EXECUTIVE
SUMMARY
EXECUTIVE SUMMARY
The industrial relations are the relationship between employees and employers within
the organization. In industrial relation performance appraisal is very necessary to understand the
employees rates in term of their performance. It also help the employees to understand their rules
and responsibilities.
The industrial relations system in India has been under pressure for decades and new
problems are emerging as the country becomes more integrated into the global economy. The
main architecture of the system was established prior to Independence and remains mostly
unchanged. The system is highly centralized and the state is the main mediator between capital
and labour. Unions have historically enjoyed a close relationship with the state through party-
based federations, but this has undermined their success developing a robust grassroots
constituency and experience in collective bargaining. This report provides a broad overview of the
evolution of the Indian system of industrial relations and the labour market reform debate that has
arisen in the context of economic change in Nahar Spinning Mills Ltd., Ludhiana.
The structure of the Indian labour market, the overwhelming size of the informal or
`unorganized' workforce, and its location outside the industrial system is the fundamental
challenge facing Indian industrial relations. There is an urgent need to develop a system that
embraces all workers especially given India's demographic profile and the expected increase in
the number of working age people over the next decade. The experience of women workers and
the failure of both the industrial system and the union movement to understand and accommodate
their needs is also an important challenge for industrial relations in India.
Present research is to study the performance of an employee in relation to industrial
relations at Nahar Spinning Mills Ltd., Ludhiana.
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CHAPTER 1:
INTRODUCTION
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CHAPTER 1: INTRODUCTION
The relationship between Employer and employee or trade unions is called Industrial Relation.
Harmonious relationship is necessary for both employers and employees to safeguard the interests
of the both the parties of the production. In order to maintain good relationship with the
employees, the main functions of every organization should avoid any dispute with them or settle
it as early as possible so as to ensure industrial peace and higher productivity. Personnel
management is mainly concerned with the human relation in industry because the main theme of
personnel management is to get the work done by the human power and it fails in its objectives if
good industrial relation is maintained. In other words good Industrial Relation means industrial
peace which is necessary for better and higher productions.1
Definition:-
i. Industrial Relation is that part of management which is concerned with the manpower of the
enterprise – whether machine operator, skilled worker or manager. BETHEL, SMITH & GROUP
ii. Industrial Relation is a relation between employer and employees, employees and employees
and employees and trade unions. - Industrial dispute Act 1947
iii. While moving from jungle of the definitions, here, Industrial Relation is viewed as the
“process by which people and their organizations interact at the place of work to establish the
terms and conditions of employment.”
The Industrial Relation relations also called as labor - management, employee-employers
relations.
A few notable features pertaining to Industrial Relations are as under:
1. Industrial Relation do not emerge in vacuum they are born of employment relationship in an
industrial setting. Without the existence of the two parties, i.e. labor and management, this
relationship cannot exist. It is the industry, which provides the environment for industrial
relations.
2. Industrial Relation are characterized by both conflict and co-operations. This is the basis of
1 http://www.citehr.com/596-industrial-relation-india.html4
adverse relationship. So the focus of Industrial Relations in on the study of the attitudes,
relationships, practices and procedure developed by the contending parties to resolve or at least
minimize conflicts.
3. As the labor and management do not operate in isolations but are parts of large system, so the
study of Industrial Relation also includes vital environment issues like technology of the
workplace, country’s socio-economic and political environment, nation’s labor policy, attitude of
trade unions workers and employers.
4. Industrial Relation also involve the study of conditions conductive to the labor, managements
co-operations as well as the practices and procedures required to elicit the desired co-operation
from both the parties.
5. Industrial Relations also study the laws, rules regulations agreements, awards of courts,
customs and traditions, as well as policy framework laid down by the governments for eliciting
co-operations between labor and management. Besides this, it makes an in-depth analysis of the
interference patterns of the executive and judiciary in the regulations of labor–managements
relations.
In fact the concepts of Industrial Relations are very broad-based, drawing heavily from a variety
of discipline like social sciences, humanities, behavioral sciences, laws etc.
In fact, Industrial Relation encompasses all such factors that influence behavior of people at work.
A few such important factors are details below:
1. Institution: It includes government, employers, trade unions, unions federations or associations,
government bodies, labor courts, tribunals and other organizations which have direct or indirect
impact on the industrial relations systems.
2. Characters : It aims to study the role of workers unions and employers’ federations officials,
shop stewards, industrial relations officers/ manager, mediator/conciliators / arbitrator, judges of
labor court, tribunal etc.
3. Methods : Focus on collective bargaining, workers’ participation in the Industrial Relation
schemes, discipline procedure, grievance re-dressal machinery, dispute settlements machinery
working of closed shops, union reorganization, organizations of protests through methods like
revisions of existing rules, regulations, policies, procedures, hearing of labor courts, tribunals etc.
4. Contents : Includes matter pertaining to employment conditions like pay, hours of works, leave
with wages, health, and safety disciplinary actions, lay-off, dismissals retirements etc., laws
relating to such activities, regulations governing labor welfare, social security, industrial relations,
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issues concerning with workers’ participation in management, collective bargaining, etc.
1.1 INDUSTRIAL RELATIONS
It is seen as a co operation between employer and employee, it is done with discipline (ii)
done in organized manner and not casual and it gives satisfaction ‘of needs’. Industrial Dispute :
As per section 2 (K) of industrial dispute or difference between employers and employees
employers and employers or employees and employees which is connected with the employment
or non employment or the terms of employment or with the condition of labour of any person.
1) There must be a dispute or difference the dispute or difference must be between employers and
employees employee and employees, employers and employers.
2) The dispute must be connected with employment or non employment or terms of employment
or with the conditions of labour of any person.
General causes of industrial disputes strains which results in bad industrial relations are.
1. Close mindedness of employers and employees one thinking to extract maximum work with
minimum remuneration, other thinking to avoid work and get more enhancement in pay and
wages.
2. Irrational wage, wage system and structure not mutually acceptable
3. Poor working environment, low presence of safety, hygiene conditions vitiated atmosphere for
smooth working
4. Poor human relations, and lack of dexterity on the part of management personnel
5. Lack of control over the situations erosion of discipline, which rebounds.
6. Introduction of new technology or automation mechanization, Computerization etc. without
proper consultations, preparations and discussion with workers and creating climate.
7. Nepotism, unequal work loads, disproportionate wage, and responsibilities.
8. Adoption of unfair labour practices either by employer or employees and unions.
9. Unjustifiable profit sharing, and not considering workers as a co-shares of the gains of the
industry.
10. Frequent union rivalries over membership foisting up of fake unions.
11. Strikes lock out, lay off, and resulting retrenchment due to high handedness on the part of the
concerned.
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12. Throwing away the agreements and arrived settlements
13. Militancy of the unions
14. Attitude of government and political parties who may indirectly control some the unions for
their own gains or to get a hold on the industry.
Few suggestions for the improvement of industrial relations and reduce disputes
1. Trade unions should be strengthened democratically so that they can understand and toe with
the main stream of the national industrial activities. They can drop the some how survive attitude
by promising impossibles and consequent perpetual strain.
2. Employers should have more transparency in their dealings with workers to build confidence
and have progressive out look.
3. They should have open minded flexible collective Bargaining.
4. Workers should be allowed to participate in the management through forums, committees and
councils,
5. Sound labour policy, planning
6. Proper leadership and communication
7. Enforcement of discipline
8. Try to have union with in workers fold.
9. Equity in distribution of wealth by acknowledging workers as team members
This has always remained as a disputable topic whether industrial relations is same as personal
relation, human relation or labour management employer employee or union and
management relations. A discussion on industrial relation considers all these as almost same.
Bad Industrial Relations leads to industrial unrest industrial dispute and a downward trend to
industries workers and the nation. Of course the first hit will be on the employers, who has
invested.
Industrial worker and the employers normally don’t think, feel or act in precisely the same way
and because each starts from a different point conflict of some fort can mover be eliminated
completely.
The main reasons for industrial discard, can be due to
1. Misunderstanding or differences in perception
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2. Lack of co operation real or imagined
3. Problems with authority
4. Future to comply with policies or stick to plans.
5. His Agreements over ways to achieve agreed goals.
Conflict can have some positive aspects also, they may give positive results like
1. Reveal new aspect of an existing issue
2. Improve long term communication between the individuals concerned
3. Always previously stifled emotions to be released
1.2 CONCEPT AND DETERMINANTS OF INDUSTRIAL
RELATIONS AND ITS POSITION IN INDIA
It is concerned with the relationships between management and workers and the role of regulatory
machanism in resolving any industrial dispute.
The relation between workers and management have undergone Himalayan changes in our
country there had been a system of king and his subjects, all should work to improve the coffers
of the king. Later Zamindars came and workers were at their mercy – some time bonded also,
later with the formation of East India company and British Rule a heart less Hire and fire system
was established Industrial workers were no man’s child neither the employers nor government
cared for them, there were no union also. Gradually enlightened leaders came in like, Gokale, MK
Gandhi Roy, Tilak etc felt the need for worker’s union. Their relentless efforts forced both
governments and the employers to think of workers lot small unions were formed, government
enacted rules like ‘Trade union Act 1926. Industrial disputes Act etc.
The workers began to realise their status and they were awakened. A sort of uprighting workers
and reluctant management has started functioning.
Soon workers motivated by different Industrial Acts enacted by parliament supporting them, and
looking after their health, welfare, safety, social security etc. Got emboldened to raise their voice.
At the same time management also has started improving, more and more industries were
nationalised, public sector came in to existence at number of places, textile insurance, banks
transport etc.
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With increasing number of public sectors, workers life style changed, assured job arrogated
unions, appeasing management, administration with less account ability – workers had their field
day. Public sectors started doing more of social service than business and profit doling out public
exchequer.
Slowly this trend is changing with the government’s reversal policy, decentralization Privatisation
etc. Compelled by universal need to compete in business, activated by world.
Trade organisation global economy etc government turned towards foreign investments and
industrial set ups by foreign investors. Stringency of some of the laws are disappearing
monopolies Restrictive Trade Practice, F.E.R.A etc consequently issues like productivity linking
productivity with emoluments are also coming into fore front. With new companies coming in,
formation of merry unions have come to a stand still, no union worth the name is there in 1.T
sector in our Tradial Park, Chip’s World etc. Job security is diminishing, legislations, are not
coming as before because we have to live in a competitive world, of industries where down sizing
out sourcing productivity, etc has become the ‘watch word’. From the words of TISCO
management. “The welfare of the labouring classes must be one of the first cares of every
employer, Any betterment of their conditions must proceed more from the employers downwards
rather than be forced up by demands from below since labour, contented, well housed, well fed
and generally well looked after, is not only an asset and advantages to the employer but serves to
raise the standard of industry and labour in the country”
It is sheer injustice on the part of any management to take advantage of the poor, helpless
conditions of workers and exploit them with more work extractions and less insufficient payment.
Workers illiteracy and lack and training made them to work in unhealthy conditions for very low
compensation. At this Juncture industrial relations need was felt to protect workers rights, wages
etc. At the same time industrial relations cannot remain producing the rights of one side only in
the industry they have to protect the rights of employers also. As such 1R has declared through
act, what are illegal strikes and various standing orders to protect the dignity of supervisors,
managers and of course employers.
