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Industrial Relation (IR)


Basically, IR sprouts out of employment relation. Hence, it is broader in meaning and wider in scope.
IR is dynamic and developing socio-economic process. As such, there are as many as definitions of IR
as the authors on the subject. Some important definitions of IR are produced here.

According to Dale Yoder’, IR is a designation of a whole field of relationship that exists because of the
necessary collaboration of men and women in the employment processes of Industry”.

Armstrong has defined IR as “IR is concerned with the systems and procedures used by unions and
employers to determine the reward for effort and other conditions of employment, to protect the
interests of the employed and their employers and to regulate the ways in which employers treat their

In the opinion of V. B. Singh “Industrial relations are an integral aspect of social relations arising out
of employer-employee interaction in modern industries which are regulated by the State in varying
degrees, in conjunction with organised social forces and influenced by the existing institutions. This
involves a study of the State, the legal system, and the workers’ and employers’ organizations at the
institutional level; and of the patterns of industrial organisation (including management), capital
structure (including technology), compensation of the labour force, and a study of market forces all at
the economic level”.

Encyclopedia Britannica defined IR more elaborately as “The concept of industrial relations has been
extended to denote the relations of the state with employers, workers, and other organisations. The
subject, therefore, includes individual relations and joint consultation between employers and workers
at their places of work, collective relations between employers and trade unions; and the part played by
the State in regulating these relations”.

Thus, IR can now safely be defined as a coin having two faces: co- operation and conflict. This
relationship undergoes change from thesis to antithesis and then to synthesis. Thus, the relationship
starting with co-operation soon changes into conflict and after its resolution again changes into co-
operation. This changing process becomes a continuous feature in industrial system and makes IR
concept as dynamic and evolving one.

Scope of IR:

The concept of industrial relations has a very wide meaning and connotation. In the narrow sense, it
means that the employer, employee relationship confines itself to the relationship that emerges out of
the day to day association of the management and the labor. In its wider sense, industrial relations
include the relationship between an employee and an employer in the course of the running of an
industry and may project it to spheres(area), which may transgress ( do wrong) to the areas of quality
control, marketing, price fixation and disposition of profits among others.
Based on above definitions of IR, the scope of IR can easily been delineated (defined) as follows:

1. Labour relations, i.e., relations between labour union and management.

2. Employer-employee relations i.e. relations between management and employees.

3. The role of various parties’ viz., employers, employees, and state in maintaining industrial relations.

4. The mechanism of handling conflicts between employers and employees, in case conflicts arise.

The main aspects of industrial relations can be identified as follows:

1. Promotion and development of healthy labour — management relations.

2. Maintenance of industrial peace and avoidance of industrial strife.

3. Development and growth of industrial democracy.

Objectives of IR:

The primary objective of industrial relations is to maintain and develop good and healthy relations
between employees and employers or operatives and management. The same is sub- divided into other
objectives. Thus, the objectives of IR are designed to:

1. Establish and foster sound relationship between workers and management by safeguarding their

2. Avoid industrial conflicts and strikes by developing mutuality among the interests of concerned

3. Keep, as far as possible, strikes, lockouts and gheraos at bay by enhancing the economic status of

4. Provide an opportunity to the workers to participate in management and decision making process.

5. Raise productivity in the organization to control the employee turnover and absenteeism.

6. Avoid unnecessary interference of the government, as far as possible and practicable, in the matters
of relationship between workers and management.

7. Establish and nurse industrial democracy based on labour partnership in the sharing of profits and of
managerial decisions.

8. Socialize industrial activity by involving the government participation as an employer.

Globalization & Industrial Relation (IR):

The relevance of globalization to IR - a summary increasing international economic interdependence

has disturbed traditional IR arrangements in several broad ways.

Firstly, such arrangements have normally been confined to the circumstances created by national
markets; but globalization has fundamentally changed, and considerably expanded, the boundaries of
the market place. In this respect, the extent of information flows made possible by new technology is
building inter-enterprise networks around the world, is calling into question the traditional boundaries
of the enterprise and is eroding current IR arrangements. MNC's are the primary driving force for
change. They are organizations that engage in FDI and own or control productive assets in more than
one country (Frenkel and Royal 1996a:7). They are creating very complex international production
networks which distinguish globalization from the simpler 6 forms of international business integration
in earlier periods. As producers of global goods and services (notably, in the area of mass
communications), centres of networks and large employers, MNC's have an impact extending far
beyond urban centres in the countries in which they are located. In addition to the activities of MNC's,
many locally-based enterprises, of varying sizes, in many countries are using information technology
to focus on the demands of international (and domestic) "niche" markets in a way which is contributing
to a growing individualization and de-collectivism of work.

Secondly, globalization has disturbed the status quo between "capital" and "labour" in each country, in
the sense that capital is significantly more mobile in an open international environment, while labour
remains relatively immobile (here it should be noted that, under globalization, international labour
migration is continuing, but, proportionately to the rate in the1970's, has not increased - see World
Bank 1995: 53). This can place "labour" at a relative disadvantage, in that "capital" can now employ
"labour" in different countries, at lower cost and on a basis which can prejudice the continuing
employment of workers in the originating country.

Thirdly, globalization is having a contradictory impact on IR. It is accelerating economic

interdependence between countries on an intra- and inter-regional basis and encouraging similarities in
approach by individual enterprises in competitive markets. This may lead to some convergence in
industrial relations arrangements around the world. At the same time, there is clear evidence of
resistance towards convergence, based on particular national and regional circumstances (eg, in Europe
and Asia). This aspect will be considered later in the paper, in relation to Asia and the Pacific

Unit 2

Trade union, also called labour union, association of workers in a particular trade, industry, or company created
for the purpose of securing improvements in pay, benefits, working conditions, or social and political status
through collective bargaining. A trade union is an association of workers formed with the object of improving
the conditions of workers. It is formed for protecting the interests of workers. Workers have little bargaining
capacity when they are unorganized. In fact, trade union movement began against the exploitation of workers by
certain managements under the capitalist system.

Historical development

As an organized movement, trade unionism originated in the 19th century in Great Britain, continental Europe,
and the United States. In many countries it is synonymous with the term labour movement. Smaller associations
of workers started appearing in Britain in the 18th century, but they remained sporadic and short-lived through
most of the 19th century, in part because of the hostility they encountered from employers and government
groups that resented this new form of political and economic activism. At that time unions and unionists were
regularly prosecuted under various restraint-of-trade and conspiracy statutes in both Britain and the United

While union organizers in both countries faced similar obstacles, their approaches evolved quite differently: the
British movement favoured political activism, which led to the formation of the Labour Party in 1906, while
American unions pursued collective bargaining as a means of winning economic gains for their workers.

Legal precedents

British unionism received its legal foundation in the Trade-Union Act of 1871. In the United States the same
effect was achieved, albeit more slowly and uncertainly, by a series of court decisions that whittled away at the
use of injunctions, conspiracy laws, and other devices against unions. In 1866 the formation of the National
Labor Union (NLU) represented an early attempt to create a federation of American unions. Although the NLU
disappeared in the 1870s, several of its member trade unions continued, representing such diverse occupations
as shoemakers, spinners, coal miners, and railway workers. The founding of the American Federation of Labor
(AFL) by several unions of skilled workers in 1886 marked the beginning of a continuous large-scale labour
movement in the United States. Its member groups comprised national trade or craft unions that organized local
unions and negotiated wages, hours, and working conditions.

Objectives of Trade Union:

The following are the objectives of trade union:

(1) To improve the economic lot of workers by securing them better wages.

To secure for workers better working conditions.

(3) To secure bonus for the workers from the profits of the enterprise/organization.

(4) To ensure stable employment for workers and resist the schemes of management which reduce
employment opportunities.

(5) To provide legal assistance to workers in connection with disputes regarding work and payment of

(6) To protect the jobs of labour against retrenchment and layoff etc.

(7) To ensure that workers get as per rules provident fund, pension and other benefits.

(8) To secure for the workers better safety and health welfare schemes.

