Assignment

ASSIGNMENT
Course Code : MS-24
Course Title : Employment Relations
Assignment Code : MS-24/TMA/SEM-I/2018
Coverage : All Blocks
Note: Attempt all the questions and submit this assignment on or before 30st April, 2018 to
the coordinator of your study centre.
1. Explain the procedure for registration of a Trade Union under the Trade Unions Act.
Discuss the objects general and political funds are spent under the Trade Union Act.
2. Describe the present position of Trade Unions in India. What are your suggestions for
strengthening the Trade Unions in India.
3. Explain the meaning and concept of Collective Bargaining. Describe the process of
collective bargaining. Discuss the conditions for success of collective bargaining.
4. Discuss the aims and objectives of workers participation in Management. Describe the
workers participation, employee involvement practices of any organisation you are familiar
with.
5. Explain various cultural aspects of employment relations. Discuss the recent developments
in employment relations. Discuss the impact of specialization, centralization and
globalisation on new employment relations.

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Answer
1. Explain the procedure for registration of a Trade Union under the Trade Unions Act.
Discuss the objects general and political funds are spent under the Trade Union Act.
Ans.: Chapter II of the Trade Unions Act, 1926 deals with the provisions of the registration
of trade unions. According to section 2 (h) of the Act, “Trade Union” means any
combination, whether temporary or permanent, formed primarily for the purpose of
regulating the relations between workmen and employers or between workmen and workmen,
or between employers and employers, or for imposing restrictive conditions on the conduct of
any trade or business, and includes any federation of two or more Trade Unions. Thus, the
present article shall deal with the most important aspect of trade union, and that is the
registration of trade unions.
Appointment of Registrars: According to section 3 of the Act, the appropriate government
shall appoint a person to be the Registrar of Trade Unions for each state, and the appropriate
government shall also appoint as many additional registrars as it may deem fit to carry out the
purposes of the Act.
Mode of Registration: According to section 4 of the Act, any seven or more members of a
Trade Union in accordance with the provisions of the Act may make an application apply for
registration of the trade union. There are two conditions subsequent to the same, firstly no
trade union of workmen shall be registered unless at least 10% or 100 of the workmen,
whichever is less engaged in the employment of the establishment are its members on the
date of making of its application and secondly no trade union shall be registered unless on the
date of making of application, minimum seven of its members who are workmen are
employed in the establishment or industry.
Also, such application shall not be deemed to be invalid merely on the ground that at any
time after the date of the application, but before the registration of the trade union some of the
members but not exceeding half of the total number of persons who made the application has
ceased to be members.
Application for registration: According to section 5 of the Act, every application for the
registration of the trade union shall be made to the Registrar and shall be accompanied by a
copy of the rules of the Trade Union and a statement of the following particulars namely-
• The names, occupations and addresses of the members making the application;
• The name of the trade union and the address of its head office, and
• The titles, names, ages, addresses and occupations of the office- bearers of the trade
union.
Where a trade union has been into existence for more than a year, then a copy of the assets
and liabilities shall also be submitted along with the application for registration.
Provisions to be contained in the rules of a Trade Union: According to section 6 of the
Act, a Trade Union shall not be entitled to registration under the Act unless the executive
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committee has been established in accordance with the provisions of the Act and the rules
provide for the following-
• The name of the trade union;
• The whole of the objects for which the trade union has been established;
• The whole of the purposes for which the general funds of the trade union shall be
applicable;
• The maintenance of a list of the members of the trade union;
• The admission of ordinary members who shall be persons actually engaged or
employed in an industry with which the trade union is connected;
• The conditions under which any member shall be entitled to any benefit assured by
the rules and under which any fine or forfeiture may be imposed on the members;
• The manner in which the rules shall be amended, varied or rescinded;
• The manner in which the members of the executive and the other office bearers of the
Trade Union shall be elected and removed;
• The safe custody of the funds of the trade union, an annual audit, in such manner, as
may be prescribed, of the accounts thereof, and adequate facilities for the inspection
of the account books by the office bearers and members of the trade union, and;
• The manner in which the trade union may be dissolved.