The main concept of industrial relations are
1. preservation and promotion of economic interest of workers along with social interest
2. Peace and productivity goes hand in hand hence. attempt to reduce industrial dispute and
promote peace is a necessity.
3. Employer employee relation should be made healthy and growing
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4. Running of the industry, day to day work should be made more democratic with increasing
workers participation
5. Producing products at a very competitive price so that country can promote export and our
economy can improve.
6. Bringing mental revolution in management.
The determinants of good industrial relation can be promoted
1. Measures for securing and preserving unity and better relations between workers and
employers
2. Arrange to probe and settle industrial dispute between employer employee or employer and
employer or employee and employee, give proper representation to workers union and industrial
federations of employers.
3. Both the ultimate weapons of employers and employee – strike and lock out should be
prevented at any cost. Proper relief to workers after a ‘lock out’ or ‘lay off’ through government
agencies
4. Workers participation at all levels and encourage give and take principle in collective
Bargaining.
Industrial relation requires a study regarding I) conditions of work (ii) compensation paid for the
sweat the worker makes iii) permanency of the job assured continuance of work or
otherwise.
The parties to Industrial Relations are
1) Workers and their unions, the intelligence level knowledge of workers, background
of worker leaders, real or boghus their linkage with political unions, are to be considered for the
effective relations.
2) Nature of employment and employers, whether benevolent, interested in workers or aiming to
get as much profit as possible squeezing workers their attitude plays vital role in maintaining
better relations. Whether they want to have team, and growth of their team as a whole or just hire
and fire system.
3) Position of government, political will whether opportunitie favouring employers or interested
in workers, are to be seen. Their interest in workers can be seen through their actions in creating
Laws for labour welfare and implementing them effectively.
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Industrial relations development can be based
1) On a spirit of team development team building workers are to be seen as partners in the
industry for national development thro industrial development, most of the laws and
government’s directives wants to enforce workers participation joint councils, collective
improvements work etc.
2) In the above method it is Bipartite, partite there is yet another arrangement of tripartite nature;
introduction acceptance and bringing up of unions.
In the first case the welfare / personal man is the link between employers and employee. In this
type of 1.R approach the unions are encouraged as a unifying force and to make workers
understand the policies – from a different position. The work becomes easier if unions are
working with spirit of development and understanding. In this type of industrial Relation
approach unions are having upper hand. Some times they make workers as pawn. Only workers
interest is put on the front, for getting the status of employers. Pressure tactics are adopted, some
time leading to strike to extract maximum from employer, this attitudes which may push towards
terror tactics may not yield desired results. Quite likely entrepreneurs may start shrinking,
existence of such industries may be jeoparadised. an unwanted situation.
Similarly the employers roaming with a ‘lock’ in his hand also will not contribute for better
relations. It is the mutual understanding and appreciation only will give better results.
1.3 IMPORTANCE OF INDUSTRIAL RELATIONS
The healthy industrial relations are key to the progress. Their significance may be discussed as
under -
1. Uninterrupted production – The most important benefit of industrial relations is that this
ensures continuity of production. This means, continuous employment for all from manager to
workers. The resources are fully utilized, resulting in the maximum possible production. There is
uninterrupted flow of income for all. Smooth running of an industry is of vital importance for
several other industries; to other industries if the products are intermediaries or inputs; to
exporters if these are export goods; to consumers and workers, if these are goods of mass
consumption.
2. Reduction in Industrial Disputes – Good industrial relation reduce the industrial disputes.
Disputes are reflections of the failure of basic human urges or motivations to secure adequate
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satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts, go-
slow tactics, gherao and grievances are some of the reflections of industrial unrest which do not
spring up in an atmosphere of industrial peace. It helps promoting co-operation and increasing
production.
3. High morale – Good industrial relations improve the morale of the employees. Employees
work with great zeal with the feeling in mind that the interest of employer and employees is one
and the same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of
industry. The employer in his turn must realize that the gains of industry are not for him along but
they should be shared equally and generously with his workers. In other words, complete unity of
thought and action is the main achievement of industrial peace. It increases the place of workers
in the society and their ego is satisfied. It naturally affects production because mighty co-
operative efforts alone can produce great results.
4. Mental Revolution – The main object of industrial relation is a complete mental revolution of
workers and employees. The industrial peace lies ultimately in a transformed outlook on the part
of both. It is the business of leadership in the ranks of workers, employees and Government to
work out a new relationship in consonance with a spirit of true democracy. Both should think
themselves as partners of the industry and the role of workers in such a partnership should be
recognized. On the other hand, workers must recognize employer’s authority. It will naturally
have impact on production because they recognize the interest of each other.
5. New Programmes – New programmes for workers development are introduced in an
atmosphere of peace such as training facilities, labor welfare facilities etc. It increases the
efficiency of workers resulting in higher and better production at lower costs.
6. Reduced Wastage – Good industrial relations are maintained on the basis of cooperation and
recognition of each other. It will help increase production. Wastages of man, material and
machines are reduced to the minimum and thus national interest is protected.
Thus, from the above discussion, it is evident that good industrial relation is the basis of higher
production with minimum cost and higher profits. It also results in increased efficiency of
workers. New and new projects may be introduced for the welfare of the workers and to promote
the morale of the people at work.
An economy organized for planned production and distribution, aiming at the realization of social
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justice and welfare of the massage can function effectively only in an atmosphere of industrial
peace. If the twin objectives of rapid national development and increased social justice are to be
achieved, there must be harmonious relationship between management and labor.
1.4 DIFFERENCE BETWEEN INDUSTRIAL RELATIONS AND HUMAN
RELATIONS
The term “Industrial Relations” is different from “Human Relations”. Industrial relations refer to
the relations between the employees and the employer in an industry. Human relations refer to a
personnel-management policy to be adopted in industrial organizations to develop a sense of
belongingness in the workers improves their efficiency and treat them as human beings and make
a partner in industry.
Industrial relations cover the matters regulated by law or by collective agreement between
employees and employers. On the other hand, problems of human relations are personal in
character and are related to the behavior of worker where morale and social elements
predominated. Human relations approach is personnel philosophy which can be applied by the
management of an undertaking. The problem of industrial relations is usually dealt with a three
levels – the level of undertaking, the industry and at the national level. To sum up the term
“Industrial Relations” is more wide and comprehensive and the term “Human Relations” is a part
of it.
Determining factors of industrial relations –
Good industrial relations depend on a great variety of factors. Some of the more obvious ones are
listed below:
1. History of industrial relations – No enterprise can escape its good and bad history of industrial
relations. A good history is marked by harmonious relationship between management and
workers. A bad history by contrast is characterized by militant strikes and lockouts. Both types of
history have a tendency to perpetuate themselves. Once militancy is established as a mode of
operations there is a tendency for militancy to continue. Or once harmonious relationship is
established there is a tendency for harmony to continue.
2. Economic satisfaction of workers – Psychologists recognize that human needs have a certain
priority. Need number one is the basic survival need. Much of men conducted are dominated by 13
this need. Man works because he wants to survive. This is all the more for underdeveloped
countries where workers are still living under subsistence conditions. Hence economic satisfaction
of workers is another important prerequisite for good industrial relations.
3. Social and Psychological satisfaction – Identifying the social and psychological urges of
workers is a very important steps in the direction of building good industrial relations. A man
does not live by bread alone. He has several other needs besides his physical needs which should
also be given due attention by the employer. An organization is a joint venture involving a climate
of human and social relationships wherein each participant feels that he is fulfilling his needs and
contributing to the needs of others. This supportive climate requires economic rewards as well as
social and psychological rewards such as workers’ participation in management, job enrichment,
suggestion schemes, re-dressal of grievances etc.
4. Off-the-Job Conditions – An employer employs a whole person rather than certain separate
characteristics. A person’s traits are all part of one system making up a whole man. His home life
is not separable from his work life and his emotional condition is not separate from his physical
condition. Hence for good industrial relations it is not enough that the worker’s factory life alone
should be taken care of his off-the-job conditions should also be improved to make the industrial
relations better.
5. Enlightened Trade Unions – The most important condition necessary for good industrial
relations is a strong and enlightened labor movement which may help to promote the status of
labor without harming the interests of management, Unions should talk of employee contribution
and responsibility. Unions should exhort workers to produce more, persuade management to pay
more, mobilize public opinion on vital labor issues and help Government to enact progressive
labor laws.
6. Negotiating skills and attitudes of management and workers – Both management and workers’
representation in the area of industrial relations come from a great variety of backgrounds in
terms of training, education, experience and attitudes. These varying backgrounds play a major
role in shaping the character of industrial relations. Generally speaking, well-trained and
experienced negotiators who are motivated by a desire for industrial peace create a bargaining
atmosphere conducive to the writing of a just and equitable collective agreement. On the other
hand, ignorant, inexperienced and ill-trained persons fail because they do not recognize that
collective bargaining is a difficult human activity which deals as much in the emotions of people
as in their economic interests. It requires careful preparation and top –notch executive
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competence. It is not usually accomplished by some easy trick or gimmick. Parties must have
trust and confidence in each other. They must possess empathy, i.e. they should be able to
perceive a problem from the opposite angle with an open mind. They should put themselves in the
shoes of the other party and then diagnose the problem. Other factors which help to create mutual
trust are respect for the law and breadth of the vision. Both parties should show full respect for
legal and voluntary obligations and should avoid the tendency to make a mountain of a mole hill.
7. Public policy and legislation: - when Government, regulates employee relations, it becomes a
third major force determining industrial relations the first two being the employer and the union.
Human behavior is then further complicated as all three forces interact in a single employee
relation situation. Nonetheless, government in all countries intervenes in management – union
relationship by enforcing labor laws and by insisting that the goals of whole society shall take
precedence over those of either of the parties. Government intervention helps in three different
ways 1) it helps in catching and solving problems before they become serious. Almost every one
agrees that it is better to prevent fires them to try stopping them after they start; 2) It provides a
formalized means to the workers and employers to give emotional release to their dissatisfaction;
and 3) It acts as a check and balance upon arbitrary and capricious management action.
8. Better education: - with rising skills and education workers’ expectations in respect of rewards
increase. It is a common knowledge that the industrial worker in India is generally illiterate and is
misled by outside trade union leaders who have their own axe to grind. Better workers’ education
can be a solution to this problem. This alone can provide worker with a proper sense of
responsibility, which they owe to the organization in particular, and to the community in general.
9. Nature of industry: - In those industries where the costs constitute a major proportion of the
total cast, lowering down the labor costs become important when the product is not a necessity
and therefore, there is a little possibility to pass additional costs on to consumer. Such periods,
level of employment and wages rise in decline in employment and wages. This makes workers
unhappy and destroys good industrial relations.
1.5 INDUSTRIAL RELATIONS PROGRAMME
Today’s professional industrial relations director, or by whatever title he is designated, no longer
views his job as personalizing management, or that of a social worker in a factory, or a union
buster, he looks upon his department as an adjunct to management supervision at all levels; he
keeps other executives informed about new discoveries, programme trends and needs. At the 15
same time, he provides efficient service in the operation of several centralized services.
