM deals with the mngt. Of
people from the stage of acquisition to the stage of separation
including HRD , compensation and utilisation of people. Thus HRM
mostly deals with the interactive behaviour between employee and
employer.
According P.S.Subba Rao- , HRM process involves close interaction
between employee and employer or his/her representativeness with
regard to employment, development, compensation and relationships.
These interactions produce either satisfaction or dissatisfaction to
bother the employee and employer. The dissatisfied employee presents
his/her dissatisfaction or grievance procedure to the employer for
redressal. Dissatisfied employees, if fail to present the problem to the
employer individually, form into an association and present the
problem to the employer.
Dissatisfied employer either individually or through their association
presents the problem to their groups for redressal. If parties failed to
get redressal parties seek redressal from govt/agencies. This entire
process affects on IR and ultimately on HRM process.
 Conditions Of Service For Change Of Which
Notice Is To Be Given- 4th Schedule, ID Act
1. Wages,, including the period and mode of payment;
2. Contribution paid,, or payable,, by the employer to any
provident fund or pension fund or for the benefit of the workmen
under any law for the time being in force;
3. Compensatory and other allowances;
4. Hours of work and rest intervals;
5. Leave with wages and holidays;
6. Starting,, alternating or discontinuance of shift working
otherwise than in accordance with standing orders;
7.. Classification by grades;
8.. Withdrawal of any customary concession or privilege or change in
usage;
9.. Introduction of new rules of discipline,, or alteration of existing
rules except insofar as they are provided in standing orders;
10.. Rationalization,, standardization or improvement of plant or
technique which is likely to lead to retrenchment of workmen;
11.. Any increases or reduction (other than casual) in the number of
persons employed or to be employed in any occupation or process or
department or shift not occasioned by circumstances over which the
employer has no control
 Unfair Labour Practices
5th Schedule, ID Act
I - On the part of employers and trade unions of employers
1. To interfere with, restrain from, or coerce, workmen in the exercise of their
right to organize, form, join or assist a trade union or to engage in concerted
activities for the purposes of collective bargaining or other mutual aid or
protection, that is to say, -
(a) threatening workmen with discharge or dismissal, if they join a trade union;
(b) threatening a lock-out or closure, if a trade union is organized; and
(c) granting wage increase to workmen at crucial periods of trade union
organization, with a view to undermining the efforts of the trade union at
organization.
2. To dominate, interfere with or contribute support, financial or otherwise,
to any trade union, that is to say :- (a) an employer taking an active interest in
organizing a trade, union of his workmen; and
(b) an employer showing partiality or granting favour to one of several trade
unions attempting to organize his workmen or to its members, where such a
trade union is not a recognized trade union.
 3. To establish employer-sponsored trade unions of workmen.
4. To encourage or discourage membership in any trade union by
discriminating against any workman, that is to say :-
(a) discharging or punishing a workman, because he urged other workmen to
join or organize a trade union;
(b) discharging or dismissing a workman for taking part in any strike (not
being a strike which it deemed to be an illegal strike under this Act);
(c) changing seniority rating of workmen because of trade union activities;
(d) refusing to promote workmen to higher posts on account of their trade
union activities;
(e) giving unmerited promotions to certain workmen with a view to creating
discord amongst other workmen, or to undermine the strength of their
trade union;
(f) discharging office bearers or active members of the trade union on account
of their trade union activities
 5. To discharge or dismiss workmen - (a) by way of victimization;
(b) not in good faith,, but in the colorable exercise of the employer's rights;
(c) by falsely implicating a workman in a criminal case on false evidence or on
concocted evidence;
(d) for patently false reasons;
(e) on untrue or trumpet up allegations of absence without leave;
(f) in utter disregard of the principles of natural justice in the conduct of domestic
enquiry or with undue haste;
(g) for misconduct of a minor or technical character,, without having any regard to
the nature of the particular misconduct or the past record of service of the
workman,, thereby leading to a disproportionate punishment..
6.. To abolish the work of a regular nature being done by workmen, and to give
such work to contractors as a measure of breaking a strike.
7.. To transfer a workman malafide from one place to another, under the guise of
follow. Management policy..
8.. To insist upon individual workmen,, who are on a illegal strike to sign a good
conduct bond,, as a precondition to allowing them to resume work..
9.. To show favoritism or partiality to one set of workers regardless of merit..
10. To employ workmen as "badlis,, casuals or temporaries and to continue
them as such for years,, with the object of depriving them of the status and
privileges of permanent workmen..
11.. To discharge or discriminate against any workman for filling charges or
testifying against an employer in any enquiry or proceeding relating to any
industrial dispute..
12.. To recruit workmen during a strike which its not an illegal strike..
13.. Failure to implement award,, settlement or agreement..
14.. To indulge in acts of force or violence..
15.. To refuse to bargain collectively,, in good faith with the recognized trade
unions..
16.. Proposing or continuing a lock-out deemed to be illegal under this Act..
IIII - On the part of workmen and trade unions of workmen
1.. To advise or actively support or instigate any strike deemed to be illegal under
this Act
2.. To coerce workmen in the exercise of their right to self-organisation or to join a
TU or refrain from joining any TU, that is to say - (a) for a TU or its members to
picketing in such a manner that non-striking workmen are physically debarred
from entering the work places;
(b) to indulge in acts of force or violence or to hold out threats of intimidation in
connection with a strike against non-striking workmen or against mangl staff.
3.. For a recognized union to refuse to bargain collectively in good faith with the
employer.
4.. To indulge in coercive activities' against certification of bargaining repve
5.. To stage, encourage or instigate such forms of coercive actions as willful "go
slow", squatting on the work premises after working hours or "gherao" of any of
the members of the managerial or other staff..
