1.0 NATURE AND FUNCTIONS OF MANAGEMENT Management is defined as the Science and Art of making intended things happen in any organization. It is thus an executive function. The basic managerial functions are given below. • • • • • • • Planning Organizing Staffing Directing Motivation Co-ordination Controlling

1.1 IMPORTANCE OF MANGEMENT Truly speaking, no enterprise can survive without management, even if it possesses huge money, excellent machinery and expert manpower, because without management, it will be all confusion and nobody will know what to do and when to do. 1.To maintain discipline and to keep control over the employees of various sections. 2.To distribute work and machines among the workers in such a way to secure maximum output. 3. To keep co-operation among the staff at various levels. 4. To improve efficiency, management keeps scientific watch and strict inspection 5. To suggest new ideas as improvement. 6. To arrange the efficient storing and recording. 7. Management creates a vital, dynamic and life giving force to the enterprise. 8. To provide good training to the staff for attaining high skills in all fields. 9. To impart the instructions timely and to provide constant guidance.


10. Management tackles business problems and provides a tool for the best way of doing things. 11. Management only can meet the challenge of change. 1.2 DEFINITION OF MANAGEMENT Management means to manage men, machines, money and materials (The four Ms) to achieve certain goals and objectives. It is a function of an industrial undertaking which plans, organizes, directs and controls various activities of the organization. 1.3 MANAGEMENT AS A SCIENCE Management is a science because the management techniques are susceptible to measurement and factual determination. F.W Taylor is the father of Scientific Management. Scientific Management is referred as 1. 2. 3. 4. 5. Science, not rule of thumb, Harmony, not discord, Co-operation, not individualism, Maximum output, The development of each worker to his greatest efficiency and prosperity.

1.4 MANAGEMENT AS AN ART Management is an art because it means coordinating and getting things done through others (people). 1.5 DIFFERENCE BETWEEN MANAGEMENT AND ADMINISTRATION ADMINISTRATION 1. Administration is a determinative function 2. Administration predetermines the specific goals and lays down the broad areas within which these goals are to attained 3. Forming various departments in the organization 4. Fixing of authority and MANAGEMENT Management is an Executive function. Management is concerned with carrying out the broad policies laid down by the administration To keep the co-ordination among the staff of various levels To distribute work and machines


responsibilities of various employees

among the workers in such a way as to secure maximum output 5. Maintaining peace and discipline To maintain discipline and keep control over the employees of various department 6. Taking timely decisions with respect To suggest new ideas and to various activities to maximize profit improvements 1.6 LEVELS OF MANAGEMENT A large industrial organization need several managers, each wiTH specific qualifications and specialities. Mainly the management of the concern may consist of three levels. (A) Top Level management 1. 2. 3. 4. 5. 6. Board of directors Managing Director or Executive Director General Manager Proprietor Financiers Shareholders.

Top level management deal with overall, long range objectives and policies, make long plans and maintain public relation contacts. For large scale industries, along with the board of Director. It also includes President or Chairman, and Vice president of the Company. (B) Middle level management Middle level management keeps closer contact with day to day results and makes the plans that will aid in achieving objectives set by Top level manager. They include departmental heads such as production manger, purchase manager, sales manager, personnel manager, superintendent etc. (C) Lower level management They are also known as supervisory level managers, who plan day to day activities and put policies in effect with the objectives set down by Top and Middle level managers. They include foreman, supervisors, chargemen, inspectors etc.


(D) Roles and responsibility Authority (Roles) means right to command and power to act. Since top man in the organization cannot do each and everything himself, a definite chain of responsibility and authority is provided from top executive to each employee. Line of responsibility should be made very clear in order to facilitate ready flow of communication and control. Authority empowers the superior to make a subordinate to do the work. Every one in the industrial organisation from top level downwards, possess some authority to secure co-operation from subordinates. When authority is given, subordinates should accept the responsibility in fulfilling the objective of the firm. Roles and responsibility must go together, if the goals of organization are to be achieved efficiently. Whenever any employee is made responsible for a particular work, he must be given due authority and also to direct and control the efforts in completing that work. Every one in the organization structure must understand the limits of his roles and responsibility. That is to say he should know where his roles and responsibility starts and stops. Roles and responsibility of different management is given below 1. Top level management a. Top management approves the decisions of the middle level management b. It can issue orders and instructions and lay down guideline which must be followed. c. The chief executive position includes the interpreting of organizational policies and communicating the goals of the organization. d. The chief executive thinks and takes decisions for the long-run welfare of the enterprise. 2. Middle level management a. To run the details of the organization, leaving the top managers as free as possible of their responsibilities. b. To implement the policies of the top management c. To achieve co-ordination between the sub-units under their charge. d. To build up a contented and efficient staff where reward is given according to capacity and merit and not according to chance or length of service. e. To build a team spirit where all are working to provide a product or service wanted by the society. 3. Lower level management They represent a link between the management and the workers.


Application of scientific methods. efficiency etc) is due to the lack of order and system in the management. Main elements of scientific management a. Frederick Winslow Taylor Fredrick Winslow Taylor is know as the founder of Scientific Management. Formulate and test principles based on experimental results of all the cases. Select alternatives d. hence it remained at the mercy of workers.Principles of management . time. He emphasized that usually management was ignorant about the amount of work performed by a worker in a day and also about the best way of doing the job.2. analyze and define objectives b. Evaluate and review each alternatives e. Criticism: 5 . Taylor therefore suggested that management should adopt scientific methods for achieving higher efficiency. energy. Recognize the problem.0 DEVELOPMENT OF DIFFERENT SCHOOLS OF MANAGEMENT THOUGHT 2. Test conclusions and if required correct actions f. Taylor laid the foundation for modern scientific management between 1880 and 1890. Taylor found that much of waste (man.” In short it is the application of scientific principles and methods to management. Essentials of scientific management i) To find out waste and its cost ii) To eliminate waste iii) To pay uniform wages with reduced labour cost iv) To increase purchasing power of customer by lowering unit cost. Take selected action and g.1 Scientific Management : Scientific management may be defined as the “Art of knowing exactly what is to be done and the best way of doing it. Some of his significant achievements were .Incentive scheme .Standardization of tools and equipment or workmen and working conditions . He reformed the management through a thoughtful and systematic approach to its problems. Collect and analyze the required data c.Work study .