A successful industrial relations programme reflects the personnel viewpoint, which is influenced
by three main considerations:
a) Individual thinking
b) Policy awareness and
c) Expected group reaction
Individualized thinking makes if imperative for the administrator to consider the entire situation
in which the affected individual is placed. Policy awareness underscores the idea of the
consistency of treatment and the precedent value of any decision which a management takes;
while expected group reaction balances what we know of human nature in groups against an
individual’s situation in the light of the policy that has been formulated and implemented. In all
these different circumstances, reality demands that all the three aspects of the personnel viewpoint
should be considered at once in terms of the past, the present and the future. This viewpoint is
held at all the levels of management from the top to the bottom, from the top executives and staff
to the line and supervisory personnel.
1.6 SCOPE OF INDUSTRIAL RELATIONS WORK
The staff employed in the industrial relations department should know the limitations within
which it has to function. The industrial relations director generally has several assistants who help
him to perform his functions effectively, and he usually reports directly to the president or
chairman of the board of directors of an organization.
The functions of the industrial relations staff are -
1. Administration, including overall organization, supervision and co-ordination of industrial
relations policies and programmes.
2. Liaison with outside groups and personnel departments as well as with various cadres of the
management staff.
3. The drafting of regulations, rules, laws or orders and their construction and interpretation.
4. Position classification, including overall direction of job analysis, salary and wage
administration, wage survey and pay schedules.
5. Recruitment and employment of workers and other staff.
6. Employment testing, including intelligence tests, mechanical aptitude tests and achievement 16
tests.
7. Placement, including induction and assignment.
8. Training of apprentices, production workers, foremen and executives.
9. Employee counseling on all types of personnel problems-educational, vocational, health or
behavior problems.
10. Medical and health services.
11. Safety services, including first aid training.
12. Group activities, including group health insurance, housing, cafeterial programmes and social
clubs.
13. Suggestion plans and their uses in labor, management and production committees.
14. Employee relations, specially collective bargaining with representatives and settling
grievances.
15. Public relations.
16. Research in occupational trends and employee attitudes, and analysis of labor turnover.
17. Employee records for all purposes.
18. Control of operation surveys, fiscal research and analysis.
19. Benefit, retirement and pension programmes.
1.7 FUNCTIONAL REQUIREMENTS OF A SUCCESSFUL INDUSTRIAL
RELATIONS PROGRAMME
The basic requirements on which a successful industrial relations programme is based are :-
a) Top Management Support: - Since industrial relations is a functional staff service, it must
necessarily derive its authority from the line organization. This is ensured by providing that the
industrial relations director should report to a top line authority to the president, chairman or vice
president of an organization.
b) Sound Personnel Policies: - These constitute the business philosophy of an organization and
guide it in arriving at its human relations decisions. The purpose of such policies is to decide,
before any emergency arises, what shall be done about the large number of problems which crop
up every day during the working of an organization. Policies can be successful only when they are
followed at all the level of an enterprise, from top to bottom.
c) Adequate Practices should be developed by professionals: - In the field to assist in the
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implementation of the policies of an organization. A system of procedures is essential if intention
is to be properly translated into action. The procedures and practices of an industrial relations
department are the “tool of management” which enables a supervisor to keep ahead of his job that
of the time-keeper, rate adjuster, grievance reporter and merit rater.
d) Detailed Supervisory Training :- To ensure the organizational policies and practices are
properly implemented and carried into effect by the industrial relations staff, job supervisors
should be trained thoroughly, so that they may convey to the employees the significance of those
policies and practices. They should, moreover, be trained in leadership and in communications.
e) Follow-up of Results: - A constant review of an industrial relations programme is essential, so
that existing practices may be properly evaluated and a check may be exercised on certain
undesirable tendencies, should they manifest themselves. A follow up of turnover, absenteeism,
departmental morale, employee grievances and suggestion; wage administration, etc. should be
supplemented by continuous research to ensure that the policies that have been pursued are best
fitted to company needs and employee satisfaction. Hints of problem areas may be found in exit
interviews, in trade union demands and in management meetings, as well as in formal social
sciences research.
1.8 INDUSTRIAL RELATIONS AT NAHAR SPINNING MILLS LTD.,
LUDHIANA
According to Pepsico Fritolay industrial relations system consists of three agents – management
organizations, workers and formal/informal ways they are organized and government agencies.
These actors and their organizations are located within an environment – defined in terms of
technology, labor and product markets, and the distribution of power in wider society as it
impacts upon individuals and workplace. Within this environment, actors interact with each other,
negotiate and use economic/political power in process of determining rules that constitute the
output of the industrial relations system. He proposed that three parties—employers, labor unions,
and government-- are the key actors in a modern industrial relations system. He also argued that
none of these institutions could act in an autonomous or independent fashion. Instead they were
shaped, at least to some extent, by their market, technological and political contexts.
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Key actors in a modern industrial relations system. He also argued that none of these institutions
could act in an autonomous or independent fashion. Instead they were shaped, at least to some
extent, by their market, technological and political contexts.
Thus it can be said that industrial relations is a social sub system subject to three environmental
constraints- the markets, distribution of power in society and technology.
Pepsico Fritolay's model identifies three key factors to be considered in conducting an analysis of
the management-labor relationship:
1. Environmental or external economic, technological, political, legal and social forces that
impact employment relationships.
2. Characteristics and interaction of the key actors in the employment relationship: labor,
management, and government.
3. Rules that are derived from these interactions that govern the employment relationship.
Pepsico Fritolay emphasizes the core idea of systems by saying that the arrangements in the field
of industrial relations may be regarded as a system in the sense that each of them more or less
intimately affects each of the others so that they constitute a group of arrangements for dealing
with certain matters and are collectively responsible for certain results”.
In effect - Industrial relations is the system which produces the rules of the workplace. Such rules
are the product of interaction between three key “actors” – workers/unions, employers and
associated organizations and government
The Pepsico Fritolay’s model gives great significance to external or environmental forces. In
other words, management, labor, and the government possess a shared ideology that defines their
roles within the relationship and provides stability to the system.
Approaches To Industrial Relations
The industrial relations scenario and factors affecting it, has been perceived differently by
different practitioner and theorist. Some have viewed it in terns of class conflict; some have
viewed it in terms of mutuality of interest of different groups; some have viewed it as a
consequence of interaction of various factors both within an organization and outside it. Based on
these orientations, several approaches have been developed to explain the dynamics of IR.
19
UNITARY APPROACH
In unitarism, the organization is perceived as an integrated and harmonious system viewed as one
happy family. A core assumption of unitary approach is that management and staff, and all
members of the organization share the same objectives, interests and purposes; thus working
together, hand-in-hand, towards the shared mutual goals. Furthermore, unitarism has a
paternalistic approach where it demands loyalty of all employees. Trade unions are deemed as
unnecessary and conflict is perceived as disruptive.
From employee point of view, unitary approach means that:
Working practices should be flexible. Individuals should be business process improvement
oriented, multi-skilled and ready to tackle with efficiency whatever tasks are required.
If a union is recognized, its role is that of a further means of communication between
groups of staff and the company.
The emphasis is on good relationships and sound terms and conditions of employment.
Employee participation in workplace decisions is enabled. This helps in empowering
individuals in their roles and emphasizes team work, innovation, creativity, discretion in
problem-solving, quality and improvement groups etc.
Employees should feel that the skills and expertise of managers supports their endeavors.
From employer point of view, unitary approach means that:
Staffing policies should try to unify effort, inspire and motivate employees.
The organization's wider objectives should be properly communicated and discussed with
staff.
Reward systems should be so designed as to foster to secure loyalty and commitment.
Line managers should take ownership of their team/staffing responsibilities.
Staff-management conflicts - from the perspective of the unitary framework - are seen as
arising from lack of information, inadequate presentation of management's policies.
20
The personal objectives of every individual employed in the business should be discussed
with them and integrated with the organization’s needs.
PLURALISTIC APPROACH
In pluralism the organization is perceived as being made up of powerful and divergent sub-groups
- management and trade unions. This approach sees conflicts of interest and disagreements
between managers and workers over the distribution of profits as normal and inescapable.
Consequently, the role of management would lean less towards enforcing and controlling and
more toward persuasion and co-ordination. Trade unions are deemed as legitimate representatives
of employees. Conflict is dealt by collective bargaining and is viewed not necessarily as a bad
thing and if managed could in fact be channeled towards evolution and positive change. Realistic
managers should accept conflict to occur. There is a greater propensity for conflict rather than
harmony.
They should anticipate and resolve this by securing agreed procedures for settling disputes.
The implications of this approach include:
The firm should have industrial relations and personnel specialists who advise managers
and provide specialist services in respect of staffing and matters relating to union
consultation and negotiation.
Independent external arbitrators should be used to assist in the resolution of disputes.
Union recognition should be encouraged and union representatives given scope to carry
out their representative duties
Comprehensive collective agreements should be negotiated with unions.
RADICAL APPROACH
This view of industrial relations is a by product of a theory of capitalist society and social change.
Marx argued that:
21
Weakness and contradiction inherent in the capitalist system would result in revolution and the
ascendancy of socialism over capitalism.
Capitalism would foster monopolies.
Wages (costs to the capitalist) would be minimized to a subsistence level.
Capitalists and workers would compete/be in contention to win ground and establish their
Constant win-lose struggles would be evident.
This perspective focuses on the fundamental division of interest between capital and labor, and
sees workplace relations against this background. It is concerned with the structure and nature of
society and assumes that the conflict in employment relationship is reflective of the structure of
the society. Conflict is therefore seen as inevitable and trade unions are a natural response of
workers to their exploitation by capital.
22
CHAPTER 2:
REVIEW OF
LITERATURE
23
CHAPTER 2: REVIEW OF LITERATURE
As per Dale Yoder Industrial Relations refers to the relationship between management and
employees, or employees and their organization, that arise out of employment.
Teed and Metcalfe observed Industrial Relations are the composite approach of the attitudes and
approaches of the employers and employees towards each other with regard to planning,
Supervision, direction and unification of the activities of a set up with less friction and more co-
operation with mutual effort for others well-being.
The essences of good industrial relation lies in the bringing up of good labour relations which
gives a forum to understand each other (employer, employee) properly. Creates co-operative
thinking and working to achieve the goal of the organization. A good Industrial Relations
increases the morale of employers and goods them to give their maximum, each think of their
mutual interest which paves way for introduction of new methods, developments and leading to
adoption of modern technology. This progressive ways when designed with their mutual interest
and consent develops many incentive propositions, effective participators forum is created in
management. Profit are shared, workers get their dues in the organization leading to job
satisfaction-which is needed for good relations. Good industrial relation increase production,
improves quality of work and products efficiency of workers increased. Cost of production
lowered.