6.. To stage demonstrations at the residences of the employers or the managerial
staff members..
7.. To incite or indulge in willful damage to employer's property connected with
the industry..
8.. To indulge in acts of force or violence or to hold out threats of intimidation
against any workman with a view to prevent him from attending work..
 Matters Within The Jurisdiction Of Labour Courts
2nd Schedule, ID Act
1.. The propriety or legality of an order passed by an employer under the
standing orders;;
2.. The application and interpretation off standing orders;;
3.. Discharge or dismissal off workmen including reinstatement off,, or grant of
relief to, workmen wrongfully dismissed;;
4.. Withdrawal off any customary concession or privilege;;
5.. Illegality or otherwise of a strike or lockout;; and
6.. All mattress other than those specified in the Third Schedule..
 Matters Within The Jurisdiction Of Industrial Tribunals
- 3rd Schedule,, ID Act
1.. Wages,, including the period and mode of payment;
2.. Compensatory and other allowances;
3.. Hours of work and rest intervals;
4.. Leave with wages and holidays;
5.. Bonus,, profit sharing,, provident fund and gratuity;
6.. Shift working otherwise than in accordance with standing orders;
7.. Classification by grades;
8.. Rules of discipline;
9.. Rationalization;
10.. Retrenchment of workmen and closure of establishment; and
11.. Any other matter that may be prescribed..
 Workers Participation in Management
Workers Participation indicates an attempt on the part of an employer to build his
employees into a team which work towards the realization of common objective.
Davis- it is a mental and emotional involvement of a person in a group situation
which encourages him to contribute to goals and share responsibilities in them.
The participation results from practices which increase the scope for employees
share of influence in decision making at different tiers of the organizational
hierarchy with concomitant assumption of responsibility
The participation has to be at different levels of mngt. - shop level, department
level and at the top level.
The participation incorporates the willing acceptance of responsibilities by body of
workers. As they become party to the decision making, the workers have to
commit themselves to ensuring their implementation
The participation is conducted through the mechanism of forums and practices
which provide for association of workers representatives
Objective is to change the orgl aspect of production and transfer the mngt
function entirely to workers so the management can become auto mngt
 Objectives of WPM
To promote increased productivity for the advantage of the organization,
workers and society at large
To provide a better understanding to employees about their role and place in
the process of attainment of organizational goals
To satisfy the workers social and esteem needs; and
To strengthen labor mngt. Cooperation and thus maintain industrial peace and
harmony
To develop social education for effective solidarity among the working
community and for tapping latent HRs
An ideological point of view to develop self-mngt in industry
An instrument for improving efficiency of the co. and establishing harmonious
industrial relations
To build the most dynamic HR
to build the nation through entrepreneurship and economic development
 Essential conditions of successful WPM
The attitude and outlook of the parties should be enlightened and
impartial so that a free and frank exchange of thoughts and
opinions could be possible. Where a right kind of attitude exists
and proper atmosphere prevails the process of participation is
greatly stimulated.
Both parties should have a genuine faith in the system and in each
other and be willing to work together.
The experiment of labour participation in mngt must be given a
wide publicity in order that the idea of participation is ingrained in
the minds of those who are to implement the scheme
Participation should be real. The issues related to increase in
production and productivity, evaluations of costs, development of
personnel, expansion of markets should also be brought under the
jurisdiction of the participatory bodies. They will meet frequently
and decisions should be implemented timely
 Objectives to be achieved should not be unrealistically high, vague
or ambiguous but practicable of achievement and clear to all
Form, coverage, extent and level of participation should grow in
response to specific environment, capacity and interest of the parties
concerned.
Participation must work as complementary body to help collective
bargaining, which creates environment, capacity and interest of the
parties concerned
Participation must work as complementary body to help collective
bargaining, which creates condition of work and also creates legal
relations
Institutional participation should be discouraged but such participation
should be encouraged through changes in leadership style,
communication process and inter personal and inter group relations
There should be a strong TU, which has learnt the virtues of unit and
self reliance so that they may effectively take part in collective
bargaining or participation
 Multiple unions should be restricted by legislative measures.
Peaceful atmosphere
Centralized authority and democratic management process
Programmes for training and education
Progressive personnel policies should ensure growth of individual
workers within industry and proper policies should exist for selection,
promotion, compensation and reward and discipline
Mngt should provide all information connected with the working of
industry and labour should handle that information with full
confidence and responsibility
The workers should become aware of their responsibilities
The follow-up action on the decisions of the participating forums
should be ensured
Effective two way communication is a must for the success of the
programme.
 Forms of WPM
Works committee
Joint Management Council
Joint Councils
Shop Councils
Unit Councils
 Works Committees
Functions- These WC/JC are consultative bodies. Their functioning
include discussion of conditions of work like lighting, ventilation,
temperature, sanitation etc. amenities like water supply for drinking
purposes, provisions of canteens, medical services , safe working
conditions, administration of welfare funds , educational and
recreational activities, and encouragement of thrift and savings. To
promote good relations between the employers and employee and
to comment upon matters of their common interest or concern and
endeavour to reconcile any material difference of opinion In respect
of such matters.
Structure- WC have, as office bearers, a President, a VP, a Secretary
and Joint Secretary. President is a nominee of the employer and the
VP is the Workers representative. Tenure of the body is 2 years. The
total strength of these bodies should not exceed 20.
 Joint Management Committee