Scientific management was an innovation and received tremendous opposition. greater efficiency was achieved in industrial operations and productivity increased. principles of scientific management started spreading rapidly throughout the industry. Later on when. 2. Primary resistance came from management itself instead of workers community which was not prepared to discard old rules of thumb in favour of scientific approach. An another cause for opposition was the feeling that scientific management treated workers like cogs in a well-oiled machine and that the system destroyed humanistic practices in industry. Opposition to this change retarded the spread of the basic idea of scientific management in the beginning.2 Henry Fayol’s Contribution: 6 . with the use of scientific management.

costs. exchange) Financial activities (search for optimum use of capital) Security activities (protection of property and persons) Accounting activities (stock taking. 5. (In union there is strength) Criticism 7 . Technical activities (Production. Unity of command 5. because he was the first who suggested the functions of management. The principles laid down by him were 1. Authority and responsibility 3. manufacture. selling. He believed that if any kind of business was to operate successfully. a French industrialist and manager. If any one was neglected. command. 3. adaptation) Commercial activities (buying. He is regarded as the father of modern management theory. these six functions had to be performed. Division of work 2. 4. Functions of management 2. His conclusions was that all work done in business enterprises can be divided into six groups. organization. Principles of management 3. The six activities were: 1. These functions have been recognized as the main task of manager in modern management theories. Scalar chain 10. the enterprise would suffer accordingly. Remuneration 8. statistics) Managerial (administrative) activities (planning. In doing so he enunciated certain principles which hold ground (with suitable modifications) to this day. Management thoughts of Fayol can be classified into the following three categories 1. Discipline 4. Initiative 14. was one of the first writers who propounded his theory of management. balance sheets. Unity of direction 6. Order 11. Subordination of individual to general interest 7. co-ordination and control) Principles laid down by Henry Fayol Fayol devoted most of his attention to the managerial activities. 6. Centralization of authority 9.Henry Fayol. 2. Esprit de corps. Abilities required from the managers Six activities identified by Henry Fayol Fayol analyzed the process of management as he had observed it first hand. Stability 13. Equity of treatment 12.

Fayol saw management as one of six basic activities, that is technical, commercial, financial, security, accounting and managerial activities. However, our concept of management should be modified to say that management is the planning, organizing, command, co-ordination and control of technical, financial, security and accounting activities. A second modification is in terms of our understanding of what makes people work at maximum productivity; we should substitute motivation for command. It is true that a manager must direct, command and order to get things done. But he also encourages, communicates, develops, and stimulates.

2.3 Behavioural scientists contributions


Hawthrone studies Elton Mayo and F.J Roethlisberger undertook the famous experiments at the Hawthrone plant of the western electric company between 1927 and 1932. Mayo and his colleagues found that changing illumination for the test group, modifying rest period, shortening workdays and varying incentive pay systems did not seem to explain changes in productivity. They came to the conclusion that factors other than these were responsible for the changes in productivity. They found that the improvement in productivity was due to such factors as morale, in “sense of belonging” which came about due to improved interrelationships between members of a work group, and effective management. Effective management was a kind of managing that would understand human behavior, especially group behaviour and serve it through such skills as motivating, counseling, leading and communicating. This phenomenon, arising basically from people being noticed has been known as the Hawthrone effect. The Hawthrone studies previously emphasized that humans are social, that business operations are not merely a matter of machinery and method but also of gearing these with the social system to develop a complete socio-technical system. Elton Mayo’s contribution He was born in Australia and trained in psychology and recognized as the “father of Human Relations Approach”. Mayo led the team, which conducted the study at Western Electrics Hawthrone plant to evaluate the attitudes and psychological relations of workers in on the job situations. His idea was that logical factors were far less important than emotional factors in determining production efficiency. Mayo concluded that work arrangements in addition to meeting the objective requirements of production must at the same time satisfy employee’s subjective requirements of social satisfaction at his work place. He was of the opinion that the cause of increase in productivity of the workers is not a single factor like changing working hours or rest pauses, but a combination of these and several other factors such as less restrictive methods of supervision giving autonomy to the workers allowing the formation of small cohesive groups of workers, cooperation between workers and management, opportunity to be heard, participation in decision making etc.,

Main aspects


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• • •

It draws concept from psychology, sociology, human relations, interpersonnel relationships, satisfaction of workers needs etc Since management is getting things done through people the managers must have a basic understanding of human behaviour and human relations in all its aspects, particularly in the context of work groups and organizations Management must study inter-personnel relations among people Greater production and higher motivation can be achieved only through good human relations Motivation, leadership, communication, participative management and group dynamics are the core of this school of thought,


3.0 MANAGEMENT PROCESS AND FUNCTION 3.1 PLANNING Planning is primary function of management to ensure proper utilization of human and material resources in an enterprise to realize profits. Planning is a process of deciding the business targets and charting out the path of attaining those targets. It can be described as the process of thinking before doing 3.1.1 Need for Planning In designing an environment for the effective performance of individuals working together in groups, a manager’s most essential task is to see that everyone understands the group’s purposes and objectives and its methods of attaining them. If the effort of group is to be effective, people must know what they are expected to accomplish. This is the function of planning, most basic of all the managerial function. Planning involves selecting missions and objectives and the actions to achieve them. Planning bridges the gap from where we are to where we want to go. Planning and Control are inseparable - Siamese twins of management. Any attempt to control without plans is meaningless, since there is no way for people to tell whether they are going unless they first know where they want to go. Therefore planning and controlling has to go hand in hand. 3.1.2 Objectives of planning Objectives are defined as the important ends towards which organizational and individual activities are directed. The goal of every manager is to create a surplus. Objectives should be understandable and measurable. However, it has been observed that stretched goals lead to higher performance than easy ones. Objectives need to be met by a specific time; therefore managers must develop plans to meet short, intermediate and long term objectives. They can be frames as per following alternatives. Short-term Vs Long term, Profit margin Vs Competitive position, Proft Vs Non-profit objective, or low-risk environment Vs High-risk environment. Other types of objectives could be • Profitability objectives • Marketing objectives • Productivity objectives • Physical and financial objectives • Quality objectives. 3.1.3 Types of plans Plans can be classified as 1) purposes or missions 2) Objectives or goals 3) Strategies 4) Policies


policies. It may be deal with operations. 3. Procedure often cut across department lines. they are guides to action. allowing no discretion. A budget may be expressed in financial terms. and other elements necessary to carry out a given course of action. procedure. Programs: Programs are a complex of goals. as the capital expenditures budget does. and unify other plans. The essence of rule is that it reflects a managerial decision that some certain action must or must not be taken. as the expense budget does. Policies : General statements that guide decision-making. and contribute to an objective. In fact. in terms of labor-hours units of product. Procedures : Establish a required method of handling future activities. They are guides to action. they are ordinarily supported by budgets. resources to be employed.4 Steps in Planning 12 .1. rules. The firm has to decide on its growth goal and desired profitability. task assignments. normally its in light of competitions. They are usually the simplest type of plan. and they detail the exact manner in which certain activities must be accomplished. “ No smoking” is a rule that allows no deviation from a state course of action. as the cash budget does.5) 6) 7) 8) Procedures Rules Programs and Budgets Strategies : Broad areas of an enterprise operation. Policies define an area within which a decision is to be made and ensure that the decision will be consistent with. make it unnecessary to analyze the same situation every time it comes up. it may reflect capital outlays. Budgets: A budget is a statement of expected results expressed in numerical terms. rather than to thinking. or it may show cash flow. steps to be taken. thinking and action. Policies help decide issues before they become problems. Policies encourage discretion and initiative within limits. Form a framework for guiding. or machine hours or in any other numerically measurable term. Rules : Specific required action. thus permitting managers to delegate authority and still maintain control over what their subordinates do. It may be called a numberized program. the financial operating budget is often called a profit plan.