Judging from the attention paid by researchers, it would seem that the 1980s and 1990s
was a period of change, turmoil, and even transformation in industrial relations systems all over
the world. Much of this literature has been based on evidence from the advanced industrial
nations (e.g., Locke 1996; Katz 1993; Swenson 1989; Kochan, Katz, and McKersie 1986; Streeck
1988; Frenkel 1988; Bray and Haworth 1993; Armingeon 1994). While there are dissenting views
about whether industrial relations has in fact transformed in these nations (e.g., Golden,
Wallerstein, and Lange 1997, Crouch 1993, Hyman 1994), and there have been attempts to make
distinctions between transformation and non-fundamental change (Erickson and Kuruvilla 1998),
there is broad agreement on the main factor driving these changes: increasingly competitive
environments caused by the integration of world markets, as well as the direction of the change:
decentralization of bargaining, and a movement towards increased flexibility in wages, labor
deployment, and at the workplace level.
Relatively less attention has been paid to how industrial relations systems have changed in
24
the developing nations of Asia, Latin America, and Africa, with some exceptions.1 Given that
several Asian countries have seen considerable changes in their industrial relations systems in the
1990s, the goal of this paper is to attempt to understand the nature of the changes, and to evaluate
whether or not they amount to fundamental transformations. The similarity in the timing of
change in Asian IR systems with that of the West (both occurred in late 1980s and early 1990s)
raises the possibility that there are universal driving forces, although idiosyncratic national forces
are also presumably at work. If in fact the forces driving change in the West (primarily, increased
competitive pressures) operate globally, then one would expect Asian IR systems to be most
likely to evidence changes (relative to African or Latin American IR systems), given that Asian
nations are generally more exposed to the global economy (World Bank, 1998).
To facilitate this investigation, we first propose an argument regarding industrial relations
system change. We then examine the extent to which Asian industrial relations systems are
changing and whether the directions of change are similar to those we have seen in the advanced
industrial countries outside of the region. Thereafter, we characterize the key features of industrial
relations change, including whether or not the changes constitute fundamental transformations,
based on recent work regarding how to judge whether a “transformation” has indeed taken place
(Erickson and Kuruvilla 1998).
Given that an exhaustive review of all Asian industrial relations systems is beyond the
scope of one article, we focus on representative systems. Kuruvilla and Venkitaratnam (1996)
argue that industrial relations systems in Asia are typified by six distinct stylized models: The
Japanese flexible workplace model, the tripartite Singapore model, the state-employer dominated
model (Malaysia and Indonesia), the pluralist decentralized and fragmented industrial relations
model (the Philippines), the politicized multi-union model (India and the rest of South Asia), and
the transitory model (a catch-all category that includes South Korea, Taiwan, China, and
Vietnam). Note that the transitory model takes into account transitions from authoritarian rule to
democracy (South Korea and Taiwan) as well as from closed to more open economies (China and
Vietnam) during the last decades.
Therefore, we examine industrial relations change in seven countries that conform closely to each
of these models: Japan, South Korea, Singapore, Malaysia, the Philippines, India, and China. Not
only are these countries representative of the Asian region in general terms (they
constitute the majority of Asian GDP and population); they also represent the range of industrial
relations systems, and they provide a good representation of the different levels of economic
25
development within Asia (with Japan being an advanced industrialized country; South Korea and
Singapore being Newly Industrialized Countries, also known as "Tigers"; Malaysia and the
Philippines being newly emerging industrial nations; and India and China having only recently
opened their doors to the world economy).
Title: Industrial Relations Advisory Services in a Changing Market
Author(s): L.C. Hunter, Mairi Steele Journal: Management Research News
Year: 1988 Volume: 11 Issue: 1/2 Page: 55 – 56 ISSN: 0140-9174
DOI: 10.1108/eb027968 Publisher: MCB UP Ltd
Industry's need for external advisory assistance in the management/industrial relations area will
be determined by the nature of the problems currently faced or anticipated. These problems in
turn will be influenced by the industrial sector, size of establishment, technology and the
economic and legal context.
Industrial Relations: Challenges and Opportunities
Based on the 1991 Shirley Lerner Memorial Lecture, a discussion is conducted of the challenges
and opportunities facing teachers and researchers arising from the rapidly changing practice of
industrial relations. A widening of the scope of the subject, to include its individual as well as
collective aspects, it is argued, is fully compatible with seeing the main focus as the employment
relationship. The challenge to the subject's research tradition of empirical enquiry, multi-
disciplinarity and above all, its integrity, is much more fundamental. Maintaining this tradition is
not only vital for industrial relations, but also for the future direction of the business schools in
which most industrial relations teachers and researchers find themselves.
Title: International Comparisons in the Study of Industrial Relations
Author(s): Ron Bean Journal: Employee Relations Year: 1987
Volume: 9 Issue: 6 Page: 3 – 7 ISSN: 0142-5455
DOI: 10.1108/eb055109 Publisher: MCB UP Ltd
More comparative research in industrial relations is needed. Whilst there maybe valid criticisms
of the adequacy of existing work, it is nevertheless useful in enhancing the cumulative
development of the discipline. Apart from being of assistance in the development and testing of
26
hypotheses, it can also make us more aware that aspects of our own system require explanation
rather than being taken for granted.
Title: Industrial Relations Training for Managers
Author(s): J.H. Mulholland Journal: Employee Relations Year: 1983
Volume: 5 Issue: 3 Page: 21 – 26 ISSN: 0142-5455
DOI: 10.1108/eb055015 Publisher: MCB UP Ltd
The quality of management is the greatest single determinant of industrial performance. Its impact
is felt as much in the social as in the economic sphere, in terms of the quality of life in an
organisation as in profitability. Given the much publicised shortcomings of industrial relations
which are damaging to industry and to the economy, the case for ensuring that managers are
adequately trained is not merely compelling, but almost self-evident.
27
CHAPTER 3:
INDIAN TEXTILE
INDUSTRY
28
CHAPTER 3: INDIAN TEXTILE INDUSTRY
The textile and apparel industry contributes significantly to the Indian economy. It accounts for
14 per cent of total industry output and nearly 5 per cent of Gross DomesticProduct (GDP). It
provides direct employment to 38 million people and is the largest foreign exchange earner,
contributing nearly 20 per cent to India’s total exports.
In the last three years, the sector has attracted a total investment of US$ 5,770 million. The
cumulative Foreign Direct Investment (FDI) made in this sector between 1991 and 2007 has been
US$ 575 million, representing 1.22 per cent of the total FDI attracted by the country.2
The industry has been growing acrosssegments
Production of textile yarn witnessed a compounded annual growth rate (CAGR) of 3.6 per cent
between 1996 and 2006. Finished cloth has witnessed a higher CAGR of 4.1 per cent during the
same period. This growth outperforms the global production, which experienced a CAGR of 2.25
per cent (both yarn and cloth). Most of this growth is contributed by non-cotton yarn, which grew
at 6 per cent CAGR in 2006. Textile exports have witnessed a CAGR of 11.8 per cent in 1996-
2006. Man-made textiles have shown maximum growth and witnessed the highest CAGR at 14.5
per cent followed by Ready-Made Garments (RMG) at 12.4 per cent. USA and EU are the major
markets contributing nearly 80 per cent to textile exports.
2 India Brand Equity Foundation (IBEF) is a public-private partnership between the Ministry of
Commerce & Industry, Government of India and the Confederation of Indian Industry, 200929
The Textile Value Chain
Figure 1: The Textile Value ChainSource-
30
Process
Output
Units
Remarks
Ginning and Cleaning machines
Man-made fibre cotton, jute, silk, Wool
Fairly large, well organized and financially strong
Spinning Mills
Yarn
1,135 small scales: 1,564 large scale
LargeCapacityFragmented
Weaving /Knitting Units
Fabric
Hand looms3.9 millionPower-looms1.8 million
Processing Units
Processing Fabric
2,100
Weak and unorganised
Some LargePlayer
ApparelDesign & Making
Garment
7, 7000Units
FragmentedConsolidating
Outlets/Stores
FairlyOrganised
Process
Process
Sourcing of raw materials, ginning and extrusion of fibre
Ginning and Cleaning machines
Spinning
Spinning Mills
Weaving/Knitting
Weaving /Knitting Units
Processing
Processing Units
ApparelMaking
ApparelDesign & Making
DistributionRetailing
Outlets/Stores
3.1 MARKET & OPPORTUNITIES
Export of textile is projected to grow at 22 per cent between 2007 and 2012 and expected to
reach US$ 55 billion by 2012.
The Indian Textile in Industry spans all activities across the value chain Raw Materials
The major raw materials for the textile and apparel industry include cotton, jute, silk, wool and
man-made fibre.
Cotton
In 2005-06, India was the second largest producer of cotton (4.15 metric tonnes) in the world,
accounting for 16.75 per cent of the global production. Cotton is the predominant fabric used in
the Indian textile industry, accounting for nearly 60 per cent of production. The average yield of
cotton per hectare in India is about 400 kilograms which is considered low. Cotton exports to
major countries stood at US$ 3,203 million in 2005-06.
Wool
The wool industry is small in size and scattered across the country, with 77 per cent of the
production coming from northern states. This sector consists of both organized players (composite
mills, combing units, worsted and non-worsted spinning units, knitwear and woven garments
units) and de-centralised units (hosiery and knitting units, power-loom units, hand-knotted
carpets, druggets and namdah units, independent dyeing and processing houses). The total
production of wool in 2006 was about 55 million kilograms.
Jute
The jute industry is labour intensive. Production of jute goods in India in 2005-06 was 1.582
metric tonnes. Jute exports for the year 2005-06 stood at US$ 272 million. About 75 per cent of
the total capacity of the jute industry is being utilised at present.
Silk
India is the second largest producer of silk in the world, contributing 18 per cent to the total
global production. It has the distinction of producing all the four varieties of silk (Mulberry, Eri,
Tasar and Muga). The total silk production in 2004-2005 stood at 44,322 million square metres.
31
Silk exports earned US$ 413.64 million in 2004-05.
Man-made fibres
Man-made fibres consist of synthetic fibres such as polyester filament yarn, polyester staple
fibre, acrylic staple fibre, nylon filament yarn and cellulose fibre/yarn such as viscose fibre/yarn.
India is a leading producer of viscose filament yarn. The total production of man-made fibres
stood at nearly 1 billion kilograms in 2006-07.
While there is abundant availability of raw materials, the Indian textile and apparel industry has
been suffering from low productivity due to low farm yields affecting cotton production,
accentuated costs incurred in additional processes to clean cotton fibres, poor (old and outdated)
ginning equipment and high defect rates in production.
Spinning
The spinning sector in India is completely (100 per cent) organised and is globally competitive in
terms of variety, process and production quantity. India has about 40 million spindles (23 per cent
of the world). Independent spinning mills account for about 75 per cent of total capacity and 92
per cent of the total production. These mills are chiefly located in North India.
The spinning process is technologically intensive, the output is affected by the quality of fibre and
the cleaning process of raw materials.
Weaving/Knitting
India’s weaving/knitting sector is highly unorganised, with the organised sector contributing to
just 5 per cent of the total production. There are about 3.9 million hand looms and 1.8 million
power-looms in India.
Hand looms cater to both ends of the value chain, i.e. mass consumption, as well as specialty use.
Hand looms are located mostly in rural areas such as Pochampally in Andhra Pradesh and
Kanchipuram in Tamil Nadu. Demand for standardisation in apparel segments such as sarees has
given a significant impetus to powerlooms, which contribute to 62 per cent of the total cloth
production. Knitting units are successful in export channels. Some of the prominent
weaving/knitting clusters include Tirupur in Tamil Nadu and Ludhiana in Punjab.