On the basis of report of study group of Indian Labour Conference in 15th

session in 1957 and it made certain recommendations:
The WP in mngt. Schemes should be set up in selected undertakings on
voluntary basis.
A sub-committee consisting of rep. of employers , workers and govt should be
set up for considering the details of WP in mngt. Schemes. This committee
should select the utakings where WP in mngt schemes would be introduced in
the first on experimental basis.
Objectives- i) to inc. association of employers and employee thereby
promoting cordial IR
To improve the operational efficiency of the workers
To provide welfare facilities to them
To educate workers so that they are well equipped to participate in these
schemes, and to satisfy the psychological needs of workers
 Joint Councils

The Joint councils are for the whole unit and its membership remains
confined to those who are actually engaged in the organization. The
tenure of JC is for two years. The Chief Executive of the unit
becomes its Chairman. Workers members of the council nominate
the VC. The Joint council appoints the secretary. The secretary is
responsible for discharging the functions of the council.
JC will meet once in 4 months, but periodicity of the meeting varies
from unit to unit, it may be once in month or quarter.
 Shop Council

. The shop council represents each dept. or a shop in an unit. Each

shop council will consist of an equal number of reps. Of employers
and workers. The employers reps will be nominated by the mngt and
must consist of persons from within the unit concerned. The
workers res will be from among the workers of the dept or shop
concerned. The no. of members of each council may be determined
by the employers in consultation with the recognized union. The
total no. of members, however, may not generally exceed twelve.
Decisions are to be taken on the basis of consensus but not by voting
 Unit Council
The scheme envisaged setting of UC in units employing at least 100 persons.
The orgs include hotels, restaurants, hospitals, air, sea, railway and road
transport services, ports and docks , ration shops, schools research institutions,
PF and pension orgs, municipal and milk distribution services, trust orgs, all
financial institutions, post and telegraph, food corps , SEB, central
warehousing, state warehousing, state trading corp., mines and minerals
trading corp, irrigation systems, tourist orgs, establishment for public
amusement and training orgs of the Central and State govt.
Main Functions- 1. to create condition for achieving optimum efficiency, better
customer service in areas where there is direct and immediate contact
between workers at the operational level and the consumer, higher
productivity and output including elimination of wastage and idle time and
optimum utilization of manpower by jt. Involvement in improving work system
2. to identify areas of chronically bad, inadequate or inferior service and to take
necessary corrective steps to eliminate the contributing factors to evolve
improved methods of operation
 3. to study absenteeism and recommend steps to reduce it.
4. To eliminate pilferage and all forms of corruption and to institute a
system of rewards for this purpose.
5. The suggest improvements in physical conditions of working such as
lighting, ventilation, dust, noise, cleanliness, internal layout, setting up of
customers service points etc.
6. To ensure proper flow of adequate two way communication between
the mngt and workers, particularly about matters relating to the service
to be rendered, fixation by targets of output and progress in achieving
these targets.
7. to recommend and improve safety, health and welfare measures for
an efficient running of the unit
8. to discuss only other matters which may have a bearing on the
improvement of performance of the unit for ensuring better customer
service
 Employee Empowerment
Empowerment is the process of giving employees in the org the power,
authority, responsibility, resources, freedom to take decisions and solve
work related problems. In order to take such initiatives and decisions,
they are given adequate authority and resources. This allocation of
authority is not based on the concept of delegation based relationship.
In empowerment it is a trust based relationship, which established
between mngt and employees.
It is continuous process. The empowered employee becomes self
directed and self controlled. Empowerment focuses on employees to
make use of their full potential.
on the other hand empowerment means giving up control on
employees and letting every employee make decisions, set goals,