an analysis and evaluation of alternative courses will disclose that two or more are advisable. and the manager may decide to follow several courses rather than the one best course.Establishing verifiable goals : Determine the current situation. applicable basic policies. the next logical and important step in planning is to decide the planning period. Deciding the planning period : Depending on the situation. Forecasting is importing in premising: What kinds of markets will there be? What volume of sale? What prices? What products? What tax rate and polices? What wage rates? etc. including examination of resources. There is seldom a plan for which reasonable alternatives do not exist and quite often an alternative that is not obvious proves to be the best. Selecting a course is a point at which the plan is adopted-the real point of decision making. Finding alternative courses of action: The next step in planning is to search for and examine alternative course of action. economic indicators. still another may better suit the company’s long range objectives. planning is seldom complete. especially those not immediately apparent. There are so many alternative courses in most situations and so many variables and limitations to be considered that evaluation can be exceedingly difficult. Developing derivative plans : When a decision is made. Derivative plans are most invariably required to support the basic plan. They are assumptions about the environment in which the plan is to be carried out. Even with mathematical techniques and the computer. and a seventh step is indicated. The more common problem is not finding alternatives but reducing the number of alternatives so that the most promising may be analyzed. Evaluating and selecting a course of action: After seeking out alternative courses and examining their strong and weak points. Establishing planning premises : The next logical step in planning is to establish circulate and obtain agreement to utilize critical planning premises such as forecasts. another may look less profitable but may involve less risk. there is a limit to the number of alternatives that can be thoroughly examined.. market trends. and existing company plans. Occasionally. The planner must usually make a preliminary examination to discover the most fruitful possibilities. One course may appear to be the most profitable but it may require a large cash outlay and have a slow payback. the next step is to evaluate the alternatives by weighing them in light of premises and goals. 13 . and competitors.

understanding and communication.2 ORGANIZING 3. 3. The overall budgets of an enterprise represent the sum total of income and expenses. Planning is very costly and must justify its existence and often delays action.2. Marketing. and the budgets of major balance sheet items such as cash and capital expenditures. Communicating means transmitting instructions and information within the organization and to outside customers. is to numberize them by converting them into budgets by which the progress can be controlled and measured. usually of expenses and capital expenditures. 3. Each department or program of a business or some other enterprise can have its own budgets. good human relations.1. social.6 Making Planning effective –Importance of the Following Co-ordination: co-ordination means weaving together the segments of an organization into a coherent whole in such a way that all parts operate at the most efficient level and produce maximum profit. Communication: Communication serves as a linking process by which parts of an organization are tied together.. the final step in giving them meaning. Production. 3. confusion and strikes. as was indicated in the of types of plans. Budgets become a means of adding the various plans and set important standards against which planning progress can be measured. Technological developments and Competitive products and services on the market.1. Proper Climate: The present and future external environment must be assessed in terms of threats and opportunities. It can be achieved through co-ooperation. legal. demographic and geographic factors. Planning may give a false sense of security as standing plans are repetitive and lead to resistance to change. The firm’s internal environment is evaluated in respect to its resources and its strengths and weakness in R&D. political. which tie into the overall budget. Human and financial resources etc. The evaluation focuses on Economic.5 Limitations of planning Planning is not a perfect measure against risk as reliability of forecasts are inversely proportional to time.Measuring and controlling the progress : After decisions are made and plans are set. In effective and improper communication lead to mistrust. with resultant profit or surplus. Co-ordination unifies the purposes and efforts of the employees working in a concern.1 Purpose of organization 14 .

Sales etc. Consideration of objectives i. policy and control etc. 3. the process of organization is divided into functions.. sub-functions and further sub-functions to be performed by individual. Identifying Key Departments: Activities of similar nature are grouped under departments.Sound organization can contribute greatly to the success of the enterprise. the reason for levels of organization is the limitation of the span of management. Determining the span of management m. A wide span of management is associated with few organizational levels. Purchase.2. Finance. Setting up co-ordination Mechanism: 15 . A properly designed and balanced organization will facilitate both management and operation of the enterprise for smooth functioning with growth. even though this limit varies depending on situations. Determining levels of Decision making l. The important steps involved in the process of organization are: h. In other words organization level exist because there is a limit to the number of persons a manger can supervise effectively. There may be different departments in an enterprise like Personnel. Production. a narrow span.2 Process of organization The process of organization may be described as the managerial function of organising. Setting up co-ordination Mechanism Consideration of objectives : Objectives decide as to why the proposed organization to be set up (purpose) and what will be the nature of work to be accomplished through the organization. Grouping of activities into departments: To achieve the objectives. Organisation is a step towards the achievement of established goals. This principle is followed to avoid duplication. Right man is put on the right job. Determining levels of Decision-making: Specific job assignments are made to different persons for ensuring a certainty of work performance. Identifying Key Departments k. Organization is a tool of management which leads to division of work and responsibilities. machinery and money. Grouping of activities into departments j. confusion and wastage of men. sections or divisions. Determining the span of management While the purpose of organizing is to make human cooperation effective. with many levels. It defines and fixes the duties and responsibilities of employees. These may be grouped on the basis of use. co-ordination.

tools. human approach by management etc. This means that effective organization must include specialization.Provision of right type of physical facilities and environment is essential for the smooth running and prosperity of the organization which include machinery. reasonable working hours. heating. The most essential guiding principles are: Objectives Specialization Span of Control Exception Scalar Principle Unity of command Delegation Responsibility Authority Efficiency Simplicity Flexibility Balance Unity of Direction Objectives: Since the objectives of the enterprise have an important bearing on the organization structure. only those objectives should be taken up and accomplished for which there is real need in the organization eg. Specialization: The organization structure should be formulated in such a way that the activities of the enterprise are divided according to the different functions and the same are assigned to person according to their specialization. as an executive will have limited time and energy available for his activities.. Depending upon the conditions of the business enterprise. rest intervals. This is necessary. Exception : Only exceptionally complex matters should be referred to the executives for their decision and matters of routine nature should be decided by the subordinates themselves. measures may be taken to increase productivity.3 Principles of organizing There is considerable agreement among management scholars and practitioners about a number of principles underlying the science of organizing. 3. the span of control may vary from 2 to 20 and an executive must not have more subordinates looking to him for guidance. because the executives at a 16 .. proper lighting. cooling. ventilating. Span of control : This refers to the number of subordinates that report to an executive or the number of subordinates that an executive can supervise directly. These principles are truths of general applicability and are more in the nature of essential criteria for effective organizing. improve product quality etc.2. safety devices.