This is the weakest link in the supply chain suffering from problems such as high power tariffs
and low investments in technology.
32
Processing
Indian processing sector is largely decentralised withlow levels of automation, marked by
hand/independent processing units. This has lead to inconsistency in production and lack of
conformance to quality. About 2,300 processors are operating throughout India, including about
2,100 independent units and 200 units that are integrated with spinning, weaving or knitting units.
Apparel Making
The apparel sector has over 25,000 domestic manufacturers, 48,000 fabricators and around 4,000
manufacturers/exporters. Over 80 per cent of the total units are small operations (less than 20
machines) and are either proprietorship or partnership firms.
Access to a variety of raw materials and flexibility of supply chain enables apparel manufacturers
to mix and match various constituents and come up with innovative designs. However, this
advantage has not been leveraged effectively.
Apparel exports in 2006-07 stood at US$ 10 billion, with a year on year growth of 8.4 per cent An
important sub-segment of the apparel segment is the Ready-Made Garments segment (RMG).
This is the largest export segment contributing to 45 per cent of the total textile exports. RMG
exports are expected to touch US$ 14.5 billion with a CAGR at 18-20 per cent.
3.2 OPPORTUNITIES FOR IN VESTING IN THE INDIAN TEXTILE
SECTOR3
Attractiveness of the industry
Favourable factor conditions
Favourable factor conditions provide India with a strong comparative advantage over other
competing countries in the textile industry. Specifically, India has the following strengths:
3 Srinivasan T.N. (2004), “China and India: economic performance, competition and cooperation:an updates,” Journal of Asian Economics 15 (2004) 613–636.
33
Cost CompetitivenessYarn: US $ per kg of yarn Fabric: US$ per yard of fabricOpen-ended Yarn
Graph1: Open-ended Yarn
Open-ended Woven Fabric
Graph2: Open-ended Woven Fabric
Open-ended Knitted Fabric
Graph3: Open-ended Knitted Fabric
34
Ring Yarn
Graph4: Ring Yarn
Ring Woven Fabric
Graph5: Ring Woven Fabric
Ring Knitted Fabric
Graph6: Ring Knitted Fabric
35
Textured Yarn
Graph7: Textured Yarn
Textured Woven Fabric
Graph8: Textured Woven Fabric
Textured Knitted Fabric
Graph9: Textured Knitted Fabric
• Abundant and low price supply of raw-materials: As can be seen from the cost competitiveness
36
chart, India is more cost-competitive than China and Brazil across a range of materials. India also
has a diverse supply of raw materials, 23 varieties of cotton and all four varieties of silk.
This inherent strength in availability of raw materials insulates the market from any supply-side
shocks.
• Availability of low cost skilled labour: Labour costs in India continue to be significantly low as
compared to other countries. This factor provides a significant advantage to the textile industry in
India, in terms of increased
Graph10: Cost Competitiveness Chart
Source- KPMG Analysis
Favourable domestic market
With increase in disposable income levels, consumer awareness and propensity to spend and the
demographic trends in India are changing significantly.
According to NCAER data, the consuming class, with an annual income of US$ 980 or above, is
growing continuously and is expected to constitute over 80 per cent of the population by 2009-10.
There is a significant change in the consumer mindset which has led to a growing trend of
increased consumption of personal care and lifestyle products, as well as branded products. These
trends offer great growth opportunities to companies across various sectors, including textiles.
In response to this growing demand for consumption a revolution is taking place in India’s retail
sector. Organised retail is playing a key role in structuring the Indian domestic market, reinforced
by the rapid rise of supermarkets, malls, theme stores and franchises across urban India. India
37
thus presents a large and vibrant market for textiles and apparels, with a potential for sustained
growth.
Government initiatives to promote investment
It is estimated that this industry will require US$ 22 billio of new capital investments over the
next five years. With a view to raise India’s share in the global textile trade to 10 per cent by 2015
(from the current 3 per cent), the Ministry of Textiles has proposed 50 new textile parks. Out of
the 50 proposed parks, 30 have been already sanctioned by the Government (with a cost of US$
710 million). Set up under the Scheme for Integrated Textile Parks (SITP), this initiative will not
only make the industry cost competitive, but also enhance the manufacturing capacity of the
sector.
To promote the industry’s growth, the Government has also taken various support initiatives in
areas such as:
• Product development and design: Encouraging institutes such as NIFT (National Institute of
Fashion Technology) and Apparel Training and Design Centres (ATDCs). There are several
colleges, including the Indian Institutes of Technology and National Institutes of Technology, that
offer courses in Textile Engineering.
• Technology Upgradiation: The Government of India established the Technology Upgradation
Fund Scheme (TUFS), to enable firms to access subsidised low-interest loans for technology
upgradation. Under this scheme, the Government reimburses 5 per cent of the interest rates
charged by the banks and financial institutions, thereby ensuring credit availability for
upgradation of technology at global rates. In a further bid to bolster the growth, the Government
is also expected to increase the TUF from US$ 124 million in 2006-07 to US$ 211 million in
2007-08
• Revival of sick units: Revival plans of the mills run by National Textiles Corporation (NTC).
Already, US$ 2.21 million worth of machinery has been ordered for the upgradation and
modernisation of 18 textile mills
• Others: The Government of India has also included new schemes in the Annual Plan for 2007-
08 to provide a boost to the textile sector. These include schemes for foreign investment
promotion to attract FDI in textiles clothing and machinery; brand promotion on Public- Private
Partnership (PPP)) approach to develop global acceptability of Indian apparel brands; trade
facilitation centres for Indian image branding; fashion hubs for creation of permanent market
38
place for the benefit of Indian fashion industry; common compliance code to encourage
acceptability among apparel buyers and training centres for human resource development on PPP
mode The fragmented structure of the industry provides the advantage of a large pool of skilled
workmen in different areas of textile manufacturing and also gives scope for entry of organised
integrated textile manufacturers. Small scale units in different sectors can also be leveraged as a
supply base, for sourcing materials at low cost.
Attractive Segments for Investment4
The different segments within India’s textile and apparel industry have been assessed along two
parameters- the growth opportunity offered, based on market trends and gaps in current
capabilities and the supportive environment, based on Government policy initiatives to
Figure 2: Attractive Segments for Investment
Source- KPMG Analysis
4 Dutta Devangshu, 2003, Indian Textile and Apparel Industry (Based on presentation made at Interstoff-Asia Spring)39
support the segment. Based on these parameters, the following segments appear attractive, and are
discussed in the following sections.
Sourcing
Sourcing of raw materials from India could be an attractiveoption for players looking to enter the
Indian textile market.
The cost of raw materials in India is amongst the lowest in the world. However, there is room for
improving the quality of cotton. The quality of the fabric can also be significantly improved, by
investing in modern ginning equipment. There is a growing need for new fabrics, such as, poly-
satin, viscose, etc. the processes of which are technologically intensive.
While some global buyers are leveraging India’s cost advantage by directly collaborating with
Indian suppliers to source material, the Government has focused on supporting the industry, to
improve quality and acquire technology.
• The Ministry of Textiles encourages firms to improve quality by introducing various quality
certifications like ISO
• The Ministry has also incorporated a Technology Upgradation Fund to encourage investment in
technology
Weaving
Weaving/knitting units in India are weak and small in size. Many are faced with debt problems
and require capital investment. At the same time, increased demand for fabric from home and
industrial textiles will require significant investments in modern processing machinery.
In these circumstances, investments in modern weaving / knitting units in India could yield
benefits. The Government has proposed credit-linked capital subsidy for procurement of modern
power-looms.
Processing
There is an increasing need to adapt prints to the export market. Also, companies need to invest in
technology like natural wash and laser wash to bring Indian garments at par with quality of
garments in the export market. The Government provides a capital-linked subsidy of 10 per cent
in addition to 5 per cent reimbursement on the interest paid for loans taken by processing units.
40
Garmenting
The RMG sub-segment is growing at a rapid pace, with RMG exports expected to touch US$ 55
billion by 2010. This segment also needs injection of new technology, especially in bringing out
new and contemporary designs quickly to the market.
Successful arrangements for investing in this sector
Different business models have been tried out by players investing in the Indian textile sector, to
leverage the existing capabilities. Two such models that could be options for new investors, are
discussed below:
Figure 3: Producer Model: The MNC invests in processing and weaving segments of the value
chain.
Source- KPMG Analysis
3.3 PRODUCER MODEL
The MNC invests in processing and weaving segments of the value chain.
The operating model
The MNC invests in the processing and weaving segments of the textile value chain. This is done
by acquiring an equity stake in the processing and weaving units. Since the processing segment is
fraught with problems related to quality conformance across various units, the MNC might set up
41
Sourcing
Common ProcessingFacility
WeavingClusters
Cutting, Stitching and Garments
Centralised Sourcing
- Common processing facility for a set of clusters
- Leverage Govt. schemes such as SITP, SEZ’s and
TUFs
especially in locations/states where there are special
incentives for setting up processing/weaving units
Branding the yarn/
fabric/prints with the
apparel in case of
high-value products
a common processing facility for a group of weaving clusters. Orders are allocated to these units
based on the manufacturing competence and capacity utilisation. There should be a centralised
sourcing system of raw materials to leverage advantages of large orders. This centralisation also
helps effective order tracking. The MNC might also invest in a captive power unit for cost
containment.
The MNC should also strategise its production with the retail demand, as many retailers usually
communicate their buying plans 9-10 months in advance. The MNC might also promote the fabric
with the final product-apparel in case of high-value garments, where the quality of fabric makes
considerable difference.
Key advantages of this business model
This model best exploits the various incentives in the processing and weaving segments that are
provided by the Government. It improves bargaining power with yarn suppliers.
Since the weaving and processing segment is highly fragmented, this business model will bring
significant organisation in the sector.
This model is being successfully followed in India, by Zeiglertex (Also see case study on
Zeiglertex, included later in this document).
The Apparel-manufacturer model
Garment manufacturing model: The MNC invests in designing and manufacturing of garments
Source: KPMG Analysis
Figure 4: Apparel-manufacturer Model
42
Sourcing and spinning Weaving and Processing Cutting, Stitching and Garments and Retailing
Can have a sourcing/buyingliaison
Provides technology support to these units for procuring best-in-class equipment
- Leverages brand and
superior design technology
- May target both domestic
as well as export markets
Source- KPMG Analysis
Features of the operating model
The MNC invests in a cutting/stitching and garmenting unit. The output is sold under the MNC
brand. It caters both to export as well as domestic markets. This investment could be through a JV
with an indian player, or as a standalone unit.
The MNC offers technology support to the weavingand processing clust ers to import best-in-
class equipment from other countries to enhance the quality of fabric. It also agrees with the
clusters on adherence to stringent quality norms
For better order management and to avoid supplyside shocks, the MNC announces its buying
plans well in advance.
Key Benefits
This is the most attractive segment for exports with RMG contributing to 40 per cent of total
exports.