accomplish results and receive rewards. It means making a person able
to manage by himself. It is a process for helping right person of the
right levels to makes the right decision for the right reasons.
 Elements of Empowerment
1. Control over work situation
2. Self sufficiency or competence
3. Purposefulness
4. Belief system and trust
Actions for empowering employees
Delegation of authority
Participative decision making
Encourage self mngt
Job enrichment
Creating self managed work teams
creating job that provide intrinsic feedback
Installation of upward performance appraisal
Lessening of formalities
Creating supportive culture
Encouraging goal setting
Educating and training employees
Effective Empowerment Conditions
Participation
innovation
Access to Information
Accountability

Other empowerment conditions

Provide the information of the co to all employees
Employees should have multi skills and knowledge
Employees should assume power to make substantive decisions
Employees should understand all the jobs
Mngt should create and maintain the culture
Mngt should delegate authority and provide power
Mngt should encourage the employees to take risk
Mngt should reward the employees adequately
 The Empowerment Process

High Power distribution

Followers granted
D authority to make
E decisions
G
R
E Power sharing
O mngr/Leader and
F followers jointly
make decisions
E
M Influence sharing
P mngr/leader
O consult followers
W when making
R decisions
M
E Authoritarian
N power
T mngt/Leader
imposes deicisions
None Domination Consultation Participation Delegation
 Five stages in the process of empowerment
Stage I Stage-2 Stage-3
Conditions leading to a The use of managerial strategies To provide self-efficacy information
Psychological state of and techniques to subordinates using four sources
Powerlessness

Orgl Factors Participative mngt Enactive attainment

Goal Setting Vicarious expenses
Feed Back Analysis
Verbal Persuasion
Supervision Emotional arousal
Contingent/Competence and
Reward System Based reward
Nature of Job Job enrichment Remove conditions
Stage -4 Stage-5 listed under
Results in empowering Leading to behavioural Stage I
experience of subordinates effects

Strengthening effort- Initiation persistence

performance of behaviour to
expectancy of belief accomplish task
in personal efficacy objectives
 Characteristics of Empowered Organization
The empowered orgs have a flat orgl structure and high degree of
performing work systems
The attitude and mindset of employees of empowered organizations are
also quite different . Each of the employees will be working towards the
vision of the org , there will be independent work teams at all levels,
continuous improvement and learning, high degree of belief system and
trust, environment of openness, authenticity and acceptance, freedom
from all threats, accountability and commitment on the part of the
employees encouragement, creativity and development all activities,
confidence at all times in the minds of employees
The empowered orgs invest a lot of time and effort in hiring, to make sure
that new recruits can handle freedom given at the work place, these orgs
have loose guidelines so that the employees can know their decision
making parameters
Results are important than the process, open and strong communication
network, most importantly satisfaction of employees
 EO also create the feeling of belongingness, and creativity is encouraged among
the employees. The employees also learn and teach the art of self leadership
Transparent ethics is another characteristic feature of empowered org
Secrecy and confidentiality are never the practices and cannot be found in any of
the org activity
The ideal sets of work practices are other added features of an empowerment org
Flexible scheduling of work, uncompromising employee integrity, low employee
turnover, quality, productivity, self directed work force, participative decision
making systems, no boundaries or borderless relationships and no hard rules are
the important characteristics of and empowered orgn.
EP benefits the org by- creating an environment which encourages proactively
problem solving, accepting challenge, innovation, continuous improvement,
optimum utilization of employees
For employees-provides sense of high self esteem , high degree of involvement and
participation, a learning environment opportunity for personal growth and
development and a greater sense of achievement
For managers- they can think of EP process as involving in several stages. Mngrs
can assume additional and new responsibilities. The mngrs of the EP orgs will have
greater commitment towards the org
 History of quality circles