(9) To secure workers participation in management.

(10) To inculcate discipline, self-respect and dignity among workers.

(11) To ensure opportunities for promotion and training.

(12) To secure organizational efficiency and high productivity.

(13) To generate a committed industrial work force for improving productivity of the system.


1. Ensure Security of Workers:

This involves continued employment of workers, prevent retrenchment, lay off or lock-outs. Restrict
application of “fire” or dismissal or discharge and VRS.

2. Obtain Better Economic Returns:

This involves wages hike at periodic intervals, bonus at higher rate, other admissible allowances,
subsidized canteen and transport facilities.

3. Secure Power To Influence Management:

This involves workers’ participation in management, decision making, role of union in policy decisions
affecting workers, and staff members.

4. Secure Power To Influence Government:

This involves influence on government to pass labour legislation which improves working conditions,
safety, welfare, security and retirement benefits of workers and their dependents, seek redressal of
grievances as and when needed.

Functions of Trade Unions:

(1) Collective bargaining with the management for securing better work environment for the workers/

(2) Providing security to the workers and keeping check over the hiring and firing of workers.

(3) Helping the management in redressal of grievances of workers at appropriate level.

(4) If any dispute/matter remains unsettled referring the matter for arbitration.

(5) To negotiate with management certain matters like hours of work, fringe benefits, wages and medical
facilities and other welfare schemes.

(6) To develop cooperation with employers.

(7) To arouse public opinion in favour of labour/workers.

Benefits of Trade Union:

Workers join trade union because of a number of reasons as given below:

1. A worker feels very weak when he is alone. Union provides him an opportunity to achieve his
objectives with the support of his fellow colleagues.

2. Union protects the economic interest of the workers and ensures a reasonable wage rates and wage
plans for them.

3. Union helps the workers in getting certain amenities for them in addition to higher wages.

4. Union also provides in certain cases cash assistance at the time of sickness or some other emergencies.

5. Union organize negotiation between workers and management and are instruments for settlement of

6. Trade union is also beneficial to employer as it organizes the workers under one banner and encourages
them follow to peaceful means for getting their demands accepted.
7. Trade union imparts self-confidence to the workers and they feel that they are an important part of the

8. It provides for promotion and training and also helps the workers to go to higher positions.

9. It ensures stable employment for the workers and opposes the motive of management to replace the
workers by automatic machines.

10. Workers get an opportunity to take part in the management and oppose any decision which adversely
effects them.

Trade union activities

1. Members of staff who are members or representatives of a recognised trade union shall be
allowed reasonable time to take part in any recognised trade union activity, including:

o meetings of official policy-making bodies, such as annual conferences

o approved workplace meetings and properly conducted ballots, including branch

committee meetings

2. Where it is necessary for unions to hold general meetings of members during working hours, they
should seek agreement from the Director of Human Resources as far in advance as is practicable.
Both sides should seek to agree on a time which minimises the effects on the operation of the

3. With the exception of industrial action, agreed time for trade union activities will normally be

Trade Union Movement in Nepal

The beginning of the Nepali trade union movement goes back slightly before 1951. While the historic
workers' movement started on 4 March 1947 in Biratnagar, the workers themselves did not know what a
trade union was and what it would contribute to. They were unknown about collective bargaining and
industrial relations. The main concern of the workers then was to attract more and more workers to the
political movement. The then leaders – Girija Prasad Koirala, Manamohan Adhikari and Tarani Prasad
Koirala – entered the area of Biratnagar Jute Mills with this purpose in mind – to mobilise the workers in the
political movement to follow.
In an interview, Girija Prasad Koirala says, "Manamohan went to the Chemical Industry; assigning clerical
jobs to Tarani Prasad and Yuba Raj Adhikari. Gehendra Hari Sharma was sent to jute mills area and I was
sent to cotton mills area by giving a work to count jute ropes. The internal motif was, however, to start a
political movement from there."

The four year long duration from 1947 to 1951 sustained through a number of ups and downs. Girija Prasad
Koirala thus clarifies the then dilemma of the labour movement: "We used to gather together during off
hours at night. I was not confident enough about the workers' movement and politics. What I knew was we
have to do something, that is, movement. Amidst this, we decided to call a strike at 7 am on 4 March 1947.
We decided to operate the mills only for 7 minutes, and then close all functions. We asked the workers to
suggest their demands from which to make a list of common demands. Manamohan was quite familiar with
the labour movement. He had experience from Indian Trade Union movement, but I was totally ignorant on

Regarding demands, BP Koirala reminded us to put only a few demands, the main one being the wage
increase by a half. It was easy to be addressed, and with it we could also further inject our political work. In
this way, the leaders involved in the movement tried to convince the workers relating them to their problems
and educating them about the importance of forming unions. However, this campaign could not include all
the workers. As Girija Prasad put, "In the beginning, only the leaders were involved, the workers took some
time to join.”

The ruling Rana oligarchy took the movement as an 'unruly behaviour of the Koirala family', and decided to
imprison the leaders of the movement. But the regime was also forced to respond to the workers’ demands.
On the 23rd day of the movement, the labour wage was increased by 15 percent as per 'the directives of the
Shree tin maharaja (Rana prime minister)’. The regime also announced to give the full wage of the workers
for the strike period.

Repressions notwithstanding, the workers involved in the movement had a great impression of it. The way of
launching the movement, organising demonstrators, and the arrangement of flag and leadership were similar
to the Indian trade union movement, which had a strong influence on the participants of the movement. BP
Koirala, the first elected prime minister of Nepal, had this to say about the movement, "This was the first
movement launched from Nepali soil. It really touched the spirit of the workers. I was also invited to lead it.
This was a political movement to suppress which the government and the mill owners were united. The
people had however a great support to the workers. …At that time, General Ram Shamsher was a senior
officer [badha hakim].
Provisions of Trade Union in Trade Union Act 2049(1992)

Act No. 37 of the year 2049 B.S.

An Act made to provide for the management of trade union

Preamble : Whereas it is expedient to make legal provision regarding registration, operation of Trade Union
and other necessary provisions relating to it for the protection and promotion of professional and
occupational rights of the persons engaging in self-employment and the workers working in various industry,
trade, profession or service in Enterprises or outside the Enterprises.

Following are the provisions of Trade Union in Trade Union Act, 2049:

Section 1: Short title and commencement

Section 2: Definitions

Section 3: Registration of Enterprise Level Trade Union

Section 4: Registration of Trade Union Association

Section 5: Registration of the Trade Union Federation

Section 6: Additional particular may be demanded

Section 7: Refusal of Registration

Section 7A: Renewal of Trade Unions

Section 8: Autonomous and Corporate body

Section 9: Objectives

Section 9A: Functions, Duties and Powers of Trade Union

Section 9B: Functions Duties and powers of Trade Union Association and Trade Union


Section 10: Statute

Section 11: Recognition of the Authorized Trade Union

Section 12: Presentation of Claim

Section 13: Duration of Validity of the Recognition of the Authorized Trade Union

Section 14: Appointment of the Registrar

Section 15: Function, Duties and Power of the Registrar

Section 16: Register Book

Section 17: Fund

Section 18: Accounts and Auditing

Section 19: Merging of the Trade Union

Section 20: Information of the change in name

Section 21: Effect of change in name, merging or dissolution

Section 22: Contractual liability To Be Fulfilled

Section 23: No case To be filed

Section 23a: Transfer or Promotion Not To Be made

Section 24: Presentation of Annual Report

Section 25: Cancellation of the Registration

Section 26: Officials of Trade Union Association and Federation

Section 26a: Representation of the Trade Union

Section 27: Notice of Dissolution of Trade Union To Be Provided

Section 27a: Limitation for Filing a Case

Section 28: Penalties

Section 29: Appeal

Section 30: Special Power of Government of Nepal

Section 31: Power of Frame Rules

UNIT 3: Collective Bargaining

Collective bargaining as a method of wage fixation:
Pre-requisits of collective Bargaining
(1) The parties must attain a sufficient degree of Organization. If the workers’ organisation is
weak, employers can say that it does not represent the workers and will refuse to negotiate
with it. Unless the workers are able to form strong and stable unions, collective bargaining
will not be successful.