Lifestyle brands from MNCs abroad are fast gaining prominence in the Indian market. Currently,
they can reach only the premium segment, due to high pricing of the apparels. Using a cost-
effective production strategy as suggested the MNC can successfully bring down the cost of the
apparels enabling it to target other customersegments of the domestic market This model is being
followed in India by Benetton. While MNC’s following the above business models are successful,
it is important to note that integration across the value chain will provide a key advantage to this
sector as discussed earlier.
Critical Success factors for manufacturers in the Textilesand Apparel Industry
While India provides various opportunities such as abundant availability of raw materials, low
cost of labour and favourable government policies, many critical factors contribute to a
manufacturer’s success, both in domestic as well as international markets. These factors include:
Scale
Indian firms are typically smaller in scale when compared to their Chinese counterparts and there
are fewer larger firms in India. For instance, on an average, Chinese firms have 1.5 times higher
spinning capacity than those of India. Scale influences cost structure as it gives an opportunity to
exploit economies of scale and an ability to attract customers with large orders. Firms must have
managerial capabilities to design appropriate supply chains to manage this scale and also the 43
workforce, especially in the case ofgarment manufacturing, which is order driven and hence
requires full-time workforce even in lean seasons.
Well integrated and lean supply chains:
Shorter cycle and delivery times
The Indian textile industry has a long and complex supply chain. This affects not only the cycle
times, but also the delivery times. The average cycle time in the Indian textile industry is about
45-50 days, which sometimes extends to 80 days. The mean delay in the supply chain from
procurementof raw materials and to export of finished goods is 15.5 days. Shelf life of fashion
driven products is very short(approximately 45days), hence such delays are untenable.
These delays not only affect time-to-market, but also Workin-Progress (WIP), variability of
supply chain and hence the cost. Therefore strong deployment of industrial engineering with
particular emphasis on cellular manufacturing and JIT systems, in order to establish lean supply
chains is extremelycrucial for manufacturers. Presence across the value chain, vertical integration
and investment in captive power units helps in effective demand assessment, resulting in greater
control over the supply chain and cost reduction.
Customer-centricity in products and brand competitiveness
A review of products imported by the US from China reveals that the top three products in terms
of percentage increase in imports belong to the synthetic products category. However, Indian
products don’t feature in this list. Synthetic products contribute to nearly 50 per cent of the global
trade and India lacks a prominent position in this segment. This is also true of other segments
such as nano-textiles, home textiles and industrial textiles. This shows that a clear understanding
of the demand in world markets and hence developing product portfolios to cater to that demand
is crucial for increasing market share.
Products with higher fashion content ,such as embroidery and sequins have gained greater
response in the EU and US markets. India has significant strength in value addition and fashion
content. Manufacturers must develop the ability to leverage these strengths to gain
competitiveness in the export markets.
The Indian consumer’s expenditure on branded apparel is increasing as indicated by the growth of
branded apparel at 25 per cent. To match up to this growing market, manufacturers must make
significant investments in brand creation and promotion.
44
Collaboration with foreign counterparts
India is slowly emerging as a good out-sourcing destination for large retailers in US and EU
markets. To take advantage of these trends, Indian manufacturers can enter into collaborative
arrangements with foreign players, thereby gaining entry into international production, sourcing
and marketing networks. This will not only give them access to international markets, but also
provide them a scope for gaining technical and marketing expertise from their foreign partners.
3.4 AGREEMENTS AND ROLE OF MNC’S
India’s textile industry is an attractive sector that is poised for growth post the Multi-fibre
Agreement (MFA) regime.
The industry enjoys significant strengths and advantages, such as, availability of raw materials,
labour, domestic market and supportive government policies.
The industry is also undergoing transformation, with an increasing number of MNCs establishing
Their presence to leverage India’s potential. While the structure is characterised by small scale
powered unorganised players, attractive government policies and increasing commitment of
players across the value chain has led to the growth of vertically-integrated, large-scale units as
well.
Many states in India in a move to tap their potential have designed specific incentives for the
textile sector.
Many MNC’s have taken advantage of these opportunities and have succeeded immensely.
Efficient supply chains, superior technology and customer centricity and the ability to leverage
the Government incentives are the key success factors for the growth of MNCs in this sector.
45
CHAPTER 4:
COMPANY PROFILE
46
CHAPTER 4: COMPANY PROFILE
Spinning a web of pure enchantment seems to be the aim and objective of NAHAR SPINNING,
reckoned to be the blue-chip in the NAHAR firmament.
Starting out as a tiny worsted spinning & hosiery unit in Ludhiana, it was incorporated as Private
Limited company in December 1980 & became a Public Limited company in 1983. The steady
growth in manufacture & export of woolen/cotton hosiery, knitwears & woolen textiles enabled
the company to earn the recognition as an “Export House” followed by a “Recognized Trading
House” by the Government of India in a short span of 8 years. Its turbo-charged performance
brought them a host of fresh laurels… they include the “National Export Trophy” and "Gold
Trophy" by the Apparel Export Promotion Council and "Gold Trophy" by 'Cotton Textile Export
Promotion Council' in recognition of its excellent Export performance.
In 1992, as a measure of backward integration, the company diversified into the Spinning
Industry. Today it has an installed spindlage of 346096 spindles.
Simultaneously the company also established an ultra modern facility to manufacture 12.5 Million
pieces of Hosiery Garments. Today Nahar Spinning’s T-shirts are being exported to reputed
international brands such as GAP, Arrow, Chaps, Old Navy, Pierre Cardin, Philips Van Heusen,
Izod, Quicksilver, Price Costco… etc.
As a measure of further value addition Nahar Spinning has put up a plant for the manufacture of
fine count mercerized yarn & fabrics catering to both, the domestic hosiery garment market as
well as export markets.
To make use of the emerging opportunities on the Global Textile Scenario and also to have a
focused business approach, the company went in for the Scheme of Demerger and Arrangement
to restructure its businesses. The Scheme was approved by the Hob’ble Punjab & Haryana High
Court vide its Order dt. 21st December, 2006. As per the scheme, company’s Investment
Activities stand demerged and transferred to Nahar Capital and Financial Services Limited. This
has drawn a visible line between two segment i.e., One Industrial (Textile) business and Secondly
47
Investment and Financial Activities.
Further as per the scheme “Textiles Business” of Nahar Exports Limited stand demerged and
transferred to the company (post demerger of investment business) in accordance with the terms
of the scheme. Thus upon implementation of the Scheme the spindlage capacity of the company
stand increased to 3.46 Lacs spindles.
The Company's mantra "World is our markets" is truly reflected in its operations. The Company is
one of the largest integrated textile player in India. The Management vision coupled with
company's inherent strength in terms of cost and quality has enabled the company to become the
second largest Cotton Yarn manufacturer in India.
4.1 MANAGEMENT
Board of Directors:
Sh. Jawahar Lal Oswal (Chairman)
Sh. Dinesh Oswal (Managing Director)
Sh. Kamal Oswal
Sh. Dinesh Gogna
Sh. S.K. Sharma
Dr. (Mrs.) H.K. Bal
Sh. Amarjeet Singh
Dr. O.P. Sahni
Prof. K.S. Maini
Dr. Suresh Kumar Singla
Finance Controllers:
Sh. Anil Kumar Garg
48
Sh. P.K. Vashishth
Company Secretary:
Sh. Brij Sharma
Auditors:
M/s Gupta Vigg & Co.
Chartered Accountants
101, Kismat Complex, G.T. Road,
Miller Ganj, Ludhiana-141 003.
4.2 PRODUCTS DIVISION
Spinning Division
The company has 346096 spindles for manufacturing Cotton, Synthetic & Blended Yarns.The
company has also processing/finishing house with a capacity of 12600 M.T. for yarn and Fabrics
and a Mercerizing cum Dyeing plant for manufacturing of High Value Added Yarn, for the
quality conscious market of U.S. & European Union. The capacity of the plant is 2040 M.T.
Expansion Plans The avail the emerging opportunities, company is going in for an expansion of
its Spinning capacity by adding 90,000 spindles in Madhya Pradesh and Punjab. The approximate
capital outlay for the project is approx. 300 Crores which is to be financed through Term Loan
under Tuff Scheme and internal accruals of the company. After expansion, company's spindlage
capacity will increase to 4.36 lacs spindles. The management is quite optimistic that enhanced
capacity will enable the company to further improve its financial performance in the coming
years.
Hosiery Garments Division The Garment Division contributed Rs. 191.20 crores towards the
revenue of the company out of which Rs.146.20 crores is export turnover.
49
Because of its excellent export performance, Company has been awarded Golden Trophy by the
Apparel Export Promotion Council for achieving highest Export of Cotton Garments for the year
2007-2008.
4.3 MILESTONES IN OUR HISTORY
Achievements
Installed Capacity of 346096 spindles | ISO-9002 certified | Golden Trading House
Installed Capacity of Mercerizing plant - 2040 MT | Garment - 12.5 Million pieces
New Expansions
90000 spindles at a capital outlay of Rs.300 Crores.
2003-2004
The Cotton Textile Export Promotion Council awarded TEXPROCIL SILVER TROPHY to the
company for its outstanding Export performance in yarns50
2006-2007
The Apparel export promotion councill awarded AEPC achievment award to the company for
achieving highest exports in garment.
2008
Apparel Export promotion council awarded Gold Trophy for achieving highest Export of Cotton
Garments.
2009
The Cotton Textiles Export Promotion Council (TEXPROCIL) awarded Gold Trophy for highest
export of Cotton Yarn (Counts 50s and below)
2009
Turnover crosses Rs.1000 crore mark.
2010
Decides to increase capacity by adding another 90000 spindles.
51
CHAPTER 5:
OBJECTIVES OF THE
STUDY
52
CHAPTER 5: OBJECTIVES OF THE STUDY
To study the factors responsible for making decisions about industrial relations.
To analysis the collective agreement and relationship between management and unions.
To study the common reasons for industrial actions and reduction of workforce at
workplace.
To study the work-life balance, wages and commitment of the employees regarding
industrial relations.
To study the relationship between employee-management and satisfaction towards
industrial relations agreement.
53
CHAPTER 6: RESEARCH
METHODOLOGY
54
CHAPTER 6: RESEARCH METHODOLOGY
Meaning of Research: -
Research in common parlance refers to a search for knowledge. And according to
Redman and Mory “systematized effort to gain new knowledge.” And some people consider
research as movement, a movement from known to the unknown. Thus Research is an original
contribution to the existing stock of knowledge making for its advancement. It is the pursuit of
truth with the help of study, Observation, comparison and experiment. In short, the search for
knowledge through objective and systematic method of finding solution to a problem is research.
Objectives of Research
The purpose of research is to discover answers to questions through the application
of scientific procedures. The main aim of research is to find out the truth which is hidden and
which has not been discovered as yet. Research objectives as falling into a number of following
broad groupings:
1. To gain familiarity with a phenomenon or to achieve new insights into it (studies with this
object in view are termed as exploratory or formulative research studies).
2. To portray accurately the characteristics of a particular individual, situation or a group
(studies with this object in view are known as descriptive research studies).
3. To determine the frequency with which something occurs or with which it is associated
with something else ( studies with this object in view are known as diagnostic research
studies)
Type of Research
The Research is Descriptive Research which is fact finding in nature.