The quality circles begun in Japan in 1960s. The concept of quality circles
is based on the participating style of management. It assumes that
productivity will improve through an uplift of morale and motivations
which are in turn achieved through consultation and discussion in
informal groups. One organizational mechanism for worker
participation in quality is the quality circle. It is typically an informal
group of people that consists of operators, supervisors, managers and
so on who get together to improve ways to make the product or
deliver the service.
 Definitions
QC is a small group of employees in the same work area or doing a similar type of
work who voluntarily meet regularly for about an hour every week to identify,
analyze and resolve work related problems, leading to improvement in their total
performance and enrichment of their work life.
According to Juran, quality circle defined as a group of work force level people,
usually from within one department, who volunteer to meet weekly (on company
time) to address quality problems that occur within their department. Quality circle
members select the problems and are given training is problem-solving techniques.
A quality circle can be an effective productivity improvement tool because it
generates new ideas and implements them. Where the introduction of quality circle
is capably planned and where the company environment is supporting they are
highly successful.
The benefits fall into two categories: those are measurable saving and
improvement in the attitudes and behaviour of people. Quality circles pursue two
types of problems, those concerned with the personal well being of the worker and
those concerned with the well being of company.
 Structure of QC
Steering Committee
Departmental Committee

Top Management

TM

Coordinating Centre
SC/DC
Facilitator
Leader/Dy.leader
Member
Non Member
 Quality Circle objectives
To contribute towards the improvement and development of the organization or a
department.
To overcome the barriers that may exist within the prevailing organizational structure so as
to foster an open exchange of ideas.
To develop a positive attitude and feel a sense of involvement in the decision making
processes of the services offered.
To respect humanity and to build a happy work place worthwhile to work.
To display human capabilities totally and in a long run to draw out
the infinite possibilities.
To improve the quality of products and services.
To improve competence, which is one of the goals of all organizations.
To reduce cost and redundant efforts in the long run.
With improved efficiency, the lead time on convene of information and its subassemblies is
reduced, resulting in an improvement in meeting customers due dates.
Customer satisfaction is the fundamental goal of any organization It will ultimately be
achieved by Quality Circle and will also help to be competitive for a long time.
 Benefits of QC
1. Quality Circles Effect on Individual Characteristics
(a) Quality circles enable the individual to improve personal capabilitiesgroup
participation and learning specific problem-solving tools.
(b) Quality circles increase the individuals self-respect.
(c) Quality circles help worker change certain personality characteristicsshy
person become as active.
2. Quality Circles Effect on Individuals Relations with Other
(a) Quality circles increase the respect of the supervisor for the worker.
(b) Quality circles increase workers understanding of the difficulties faced by
supervisorsproblem selection, solving and implementations.
(c) Quality circle increase managements respect for worker.
3. Quality Circles Effect on Workers and Their Attributes
(a) Quality circles change some worker negative attitudes.
(b) Quality circle reduces conflict stemming from the working environment.
(c) Quality circles help workers to understand better the reasons while many
problems solved quickly.
Quality circles, as a management tool, are based on the following basic principles
of people:
(a) People want to do a good job.
(b) People want to be recognized as intelligent, interested employees and to
participate in decisions affecting their work.
(c) People want information to better understand goals and problems of their
organization and make informed decisions.
(d) Employees want recognition and responsibility and a feeling of self-esteem.
Motivational methods are not enough for successful quality circle programs.
Management support, technical knowledge, and statistical procedures are
essential.
 Right Sizing and VRS
Right Size of the work force refers to employing and maintaining exact
number of employees with required skills, abilities and knowledge to
perform the existing number of jobs in an org. Clear and systematic job
analysis, job specification and job description provide the basis for
arriving at an exact number of employees required. Due to information