(2) Freedom of association is essential for collective bargaining. Where there is no freedom of
association, there can be no collective bargaining. Freedom of association implies that the
workers as well as the employers will have the right to form an organisation of their own to
protect their interests.

(3) There should be mutual recognition between both the groups. Collective bargaining cannot
begin if the employers do not recognise the workers’ organisation. The conflict of interests
makes the two groups hostile to each other. They must recognise each other and realise that
adjustment and understanding is essential for the achievement of organisational goals.

(4) There must exist a favourable political climate, essential for successful collective
bargaining. If the government encourages collective bargaining as the best method of regulating
conditions of employment, it will be successful. Where the governments restrict trade union
activities, there can be no collective bargaining.

(5) Agreement must be observed by those to whom they apply. The workers’ organisation must
be strong enough to exercise its authority over its members. If the trade union has no power over
its members, collective bargaining will not be effectively implemented.
(6.) A give and take policy must prevail in the organisation. The difference between two parties
can be adjusted only by compromise so that an agreement can be reached. Neither side should be
too rigid on its demand.Their attitudes should be flexible and both sides should be ready to give
up some of its demands. Unions should not rigidly insist upon unreasonable demands and should
be ready to reduce its demands to come to an agreement.

(7) Sometimes unfair labour practices are resorted to by both the employers and the trade
unions. These will restrict the development of collective bargaining. Unfair labour practices
should be avoided by both the sides, as this will create an atmosphere of goodwill.

Top Ten Effective Negotiation Skills

Job descriptions often list negotiation skills as a desirable asset for job candidates, but the ability
to negotiate requires a collection of interpersonal and communication skills used together to
bring a desired result. The circumstances of negotiation occur when two parties or groups of
individuals disagree on the solution for a problem or the goal for a project or contract. A
successful negotiation requires the two parties to come together and hammer out an agreement
that is acceptable to both.

Problem Analysis
Effective negotiators must have the skills to analyze a problem to determine the interests of each
party in the negotiation. A detailed problem analysis identifies the issue, the interested parties
and the outcome goals. For example, in an employer and employee contract negotiation, the
problem or area where the parties disagree may be in salary or benefits. Identifying the issues for
both sides can help to find a compromise for all parties.

Before entering a bargaining meeting, the skilled negotiator prepares for the meeting. Preparation
includes determining goals, areas for trade and alternatives to the stated goals. In addition,
negotiators study the history of the relationship between the two parties and past negotiations to
find areas of agreement and common goals. Past precedents and outcomes can set the tone for
current negotiations.

Active Listening
Negotiators have the skills to listen actively to the other party during the debate. Active listening
involves the ability to read body language as well as verbal communication. It is important to
listen to the other party to find areas for compromise during the meeting. Instead of spending the
bulk of the time in negotiation expounding the virtues of his viewpoint, the skilled negotiator
will spend more time listening to the other party.

Emotional Control

It is vital that a negotiator have the ability to keep his emotions in check during the negotiation.
While a negotiation on contentious issues can be frustrating, allowing emotions to take control
during the meeting can lead to unfavorable results. For example, a manager frustrated with the
lack of progress during a salary negotiation may concede more than is acceptable to the
organization in an attempt to end the frustration. On the other hand, employees negotiating a pay
raise may become too emotionally involved to accept a compromise with management and take
an all or nothing approach, which breaks down the communication between the two parties.

Verbal Communication

Negotiators must have the ability to communicate clearly and effectively to the other side during
the negotiation. Misunderstandings can occur if the negotiator does not state his case clearly.
During a bargaining meeting, an effective negotiator must have the skills to state his desired
outcome as well as his reasoning.

Collaboration and Teamwork

Negotiation is not necessarily a one side against another arrangement. Effective negotiators must
have the skills to work together as a team and foster a collaborative atmosphere during
negotiations. Those involved in a negotiation on both sides of the issue must work together to
reach an agreeable solution.

Problem Solving

Individuals with negotiation skills have the ability to seek a variety of solutions to problems.
Instead of focusing on his ultimate goal for the negotiation, the individual with skills can focus
on solving the problem, which may be a breakdown in communication, to benefit both sides of
the issue.
Decision Making Ability

Leaders with negotiation skills have the ability to act decisively during a negotiation. It may be
necessary during a bargaining arrangement to agree to a compromise quickly to end a stalemate.

Interpersonal Skills

Effective negotiators have the interpersonal skills to maintain a good working relationship with
those involved in the negotiation. Negotiators with patience and the ability to persuade others
without using manipulation can maintain a positive atmosphere during a difficult negotiation.

Ethics and Reliability

Ethical standards and reliability in an effective negotiator promote a trusting environment for
negotiations. Both sides in a negotiation must trust that the other party will follow through on
promises and agreements. A negotiator must have the skills to execute on his promises after
bargaining ends.

Types of collective Bargaining

Definition: The Collective Bargaining is the process wherein the unions (representatives of
employees or workers), and the employer (or their representative) meet to discuss the issues
related to wage, the number of working hours, work environment and the other terms of the

There are four types of Collective Bargaining classified on the basis of their nature and the
objectives, and can be practiced depending on the different situation requirements.

1. Conjunctive or Distributive Bargaining: In this form of collective bargaining, both the parties
viz. The employee and the employer try to maximize their respective gains. It is based on the
principle, “my gain is your loss, and your gain is my loss” i.e. one party wins over the other.

The economic issues such as wages, bonus, other benefits are discussed, where the employee
wishes to have an increased wage or bonus for his work done, whereas the employer wishes to
increase the workload and reduce the wages.
2. Co-operative or Integrative Bargaining: Both the employee and the employer sit together and
try to resolve the problems of their common interest and reach to an amicable solution. In the
case of economic crisis, such as recession, which is beyond the control of either party, may enter
into a mutual agreement with respect to the working terms.

For example, the workers may agree for the low wages or the management may agree to adopt
the modernized methods, so as to have an increased production.

3. Productivity Bargaining: This type of bargaining is done by the management, where the
workers are given the incentives or the bonus for the increased productivity. The workers get
encouraged and work very hard to reach beyond the standard level of productivity to gain the
additional benefits.

Through this form of collective bargaining, both the employer and the employee enjoy the
benefits in the form of increased production and the increased pay respectively.

4. Composite Bargaining: In this type of collective bargaining, along with the demand for
increased wages the workers also express their concern over the working conditions, recruitment
and training policies, environmental issues, mergers and amalgamations with other firms, pricing
policies, etc. with the intention to safeguard their interest and protect the dilution of their powers.

Thus, the purpose of the Collective Bargaining is to reach a mutual agreement between the
employee and the employer with respect to the employment terms and enjoy a long term
relationship with each other.

Negoatiation Techniques & Skills:

Problem Analysis

Effective negotiators must have the skills to analyze a problem to determine the interests of each
party in the negotiation. A detailed problem analysis identifies the issue, the interested parties
and the outcome goals. For example, in an employer and employee contract negotiation, the
problem or area where the parties disagree may be in salary or benefits. Identifying the issues for
both sides can help to find a compromise for all parties.


Before entering a bargaining meeting, the skilled negotiator prepares for the meeting. Preparation
includes determining goals, areas for trade and alternatives to the stated goals. In addition,
negotiators study the history of the relationship between the two parties and past negotiations to
find areas of agreement and common goals. Past precedents and outcomes can set the tone for
current negotiations.

Active Listening

Negotiators have the skills to listen actively to the other party during the debate. Active listening
involves the ability to read body language as well as verbal communication. It is important to
listen to the other party to find areas for compromise during the meeting. Instead of spending the
bulk of the time in negotiation expounding the virtues of his viewpoint, the skilled negotiator
will spend more time listening to the other party.