. activities to be undertaken and the authority delegated and has an understanding of authority and informational relationships with other positions. the problem of effective co-ordination and communication may arise. Simplicity: The organization structure should be simple with a minimum number of levels. the smaller the problem of conflicting instructions and the greater the feeling of personal responsibility for results. Unity of command : The more complete an individual’s reporting relationships to a single superior. nor should it be less. Flexibility: Organizational flexibility specifies the capacity to adjust work assignments. Delegation : Delegation is said to be existing when an executive instead of doing all the thinking for the unit himself passes down to his subordinates any tasks on which they can take themselves and perform it efficiently and effectively. the entire process of delegation can become ineffective unless authority delegated is commensurate with responsibility. By doing so executives gives a chance to his sub-ordinates to think and develop and keeps himself free to deal with managerial responsibilities such as handling special problems if any. coordinating. the more adequately and efficiently the responsible individual can contribute towards accomplishing enterprise objectives. Scalar Principle: The clearer the line of authority from the ultimate management position in an enterprise to every subordinate position. the clearer will be the responsibility for decision making and the more effective will be organizational communication. Authority The responsibility for actions cannot be greater than that implied by the authority delegated. personnel and facilities to temporary changes in the volume of 17 . Efficiency : The more a position or a department has a clear definition of the results expected. planning improvement etc. Authority and responsibility should be coexisting and both must be present for smooth functioning of the organization. If the organization structure has a large number of levels.higher level instead of spending their time for deciding routine matters concentrate on more important matters. Responsibilities: The responsibilities to their superiors for performance is absolute and superiors cannot escape responsibility for the organization activities of their subordinates.

2. Balance: The application of principles must be balanced to ensure the overall effectiveness of the structure in meeting enterprise objectives.Organisation structure marks line of authority. each group of activities with the same objective must have one head and one plan.Complexity of the problems being faced . Unity of Direction: The more an organization structure and its delegations of authority enable mangers to design and maintain an environment for 18 . 3.Size of the organization .4 Types of Organization The structure of one industrial organization differs from that of another organization and it depends upon . the more they will help the leadership abilities of those managers. Flexibility is the ability to bend and blend without experience any serious setback. responsibility and coordination. Accordingly.Nature of the product being manufactured .

legal. Advantages : It is simple and easy to understand It is flexible. The authority flows directly from the works manager (WM to Superintendent to Foremen and from them to workers. Any enterprise that starts small probably starts with a line type of organization. Public relations etc besides looking 19 . textile. dismisses and takes disciplinary action against them. Disadvantages: It neglects specialists It overloads a few key executives It requires a high type of supervisory personnel to meet the challenges imposed in the absence of specialists as advisors It is limited to very small concerns It encourages dictatorial way of working In line organizations provisions are seldom made to train. It was called military organization because it resembled to olden military organization. As the industry grew in size and complexity. Taylor’s functional organization hastened its development. with no confusion at all It encourages speedy action It is strong in discipline as it fixes responsibility on an individual It is capable of developing the all round executive at the higher levels of authority. etc. Military or Scalar organization b) Functional organization c) Line and staff organization Line organisation It is a simplest form of organization structure. Line and staff organization Line organization gradually developed to shape as the line and staff organization.A few commonly known forms of organization types are a) Line. distribution. sugar. develop and replace top executives Due to lack of specialization perhaps there is more wastage of materials and man-hours. Line organization is direct and different levels know to whom they are accountable. assigns duties. Line organization is based upon relative authority and responsibility rather than on the nature and kind of operation or activities. The immediate superior gives orders to the subordinates. easy to expand and contract It makes clear division of authority There is clear channel of communication. the line executives could not perform all other functions such as R&D. Line organization is suitable for small concerns free from all complexities and automatic and continuous process industries such as paper. planning.

he can perform his duties in a better manner • Functional organization makes use of specialists to give expert advise to workers • It relives line executives of routine. thus weakening the line organization when its (i. staff department’s) true function strengthen this organization. man and machine hours. Taylor suggested functional organization because it was difficult to final round persons qualified to work at middle management levels in the line organization. Each functional foreman who is a specialist in an activity is incharge of one function. 20 . specialized decision • Expert guidance reduces the number of accidents and wastage of materials.e. Disadvantages Product cost will increase because of high salaries of staff executives At times the staff department may infringe upon the rights and responsibilities of the line organization. man and machine hours Quality of product is improved There is no confusion as exists in functional organization Line and staff organization possesses practically all the advantages of both the line and functional organization. Functional organization is also a line type of organization with the difference that instead of one foreman there are eight functional foremen. but everyone having direct and equal authority over the workers. Less wastage of material.W.after production. Line executives if they start depending too much on staff executives may lose loose their initiative drive and ingenuity. Line and staff organization may get confusion in case functions are not clear Frictions are jealousies of developed between line and staff executives may cause harm to enterprises. four of them located on the shopfloor and the remaining four in the office. Advantages Expert advice from specialist staff executives can be made use of Line executives are relieved of some of their loads and are thus able to devote more attention towards production. The line executives retain supervisory authority and control over the work of their subordinates whereas the staff executives relieve line executives of certain specialized work and advise on matter referred to them. Functional organization F. Advantages • Since a foreman is responsible for one function. The final decision whether to accept and implement the recommendations of the staff executive remain in the hands of the line executive. They arouse the need for employing special executives to assist line executives and they were known as STAFF as they were recruited to perform staff or specialist functions.

3.5 Delegation and Decentralization Purpose of Delegation and Decentralization Any manager may delegate authority to his subordinate. In decentralized organization. might be used by a particular manager without being part of decentralization program. • It is difficult to maintain discipline as each worker is responsible to eight foremen • It is very difficult to fix up the responsibility to any one foreman in case something goes wrong. authority and decision making have been pushed downward throughout the organization. 21 .• • It relieves pressure of need to search a large number of all-round executives. When delegation is used systematically and extensively throughout an organization the arrangement may be described as decentralization. but delegation. initiative and drive.2. on the other hand. Quality of work is improved. Decentralization thus necessitates delegation. Disadvantages • Coordination of the efforts of various functional foreman is difficult. Delegation may thus be highly individualized relationship. • Workers always remain confused about the authority and activity of each foreman • It makes industrial relationships more complex • Workers are not given opportunity to make use of their ingenuity. • All round executives cannot be developed.