The general funds of a registered trade union shall not be spent on any other objects than the
following namely-
(a) The payment of salaries, allowances and expenses to 8[office-bearers] of the trade
unions;
(b) The payment of expenses for the administration of the trade union, including audit of
the accounts of the general funds of the trade union;
(c) The prosecution or defense of any legal proceeding to which the trade union or any
member thereof is a party, when such prosecution of defense is undertaken for the
purpose of securing or protecting any rights of the trade union as such or any rights
arising out of the relations of any member with his employer or with a person whom
the member employs;
(d) The conduct of trade disputes on behalf of the trade union or any member thereof;
(e) The compensation of members for loss arising out of trade disputes;
(f) Allowances to members or their dependants on account of death, old age, sickness,
accidents or unemployment of such members;
(g) The issue of, or the undertaking of liability under, policies of assurance on the lives of
members, or (under) policies insuring members against sickness, accident or
unemployment;
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(h) The provision of education, social or religious benefits for members (including the
payment of the expenses of funeral or religious ceremonies for deceased members) or
for the dependants of members;
(i) The upkeep of a periodical published mainly for the purpose of discussing questions
affecting employers or workmen as such;
(j) The payment, in furtherance of any of the objects on which the general funds of the
trade union may be spent, of contributions to any cause intended to benefit workmen
in general provided that the expenditure in respect of such contributions in any
financial year shall not at any time during that year be in excess of one-fourth of the
combined total of the gross income which has up to that time accrued to the general
funds of the trade union during that year and of the balance at the credit of those funds
at the commencement of that year; and
(k) Subject to any conditions contained in the notification, any other object notified by
the 18[appropriate government] in the Official Gazette.
2. Describe the present position of Trade Unions in India. What are your suggestions for
strengthening the Trade Unions in India.
Ans.: India has the largest number of trade unions. But they have developed very slowly. In
spite of the slow growth, the unions brought about some economic, political and social
betterment of the workers. Economically, they have improved the lot of the workers.
Politically, the unionism has produced a mighty secular anti-imperialist, anticapitalist,
equalitarian and socialistic force of national economy. Socially they have emerged as a
unique force of national integration in spite of the hindrance offered by illiteracy, rural
background of the worker and their migratory character, by communalism, casteism and
linguism. The chief features of the present day unionism in India are that only about 28% of
the workers are unionized. The unions are getting smaller in size. Their finances are generally
in bad shape. Trade union leadership faces several dilemmas. The unions often cannot make a
constructive approach because of intensive inter-union rivalries and multiplicity of unions.
Then, there is the heterogeneity of membership with workers from different areas, classes,
castes and regions. Because of such peculiarities, it has been observed that unlike the trade
unions in Sweden, Germany, the U.K., the U.S.A. Indian unions are yet weak, unstable,
amorphous, fragmental and uncoordinated. The most important problems of the trade unions
in India are uneven Growth: industry-wise and Area-wise, small size of unions, financial
weakness, multiplicity of the unions and inter-union rivalry, leadership issue, politicaliation
of the unions, democracy and leadership, management Attitude, statutory support, illiteracy
and ignorance.
Uneven Growth of Unionism: Trade unionism has not influenced a variety of industries.
Plantations, coals mines, food industries, textiles, printing presses, chemicals, utility services,
transport and communication and commerce are the main organised industries, in which
unionism has made progress. The degree of unionisation varies widely from industry to
industry. For example, it has been 51% in mining and 30 to 37% in transport,
communication, manufacturing industries and electricity and gas, industries with a high rate
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of unionism are coal (61%); tobacco manufacture (75%); cotton textile (56%); iron and steel
(63%) banks (51%) insurance (33%) railways (33%) and plantation (28%). Another
important feature of the unionism is that it is mainly concentrated in a few States and in
bigger industrial centres. The main reason for the development of such industry-cum-centre
unions has been the concentration of certain industries in particular areas. For example textile
workers in Bombay, Ahmedabad, Indore, Kanpur; plantation labour in Assam, west Bengal,
Tamil Nadu and Kerala; jute mill workers in Bengal, engineering workers in Calcutta,
Bombay etc; workers engaged in chemical and pharmaceutical industries in Bombay and
Vadodra. Trade union development in white-collar workers and in lower management cadre
is even more unsatisfactory. Hardly there is any trade union activity in small scale
enterprises, domestic servants and agricultural labour. Of the total labour force of about 100
lakhs, only about half of the workers are trade union members. The story of labour in the
organised industry is the history of Indian labour moment. There has been no movement
amongst the vast mass of labour in the primary sector and the small establishments. The lack
of labour organisation in the rural sector is due to their scattered and sparse habitations, their
lack in “in group” feeling, and their neglect by labour leaders. The proportion of union
members to the total number of workers could be placed at about 23 per cent in sectors other
than agriculture. If workers in agriculture are included, the percentage of organized labour
will fall considerably.