Emotional Control

It is vital that a negotiator have the ability to keep his emotions in check during the negotiation.
While a negotiation on contentious issues can be frustrating, allowing emotions to take control
during the meeting can lead to unfavorable results. For example, a manager frustrated with the
lack of progress during a salary negotiation may concede more than is acceptable to the
organization in an attempt to end the frustration. On the other hand, employees negotiating a pay
raise may become too emotionally involved to accept a compromise with management and take
an all or nothing approach, which breaks down the communication between the two parties.

Verbal Communication

Negotiators must have the ability to communicate clearly and effectively to the other side during
the negotiation. Misunderstandings can occur if the negotiator does not state his case clearly.
During a bargaining meeting, an effective negotiator must have the skills to state his desired
outcome as well as his reasoning.

Collaboration and Teamwork

Negotiation is not necessarily a one side against another arrangement. Effective negotiators must
have the skills to work together as a team and foster a collaborative atmosphere during
negotiations. Those involved in a negotiation on both sides of the issue must work together to
reach an agreeable solution.

Problem Solving

Individuals with negotiation skills have the ability to seek a variety of solutions to problems.
Instead of focusing on his ultimate goal for the negotiation, the individual with skills can focus
on solving the problem, which may be a breakdown in communication, to benefit both sides of
the issue.

Decision Making Ability

Leaders with negotiation skills have the ability to act decisively during a negotiation. It may be
necessary during a bargaining arrangement to agree to a compromise quickly to end a stalemate.

Interpersonal Skills

Effective negotiators have the interpersonal skills to maintain a good working relationship with
those involved in the negotiation. Negotiators with patience and the ability to persuade others
without using manipulation can maintain a positive atmosphere during a difficult negotiation.

Ethics and Reliability

Ethical standards and reliability in an effective negotiator promote a trusting environment for
negotiations. Both sides in a negotiation must trust that the other party will follow through on
promises and agreements. A negotiator must have the skills to execute on his promises after
bargaining ends.

Provision of CB in Nepal:
Note :This is as per the labor law of Nepal for detailed understanding pls read labor law given to you

 Every two years workers can put forward their demand related to welfare of the
management otherwise known as collective Bargaining(CB)
 However the demand shall not include the following (a) Demand contrary to the
constitution of Nepal, (b) Demand which are not related to the enterprises .(c) The
duration of the demand place shall not be prior to two years i.e before two years
employee cannot put forward any demand to the management. (d) Matters which are
prejudicial to the conduct of any individual worker or employ.
 For a collective bargaining to be valid 51% of the workers should signed the agenda else
it would not be considered valid.
 Initially 21 days time is given for mutual discussion, or say, bi-lateral discussion this is
from the date of submission of demand. If any discussion is not held in 21 days then
another 15 days time is granted to them and this time there should be the presence of
labor office representative (i.e a government person).
 If the discussion is not solved in this step also then a mediator is appointed ( a mediator is
generally a lawer or someone who have good understanding of the subject matter
pertaining to collective bargaining), if not solved by a mediator a tripartite committee is
formed which comprise of Worker, management & Government.
 They are given 60 days time to solve the issue otherwise the process will move towards
the strike (but if the whole thing is marching towards strike then 30days prior notice is
required with 60% of employees agreeing to it )
 If prior notice is not given and Collective Bargaining is not as per process then the
management can go for lockout with justification ( in this case a 7days prior notice
should be given by the management to the employs )
 After Placing the order for strike, if government of Nepal things that the agenda is not
rational enough they can declare it void.
 At last if nothing works the government forms a tribunal ( a group of experts from the
government) and the decision levied by them should be agreed by both the labor and the
management mandatorily.

Collective Bargaining issues in Organizations :

Practically speaking, any issue that has relevance to management and workers becomes the
subject matter of bargaining. However, in certain specific cases both management and the union
are reluctant to yield ground. Traditionally, management is not willing to negotiate work
methods’, arguing that it is management’s exclusive right to decide how the work is to be done.
Likewise, unions don’t want negotiations on production norms and disciplinary matters, because
any agreement in this regard would put limits on their freedom. However over the years, the
nature and content of collective bargaining has changed quite dramatically. Traditionally, wages
and working conditions have been the primary focus areas of collective bargaining.

However, in recent times, the process of collective bargaining has extended to almost any area
that comes under employer-employee relations, covering a large territory. But broadly these
issues can be categorized into two parts:

1. Issues of right

2. Issues of Interest

Issues of Right: It is a participative right of both the parties. For example: Wage fixation and
productivity norm setting are the rights of workers.

Issues of Interest: These issues do not have participative rights and may only be granted as a
sign of goodwill. Example: Providing Transport facilities to the work place is not binding on the
Management. It is provided only for the convenience of the workers and the benefit of the

Some of the examples of issues of collective bargaining are mentioned below.

· Wages and Working conditions , Work norms, Incentive payments · Job Security · Changes in
technology · Work tools, techniques and practices · Staff transfers and promotions · Grievances ·
Disciplinary matters · Health and safety · Insurance and benefits · Union recognition · Union
activities / responsibilities · Management rights etc.

The major issues dealt with in collective bargaining are broadly categorized as below:

Wage Related issues – These include topics like how basic wage rates are determined, cost –of-
living adjustments, wage differentials, overtime rates, wage adjustments etc. ·

Supplementary economic benefits – These include issues as pension plans, paid vacations, paid
holidays, health insurance plans, dismissal plans, supplementary unemployment benefits etc.

Institutional Issues – These consists of rights & duties of employers, employees & unions,
including union security, check off procedures, quality of work-life program etc.
Administrative Issues – These include issues such as seniority, employee discipline and
discharge procedure, employee health & safety, technological changes, work rules, job security
and training, attendance, leave etc.

However some of the collective Bargaining issues in Nepalese Organization are :

 The tendency of Union to Compare everything with wages : If management thinks about
the holistic development of employee they will not only think about salary, apart from
salary there are other different segments like training & development, flexi work hour,
leaves to make a work life balance etc. which will help them to grown and get
satisfaction from the job.
 Management should also not bargain only on the ground of salary because there must be
employees who value job on the grond of the benefits & faciities there are getting rather
then only comparing with pay.
 Irrational demand by the trade union with the view of coercing management to increase
the pay or benefit : employees they think that if they place a very high demand the
management will bargain but the bargained demand will also be more then what they
have expected but things may not go that way .

Unit 4: Employee Grievances, Conflicts & Disputes


Employee grievance refers to the dissatisfaction of an employee with what he expects from the
company and its management. A company or employer is expected to provide an employee with
a safe working environment, realistic job preview, adequate compensation, respect etc. However,
employee grievance is caused when there is a gap between what the employee expects and what
he receives from the employer.
Employee grievances may or may not be justified. However, they need to be tackled adequately
because they not only lower the motivation and performance of the employee but also affects the
work environment. Employee grievances if left unchecked can lead to large disputes within the
company. Any company must have a proper channel for employee grievance redressal.

Employee Grievance should be handled in a proper and well defined manner. If an employee
reports a matter related to a policy or something he or she is not happy with or wants to
complaint against, a framework defined in policy should be used.

Typical Steps in Employee Grievance Handling:

1. Employee grievance should be submitted in a proper channel

2. The supervisor of the employee should be informed and spoken to

3. A review committee should examine the grievance for its validity and against the company's

4. Resolution should be provided if the grievance is valid

5. If the employee grievance is not resolved there should be a further body where it can be

Employee Grievance Procedure: (Nature and Causes of Grievance)

Most large organisations have a formal grievance procedure which enables the organisation to
redress those grievances which come under their purview.

The advantages of having a formal procedure are listed below:

(i) It provides established and known methods of processing grievances and keeps this channel of
communication open
(ii) The redressal of a grievance is attempted by:

(A) Establishment of facts pertaining to the grievance

(b) Collection of facts and evidences

(c) Asking probing questions relating to the grievance

(d) Analysis of facts and data generated

(e) Taking decisions on impartial basis.

(iii) Role of emotion which may have caused the grievance in the first place can, however, be
minimized by following the process of objective analysis.