Descriptive Research
Descriptive research includes survey and fact-finding enquiries of different kinds.
The major purpose of descriptive research is description of the state of affairs, as it exists at
present.
Basis of study
55
The study will be based on Primary as well as on Secondary data.
Interview with employees of the Nahar Spinning Mills Ltd., Ludhiana and the information
was collected from the employees with the help of a structured questionnaire. And secondary data
collected from company broacher and related website.
SAMPLING DESIGN
SAMPLING UNIT
Employees of Nahar Spinning Mills Ltd., Ludhiana
SAMPLE SIZE
100 employees from Nahar Spinning Mills Ltd., Ludhiana
SAMPLING TECHNIQUE
In this study, the respondents were chosen through convenience sampling.
SCOPE OF THE STUDY
Scope of the present study is Industrial Relations in Nahar Spinning Mills Ltd., Ludhiana.
STATISTICAL TOOL
Data collection through survey was analyzed with the help of simple % Tabular & graphic
method that includes both graphs & Pie Charts.
56
CHAPTER 7:
DATA
INTERPRETATION &
ANALYSIS
57
CHAPTER 7: DATA INTERPRETATION AND ANALYSIS
MANAGING IR/HR
1. Who has main responsibility for making decisions about industrial relations or human
resource management which apply to this workplace?
Table: 1
Yourself, or 11
Senior 19
Supervisor 37
Higher Authority 43
Graph: 1
Interpretation: According to 100 employees of Nahar Spinning Mills Ltd., Ludhiana 11 of them
say decisions about industrial relations or human resource management is taken by yourself, 19 of
them say decisions about industrial relations or human resource management is taken by seniors,
37 of them say decisions about industrial relations or human resource management is taken
supervisor and rest 43 of them say decisions about industrial relations or human resource
management is taken higher authority.
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2. What is the length of the most common shift worked at this workplace?
Table: 2
5-8 Hours 33
8-10 Hours 42
More Than 10 Hours 25
Graph: 2
Interpretation: According to 100 employees of Nahar Spinning Mills Ltd., Ludhiana 33%of
them say that the most common shift worked at this workplace is 5-8 hrs, 42% of them say that
the most common shift worked at this workplace is 8-10 hrs and rest 25% of them say that the
most common shift worked at this workplace is more than 10 hrs.
59
INDUSTRIAL ACTIONS AND UNION
3. Was that collective agreement negotiated with a union?
Table: 3
Yes 89
No 11
Graph: 3
Interpretation: According to 100 employees of Nahar Spinning Mills Ltd., Ludhiana 89% of
them say yes collective agreement negotiated with a union and rest 11% of them say no collective
agreement does not negotiated with a union.
60
4. How would you rate overall the relationship between management and unions at this
workplace?
Table: 4
Very good 36
Good 29
Neither good nor poor 10
Poor 16
Very poor 9
Graph: 4
Interpretation: According to 100 employees of Nahar Spinning Mills Ltd., Ludhiana 36% of
them say the relationship between management and union is very good, 29% of them say the
relationship between management and union is good, 10% of them say the relationship between
management and union is neither good nor poor, 16% of them say the relationship between
management and union are poor, and rest 9% of them say the relationship between management
and union are very poor.
61
5. Have any of the following taken place at this workplace in the last year?
Table: 5
Strikes or picketing 0
Stop work meetings 24
Overtime bans, restrictions, work to rule or go slows 49
Other bans 27
Graph: 5
Interpretation: According to 100 employees of Nahar Spinning Mills Ltd., Ludhiana strikes or
picketing have not occurred in the last year, 24% of them say stop working meetings due to some
industrial relations , 49% of them say overtime bans, restrictions and work to rule or go slow, and
rest 27% o them say some other bans occurred in the last year.
62
6. What have been the most common reasons for the industrial action, or actions, at this
workplace over the past year? ACCEPT MULTIPLES
Table: 6
Negotiations over a enterprise agreement 29
Outsourcings, use of contractors or labor hire 19
Health and Safety issues 35
Implementation /interpretation of agreement/award 27
Dismissal, discipline 19
Management decisions or proposals 32
Industry or state wide issue 21
Redundancy 22
Other 27
Graph: 6
Interpretation: According to 100 employees of Nahar Spinning Mills Ltd., Ludhiana 29 of them
say Negotiations over a enterprise agreement is the most common reasons for the industrial action,
or actions, at this workplace over the past year, 19 of them say Outsourcings, use of contractors or
labor hire is the most common reasons for the industrial action, or actions, at this workplace over the
63
past year, 35 of them say Health and Safety issues is the most common reasons for the industrial
action, or actions, at this workplace over the past year, 27 of them say Implementation /interpretation
of agreement/award is the most common reasons for the industrial action, or actions, at this
workplace over the past year, 19 of them say Dismissal, discipline is the most common reasons for
the industrial action, or actions, at this workplace over the past year, 32 of them say Management
decisions or proposals is the most common reasons for the industrial action, or actions, at this
workplace over the past year, 21 of them say Industry or state wide issue is the most common
reasons for the industrial action, or actions, at this workplace over the past year, 22 of them say
Redundancy is the most common reasons for the industrial action, or actions, at this workplace over
the past year and rest 17 of them say other reasons is the most common reasons for the industrial
action, or actions, at this workplace over the past year
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WAGES AND ENTITLEMENTS
7. During the last year, which of the following was the majority of your non-managerial
employees entitled to?
Table: 7
A higher rate of pay when they work overtime 55
Penalty rates when they work on weekends 32
Paid maternity leave 4
Annual leaves loadings 11
Performance related pay component 42
Annualized salary 33
Paying out accrued holidays 25
Paying out accrued sick leave 21
Roister days off 39
Graph: 7
65
Interpretation: According to 100 employees of Nahar Spinning Mills Ltd., Ludhiana 55 of them
say that last year the majority of your non-managerial employees entitled to a higher rate of pay
when they work overtime, 32 of them say that last year the majority of your non-managerial
employees entitled to penalty rates when they work on weekends, 4 of them say that last year the
majority of your non-managerial employees entitled to paid maternity leave, 11 of them say that
last year the majority of your non-managerial employees entitled to Performance related pay
component, 42 of them say that last year the majority of your non-managerial employees entitled
to Performance related pay component, 33 of them say that last year the majority of your non-
managerial employees entitled to annualized salary, 25 of them say that last year the majority of
your non-managerial employees entitled to paying out accrued holidays, 21 of them say that last
year the majority of your non-managerial employees entitled to paying out accrued sick leave and
rest 39 of them say that last year the majority of your non-managerial employees entitled to
rustier day off.
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PROFIT, COSTS AND PRODUCTIVITY
8. Compared to a year ago, have the labor costs of this workplace increased, decreased or
stayed the same?
Table: 8
Increased 67
Decreased 8
Stayed the same 23
Don’t know 2
Graph: 8
Interpretation: According to 100 employees of Nahar Spinning Mills Ltd., Ludhiana 67% of
them say that the labor costs of this workplace has increased, 8% of them say that the labor costs
of this workplace has decreased, 23% of them say that the labor costs of this work place had
stayed the same and rest 2% of them say that they don’t know about the labor costs of this work
place.
67
9. Compared to a year ago, has productivity at this workplace increased, decreased or
stayed the same?
Table: 9
Increased 47
Decreased 10
Stayed the same 29
Don’t know 14
Graph: 9
Interpretation: According to 100 employees of Nahar Spinning Mills Ltd., Ludhiana 47% of
them say that the productivity at this workplace has increased, 10% of them say that the
productivity at this workplace has decreased, 29% of them say that the productivity at this place
stayed the same, and rest 14% of them say that they don’t know about the productivity at this
work place.
68
WORKFORCE REDUCTIONS & ADDITIONS
10. Has management intentionally reduced the size of the workforce at this workplace at
any time in the last year?
Table: 10
Yes 37
No 63
Graph: 10
Interpretation: According to 100 employees of Nahar Spinning Mills Ltd., Ludhiana 37% of
them say yes the management intentionally reduced the size of the workforce at this workplace at
any time in the last year , and rest 63% of them say that the management intentionally
reduced the size of the workforce at this workplace at any time in the last year
69
11. What was the reason or reasons for this reduction on the last occasion? ACCEPT
MULTIPLES
Graph: 11
Lack of demand for the product or service 4
Technological change 3
Organizational restructuring 12
Financial problems or difficulties 6
To decrease costs or increase efficiency 5
Others 4
Don’t know 3
Graph: 11
70
Interpretation: According to 100 employees of Nahar Spinning Mills Ltd., Ludhiana 11% of
them say that lack of demand for the product or service is one of the reasons for this reduction on
the last occasion, 8% of them say that the technological change is one of the reasons for this
reduction on the last occasion, 32% of them say that the organizational restructuring is one of the
reasons for this reduction on the last occasion, 16% of them say that the financial problems or
difficulties is one of the reasons for this reduction on the last occasion, 11% of them say that other
reasons for this reduction on the last occasion and rest 8% of them say that they don’t know about
the reasons for this reduction on the last occasion.
71
ATTITUDES OF MANAGEMENT
12 How would you rate the relationship between employees and management at this
workplace?
Table: 12
Very good 25
Good 37
Neither good nor poor 22
Poor 9
Very poor 7
Graph: 12
Interpretation: According to 100 employees of Nahar Spinning Mills Ltd., Ludhiana 25% of
them say that the relationship between employees and management at this workplace is very
good, 37% of them say that the relationship between employees and management at this
workplace is good, 22% of them say that the relationship between employees and management at
this workplace is neither good nor poor, 9% of them say that the relationship between employees
and management at this workplace is poor and rest 7% of them say that the relationship between
employees and management at this workplace is very poor.
72
13 How satisfied are the managers with the industrial relations arrangements which operate
at this workplace?
Table: 13
Very satisfied 21
Satisfied 39
Neither satisfied nor dissatisfied 27
Dissatisfied 10
Very dissatisfied 3
Graph: 13
Interpretation: According to 100 employees of Nahar Spinning Mills Ltd., Ludhiana 21% of
them say that the managers are very satisfied with the industrial relations arrangements which
operate at this workplace, 39% of them say that the managers are satisfied with the industrial
relations arrangements which operate at this workplace, 27% of them say that the managers are
neither satisfied nor dissatisfied with the industrial relations arrangements which operate at this
workplace, 10% of them say that the managers are dissatisfied with the industrial relations
arrangements which operate at this workplace and rest 3% of them say that the managers are very
dissatisfied with the industrial relations arrangements which operate at this workplace.
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APPRAISAL AND GRIEVANCE HANDLING
14. According to you the appraisal should be conveyed to employees?Table: 14
Quarterly 34
Half yearly 59
Yearly 7
Graph: 14
INTERPRETATION: From the above data it is evident that the majority of the respondent’s i.e
34% of them says that the appraisal should be conveyed to employees quarterly, 59% of them say
that the appraisal should be conveyed to employees half yearly and rest 7% of them say that the
appraisal should be conveyed to employees yearly.