Small Size of Unions: Though trade unions are of various sizes with thousands of members,
yet, most of the unions are still characterized by their small size and small membership. The
average membership per union in India is less than 800, as compared with the U.K (17,600)
the USA (9,500). The small size of the unions is due to the following factors as the fact that
any seven workers may from a union under the Trade Union Act and get in registered has
resulted in large number of small unions, the structure of the trade unions organisation in the
country is in most cases, the factory or the unit of employment; so whenever employees in a
particular factory or mine are organised, a new unions is formed. Unionisation in India started
with the big employees and gradually spread to smaller employees. This process is still
continuing and has pulled down the average membership. Though the number of unions and
union membership are increasing, average membership is declining. Rivalry among the
leaders and the Central Organisations has resulted in multiplicity of unions thereby reducing
the average membership. It is noteworthy that as the number of unions increases, the total
membership does not increase proportionately. If rival unions could be stopped from being
evolved, the average size of unions could definitely go up. Because of the small size of the
unions, they suffer from lack of adequate, funds and find it difficult to engage the services of
experts to aid and to advise members in time of need. Further, they cannot face the challenge
of employers for long because of their weak bargaining power. Again, the small degree of
unionisation further aggravates their helplessness in collective bargaining and makes them
thoroughly dependent either on the political parties or on such outside personalities who
happen to command political influence on the employers and the Government machinery.
Financial Weakness: Trade unions suffer from financial weakness as the average yearly
income of the unions has been rather low and inadequate. The average income has been low
not because of the poverty of the workers but because of certain factors namely, workers are
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apathetic towards trade unions and do not want to contribute out of their hard earned money.
The national commission on labour observed that, union organisers generally do not claim
anything higher nor do the workers feel like contributing more because the services rendered
by the unions do not deserve a higher fee. The members instead of making regular payment
to the union make adhoc payment if a dispute arises which show a lack of commitment to the
unions. Under conditions of multiplicity of unions, a union interested in increasing its
membership, usually keeps their subscription rate unduly low and does not collect even that
subscription regularly. To improve the financial conditions of the unions, the National
Commission on Labour recommended that the minimum subscription should be raised to
rupee one per month. It, however did not favour the existing arrangement of collecting one
per cent or even more by way of membership fee on the ground that it would mean different
amounts within each State for the same group of workers. Another method advocated is the
introduction of the “Checkoff system,” under which an employer undertakes on the basis of a
collective agreement, to deduct union dues from the worker’s pay and transfer the same to the
union. But, this system has not found favour with certain sections. It has been alleged that if
the system is adopted, the constant touch between the union and the rank-and file will be
lessened. Further, no deductions can be made on this account under the payment of Wage
Act. The National Commission on Labour has held “An enabling provision should be
adequate. The right to demand checkoff facilities should vest with the unions, and if such a
demand is made by a recognised union, it should be incumbent on the management to
accept”. But this recommendation seems to be difficult to implement. The best solution of
improving the financial; condition of the unions would be to remove trade union rivalry, by
strictly adhering to the principle of “one union in one industry’.