Customarily. inconspicuous and infinite What exists in fact Serves as a basis organization of informal Distinction between Delegation and Decentralization Delegation Authority and responsibility must be delegated throughout a firm to promote the efficiencies of an organizational structure. delegation can be downward. Earned by an individual through its own efforts Undefined. 22 . but it can also be from a lower to higher level or between levels on the same plan.Differentiate between Authority and Power AUTHORITY Institutionalized right of a superior to command and compel his subordinate to perform of certain act It rests in position. Decentralization Organization authority is merely the discretion conferred on people to use their judgement to make decisions and issue instructions. Delegation has a dual characteristic. or sideward. With the change in position. his power remains intact. delegation is considered as coming from a higher to a lower level. Hence. the authority of the individual also changes Delegated to an individual by his superior Well defined. upward. As a result of delegation. It is a fundamental aspect of delegation. the subordinate receives authority from the superior. it is centralized. but at the same time the superior retains all original authority. Delegation means conferring authority from one manger or organizational unit to another in order to accomplish particular assignments. to the extent that authority is not delegated. Although authority and responsibility may be delegated by a manager. even when his position changes. Thus. Decentralization is the tendency to disperse decision-making authority in an organized structure. they can never be abdicated. Delegation of authority is necessary wherever a manger must rely on another to help accomplish an objective. shown on the organization chart and commensurate with responsibility What exists in the eye of law Serves as a basis of formal organization POWER Ability of person to influence another person Rests in the individual.

for if managers delegated all their authority. 23 . resulting in greater employee enthusiasm and co-ordination. to speed up the decision making process etc. modified and proven before being supplied to similar plants of a company.. Advantages of effective delegation • • The effective delegation relieves the burden on senior management. there cannot be absolute decentralization. For multiunit enterprises keyed to geographic dispersion. Familiarity with important aspects of special work is readily acquired. Risks involving possible losses of personnel. thereby facilitating succession into positions of general managers. The development of generalists rather than specialists is encouraged. 3. Intimate personal ties and relationships are promoted. On the other hand. Efficiency is increased since mangers are near the activities for which they are held responsible and trouble spots can be located and remedied easily.3 Direction : Principles of Direction The principles to be observed by Management in direction of its subordinates are as follows: a) harmony of objectives : The management should bring out co-ordination of individual objectives of the subordinates working in the organization with those of the enterprise. Advantages of Decentralization • • • • • • • • A decentralized organization structure stresses delegation of decision – making and lightens the load of top managers.There could be absolute centralization of authority in one person implying no subordinate managers and therefore no structured organization. their positions would be eliminated and there would be no organization. full advantage of local conditions can be obtained. their status as managers would cease. Directing should be such that it would make the subordinates identify themselves with the company and integrate their objectives with those of the company. facilities and plants are spread out. Plans can be tried out on an experimental basis in one plant. Effective delegation contributes to growth of individual (subordinate) and overall morale.

h) Comprehension : According to this principle. confusion and indiscipline which may affect the efficiency of business d) Direct supervision : Every superior must maintain direct contact with his subordinates. farsighted leadership and good motivation for ensuring the success of direction. Subordinates also would be happy if they get effective leadership from their boss. how much information is correctly understood by subordinates is more important than what is said and how it is said. i) Effective leadership : It is necessary for the boss to possess the qualities of a good leader for getting the work done by the subordinates. e) Flow of information : Effective direction is largely dependent upon the flow of information and the efficiency with which it is disseminated among the subordinates. j) Effective motivation : The workers. The management may be helped if it uses both formal and informal channels of communication. c) Unit of command :This principle requires that the employees should receive orders and institutions only from one superior. direct supervision also develops feed-back information. if they are properly induced and motivated. Personal touch and face to face communication with the subordinates ensure successful direction. direction should be such that it inspires the workers to contribute their maximum with enthusiasm for the purpose of the organization. Further.b) Maximum individual contribution : The technique of direction adopted by the management should be such that it should be in a position to inspire the employees to contribute their maximum for the achievement of the enterprise objectives. Hence. The boss should guide and counsel the workers not only on the work problems but also on the personal problems of his subordinates. effective supervision. The violation of this principle may lead to disorder. g) Efficiency of direction : The Principle requires that there should be an effective network of communication. This principle can be observed only if the management makes provision for a proper feed-back system of communication. The techniques that are normally used are I) consultative 2) free-rein and 3) autocratic and these should be selected according to circumstances. f) Appropriateness of direction technique : The technique that is used by the management for direction should be appropriate so as to ensure effective direction. k) Follow through : Direction is not only telling subordinates what they should do but also seeing to it that they do it in the desired way. This requires the 24 . will volunteer themselves for the accomplishment of the goals.

management to provide continuous guidance. and h) it should specify the time within which the order should be carried out and completed. It may be stated that the terms “order” . Direction of the management Direction is a vital managerial function and also is the essence of management. For the effective implementation of any administrative decision. an instruction is understood to be a charge by a superior requiring a subordinate to act or refrain from acting in a given circumstance”.e. it is also called management in action. Order giving An order is a fundamental tool used by the management for directing its subordinates. “instruction”. the executive takes a decision and issues a direction only after consultation his subordinates regarding the feasibility and workability of the problem. Hence. his best co-operation and enthusiasm can be secured in carrying out the direction. Techniques of simplification of direction The techniques of direction that are used by the mangers are as follows: a) Consultative direction : Under this method. suffers from one disadvantage. advice and help to the subordinates in their activities. i. “Directive” and “command” are used interchangeably. enthusiastic acceptance by the subordinate. supervision. This method however. One advantage of this method is that as the subordinate also has been consulted about the feasibility and workability of the problem. Characteristics of good order The characteristics of a good order are as follows a) an order should be reasonable and enforceable b) it should be clear and easily understandable c) it should be compatible with the purpose and objectives of the enterprise d) it should be complete e) it should stimulate willing. “ As a directional technique.. planning. the order should be in writing g) the tone of the order should be appropriate. at 25 . An order can be issued by a superior only and he has the right to enforce the order to be followed by his subordinates. Planning and organizing are concerned only with the preparations for work performance and it is direction which alone stimulates the organization and its staff to execute the plans. organizing and staffing are not enough the manager must stimulate action by giving direction to his subordinates through orders and also supervise their work to ensure that the plans and policies achieve the desired actions and results. According to Koontz and O’Donnell. f) preferably.

the subordinate is encouraged and enabled to show his own initiative and give independent thought to the solution of the problem. The manager assigns the task in general terms and not in a specific way. b) Free-rein direction : Under this method. It is process of exchanging information and feeling between two or more people.time. Communication is the transfer of information from a sender to a receiver. 3. Process of Communication 26 .4 Communication Introduction Communication is the art of developing and attaining understanding between people. with the information being understood by the receiver. and is essential to effective management. efficient and sincere. The executive himself solves the problem and gives orders to his subordinates with instructions as to how and what is to be done by them. c) Autocratic direction : Under this method . The subordinates must take the initiative and find a solution to the task assigned and carry it out. the subordinate may consider it his right to be consulted before the executive takes a decision. the subordinates the not allowed to take any initiative in solving the problem. This technique of direction may profitability be used only if the subordinate is highly educated.