(iv) The process covers several levels in the organization including reference to out side
institutions or individuals, if so desired or provided in the contract.

(v) Its existence provides confidence among employees that they can be heard and threat their
grievances could be impartially redressed the mere existence of this procedure, therefore, is
satisfying even though an employee may never have an occasion to use it.

(vi) Even if a grievance is not settled in an employee’s favour, still the employee may feel
satisfied because of the opportunity to communicate and to be heard by the management.

(vii) Involving various hierarchical levels like middle and senior management in the grievance
redressal process provides a safeguard against the possible arbitrary of biased decision of the
immediate supervisor.

(viii) Various levels in the organisation get to know of the kinds of issues that concern workers
and managers

Machinery for Handling Grievances:

Every organisation needs a permanent procedure for handling grievances. This procedure usually
consists of a number of steps arranged in a hierarchy. The number of these steps varies with the
size of the organisation. A small organisation may have only two steps-the supervisor and the
manager-but a big organisation may have as many as ten steps.

The first and the last steps are almost always the same for all organisations. Though a labour
union is not essential to the establishment and operation of a grievance procedure, one is
assumed in the schematic diagram of a four-step grievance procedure.

The frontline supervisor is always accorded the first opportunity to handle grievances. He is the
first rung of the ladder if the concern is unionised, a representative of the union may also join

This step is very necessary to preserve the authority of the supervisor over his workers. But all
grievances cannot be handled by the supervisor because many of them involve issues or policies
which are beyond the limits of the authority.

There may be some grievances which he may fail to redress and find solution for. Hence
provision is made for a second step in handling grievances. This second step may be the
personnel officer himself or some middle-level line executive. If the concern is unionised, some
higher personnel in the union hierarchy may join him. It should, however, be remembered that by
injecting the personnel officer into the procedure at this step and by giving him authority to
overrule and reverse the decision of the supervisor the fundamental principle of line and staff
relationship is violated. A third step is constituted by the top management to handle grievances
involving company-wide issues.

In this step the top union representatives join. The redressed of grievances becomes complex and
difficult because by now they acquire political hues and colours. If the grievance has not been
settled by top management and top union leadership then in the fourth and final step it may be
referred to an impartial outside person called an “arbitrator”. Two other possibilities are that the
issue may be temporarily or permanently dropped or the workers may go on strike.
Nature and causes of grievance:
Is it can be seen from the above, the meaning of grievance is restrictive in nature and the
decision as to what constitutes a grievance in an organizational context is arrived at collectively
by the management and the union of that enterprise? When the individual grievances are not
redressed and if other workers get affected by the same situation, they may become a collective
grievance. The collective grievances normally come under the purview of collective bargaining.
Although the precise nature of the causes of a grievance differs from one organisation to another
in general they tend to fall under the following categories in most organisations:

(i) promotions:
(a) Suppression (b) Acting promotion (c) Seniority (d) Pay fixation

(ii) Compensation:
(a) Increments (b) Payment (c) Recovery of dues

(iii) Amenities:
(a) Inequitable distribution (b) Entitlement (c) Medical benefits

(iv) Service matters:

(a) Transfers (b) Continuity of service (c) Superannuation

(v) Disciplinary action:

(a) Punishment (b) Fines (c) Victimisation

(vi) Nature of job:

(a) Job allocation

(vii) Condition of work:

(a) Safety (b) Hazards

(viii) Leave:
The International Labour Organisation (ILO) classified a grievance as a complaint of one or
more workers with respect to wages and allowances, conditions of work and interpretations of
service stipulations, covering such areas as overtime, leave, transfer, promotion, seniority, job
assignment and termination of service.

The causes of grievances mentioned are necessary to identify the nature of a grievance and to
decide whether that grievance can be formally taken up for redressed through the formal
grievance handling machinery. The deeper causes leading to those grievances need to be
analysed so that preventive as well is corrective steps could be taken by management.

Grievance procedure:
Grievance procedures are a means of dispute resolution that can be used by a company to address
complaints by employees, suppliers, customers, and/or competitors. A grievance procedure
provides a hierarchical structure for presenting and settling workplace disputes. The procedure
typically defines the type of grievance it covers, the stages through which the parties proceed in
attempting to resolve matters, individuals responsible at each stage, the documentation required,
and the time limits by which the grievance must be presented and dealt with at each stage. The
best-known application of grievance procedures is as a formal process outlined in labor union

Grievance procedures do not necessarily have to be so formal and elaborate, and in fact, overly
formal grievance procedures often discourage the airing of disputes in a timely manner. In small
businesses, the procedures may consist of a few lines in an employee manual or the designation
of a single ombudsman to deal with problems as they develop. Peer review of employee concerns
is another popular way to address grievances. On the other hand, some larger companies may
create an entire department dedicated to fielding complaints from employees or customers.

Whatever form they may take, grievance procedures are intended to allow companies to hear and
resolve complaints in a timely and cost-effective manner, before they result in litigation.
Knowing that formal procedures are available often encourages employees to raise concerns or
question company policies before major problems develop. It also makes managers less likely to
ignore problems, because they know that upper management may become involved through the
grievance process. In union settings, grievance procedures help protect employees against
arbitrary decisions of management regarding discipline, discharge, promotions, or benefits. They
also provide labor unions and employers with a formal process for enforcing the provisions of
their contracts.

Although having grievance procedures in place is important in both unionized and non-unionized
settings, companies must support their written policies with consistent actions if they hope to
maintain good employee relations. To make a grievance procedure work, all parties must
approach it with the attitude that it serves their mutual interests. Ideally, an effective grievance
procedure helps management discover and correct problems within an operation before they
cause serious trouble. It can provide a vehicle through which employees can communicate their
concerns to upper management.

For grievance procedures to be effective, both parties should view them as a positive force that
facilitates the open discussion of issues. In some cases, the settling of grievances becomes a sort
of scorecard that reinforces an "us versus them" mentality between labor and management. In
other cases, employees are hesitant to use the grievance process out of fear of recrimination.
Some studies have shown that employees who raise grievances tend to have lower performance
evaluations, promotion rates, and work attendance afterwards. This suggests that some
employers may retaliate against employees who raise complaints. It is vital that a company's
grievance procedures include steps to prevent a backlash against those who choose to use them.

Benefits of a Grievance procedure:

1. It brings grievances into the open so that management can learn about them and try corrective

2. It helps in preventing grievances from assuming big proportions. The management catches and
solves a grievance before it becomes a dispute.

3. It provides employees a formalised means of emotional release for their dissatisfactions. Even
if a worker does not use the grievance system for his own emotional release in a particular
situation, he feels better because he knows the system is there to use if he wants to do so. It
builds within him a sense of emotional security.
4. It helps in establishing and maintaining a work culture or way of life. As problems are
interpreted in the grievance procedure, the group learns how it is expected to respond to the
policies that have been set up.

5. It acts as a check upon arbitrary(logical) and capricious(changeable) management action when

a manager knows that his actions are subject to challenge and review in a grievance system he
becomes more careful in taking his decisions.

Industrial conflict:

A term which refers to all expressions of dissatisfaction within the employment relationship,
especially those pertaining to the employment contract, and the effort bargain. The many
different kinds of industrial conflict may be divided into two broad classes—informal and

Informal industrial conflict is so labelled because it is not based on any systematic organization,
results directly from a sense of grievance, and supposedly is wholly expressive in nature. Many
forms of industrial sabotage which appear irrational would constitute industrial conflict in this
sense, as would purely individualized and even unconscious forms of protest, including
absenteeism, frequent job-changing, negligence, and even accidents at work. Industrial
sociologists have also regarded spontaneous walk-outs and strikes as examples of informal
industrial conflict, as well as the constant opposition to management expressed in workgroup
norms regulating output, restrictive practices, secrecy, or other guarded treatment of superiors.
The idea of informal industrial conflict thus draws attention to the roots of behaviour which may
appear incomprehensible from the point of view of management. Used too widely, however, it
loses its vigour.