Multiplicity of Trade Unions: Multiple trade unions are the biggest curse of Indian trade
union movement. Existence of many unions each trying to compete with each other on
membership drive and securing management support to recognise their union, not only
weakens the trade union movement but also cause inter-union rivalry and disunity among the
workers. The following are the major causes of multiple trade unions. Rapid industrialization
has increased the pace of capital formation in India. But skill formation” has not matched the
capital formation. This is because we in India missed ‘merchant craftsmanship” stages of
capitalism and instead a predominately “agrarian labour force” was converted directly into an
“industrial labour force”. Accordingly, most of the trade unions were not based on “trade”
specialization and instead based on generalization. Most of the trade unions were linked to
the political parties. Since India have a plethora of political parties, it causes formation of
number of trade unions linking with each political parties. When such political parties spilt,
the trade unions also spilt. Political influence often necessitates projecting outside politicians
as trade unions leaders. Since the political parties’ fortune changes rapidly, the membership
of unions also fluctuate. Union management relationship is a social relationship.
Unfortunately, in India we the same more as a legal matter. For example, as per Indian Trade
Unions Act, any seven workers can form a union. Many unions are formed on this basis.
Also, there is no central law which stipulates conditions for recognizing a trade union. Hence,
each union is trying to ‘influence management’ to recognize a trade union. In order to
influence them, they often take help from outside leaders and political parties and organise
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union as dictated by influential persons from outside. The ill-effects of multiple trade unions
are also as multiplicity divide the workers on party lines instead of uniting them together
which is the primary objective of trade unionism. Unscrupulous management exploits this to
their advantage. Unions organized on party line are more committed to the ideology of
political parties to which it is affiliated than the industrial unit and its objectives in which
they work. Union’s rivalries often make it difficult to settle disputes because their approach
to the problem and method of settlement vary. The problem is more complicated when
settlement does not suit the liking of their” political bosses” outside. Multiple trade unions
also make it difficult for all of them to join together and make a single charter of demands or
chalk out a common strategy of action plan. This will make their bargaining power very
weak. Multiple trade unions weaken the financial status of each union. This causes severe
handicap for each of them to effectively project their programmes and influence the workers.
Majority of Indian labour is illiterate, ignorant and poor. They are exploited by unscrupulous
trade union leaders, which result in the following problems. These workers are easily brain-
washed to become card holders of political parties and work for such parties at the expense of
working clause interest and unity. Workers are divided on caste religion, ethnic and creed
lines which goes against trade union objectives of unity and identity. Illiteracy and ignorance
are also exploited by outside leaders who prevent development of leaders from within the
organization. Workers are too ignorant to know their rights and often pampered with false
promises by union-leaders and politicians. This is the tendency of a worker moving from one
union to other with the hope that such a change will improve his economic gains. At times,
they may even hold membership of more than one union.
3. Explain the meaning and concept of Collective Bargaining. Describe the process of
collective bargaining. Discuss the conditions for success of collective bargaining.
Ans.: In the work situation, an individual worker has to face many problems such as, low
wages, long hours of work, loss incentive etc. These problems of an individual or few
individuals cannot attract the attention of the employer because of their less bargaining
power. The growth of trade union increased the bargaining strength of workers and enables
them to bargain for their better conditions collectively.
Collective bargaining is a source of solving the problems of employees in the work situation
collectively. It provides a good climate for discussing the problems of workers with their
employers. The employees put their demands before the employers and the employers also
give certain concession to them. Thus it ensures that the management cannot take unilateral
decision concerning the work ignoring the workers. It also helps the workers to achieve
responsible wages, working conditions, working hours, fringe benefits etc. It provides them a
collective strength to bargain with employer. It also provides the employers some control
over the employees.
The process of collective bargaining is bipartite in nature, i.e. the negotiations are between
the employers and employees without a third party’s intervention. Thus collective bargaining
serves to bridge the emotional and physiological gulf between the workers and employers
though direct discussions.
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The HR Labor Relations Manager directs the organization's labor relations agreement in
accordance with executive level instruction and endorsement. They supervise labor relations
support staff and serve as the management representative in labor negotiation, bargaining, or
interpretive meetings.
This major objective of collective bargaining can be divided into the following sub-
objectives:
1. To foster and maintain cordial and harmonious relations between the
employer/management and the employees.
2. To protect the interests of both the employer and the employees.
3. To keep the outside, i.e., the government interventions at bay.
4. To promote industrial democracy.
The need for and importance of collective bargaining is felt due to the advantages it offers to
an organisation.