technology multiskilled people determine the no. of workers required to
perform the existing job.
Overstaffing is the common problem in public sector companies. OS
results in high labour cost, high cost of production in addition to orgl
politics. Employees without optimum work load resort to orgl politics
and/or dysfunctional activities. This ultimately affected the profitability
of the public sector companies. As such the public sector companies
retrenched the employees by downsizing the HRs. This experience
influenced the cos to plan for and practice the right size of employees.
Indian org retrench the employees through various schemes like
voluntary retirement schemes and golden handshakes
 Factors resulted in Right sizing
Competition
Information Technology
Technological innovation
Mergers and Acquisitions
Strategic Alliances
Outsourcing
Business Efficiency
Multi-skills
Orgl Restructuring
 Consequences of Right Sizing
Positive Effects
Organizational efficiency
Effective Allocation and Utilization of HR
HRD
Negative Effects
Loss of Employment
Loss of Income
Shattering of Employees families
Committing Suicide
 Need for Right Sizing
To have exact number of employees as per the job analysis, job
description and job specification exercise of the company
To minimise the cost of HRs and thereby to contain the cost of
production by eliminating unnecessary costs
To minimise organizational policies
To reduce the dysfunction activities of the employees
To maximize productivity by enhancing employee performance
To avoid formation of TU and its consequences
To reduce the maintenance activities of various employee facilities and
benefits like housing, canteen, transportation, medical and recreational
To maintain sound human relations with the exactly required no. of
employees
To create a sense of belongingness with the employees by maintaing
close and personal relations & to improve employee collaboration
 VRS
In the present globalised scenario, right sizing of the manpower
employed in an organisation has become an important management
strategy in order to meet the increased competition. The voluntary
retirement scheme(VRS) is the most humane technique to provide
overall reduction in the existing strength of the employees. It is a
technique used by companies for trimming the workforce employed in
the industrial unit. It is now a commonly method used to dispense off
the excess manpower and thus improve the performance of the
organisation. It is a generous, tax-free severance payment to persuade
the employees to voluntarily retire from the company. It is also known
as 'Golden Handshake' as it is the golden route to retrenchment.
 In India, the Industrial Disputes Act,1947 puts restrictions on
employers in the matter of reducing excess staff by retrenchment, by
closures of establishment and the retrenchment process involved lot
of legalities and complex procedures. Also, any plans of retrenchment
and reduction of staff and workforce are subjected to strong
opposition by trade unions. Hence, VRS was introduced as an
alternative legal solution to solve this problem. It allowed employers
including those in the government undertakings, to offer voluntary
retirement schemes to off-load the surplus manpower and no
pressure is put on any employee to exit. The voluntary retirement
schemes were also not subjected to not vehement opposition by the
Unions, because the very nature of its being voluntary and not using
any compulsion. It was introduced in both the public and private
sectors. Public sector undertakings, however, have to obtain prior
approval of the government before offering and implementing the
VRS.
 A business firm may opt for a voluntary retirement
scheme under the following circumstances:-

Due to recession in the business.

Due to intense competition, the establishment becomes unviable

unless downsizing is resorted to.

Due to joint-ventures with foreign collaborations.

Due to takeovers and mergers.

Due to obsolescence's of Product/Technology.

 A company may make the following announcements while
implementing a voluntary retirement scheme:-
The reasons behind downsizing the organisation.
The eligibility criteria for voluntary retirement scheme.
The age limit and the minimum service period of employees who can
apply for the scheme.
The benefits that are offered to the employees who offer to retire
voluntarily.
The rights of the employer to accept or reject any application for
voluntary retirement.
The date up to which the scheme is open.
The income tax benefits and income tax incidence related to the
scheme.
It should also indicate that the employees who opt for voluntary
retirement and accept the benefits under such scheme shall not be
eligible in future for employment in the organisation.
 Business Process Reengineering

Business Process Re-engineering (BPR) can be defined as:

... a radical scrutiny, questioning, redefinition and redesign of business
processes with the aim of eliminating all activities not central to the
process goals and automating all activities not requiring human
judgmental input, or facilitating that judgment at reduced cost
(Thomas 1994, p.2
BPR was championed by Michael Hammer and James Champy (1994) in
the book Re-engineering the Corporation in which they advocated
that old systems be discarded and replaced with new, more innovative
and effective processes. BPR demands lateral thinking that extends
beyond the current boundaries in order to achieve a more effective
organisation.8).
 Business Process Re-engineering (BPR) is the term used to express the
process of optimizing organizational processes and structures for best
possible end result. Process Re-engineering can be applied to the
whole organization, part of the organization or to a single unit with in
the organization.
Currently, Business Process Re-engineering is one of the emerging and
fastest growing scientific management tools that aim at optimizing
organizational resources for best end result.
It is the redesign of business processes and the associated systems and
organizational structure to achieve a dramatic improvement in
business performance. The business reasons for making such changes
could include poor financial performance, external competition, and
erosion of market share, emerging market opportunities, or some
other pressing business issue. Business Process Re-engineering is not
downsizing, restructuring, reorganization, automation, new
technology, etc. It is the examination and change of five components
of the business:
 Strategy: The general direction of the business, its business model and
its future direction must be taken into account while embarking onto a
reengineering effort. Before reengineering can be done the
organizations strategies that can be used as a foundation should be
known. This approach helps in selecting the right process for
reengineering and sets how and by how much to reengineer.
Process: Processes are the targets of reengineering in BPR. Processes
are self-contained workflow patterns where there is an input a series of
actions and an output.
Enabling Tool (Technology): Information Technology plays a crucial
role in BPR, but it can be easily misplaced. Modern state of the art
Information Technology is part of the reengineering effort, an essential
enabler since it permits companies to reengineer business processes.
However, merely introducing computers into an existing business
problem does not cause it to be reengineered. In fact, the misuse of
technology can block reengineering altogether by reinforcing old ways
of thinking and old behavior patterns.
 Organization: A reengineering effort triggers changes that are of
multidirectional in nature. Job designs, organizational structures,
management systems everything associated with the process must be
refashioned in order to maintain a coherent business system.
Culture: People need some reason to perform well within the
reengineered processes. It isnt enough simply to put new processes in
lace; managers must motivate employees to rise to the challenge of the
processes by supporting the new values and beliefs the processes
demand. In other words, management must pay attention to what goes
on in peoples minds as well as what happens on their work place. This
includes motivation, empowerment, training, etc.
 What is BPR?
BPR is not automation
Reengineering is not restructuring or downsizing
Reengineering also is not the same as reorganizing, or flattening an
organization
BPR and TQM not one and the same
TQM:
Continuous improvement
Company relatively in good condition
Improvement envisaged is in he order of 10-20% at a time
BPR:
Radical change, process redesign
Company relatively in bad condition
Improvement envisaged is in he order of 50% and above
 7 Principles of Reengineering

Hammer and Champy suggest seven Principles of reengineering

1. Organize around results and outcomes, not tasks
2. Have those who use the output of the process perform the process
3. Subsume information processing work into the real work that
produces the information
4. Treat geographically dispersed resources as though they were
centralized
5. Link parallel activities instead of integrating their results
6. Put the decision point were the work is performed and build control
into the process
7. Capture information once and at the source
 Implementation of BPR
People who should carry out the scheme have to be convinced to perform their
duties properly.
The tremendous challenge in reengineering is to persuade people with in the
organization to embrace or at least not to fight the prospect of a major
change.
According to Hammer & Champy, the companies that have the most success in
convincing the employees the need for change are those that have developed
the clearest messages about the need for reengineering. Senior manager,
preferable the CEO, of these companies have done the best job of formulating,
and articulating two key messages that they must communicate to the people
who work in their organizations. The first of these is: Here is where we are as a
company and this is why we cant stay here. The second is: This is what, we, as
a company need to become.
The first message must make a compelling argument for change. It must convey
a forceful message, why the company must reengineer, that it is essential for its
survival.
 The second message, what the company needs to become, gives
employees a visible goal for which to shoot. Articulating it forces
management to think clearly about the purpose of their change
program and about the extent of change that needs to be effected
through reengineering.
Experience in the industry shows that there are three types of
employees as far as change is concerned:
1. Innovative Type: These are change pioneers. They actively embrace
change and are the best assets for BPR. These are usually few in no.
2. Listeners: This type of employees can be easily convinced of the need
for change. They comprise of the majority of the employees in the co.
3. Resisters: This are the type of people who resist change even if they
know that change is necessary and inevitable. These are also few in
number. Attempt has to be made to salvage such employees. However,
if they persist in resisting the change, they should be presented with the
ultimatum, that is, they should shape-up or ship-out.
 The following are some commonalities, recurring themes or common
denominator/characteristics that are frequently encountered in
reengineered business processes.
Several jobs are combined into one (cross-functional teams)
The steps in the process are performed in their natural order
Work is performed where it makes the most sense
Workers make decisions
Checks and controls are reduced
Reconciliation is minimized
Processes have multiple versions
Central manager provides a single point contact
Hybrid centralized/decentralized operations are prevalent
 Productivity and trade unions