Formal industrial conflict is reserved for organized expressions of conflict articulated through
a trade-union or other worker representative. It’s supposed purpose is strategic or instrumental
rather than (or as well as) expressive and may often involve workers who, by themselves, have
no feelings or personal involvement regarding the issues at stake in the dispute. Its characteristic
form is the organized strike: that is, a withdrawal of labour such as to constitute a temporary
breach of contract, using the collective strength of the workforce to avoid sanctions and achieve
adjustments to pay or conditions of work. Strikes may be reinforced by other types of formal
sanction such as the go-slow and work to rule. They may be confined to those directly affected or
may take the form of sympathy strikes by workers in related jobs and industries. Strikes are
deemed to be official if they have been called at the behest of the union leadership and in
accordance with the law and with procedural collective-bargaining agreements. The term
unofficial or ‘wildcat’ is applied to strikes waged through unrecognized leaders such as shop
stewards, or by a non-recognized union, or in some other way which breaches established
collective-bargaining laws and procedures. Obviously, there is not a clear distinction in practice
between wildcat strikes and some of the more collective forms of unofficial conflict.

Nature of conflict & Manifestation:

Many people associate conflict with violence, destruction and war. Conflict is seen
overwhelmingly as a negative phenomenon. This perception emerges because we have not been
very successful at managing or transforming our conflicts. The conflict cycle below shows how
negative beliefs about conflict develop. If your response to a conflict creates undesirable
consequences, you are likely to believe that the conflict itself was a negative event. Over time, if
you experience negative consequences to conflict more often than not, your attitudes and beliefs
toward conflict become ingrained, since they are continually reinforced.

A. The Conflict Cycle

The idea of conflict is basic to our understanding and appreciation of our exchange with reality--
of human action. Conflict can be treated broadly as a philosophical category denoting the clash
of power against power in the striving of all things to become manifest. Or, conflict can be seen
simply as a distinct category of social behavior--as two parties trying to get something they both
cannot have. Moreover, conflict can be apprehended as a potentiality or a situation, as a structure
or a manifestation, as an event or a process.

The concept of conflict is multidimensional; it envelops a family of forms. We select one

depending on our analytical purposes and practical problem. Because my concern is to
understand conflict as a social field phenomena, I must first consider conflict as a general
category. From this most general conception I can work towards comprehending social conflict,
and its empirical manifestations.

Reality comprises multiform and interwoven potentialities, dispositions, and powers. What
aspect becomes manifest depends on the dialectical confrontation between this reality and our
perspective, which is a power, an outward directed vector. What we perceive is the result of
the conflict between this vector and reality's inward bearing vector of power (e.g., between a
baby's cry and what we are focusing on at the moment).
Such is the view of reality provided by the field approach of this book. What then is
conflict? Conflict is a balancing of vectors of powers, of capabilities to produce effects. It is a
clash of powers. But note. Conflict is not a balance, an equilibrium, of powers. It is not a stable
resultant. Conflict is the pushing and pulling, the giving and taking, the process of finding the
balance between powers. Thus, I have favored the term dialectical--the moving back and forth in
a field of confrontation--to describe perception. For perception is seldom determinate. It is a
continual balancing of outward directed and inward bearing vectors of power, a perpetual

Most fundamentally, therefore, conflict is correlative to power. Power, simply, is the capability
to produce effects; conflict is the process of powers meeting and balancing. To understand what
powers become succeed requires comprehending their conflicts; to understand conflict involves
untangling the powers involved.

Conflict is therefore universal, as Heracleitus pointed out. Our very experience presupposes
conflict in its generation, and our knowledge, apart from its apriori categories, is based on such
conflict. Our learning about ourselves, others, and reality, our growth and development, and our
increasing ability to create our own heaven or hell, comes through conflict. The desire to
eradicate conflict, the hope for harmony and universal cooperation, is the wish for a frozen,
unchanging world with all relationships fixed in their patterns--with all in balance. One in which
we cannot hope nor plan for a better tomorrow, but can only follow our inevitable course, with
the determined ups and downs of a wooden horse on a merry-go-round.

Conflict Resolution:

Conflict, arguments, and change are natural parts of our lives, as well as the lives of every
agency, organization, and nation.

Conflict resolution is a way for two or more parties to find a peaceful solution to a disagreement
among them. The disagreement may be personal, financial, political, or emotional.

When a dispute arises, often the best course of action is negotiation to resolve the disagreement.

The goals of negotiation are:

 To produce a solution that all parties can agree to
 To work as quickly as possible to find this solution
 To improve, not hurt, the relationship between the groups in conflict

Conflict resolution through negotiation can be good for all parties involved. Often, each side will
get more by participating in negotiations than they would by walking away, and it can be a way
for your group to get resources that might otherwise be out of reach.

Is there a correct way to handle conflict? What are the effects of poor conflict management?
Conflict in the workplace might be inevitable, as employees have different personalities, goals,
and opinions. Learning how to handle conflict efficiently is the key to preventing it from
hindering employees' professional growth.Conflict resolution is only a five-step process:

Step 1: Identify the source of the conflict. The more information you have about the cause of
the conflict, the more easily you can help to resolve it. To get the information you need, use a
series of questions to identify the cause, like, “When did you feel upset?” “Do you see a
relationship between that and this incident?” “How did this incident begin?”

As a mediator, you need to give both parties the chance to share their side of the story. It will
give you a better understanding of the situation, as well as demonstrate your impartiality. As you
listen to each disputant, say, “I see” or “uh huh” to acknowledge the information and encourage
them to continue to open up to you.

Step 2: Look beyond the incident. Often, it is not the situation but the perspective on the
situation that causes anger to fester and ultimately leads to a shouting match or other visible—
and disruptive—evidence of a conflict. The source of the conflict might be a minor problem that
occurred months before, but the level of stress has grown to the point where the two parties have
begun attacking each other personally instead of addressing the real problem. In the calm of your
office, you can get them to look beyond the triggering incident to see the real cause. Once again,
probing questions will help, like, “What do you think happened here?” or “When do you
think the problem between you first arose?”
Step 3: Request solutions. After getting each party’s viewpoint on the conflict, the next step is
to get each to identify how the situation could be changed. Again, question the parties to solicit
their ideas: “How can you make things better between you?”

As mediator, you have to be an active listener, aware of every verbal nuance, as well as a good
reader of body language.

Just listen. You want to get the disputants to stop fighting and start cooperating, and that means
steering the discussion away from finger pointing and toward ways of resolving the conflict.

Step 4: Identify solutions both disputants can support. You are listening for the most
acceptable course of action. Point out the merits of various ideas, not only from each other’s
perspective, but in terms of the benefits to the organization. (For instance, you might point to the
need for greater cooperation and collaboration to effectively address team issues and
departmental problems.)

Step 5: Agreement. The mediator needs to get the two parties to shake hands and agree to one
of the alternatives identified in Step 4. Some mediators go as far as to write up a contract in
which actions and time frames are specified. However, it might be sufficient to meet with the
individuals and have them answer these questions: “What action plans will you both put in place
to prevent conflicts from arising in the future?” and “What will you do if problems arise in the

Grievances & Industrial Relation:

Nature of Industrial Dispute :

Any dispute or difference between employers and employers or between employers and
workmen or between workmen and workmen, which is connected with the employment or non-
employment or the terms of employment or with the conditions of labour of any person.
 Interest Disputes : Interest dispute arises when there is dual interest of employer and
employee that is when both the parties are thinking in different dimensions. For example,
if the employer thinks about the productivity of the organization only, making them work
extra hours neglecting the health hazard for employees, this kind of dispute is called
interest dispute.

 Grievance Disputes: A grievance is a formal complain raised by the employee towards

employer in the work place. when a employee feels that his grievances has not been
addressed or recognised by the employer in a due course of time also and the same is
creating a problem in smooth operation of his/her duty then the grievances dispute is said
to araise.

 Disputes over unfair labour practices: If an organization does unfair labor practice that
is, keeping remuneration below government rate, making them work extra hours, without
compensation at overtime rate or any other facility to compensate them, dispute over
unfair labor practice arises.