The chief ones are as follows:
1. Collective bargaining develops better understanding between the employer and
the employees: It provides a platform to the management and the employees to be at
par on negotiation table. As such, while the management gains a better and deep
insight into the problems and the aspirations of die employees, on the one hand, die
employees do also become better informed about the organisational problems and
limitations, on the other. This, in turn, develops better understanding between the two
parties.
2. It promotes industrial democracy: Both the employer and the employees who best
know their problems, participate in the negotiation process. Such participation breeds
the democratic process in the organisation.
3. It benefits the both-employer and employees: The negotiation arrived at is
acceptable to both parties—the employer and the employees.
4. It is adjustable to the changing conditions: A dynamic environment leads to
changes in employment conditions. This requires changes in organisational processes
to match with the changed conditions. Among other alternatives available, collective
bargaining is found as a better approach to bring changes more amicably.
5. It facilitates the speedy implementation of decisions arrived at collective
negotiation: The direct participation of both parties—the employer and the
employees—in collective decision making process provides an in-built mechanism for
speedy implementation of decisions arrived at collective bargaining.
A collective bargaining process generally consists of four types of activities- distributive
bargaining, integrative bargaining, attitudinal restructuring and intra-organizational
bargaining.
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• Distributive bargaining: It involves haggling over the distribution of surplus. Under

it, the economic issues like wages, salaries and bonus are discussed. In distributive
bargaining, one party’s gain is another party’s loss. This is most commonly explained
in terms of a pie. Disputants can work together to make the pie bigger, so there is
enough for both of them to have as much as they want, or they can focus on cutting
the pie up, trying to get as much as they can for themselves. In general, distributive
bargaining tends to be more competitive. This type of bargaining is also known as
conjunctive bargaining.
• Integrative bargaining: This involves negotiation of an issue on which both the
parties may gain, or at least neither party loses. For example, representatives of
employer and employee sides may bargain over the better training programme or a
better job evaluation method. Here, both the parties are trying to make more of
something. In general, it tends to be more cooperative than distributive bargaining.
This type of bargaining is also known as cooperative bargaining.
• Attitudinal restructuring: This involves shaping and reshaping some attitudes like
trust or distrust, friendliness or hostility between labor and management. When there
is a backlog of bitterness between both the parties, attitudinal restructuring is required
to maintain smooth and harmonious industrial relations. It develops a bargaining
environment and creates trust and cooperation among the parties.
• Intra-organizational bargaining: It generally aims at resolving internal conflicts.
This is a type of maneuvering to achieve consensus with the workers and
management. Even within the union, there may be differences between groups. For
example, skilled workers may feel that they are neglected or women workers may feel
that their interests are not looked after properly. Within the management also, there
may be differences. Trade unions maneuver to achieve consensus among the
conflicting groups.
The collective bargaining process comprises of five core steps:
1. Prepare: This phase involves composition of a negotiation team. The negotiation
team should consist of representatives of both the parties with adequate knowledge
and skills for negotiation. In this phase both the employer’s representatives and the
union examine their own situation in order to develop the issues that they believe will
be most important. The first thing to be done is to determine whether there is actually
any reason to negotiate at all. A correct understanding of the main issues to be
covered and intimate knowledge of operations, working conditions, production norms
and other relevant conditions is required.
2. Discuss: Here, the parties decide the ground rules that will guide the negotiations. A
process well begun is half done and this is no less true in case of collective
bargaining. An environment of mutual trust and understanding is also created so that
the collective bargaining agreement would be reached.
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3. Propose: This phase involves the initial opening statements and the possible options
that exist to resolve them. In a word, this phase could be described as ‘brainstorming’.
The exchange of messages takes place and opinion of both the parties is sought.
4. Bargain: negotiations are easy if a problem solving attitude is adopted. This stage
comprises the time when ‘what ifs’ and ‘supposals’ are set forth and the drafting of
agreements take place.
5. Settlement: Once the parties are through with the bargaining process, a consensual
agreement is reached upon wherein both the parties agree to a common decision
regarding the problem or the issue. This stage is described as consisting of effective
joint implementation of the agreement through shared visions, strategic planning and
negotiated change.