past experience within similar communication. hearing. sensing and so on. Downward and Horizontal Formal communication It implies the flow of information along the lines of hierarchy formally established in each enterprise. interpretation of body language. reports and suggestions by subordinates to superiors as per the routine evolved in the administration. Step5 and 6 : Decoding and response Decoding is the receiver’s interpretation of the message. Orders by superiors to subordinates. etc. seeing. lack of misunderstanding and improper response to the message.There are seven steps in the process of communication. to communicate the best medium that will goal is mutuality of mutuality results in Step 3: Message and medium This step involves the actual transmission of the conceptualized message. This is planning of the communication process Step 2: Encoding Encoding involves selecting the medium through which planned message. The understanding between sender and receiver. constitute formal communication 27 . Step 7 : Feed back The receiver’s reaction to the message is a form of communication back to the sender and follows on the same step-by-step process Types of communication a) Formal and Informal b) Written and Verbal c) Upward. Step 4: Receiving This simply involves the physical reception of the message. such as perception of the sender. It involves the mental process of asking: what does this mean to me? And what should I do about it? This is affected by many factors. feeling. The object of encoding is to select the be most accurately comprehend by the receiver. They are: Step 1: Sender – planner The communication or message sender must conceptualize the message mentally before it is encoded.

. It has no procedural basis. meetings of workers of the same class to discuss a problem. belong to this mode of communication. suggestions. magazines. Informal communication is not official or authoritative but spontaneous expression of ideas. 28 . The purpose is to inform the superiors about the work and difficulties encountered by them. It is often termed as “Grapevine”. memos. personal conversation. It can be easily grasped and if doubt arises it can be clarified then and there. face to face interviews. Horizontal communication This is interchange of ideas among the managers at the same level and other personnel of the same rank. discussions at meetings etc are examples of oral communication. instructions. gestures etc. Verbal or oral communication It is the conveying of messages through spoken words. grievances. circulars. Downward communication It signifies the transmission of orders.Informal communication. nod. Oral orders. instructions etc.. The verbal communication will be more effective and in emergencies it is the only mode of quick communication and also less expensive. Written communications are preferred for following merits: i) When lengthy messages are to be conveyed ii) When the sender and the receiver are at distant places iii) When the communication is to be clear without ambiguity. Written communication It means transmission of messages in the form of letters. visual media. iv) Written communication constitute reliable records for future reference v) Written messages can be quoted as legal evidence if the situation demands. Consultations between managers. publications etc. smile. suggestions they have in mind about improvements grievances which they desire to settle etc. Upward communication It is the flow of facts from the lower layers of the organization to the top levels of authority such as reports. glance etc. reports. from the upper levels of management to the subordinates of the organization. The object of the communication from top to lower levels is to pass orders. information. without any formalities. lectures. instruction cards. boards. representations etc. but is associated with expression of gesture.

It breaks down. eg. Introduce a proper amount of redundancy in the message. obstructs. employees are more likely to accept the change when they themselves participate in the process of change. The various barriers to communication are: • Long and ill-instructed channels of communications • Heavy work-loads at certain levels in the organization structure. Measures to improve communication • • • • • • • • • Sending direct and simple messages Feedback system to know whether the message has been understood correctly or not Using many communication channels Adopting face-to-face communication Be sensitive to the private world of the receiver..e. delays. i.Barriers of communication: A barrier to successful communication does not permit the transmission of accurate and full information at the receiving end. interests and values Time the message carefully. 29 . • Receiver ignoring conflicting information • Receiver tending to evaluate information from his own angle • Receiver emotionally upset. Communicate when the receiver is motivated to listen and he is not worried about other things Reinforce the words with actions. • Attitude-either not to hear or to hear what one expects to hear • Prestige and superiority complex • Sender and receiver having different perception • Sender unable to symbolize the information correctly • Prejudiced and biased attitude of the receiver • Receiver unable to get the information (subject to different meanings) clarified. distorts and tends to give another colour to the information by the time it reaches the destination. some amount of repetition of information so that the information is not misunderstood Create cordial and peaceful atmosphere in the organization. try to predict the impact of what you say on his feelings and attitude and tailor your message to fit receiver’s vocabulary.

Transactional analysis One of the most insightful and certainly one of the most popular approaches to understanding interpersonal communication is that of transactional analysis which is an approach to or a means for analyzing and improving transactions between people. Definition : Transactional Analysis is a technique for examining the nature of the interpersonal communication between two individuals and to analyze whether or not effective communication is taking place. Eric Berne 30 . Theory of Dr. Every piece of conversation is treated as a transaction.

Today there is greater understanding of Transactional Analysis. Books have been written for all ages.Transactional Analysis is a theory developed by Dr. and offers suggestions and interventions which will enable us to change and grow. how we relate and communicate with others. Today Transactional Analysis is used in psychotherapy. Berne wanted a theory which could be understood and available to everyone and began to develop what came to be called Transactional Analysis (TA). Three Ego states in human being and their characteristics There three ego states are 1. Adult ego state 3. by people all over the world. Also. each one of us generally tends to have a dominant ego from which we transact most of the time. Many did not appreciate the duration and complexity of the training. The 31 . organizational and management consultants. led their readers to believe that there was very little to it. Those taking training include psychiatrists. designers. paralleling the processes we encourage in ourselves and others. educational and religious settings. Originally trained in psychoanalysis. which can only touch on some of the concepts in Transactional Analysis. However. Theoretical concepts within the Transactional Analysis world are constantly being challenged and developed making it a rich dynamic process. It originally suffered much from the popularised writings in the 1960's. Transactional Analysis is underpinned by the philosophy that: • • people can change we all have a right to be in the world and be accepted Initially criticised by some as a simplistic model. Transactional Analysis is truly an international theory relating to a diverse range of cultures. summarised explanations. Eric Berne in the 1950's. organisations. Parent ego state 2. Berne died in July 1970 at the age of 60. Transactional Analysis is a social psychology and a method to improve communication. More and more people are taking the four to five year part-time training courses to qualify. Transactional Analysis is now gathering worldwide attention. from children through to adults. and increasingly universities are accrediting these courses for masters degrees. teachers. social workers. Transactional Analysis has not stood still and continues to develop and change. such as this. Child ego state All of us transact from all three states from time to time. The theory outlines how we have developed and treat ourselves. engineers and the clergy.

joyful and rebellious). beliefs. the adult ego is rational (mature and objective) and the child ego is impulsive (immature. feelings and behaviours from our parents and caretakers. and Child. As we grow up we take in ideas. These are drawn as three stacked circles and they are one of the building blocks of Transactional Analysis. it is called introjecting and it is just as if we take in the whole of the care giver. we may notice that we are saying things just as our father. Each ego state is given a capital letter to denote the difference between actual parents. Adult. If we live in an extended family then there are more 32 . adults and children. For example. even though. or treat others as we might have been treated. feel and behave and are called Parent. grandmother may have done. They categorise the ways we think. and how we relate to others.parent ego is authoritarian (protective and critical). consciously. Transactional Analysis first order structural model Berne devised the concept of ego states to help explain how we are made up. As we grow up we take in ideas. We do this as we have lived with this person so long that we automatically reproduce certain things that were said to us. mother. If we live in an extended family then there are more people to learn and take in from. Parent ego state This is a set of feelings. When we do this. beliefs. we don't want to. thinking and behaviour that we have copied from our parents and significant others. feelings and behaviours from our parents and caretakers.