 Recognition Disputes: When a staff sincerely and committedly does his work, comes
and leaves the office on time and abides by all the rules and regulations implied by the
organization for ages and still do not get any recognition by the organization then
recognition dispute arises . When the employee id putting an extra effort for his job he
also expects an extra treatment by the employer after due course of time, if the employer
do not realize it on time then it becomes a major cause for recognition dispute.

 Legal provision on dispute settlement process in Nepalese Organization:

Strikes & lockout – Causes :

Strikes and lockouts are legitimate actions used by parties to advance their bargaining aims.
These actions can have a significant impact on both parties and shouldn’t be taken lightly. They

 have major emotional and economic effects on the parties, their families and in some cases,
on society
 significantly harm the relationships of those bargaining.

Strikes and lockouts are also lawful where those striking or locking out have reasonable grounds
for believing health or safety is being compromised.


Employees strike when a number of employees totally or partially:

 break their employment agreement

 stop work or don’t accept some or all the work they usually do
 reduce their normal output, performance, or rate of work.

Employees don’t have to stop work completely for them to be on strike.

To be a strike the action must be part of a combination, agreement, common understanding, or

joint action made or done by the employees. Employees can do this action to try to make their
employer give in to their demands. Employers can’t discriminate against employees for taking
part in a lawful strike.


Employers lockout employees when they close, suspend, or discontinue their business or a part
of it, break some or all of an employee’s employment agreement, don’t give them work they
would usually give them, or suspend employees. To be a lockout, this action must be done to try
to make their employees, (or to help another employer make their employees), accept terms of
employment or comply with their demands. Employers may also lock out on health and safety

Causes of Strikes:

Employees may strike due to low pay, they want to be paid fair and equitable remuneration. If
they believe that they need to be paid more but the employer does not agree, it may results to
strike. Example: striking due to issues of overtime payments, difference in salary pay sometimes
for people with the same knowledge. Also in times of inflation, wages a likely to seek increase in
salary to maintain their standard of living.


Employees strike for improvement of their working conditions. Working conditions relates to
health and safety at work place. If production tools are not safe, poor or fewer than the actual
work to be done daily, if there are fewer or no protection tools such as coats and gloves. Workers
may strike to demand sufficient tools needed.



Dissatisfaction of policies includes policies related to leave entitlement such as sick leave,
holiday leave, promotion and redundancy. For example strike due to demand for leave pay; if
companies do not pay their employees when they are on leave, or unsatisfactory payment related
to leave then workers may strike


If termination of employment is not of proper reasons, such employment termination based on

discrimination on color, sex or tribe, termination without following proper procedures , or
termination of employees who are exercising labour rights then employees may strike


If employees are working more than established hours set by the government as per industrial
relation and labour act, Also if there is no overtime payments for such excessive hours work it
will results to strikes


If there is a dispute between employees and management in which employees believe there is a
need for change on a certain matter and management has been notified, reminded of such
demand, yet management do nothing( I.e. no response from management). Employees may strike
to get their demands settled


When management goes against the collective agreement between them and employees, it may
result to strike.


The existence of discrimination highly encourages strikes .Example if part wages were treated
more fairly than fulltime wages in terms of payment, wages may strike to demand an equal pay
for both fulltime and part time wages


Most managers do not consider employees; they just look on their own side. For example
managers may use abusive languages to their employees and sometimes even hit workers that in
return create a desire for revenge on workers towards management. Also the behavior of
managers to discourage labour unions and their rights contributes towards strike.


The lack of transparency between management and employees due to levels of hierarchy
between them can lead to strike as matters may take time to be solved due to the presence of
slower or poor communication between employees and management.
Unit 5: Workers participation in Management

Meaning & Concept:

Quality Circle :

It is small group of employees in the same work area or doing similar type of who voluntarily
meets regularly for about an hour every week to identify, analyze and resolve work related
problems not only to improve quality, productivity and the total performance of the organization,
but also to enrich the quality of work life of employees. There is a misconception that quality
circles and task force are one and the same. But the quality circle is not a task force and the
former is broader than the latter.

A task force is a group of most skilled employees selected and appointed by the management,
engaged in various functions with an orientation to problem- solving. The quality circles are
voluntary associations of workers of the same work place. Quality circles involve people in
solving problems and their brain power effectively.

Objectives: the important objectives of Quality Circles are:

(i) To develop, enhance and utilize human resources effectively;

(ii) To improve quality of products/services, productivity and reduce cost of production per unit
of output;

(iii) To satisfy the workers’ psychological needs for self-urge, participation, recognition etc. with
a view to motivating them. Accomplishment of this objective will ensure enhancement of
employee morale and commitment;

(iv) To improve various supervisory skills like leadership, problem solving, inter-personal and
conflict resolution and
(v) To utilize individual imaginative, creative and innovative skills through participation,
creating and developing work interest, including problem solving techniques etc. Achievement
of these objectives effectively requires the use of certain techniques.

Benefits of Quality Circles

Quality circles benefit both the members and the organization.

Benefits for members include: (i) satisfaction of self-esteem and esteem from others,
(ii) improved job satisfaction, (iii) self-development in terms of skills, knowledge \, sensitivity
skills etc, (iv) satisfaction of social and psychological needs. Benefits to the organization
include: (i) improvement in the job performance of the members, (ii) development of solutions to
the identified areas, (iii) improvement in two way communications among members and the
management, (iv) promotion of participative management culture and team work, (v) generation
of pride among the member in doing a meaningful job, (vi) increased managerial
effectiveness, (vii) development of problem solving- ethics in the
organization, (viii) development of harmony and mutual trust between members and the

Ultimately, the effective functioning of the quality circle results in organizational effectiveness.

Problems of Quality Circles

However, there are certain problems in quality circles regarding fitting them effectively in the
existing cultural environment in the industry, rewarding, awarding and motivating the quality
circle members’ and facilitators. These problems can be solved if the top management takes
proper care and interest. This participative scheme will contribute to the organizations’
effectiveness and to enhance job satisfaction and sound human relations in an organization and
quality of the work life of employees.

Kaizen & its Benefits:

What Are the Benefits of Kaizen?

Businesses continue to turn towards lean manufacturing tools to find ways to tighten their belts
and remain competitive. Lean tools with low up-front costs are especially appealing. One such
tool, Kaizen, focuses on continuous improvements and can be implemented on nearly any
budget. Kaizen involves every employee in making small, daily changes. Using knowledge from
every employee, Kaizen identifies problems at their source, solves them, and changes standards
to ensure problems stay solved.

Improvements don’t stop once a solution is realized. Instead, each process is fine-tuned as
employees continue to look for areas that can improve. The benefits of Kaizen span throughout
the entire business.

Kaizen Benefit to Business

Every employee, in every area, actively looks for things that can be improved. Over time, the
small changes lead to major benefits in efficiency, safety, as well as employee and customer
satisfaction. Kaizen can provide these benefits to nearly any industry, from manufacturing to

Reducing Waste

Reducing waste is one of the key aspects of Kaizen and often the easiest to start with. Waste can
take many forms, including time, resources, and revenue.

A hospital in Washington, for instance, significantly reduced ER preparation time by acting on a

single suggestion. A worker noticed that each room had tools and supplies set up differently. The
worker suggested a common way to organize each room, using color-coding and labeling:
breathing supplies were green, gauze was blue, and IV supplies were red. Staff no longer wasted
time looking for supplies and were able to prep the ER for patients quickly and efficiently.

Another example comes from a company based in Commerce City, California. The company
determined that there were 700 incomplete orders from the previous month, causing a significant
drop in revenue. Generally, the unfinished orders were caused by receiving incorrect or partial
information from sales. The sales team worked together and helped to develop order tracking
systems that significantly reduced incomplete orders—increasing revenue and decreasing time
spent hunting down missing information.