4. Discuss the aims and objectives of workers participation in Management. Describe
the workers participation, employee involvement practices of any organisation you are
familiar with.
Ans.: Workers’ participation in management is an essential ingredient of Industrial
democracy. The concept of workers’ participation in management is based on Human
Relations approach to Management which brought about a new set of values to labour and
management. Traditionally the concept of Workers’ Participation in Management (WPM)
refers to participation of non-managerial employees in the decision-making process of the
organization. Workers’ participation is also known as ‘labour participation’ or ‘employee
participation’ in management. In Germany it is known as co-determination while in
Yugoslavia it is known as self-management. The International Labour Organization has been
encouraging member nations to promote the scheme of Workers’ Participation in
Management.
Workers’ participation in management implies mental and emotional involvement of workers
in the management of Enterprise. It is considered as a mechanism where workers have a say
in the decision.
The philosophy underlying workers’ participation stresses:
• Democratic participation in decision-making;
• Maximum employer-employee collaboration;
• Minimum state intervention;
• Realisation of a greater measure of social justice;
• Greater industrial efficiency; and
• Higher level of organisational health and effectiveness.
It has been varyingly understood and practised as a system of joint consultation in industry;
as a form of labour management cooperation; as a recognition of the principle of co-
partnership, and as an instrument of industrial democracy. Consequently, participation has
assumed different forms, varying from mere voluntary sharing of information by
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management with the workers to formal participation by the latter in actual decision-making
process of management.
Workers’ participation in Management in India was given importance only after
Independence. Industrial Disputes Act,1947 was the first step in this direction, which
recommended for the setting up of works committees. The joint management councils were
established in 1950 which increased the labour participation in management. Since July 1975
the two-tier participation called shop councils at shop level and Joint councils were
introduced. Workers’ participation in Management Bill, 1990 was introduced in Parliament
which provided scope for up liftment of workers.
Workers participation in management is not a new concept; it is as old as the institution of
owners and workers. Only its importance has increased and has been brought into sharp focus
with the industrial revolution and the advent of large enterprises" (Virmani, 1978). In the
feudal system before the Industrial Revolution, the units were small and there used to be a
joint decision making through consultation between the owner and worker. The owner took a
paternalistic approach and interest in the employee.
At times interests of workers and of management clash with each other and effective
discussion becomes essential. Groups representing both sides negotiate to derive common
ground for finding solutions for the conflict. Such a common ground can also be prepared
through cooperation, mutual trust and understanding of issues between the management and
workers. This can be possible when both cooperate jointly to manage issues.
The issues on which workers or employees are to be consulted have also varied widely.
Broadly speaking, the range of issues in any enterprise on which decisions need to be taken
from time to time can be classified under five major heads: safety and welfare issues; work-
related issues (production on the shop floor, quality, machine maintenance); sharing of gains
(wages, incentives, allowances); production-related issues (product-mix, plant production
targets, technology) and; business policy (expansion, contraction, pricing). Even the most
reluctant managers agree that workers should have some say in the first three categories,
although there may again be doubts about the second category. The third category obviously
gives workers some influence through the process of collective bargaining, wherever it exists.
There is, however, much difference of opinion as far as the last two categories are concerned.
Of late, interest in participative systems or even participative styles appears to have been
renewed with the need for change in the post-globalization scenario. Enterprises cannot be
changed without involving their employees. At the same time, formal participative processes
seem to have shifted to more informal ones, with an emphasis on styles rather than forums of
participation. But such systems of participation also seem to be in danger of lapsing into
intermediate or superficial types of participation. They would also depend greatly on the
individual perceptions of managers among and within the enterprise.
The issue of ownership is also relevant. Many employers and governments have been known
to propose workers’ stock ownership as a method of participation. This, they feel, could
increase worker control over industry, since they would become shareholders of the
company. But few shareholders anywhere have any control over policy decisions. In the
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United States, there have been many experiments with what is referred to as ESOPs, or
employee stock option plans. In India, New Central Jute Mills in West Bengal was operating
for several years with majority employee ownership.