Harvard economists that unions tend to increase productivity through

their collective voice/institutional response role. Advocates of this
view argue that unions, on balance, increase productivity in unionized
enterprises by reducing labour turnover, enhancing worker morale
and cooperation, providing efficient collective voice in negotiating
workplace characteristics and grievance resolution, and pressuring
mngt into stricter efficiency.
The traditional view has been that unions impede productivity within
unionized firms by limiting mngt flexibility, be engaging in restrictive
practices and featherbedding, and by disrupting production through
strikes, strike threats and other adversarial tactics.
 UNIONS AS AN IMPEDIMENT TO PRODUCTIVITY
Alternatively and frequently, unions are viewed as an impediment to
productivity. The features of the neo-classical approach to trade unions
and productivity are:
Unions force wages to be lifted too high;
Firms respond by shedding labour in unionized work places and
substituting capital for labour;
Displaced labour is either: a. employed in non-union firms, but for lower
wages in less productive labour - intensive activities.
b. remains unemployed. To this end, the overall impact will be declining
output, with the impact dependent upon the magnitude of labour
shedding. The more responsive are employers and consumers to relative
price effects, the larger will be the predicted fall in output.
c. reduced levels of investments in unionized firms.
d. reduced managerial discretion.
e. the promotion of adversarial labour relations.
 UNIONS AS AN ENHANCEMENT TO PRODUCTIVITY
Frenkel and Peetzy (1990) say that unions may be viewed as an
enhancement to productivity. The Harvard School emphasizes the
following characteristics of unionized work places:
1. Unions, by providing an effective collective voice in the work place,
enable more satisfactory work arrangements to be developed for the
benefit of employees and employers:
the public good nature of work place issues means that action by
individuals will benefit the majority yet most individuals are inclined to
be free riders so that action has to be taken collectively rather
relying on an individual;
individual workers will be reluctant to act on their own for fear of
management reprisals;
without a collective voice, individual workers will opt to quit the work
place rather than endure unsatisfactory working conditions.
 Unions force management into adopting the most productive
techniques.
Union presence may sharpen the incentive of employers to adopt best
practices, because other routes to profitability (low wages, sweating)
are made more difficult.
Conversely, where collective organization is absent, employers may
postpone investment and endeavour to maximize profits by working
with existing productive resources more intensively.
Short-term gains are thus secured at the expense of dynamic efficiency
 ROLE OF THE INDUSTRIAL RELATIONS CLIMATE

Productivity depends on the state of labour-management relations at the

work place. When relations are good, workers and management may pull
together for the benefit of the organization.
In an analysis of productivity at 18 GM plants, found higher productivity
where plant managers rated the industrial relations climate as good or
where the rate of grievances filed by workers was low (suggesting that
workers viewed the state of labour-management relations as good).
In a detailed study of paper mills, Ichniwski (1992) of National Bureau of
Economic Research obtained similar results: a plant with low rate of
grievances filed in a given period, had notably better productivity than
the same plant when it had a high rate of grievances filed. In addition,
Ichniowske (1992) has estimated that because of the better productivity,
low grievances plants have correspondingly higher profits, by as much as
a third compared with high grievance plants.
 In the third study, Schuster (1990) of Syracuse University examined
productivity at nine manufacturing plants over a period of five years
during which a cooperative union management programme was
introduced. He found an increase in productivity in 6 of the 8 plants for
which productivity could be measured. While all three of these studies
were limited to organized plants, the implication is that the Impact of
unionism on productivity depends not only on what unions and
management do separately but also on their relationships with one
another. Where that relationship is good, productivity is higher than
where the relationship is bad.
The finding that unionism is generally associated with higher
productivity implies that in most organized plants say in the United
States and Japan, labour and management have developed amicable
working relations. The lesson is that unionism per se is neither a plus nor
a minus to productivity. What matters is how unions and management
interact at work places.