74
15. The organization puts in lots of efforts in discovering your potential through Training?Table: 15
Strongly agree 21
Agreed 48
Neither agrees nor disagrees 27
Disagree 4
Strongly disagree 0
Graph: 15
INTERPRETATION: According to 100 respondents 21% of them say that they are strongly
agree that the organization puts in lots of efforts in discovering their potential, 48% of them say
that they are agree that the organization puts in lots of efforts in discovering their potential, 27%
of them say that they are neither agrees nor disagrees that the organization puts in lots of efforts in
discovering their potential and rest 4% of them say that they are disagreee that the organization
puts in lots of efforts in discovering their potential
75
16. What is the prominent cause of grievance?
Table: 16
Wages & salary 35
Working condition 28
Promotion 25
Discipline 12
Graph: 16
INTERPRETATION: According to 100 respondents that 35% of them say that the wages and
salary is the prominent cause of grievance, 28% of them say that the working condition is the
prominent cause of grievance, 25% of them say that promotion is the prominent cause of
grievance and rest 12% of them say that discipline is the prominent cause of grievance
76
17. Are you satisfied that grievance are being redressed is reasonable period of time?
Table: 17
Strongly agree 31
Agreed 57
Neither agree nor disagree 12
Disagree 0
Strongly disagree 0
Graph: 17
INTERPRETATION: According to 100 respondents 31% of them say that they are strongly
agree that they are satisfied that grievance is being redressed is reasonable period of time,
57% of them say that they are agree that they are satisfied that grievance is being redressed is
reasonable period of time, and rest 12% of them say that they are neither agree nor disagree that
they are satisfied that grievance is being redressed is reasonable period of time
77
18. Are you aware of the grievance redressal procedure followed in your organization?
Table: 18
Strongly agree 27
Agreed 45
Neither agree nor disagree 20
Disagree 8
Strongly disagree 0
Graph: 18
INTERPRETATION: From the above data majority of the respondents i.e 27% of them say that
they are strongly agree that they are aware of the grievance redressal procedure, 45% of them say
that they are agree that they are aware of the grievance redressal procedure, 20% of them say that
they are neither agree nor disagree that they are aware of the grievance redressal procedure and
rest 8% of them say that they are disagree that they are aware of the grievance redressal
procedure.
78
19. Are you satisfied with the grievance handling policy of your organization is effective?
Table: 19
Strongly agree 29
Agreed 43
Neither agree nor disagree 19
Disagree 9
Strongly disagree 0
Graph: 19
INTERPRETATION: According to 100 respondents 29% of them say that they are strongly
agree that they are satisfied with the grievance handling policy of their organization, 43% of them
say that they are agree that they are satisfied with the grievance handling policy of their
organization, 19% of them say that they are neither agree nor disagree that they are satisfied with
the grievance handling policy of their organization and rest 9% of them say that they are disagree
that they are satisfied with the grievance handling policy of their organization
79
CONCLUSIONS
80
CONCLUSIONS
Mostly employees of Nahar Spinning Mills Ltd., Ludhiana say decisions about industrial
relations or human resource management is taken by higher authority.
The most common shift worked at Nahar Spinning Mills Ltd., Ludhiana is 8-10 hrs
Mostly employees of Nahar Spinning Mills Ltd., Ludhiana say yes collective agreement
negotiated with a union.
Maximum employees of Nahar Spinning Mills Ltd., Ludhiana say that the relationship
between management and union is very good.
Mostly overtime bans, restrictions and work to rule or go slow.
Maximum employees of Nahar Spinning Mills Ltd., Ludhiana say that Health and Safety
issues and Management decisions or proposals are the most common reasons for the
industrial action, or actions, at this workplace over the past year.
Mostly employees of Nahar Spinning Mills Ltd., Ludhiana the last year the majority of
your non-managerial employees entitled to a higher rate of pay when they work overtime
and Performance related pay component.
According to 100 employees of Nahar Spinning Mills Ltd., Ludhiana mostly employees
say that the labor cost of this workplace has increased.
Mostly employees of Nahar Spinning Mills Ltd., Ludhiana the productivity at this
workplace has increased.
Maximum employees say that the management intentionally reduced the size of the
workforce at this workplace at any time in the last year.
According to the employees of Nahar Spinning Mills Ltd., Ludhiana the organizational
restructuring and the financial problems or difficulties are the reasons for this reduction on
the last occasion.
According to employees of Nahar Spinning Mills Ltd., Ludhiana the relationship between
employees and management at the workplace is very good.
According to employees of Nahar Spinning Mills Ltd., Ludhiana the managers are
satisfied with the industrial relations arrangements which operate at this workplace.
81
SUGGESTIONS AND
RECOMMENDATIONS
82
SUGGESTIONS AND RECOMMENDATIONS
My survey has given me an opportunity to bring out the human problems and to express their
feelings, fears, doubts and dissatisfactions among the minds of the employees regarding industrial
relations. So, on the basis of their discontentment’s there are some suggestions and
recommendations on my part that the companies could think over it and take some correct actions
regarding their operations.
The company should try to enhance the availability of their services towards their
employees.
The company should have to take care regarding the work shift at workplace so that
employees don’t get exhausted.
Company should have to take in account that collective agreements should have to be
negotiated with the union.
Relationship between management and union should have to be at its best to avoid any
kind of strike or ban.
The Company has to make balance between the workplace labour costs and productivity.
The company should have to management the relation between employees and
management for their satisfaction.
83
LIMITATIONS
84
LIMITATIONS
Every project has its own limitations. The purpose of mentioning is to help readers form a more
accurate interpretation of the results. Present study is subject to the following limitations which
would be taken into consideration.
Employees of the plant are so busy in their work that they are not able to give proper times
regarding the discussions of my project.
Due to time constraints, the size of the sample was restricted. It may not be possible to
generalize the results on the basis of such small sample size.
Some employees are highly loyal and satisfied towards the organization due to some
specific reason as some employees being the member of canteen committee, one being
sports coordinator etc. As the matter of which the results obtained may be bias.
Covering each and every benefit of the organization is not possible for the survey and
discussing each and every aspect of the questionnaire to everyone has also become the part
of limitation of the study.
85
WHAT I HAVE LEARNT ?
I have discovered that human resource is the heart of every organization. Productivity of any
organization is directly related to the quality of HR it contains. All the organizations have also
realized the importance of human resource and they have also realized that their growth and
industrial relations has an effect on the company’s bottom line. In my training I have learnt a lot
of things, which will surely help me in my future. The first thing is the skill of communication
and they have also developed confidence thereby taking interviews of well experienced people of
the organization. This has made me bold to handle the situations accordingly.
This training has given me practical exposure to the corporate world which I
could never had obtained by sitting in a classroom. We have learnt the methods the organization
is applying to motivate and empower their employees towards industrial relations.
I got the opportunity to interact with the number of people from the corporate
world which developed in me the spirit of being one of them.
Last but not the least I had a lifetime experience.
86
BIBLIOGRAPHY
87
BIBLIOGRAPHY
BOOKS AND JOURNALS
Armingeon, Klaus. 1994. Staat und Arbeitsbeziehungen: ein internationaler Vergleich.
Opladen, Westdeutscher Verlag, 1994.
Bray, Mark and Haworth, Nigel. 1993. “Economic Restructuring and Industrial Relations in
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INTERNET RESOURCES
http://www.owmnahar.in/nsm.html
http://www.nseindia.com/content/corporate/NAHARSPING_base.pdf
http://money.rediff.com/companies/nahar-spinning-mills-ltd/16080002
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ANNEXURE
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ANNEXURE: QUESTIONNAIRE
Name: ___________________________________ Designation: __________________
MANAGING IR/HR
1. Who has main responsibility for making decisions about industrial relations or human
resource management which apply to this workplace?
a) yourself, or
b) Senior
c) Supervisor
d) Higher Authority
WORKING
2. What is the length of the most common shift worked at this workplace?
a) 5-8 Hours
b) 8-10 Hours
c) More Than 10 Hours
INDUSTRIAL ACTIONS AND UNION
3. Was that collective agreement negotiated with a union?
a) Yes
b) No
4. How would you rate overall the relationship between management and unions at this
workplace?
a) Very good
b) Good
c) Neither good nor poor
d) Poor
e) Very poor
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5. Have any of the following taken place at this workplace in the last year?
a) Strikes or picketing
b) Stop work meetings
c) Overtime bans, restrictions, work to rule or go slows
d) Other bans
6. What have been the most common reasons for the industrial action, or actions, at this
workplace over the past year? ACCEPT MULTIPLES
a) Negotiations over a enterprise agreement
b) Outsourcing, use of contractors or labour hire
c) Health and Safety issues
d) Implementation /interpretation of agreement/award
e) Dismissal, discipline
f) Management decisions or proposals
g) Industry or state wide issue
h) Redundancy
i) Other: . . . . . . . . . . .
WAGES AND ENTITLEMENTS
7. During the last year, which of the following were the majority of your non-managerial
employees entitled to?
a) a higher rate of pay when they work overtime
b) penalty rates when they work on weekends
c) paid maternity leave
d) annual leave loadings
e) performance related pay component
f) annualised salary
g) paying out accrued holidays
h) paying out accrued sick leave
i) rostered days off
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PROFIT, COSTS AND PRODUCTIVITY
8. Compared to a year ago, have the labour costs of this workplace increased, decreased or
stayed the same?
a) increased
b) decreased
c) stayed the same
d) don’t know
9. Compared to a year ago, has productivity at this workplace increased, decreased or
stayed the same?
a) increased
b) decreased
c) stayed the same
d) don’t know
WORKFORCE REDUCTIONS & ADDITIONS
10. Has management intentionally reduced the size of the workforce at this workplace at
any time in the last year?
a) Yes
b) No
11. What was the reason or reasons for this reduction on the last occasion? ACCEPT
MULTIPLES
a) Lack of demand for the product or service
b) Technological change
c) Organisational restructuring
d) Financial problems or difficulties
e) To decrease costs or increase efficiency
f) Other: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
g) Don’t know
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ATTITUDES OF MANAGEMENT
12. How would you rate the relationship between employees and management at this
workplace?
a) Very good
b) Good
c) Neither good nor poor
d) Poor
e) Very poor
13. How satisfied are the managers with the industrial relations arrangements which
operate at this workplace?
a) Very satisfied
b) Satisfied
c) Neither satisfied nor dissatisfied
d) Dissatisfied
e) Very dissatisfied
APPRAISAL AND GRIEVANCE HANDLING
10. According to you the appraisal should be conveyed to employees?a) Quarterlyb) Half yearlyc) Yearly
11 . The organization puts in lots of efforts in discovering your potential through Training?a) Strongly agreeb) Agreedc) Neither agree nor disagreed) Disagreee) Strongly disagree
12. Do training needs can be identified with think the helpful performance appraisal?a) Strongly agree d) Disagreeb) Agreed e) Strongly disagreec) Neither agree nor disagree
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13. What is the prominent cause of grievance?a) Wages & salaryb) Working conditionc) Promotiond) Discipline
14. Are you satisfied that grievance are being redressed is reasonable period of time?a) Strongly agreeb) Agreedc) Neither agree nor disagreed) Disagreee) Strongly disagree
15. Are you aware of the grievance redressal procedure followed in your organization? a) Strongly agreeb) Agreedc) Neither agree nor disagreed) Disagreee) Strongly disagree
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