If this were explored we might remember the time the head teacher called us in to tell us off. We ask for information rather than stay scared and rather than make assumptions. grandmother may have done. We deal with things that are going on today in ways that are not unhealthily influenced by our past. This might be done by stating that this kind of parenting is not helpful and asking if it is prepared to learn another way. the Integrating Adult ego state can just stop any negative dialogue and decide to develop another positive Parent ego state perhaps taken in from other people they have met over the years. we may immediately get a churning in our stomach and wonder what we have done wrong. For example. saying "You are no good. consciously. Taking the best from the past and using it appropriately in the present is an integration of the positive aspects of both our Parent and Child ego states. look at what you did wrong again. The Adult ego state is about being spontaneous and aware with the capacity for intimacy. we may notice that we are saying things just as our father. Many people hardly hear this kind of internal dialogue as it goes on so much they might just believe life is this way. When in our Adult we are able to see people as they are. The Child may then respond with "I am no good.people to learn and take in from. Of course. mother. In this structural model. you are useless". So this can be called the Integrating Adult. rather than what we project onto them. Adult ego state The Adult ego state is about direct responses to the here and now. or treat others as we might have been treated. look how useless I am. thoughts and feelings which are replayed from our own childhood. not everything in the Child ego state is negative. For example. the Integrating Adult ego state circle is placed in the middle to show how it needs to orchestrate between the Parent and the Child ego states. I never get anything right". the internal Parent ego state may beat up on the internal Child. it is called introjecting and it is just as if we take in the whole of the care giver. Child ego state The Child ego state is a set of behaviours. even though. Perhaps the boss calls us into his or her office. we don't want to. Alternatively. When we do this. We might go into someone's house and smell a lovely smell and remember our grandmother's 33 . An effective Integrating Adult ego state can intervene between the Parent and Child ego states. We do this as we have lived with this person so long that we automatically reproduce certain things that were said to us. Integrating means that we are constantly updating ourselves through our every day experiences and using this to inform us.

Racism is an example of this. We might also have been told that Black people are aggressive. We may be in our Child ego state when we say this. contamination of the Adult ego state The word contamination for many conjures up the idea of disease. Positive experiences will also go into the Child ego state as archaic memories. This occurs when we talk as if something is a fact or a reality when really this is a belief. we would think that such statements were facts rather than beliefs and when this happens we say that this is Integrating Adult ego syntonic. but saying "I" reminds us to take responsibility for our actions. In our Child ego state may well lodge some scared feelings about Black people and in this ego state we may start to believe "All Black people are scary". Subsequently. The positive experiences can then be drawn on to remind us that positive things do happen. The Integrating Adult ego state is contaminated in this case by the Parent ego state. However. Both the Parent and Child ego states are constantly being updated. objectively. The process of analysing personality in terms of ego states is called structural analysis. For instance. we may meet someone who gives us the permission we needed as a when we were little. rather than beating up on ourselves for what we did or did not do. We may well use that person in our imagination when we are stressed to counteract our old ways of thinking that we must work longer and longer hours to keep up with everything. If we are white we might have lived with parents or significant others who said such things as "Black people take our jobs". Therefore it is important to say "I want some fun" rather than "My Child wants some fun". It is important to remember that ego states do not have an existence of their own. what tends to happen is we automatically start to give ourselves new permissions and take care of ourselves. they are concepts to enable understanding. that having no real experience to go by. That is. We might ask ourselves "I wonder what X would say now". to be fun and joyous. Alternatively. For example. they fit with the Integrating Adult ego state and only those people outside of our situation and sometimes outside of our peer group or culture can see that. Then on hearing the new permissions to relax and take some time out. and all the same warm feelings we had at six year's of age may come flooding back. we might have had a traumatic experience yesterday which goes into the Child ego state as an archaic memory that hampers our growth. and did not get. we tend to use the word for when bacteria has gone into milk. Well. This would mean that there would be a double contamination of the Integrating Adult ego state. such beliefs are just that and therefore they can be changed. 34 . Growing up it is likely. this is similar to the case with the contaminated Integrating Adult ego state. we believed this. do just that and then return to the work renewed and ready for the challenge.

5 Motivation: Motivation is the need or drive within an individual that drives him or her towards goal oriented action. Effects of motivation comes to all acts of the organization. (just as with traffic lights we get the go ahead when the green light comes on). and ineffective communication come from the red modes (as with the red traffic light). Effective communication comes from the green modes. Temple's (1999) term "mode" as it differentiates it from the structural ego state model mentioned above. Any concern may have best instruments. raw materials in sufficient quality and sufficient persons and finances but their proper use is not possible till the working persons do not use them properly. When we come from the red modes we invite a negative response. 3. and vice versa from the green modes. The extent of drive depends on the perceived level of satisfaction that can be achieved by the goal. We colour the different modes in red and green for those who find colour helpful as a tool. Need for Motivation: The aim of motivation is instigation to do work by all the employees working in any organization so that more results are attained through less efforts.The Descriptive Model This model shows how we function or behave with others. Prize or facilities may be 35 . Kinds of motivation Positive motivation : Positive motivation means worker may be instigated to work with some facilities or giving some prize so that the may do good or more than was done previously and with less supervision. The model used here is divided up into nine and we have used S. Motivation refers to the drive and effort to satisfy a want or goal.Transactional Analysis .

financial or non financial. To give more wages for work is the financial motivation. This is of two kinds. the financial or non-financial. Negative motivation : This is based on punishment or fines if the labours is not encouraged for work. property. 1. 3. such as food. to be accepted by others. this kind of need ceases to be a motivator. water. 2. Untill these needs are satisfied to the degree necessary to maintain life other needs will not motivate people. and he concluded that when one set of needs is satisfied. warmth. or acceptance needs : Since people are social beings. Affiliation.1 Theories of Motivation: Maslows’s hierarchy of human needs One of the most widely mentioned theories of motivation is the hierarchy of needs theory put forth by psychologist Abraham Maslow. 36 . Physiological needs : These are the basic needs for sustaining human life itself. Security. while appraisal of the worker’s work. food or shelter. they need to belong. For less work or for not doing work he must be punished or fined. appreciation etc. Maslow saw human needs in the form of a hierarchy ascending from the lowest to the highest.5. shelter and sleep. are non-financial position. 3. promotion. or safety needs : These are the needs to be free of physical danger and of the fear of losing a job.