This issue has been debated in India. From time to time, the Government has proposed
employee ownership of some percentage of public sector equity. At a national seminar on this
and related issues, union representatives hotly contested equity plans as substitutes for
participation, however. They objected on two grounds: one, that equity divestment even to
workers/employees would mean dilution of the concept of the public sector and its public
ownership and, two, that participation in equity is separate and distinct from the issue of
workers’ participation in management and not a cornerstone. Equity participation hardly
contributes to managing a unit. The BMS union felt that equity ownership of more than 50
per cent could mean some control for workers.
5. Explain various cultural aspects of employment relations. Discuss the recent
developments in employment relations. Discuss the impact of specialization,
centralization and globalisation on new employment relations.
Ans.: Culture can be broadly defined as a system of shared beliefs, values, customs,
behaviours and material objects that the members of a society use to cope with their world
and with one another. This definition includes not only patterns of behaviour but also patterns
of thought, i.e., shared meanings that the members of a society attach to various phenomena,
rites and rituals. In short, culture includes almost any form of behaviour that is learned rather
than instinctive or inherited. For instance, we can broadly divide the global culture into
occidental and oriental on the basis of the above definition. The beliefs, perceptions and
convictions of the people living in eastern hemisphere are quite different from their western
counterparts. These beliefs and perceptions in turn influence their attitudes towards life,
work, people, and affect their social behaviours in several ways. Within each of these two
broad classifications lie different cultures, which may be specific to the national, social or
even religious contexts. Each national culture may be composed of several sub-cultures,
which can be different inter se in certain fine aspects. The fact that cultures differ from one
another predicates that the beliefs and values considered appropriate in one cultural setting
may be considered inappropriate in a different cultural context.
Some key components of the industrial era are as important for their cognitive as for their
technological effects. The view of the world as a machine underlies the concept of the
assembly line, a concept in which various tasks are broken down into simple components.
This division of labour permitted the employers to engage unskilled labour with the worker
becoming one more component in the productive process. Workers often came to see little of
themselves in their product. Their labour was used impersonally and they responded in kind.
Industrial employers began realizing that this was not the most efficient way to organise
production in a high-technology society. For example, General Motors now operates facilities
at which teams of workers have responsibility for producing the entire car and not the parts
that go into the making of the car. Increasing amounts of knitwear are being manufactured in
New England homes, reviving the cottage industry that had almost died out by the end of the
nineteenth century.
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Globalisation has brought about a sea change in the cross-cultural interactions on a scale
unprecedented in the history. The increasing congruence of world’s cultures is a direct
product, in the first instance, of industrialization and, in the second, globalisation of the late
20th century. Advanced transportation and communication systems such as e-mail, along
with international migration, have brought peoples once isolated into contact with other
societies. Above all, the economic forces of international market system have broken down
the geographical barriers. Products are manufactured on one continent from the raw materials
of another and sold on still another. The decisions made by Iowa wheat farmers in the United
States affect the price of bread in India; the cost of oil in the Persian Gulf helps determine the
cost of corn in the United States. In essence, the world’s people are coming to live and
produce under increasingly similar economic conditions.
The traditional IR is passing through a critical phase. Several factors are responsible for this,
significant among them being the free market economy in the wake of globalisation, which
has been exerting tremendous pressure on business organisations in terms of survival in a
competitive environment. Employees and trade unions have come to realize that their own
survival in an organizational context is closely intertwined with that of the organisation. This
has resulted in a major departure in terms of union attitudes and approaches towards
production, productivity, quality, customer-orientation, etc. Downsizing and de-layering of
organisations with a view to cut costs and stay competitive added a new dimension to the
industrial relations management all over the world. Today’s unions and employees are less
militant and less non-cooperative than their counterparts of 1960’s and 1970’s. There has
been a marked tilt towards bipartism in the recent past in preference over thirdparty
intervention in the settlement of industrial disputes. Bipartism refers to the initiatives taken
by the employer and the union to resolve disputes mutually across the table in a spirit of give
and take. Tripartism or third-party intervention refers to either settlement of disputes with the
help of a mediator (conciliation) or through the medium of a judicial or quasi-judicial
authority (adjudication). The advent of Human Resource Management with its focus on soft
skills, individualism, non-unionism and performance management is yet another factor which
has been impacting industrial relations in its traditional sense.
