Industrial Relations

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

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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.

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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.

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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.

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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

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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.

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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

95