Simplifying Work Processes

Kaizen also benefits companies by eliminating overly difficult work. Making work easier helps
to reduce potential mistakes and increase efficiency. A Sony plant in Indiana identified several
processes that were overly complicated. Station operators identified several solutions to make
work easier, such as eliminating the need to reach by re-configuring workstation height, and
redesigning the packaging machine so that it required less physical effort to operate. These
changes, among others, nearly halved production time by eliminating difficult tasks.

A more efficient and easier process can be enjoyed by companies outside manufacturing as well.
In an Environmental Protection Agency (EPA) case study, Kaizen was used to improve the
purchasing process. The original process had twenty-seven steps which made the process overly
difficult. The purchasing group worked together and reduced the number of steps to sixteen. The
group also created a visual inventory system, using labels and barcodes to simplify the ordering
process. Ninety days after the changes were made, purchasing errors were reduced by 50%,
reducing the effort spent fixing errors.

Improving Safety

In addition to reducing injuries and the related costs, a safer workplace makes employees feel
more comfortable when working. An excellent example of Kaizen improving safety is
in hospitals. Health care-associated infections (HAIs) are a significant risk in hospitals. In an
effort to reduce the number of HAIs, a hospital asked its employees to focus on changes that
would reduce infection rates. Several suggestions were brought forward and quickly
implemented. To start, cultures were taken from patients when they arrived for surgeries and
again when they left. This change identified infections that were present when patients arrived,
so they could be treated right away. It also identified patients who developed infections in the
hospital, also allowing for quick treatment.

Next, glove stations and alcohol dispensers were placed right next to entryways, with signs to
remind workers to use them immediately upon entering a room. These changes helped to reduce
the overall number of HAIs, creating a safer environment. They also helped to reduce the cost
associated with HAIs, saving a substantial amount of money. Overall, the staff was relieved to
know that they were doing everything possible to keep their patients safe.

Improving Employee and Customer Satisfaction

Businesses that practice Kaizen gain additional benefits, including employee and customer
satisfaction. By involving employees in making changes, workers gain confidence and are
happier. In Gemba Kaizen, the author provides an excellent example of a business where
employees are more content and customers are happier. Each day, the owner holds a 30-minute
class that engages the entire company in addressing and solving problems. This has created an
open environment where problems are immediately addressed and solved by the employees.

Problems are not just solved in-house. For example, if a customer needs a specific technology to
solve its problems, the company will work with the customer to develop the new technology.
The company and its customers solve problems together—resulting in many shared patents
between the company and its customers. The open problem-solving practice has created a
workplace culture where employees have pride in their work, and customers trust that their needs
are always a priority.

Adopting Kaizen has many benefits that improve productively, safety, and the satisfaction of
both employees and customers. Each of these, in turn, helps reduce costs and increase profit
without large, capital-intensive improvement projects.

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essential information that can make Kaizen succeed

Quality of work life:

WL is defined as the favorable conditions and environments of a workplace that support and
promote employee satisfaction by providing them with rewards, job security, and growth
opportunities. The continuous effort to bring increased labor-management cooperation through
joint problem solving to improve organizational performance and employee satisfaction are key
aspects of QWL.

The unions can play a constructive role in QWL effort by sustaining and even enhancing its
relevancy as a legitimate institution which represent the rights and interests of the workers. This
encourages unions to take collaborative course and minimize adversarial and competitive tactics
which brings employee satisfaction and better QWL in the work place. Unions must adopt more
proactive and creative roles in the work place and discard their largely reactive strategy to
employer initiatives. For this, organizations should start involvement of unions in participation
process by establishing cohesive, supportive organized groups based on an educational strategy
that analyses the work processes of the plant or office and comes up with a programme of
reforms aimed at increasing individual autonomy, skills, social support, and empowerment(
Hewlett, S., Luce, C., Shiller, P., & Southwell, S,2005).

Good employee relations provide fair and consistent treatment to all employees so that they will
be committed to the organization. Companies with good employee relations are likely to have an
HR strategy that places a high value on employees as stakeholders in the business. Employees
who are treated as stakeholders have certain rights within the organization and can expect to be
treated with dignity and respect. The management should also give employees the freedom to air
grievances about management decisions. Effective employee relations require cooperation
between managers and employee relations representatives (Gomez-Mejia, 2006). QWL as a
process by which an organization responds to employee needs by developing mechanisms to
allow them to share fully in making the decisions that design their lives at work.

Since then a number of attempts have been made to identify various dimensions of Quality of
Work Life in detail. Some have emphasized the improvement of work conditions leading to
better Quality of Work Life, while other feel a fair compensation and job security should be
emphasized. Walton (1975) one of the major interpreters of Quality of Work Life movement has
proposed eight main conceptual categories for understanding the concept of Quality of Work
Life. These are briefly presented below;
Adequate and Fair Compensation : This refers to a just and fair balance between effort and
reward. It includes such things as a fair job evaluation, training to perform the job reasonably,
ability of the organization to pay, demand and supply of talent and skills and profit sharing.

Safe and Healthy Working Conditions : This refers to the work environment which should
be free from hazards or other factors responsible for health and safety of the employees.

Development of Human Capacities : This refers to the use of skills and abilities of the
employees autonomously and requires immediate feedback to take corrective action.

Growth and Security : This refers to the career opportunities of the employees in the job
which finally lead to the personal growth and security.

Social Integration in Work Organization : It refers to the self-esteem and self-identity of the
employee that should be free from prejudice based on sex, caste, race, creed, and religion.

Constitutionalization in Work Organization : This refers to the “rule of law” and should also
ensure zero violation of the constitutional guarantee by executive or organization decision-
making body.

Work and Total Life Space : This refers to the demands of work, like late hours, frequent
travel, etc which are both psychologically and socially very costly to the employee or his/her

Social Relevance of Work Life : This refers to the organization’s lack of concern for social
causes, like waste disposals, low quality products, over aggressive marketing and employment
practices make workers depreciate the value of their work and career which effects their self-

Work Behaviour

Work behavior is the behavior one uses in employment and is normally more formal than other
types of human behavior. This varies from profession to profession, as some are far more casual
than others. For example, a computer programmer would usually have far more leeway in their
work behavior than a lawyer.
People are usually more careful than outside work in how they behave around their colleagues,
as many actions intended to be in jest can be perceived as inappropriate or even harassment in
the work environment. In some cases, men may take considerably more care so as not to be
perceived as being sexually harassing than they would ordinarily.

Problems Facing Industrial Relations

Industrial relations is the term that describes how the management and the employees of a
company interact with each other. Specifically, it is the relationship that exists between the upper
management of a small business and the staff that carries out the duties of the small business.
Because there is a divide between these two aspects of a business, problems also arise when
maintaining a relationship between management and staff.

Narrow Focus : In many businesses, an issue that arises out of industrial relations is a narrow
focus by the employees of the organization. An employee or staff member may only view the
task at hand that they have to perform to complete their job rather than viewing how the role the
employee plays benefits the organization as a whole. Many employees simply see their managers
as someone who tells them what to do rather than as a facilitator that can help the employee
achieve their own professional goals as well as bring the company to a point where it reaches the
goals of the business.

Inflexibility of Employer :When an employer is inflexible, this can stifle the creativity of
employees. When employees feel as if their creativity is being squashed or that their opinions do
not matter, this can cause strife between the employees and management of the business. When
creativity is squashed, this can cause the company innovation to lack, which can ultimately
create an uncompetitive position for the company in the marketplace. Employers that allow
employees to participate in running the company by allowing suggestions and feedback from the
employees and even empowering employees to take on more responsibility for the route the
business takes, typically enjoys a more successful business environment—internally and in the
Division : Another issue that arises in industrial relations is an “us against them” mentality.
Many employees believe there is a great divide that exists between them and the management of
the company. This division between the two groups of a business can cause a myriad of issues
such as contract negotiation problems, strikes and the required intervention of trade and labor
unions. When management and employees can relate and communicate with each other, it
typically alleviates the problems, such as not being able to negotiate work contract agreements or
having to bring in the labor union to negotiate the terms and conditions between employees and