In an environment in which collective bargaining agreements are to be replaced by
individual, one-to-one bargaining between the employer and the employees, particularly, in
matters of wage and salary determination, the whole process may result in a heterogeneous
employment relationship coupled with wide disparities among employees of the same skill
level, grade and position. This may eventually affect employee motivation, productivity, and
quite often hike the turnover rates due to inequity - perceived or real. Inequity is said to exist
in a setting if equals are treated unequally or vice versa. Inequity, whether real or perceived,
plays an important part in the nature and quality of employment relationship. ‘Equity’ can be
viewed from three different perspectives. ‘Individual equity’ is the perception of individual
employee about the fairness of the employer in compensating him commensurate with his
skills and contribution, i.e., whether he is being under-paid by the employer relative to the
output given by him. ‘Internal equity’ is the perception of the employee about the fairness of
the employer in compensating him relative to other employees who are similarly placed in
terms of knowledge, experience, skill, performance, etc., i.e., whether he is being treated on
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par with his peers in matters of rewards and compensation. ‘External equity’ is the perception
of employees as to the fairness of their employer in compensating them relative to what is
being paid for similar level of knowledge, skills, etc., by other organisations in the region,
i.e., whether they are being paid less than the ‘going rate’. In the traditional culture, where
wage revision is determined by collective bargaining, problems of inequity do not, as a
general rule, exist as the demands made by the union and negotiated and settled between the
parties take into account the region-cumindustry practices, productivity considerations, and
the skill-based or grade-based wage differentials, and therefore, there is less dissatisfaction
among employees on this count. But in the new scheme of things with its focus on individual
bargaining, inequity can exercise a major impact on the nature and quality of employment
relations.
With the onset of free-market economy and globalised competition, employment relationship
is taking a somersault to the position of status quo ante in so far as trade unions are fast losing
the power and authority that they gained after decades of struggle. The managerial
prerogatives, most of which vanished into thin air under the renewed assault from trade
unions, are being restored. In the current context, the managerial focus is increasingly on
flexibility (of work, time, tenure and pay), outsourcing, performance-based rewards, and
teamwork. Of these, flexibility is critical because of its enlarged scope. Flexibility can be
defined as the ability to change the methods and processes at short notice with least friction
or dislocation. Flexibility of work refers to the right of employer to transfer employees from
one job to another, which presupposes that the employees possess multiple-skills in striking
contrast to the traditional narrow, single-skill specialization. Flexibility of time (or flexi-time)
refers to the right of employer to break the work period into smaller chunks (with intermittent
breaks), during which he can direct the employees to work instead of the traditional 8-hour
long shift. This system is particularly in vogue in IT industry and certain other service sector
industries. Flexibility of tenure refers to the fixedterm or close-ended contracts of
employment, which stipulate a date on which the contract comes to an end. This is in sharp
contrast to the traditional open-ended contracts, which have been in force for well over 5-6
decades and, which imply that the contract is deemed to last till the time the employee attains
his age of superannuation. Flexibility of pay refers to the right of employer to pursue a policy
of differential pay even in respect of employees who are similarly placed. It further
recognizes the right to link pay/increments to merit/performance unlike the traditional job-
based and/or seniority based pay. These concepts have a decisive impact on the employment
relationship in the years to come.
They say reality is a matter of perception, and it’s especially true when it comes to a
company’s culture. Company culture can be described as an organization’s brand or
personality; it’s what you believe in and stand for, and what makes your company unique.
Company culture has everything to do with how employees, prospective employees,
customers and the public perceive your organization.
Company culture is powerful: it can impact sales, profits, recruiting efforts and employee
morale, whether positively or negatively. A great company culture attracts people who want
to work or do business with a company. It can inspire employees to be more productive and
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positive at work, while reducing turnover. It can even act as your best recruiter, attracting
qualified candidates who want to work for your company. It’s easy to see how important
company culture can be.
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• Distributive bargaining: It involves haggling over the distribution of surplus. Under

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