while in other self-actualization needs were strongest. status and self –confidence. McGregor’s Theory “X” and Theory “Y” : Douglas MC Gergor developed a philosophical view of humankind with his Theory X and Theory Y. It is the desire to become what one is capable of becoming to maximize one’s potential and to accomplish something. People prefer to be directed. however. management’s role is to coerce and control employees. Need for self actualization : Maslow regards this as the highest need in the hierarchy. Edward Lowler and Lloyd Suttle found little evidence to support Maslow’s theory that human need form a hierarchy. that there were two levels of needs –biological and other needs and other needs would emerge only when biological needs were reasonably satisfied. They did note. This kind of need produces such satisfaction as power. These are two opposing perceptions about how people view human behaviour at work and organizational life. do not want responsibility. they tend to want to beheld in esteem both by themselves and by others. prestige. They found that at predominated. With Theory X assumptions. once people being to satisfy their need to belong. Theory X People have an inherent dislike for work and will avoid it whenever possible People must be coerced. Theory Y Work is as natural as play and rest 37 .4. directed or threatened with punishment in order to get them to achieve the organizational objectives. controlled. Esteem needs: According to Maslow. 5. and have little or no ambition People seek security above all these. Maslow’s concept of a hierarchy to needs has been subjected to considerable research.

their lack of existence would. interpersonal relations. These were found by Herzberg and his associates to be only dissatisfied and not motivators. they yield no dissatisfaction. challenging work. salary. They include achievement. result in dissatisfaction. management’s role is to develop the potential in employees and help them to release that potential towards common goals. Satisfiers: In the second group. Commitment to objectives is a function of the rewards associated with their achievement People learn to accept and seek responsibility Creativity. Theory X is the view that traditional management has taken towards the workforce. A boss can be viewed as taking the Theory X approach. People have potential. hygiene or job context factors. job security and personal life. Herzberg’s Theory of motivation Frederick Herzberg and his associates categorized various needs of individuals into two groups 1. Their existence does not motivate in the sense of yielding satisfaction. Many organizations are now taking the enlightened view of Theory Y. recognition. however. 38 . ingenuity. People are capable of using these abilities to solve an organizational problem. Their existence will yield feelings of satisfaction or no satisfaction. Advancement and growth in the job. Dissatisfies and 2. Satisfiers Dissatisfiers : In the first group of needs are such things as company policy and administration.People will exercise self –direction if they are committed to the objectives (the are NOT lazy). working conditions. With Theory Y assumptions. Herzberg listed certain satisfiers all related to job content. If they exist in a work environment in high quantity and quality. while a leader takes the Theory Y approach. Herzberg called them maintenance. supervision. and imagination are widely distributed among the population.

the larger the size of the enterprise. The departments and self-directed efforts of individual members of the enterprise may move in opposite direction due to which the enterprise may find it difficult to achieve its objectives.6 Co-ordination and control. Generally. The need for co-ordination arises because of the following factors. the dissatisfiers. the job contents factors. Sometimes. therefore. Need and importance of co-ordination. the greater is the need for co-ordination. 1. It may also lead to chaos in the organization. yet they must be present or dissatisfaction will arise. Herzberg found to be the real motivators because they have the potential of yielding a sense of satisfaction. A large-scale business consists of a number of departments in which a large number of persons employed. It is. The first group of factors. 3. necessary to acquaint the individual member in clear terms with the enterprise goals and the methods to achieve them. 39 .The satisfiers and disatisfiers identified by Herzberg are similar to the factors suggested by Maslow as shown in the figure below. The second group. Each department and employee has to contribute harmoniously towards realizing the objective of the concern. Each individual is a unique and distinct personality and has his own way of doing things. the method adopted by an individual for going anything may even be detrimental to the interests of the concern as a whole. will not motivate people in an organization. Large-scale business enterprises employing a large number of persons require to co-ordinate the efforts or interests of individuals in pursuit of a common purpose.

Tools for co-ordination In order to make co-ordination effective. All these would lead to the violation of the principle of unity of command. staffing. Departmental heads who are in charge of these departments are often in conflict with each other. there should be consultant among the concerned officials while preparing the plan itself. others may be just frail. co-ordination is the very essence of management. the task of adjustment 40 . They are: 1. 3. if not impossible”. The need for co-ordination is also felt because of the existence of line and staff structure of organization in which the members often may not be clear as to their basic role. there is need for co-ordination. It is said that coordination is the key to these functions. The importance of the function of coordination in the management of an enterprise is so much that now it is not regarded as a separate function of management. Early start : There should be co-ordination even in the early stages of planning and policy making. Various other functions of management such as planning. organizing. there is need for the management to co-ordinate the functions of line and staff authority. To realize the enterprise objectives. it should be based on certain fundamental principles. 4. to make all departmental heads function as well-balanced team to realize the enterprise objectives.2. etc. To bring about a balance between these different degrees of qualities. Co-ordination by preventing duplication of efforts increases total production. Hence. By this. some of them may have a strong personality. can be effectively performed by means of co-ordination. Large business enterprises consists of a number of departments such as production. the departmental heads give so much importance to their departmental objectives that they neglect the enterprise objective. personnel etc. But very often. there is need for co-ordination. Though they may be working in the same type of work. Some may be well-qualified and quick to grasp. finance. purchase sales. there may be friction between the line and staff officers. There may be confusion as to where the staff authority ends and line authority begins. 6. Further. Hence. 5. their total accomplishment will be far greater than the sum total of individual achievements. According to Koontz and O‘Donnel. Mooney and Reiley have rightly stated that “Co-ordination is a force without which attainment of enterprise objectives become difficult. For example. all departmental heads must act as well-balance team. An enterprise employs persons of different types. If the efforts of employees are closely co-ordinate. while some others may not be adequately qualified and also cannot grasp quickly.

4. For proper co-ordination there is also a need for effective communication. In view of this. The manager of different departments should be clearly explained the objectives of the enterprise and also they should be prevailed upon to work for the achievement of the common objective of the enterprise. co-ordination to modified to suit the changes in the external environment and internal actions and decisions. Further effective communication helps in discussing 41 . 5. The achievement of co-ordination itself modifies the strength of the contending forces and will create new conditions. Further. 3. The operations and functions which are closely related and connected may be put under the charge of one executive and this would facilitate the taking of necessary action for better co-ordination. 8. Simplified organization : The management may consider rearrangement or reorganization of departments in order to have better co-ordination among the department heads.and integration in the process of implementation of the plan will be easier and also there would be any resistance from the concerned officials. Direct contact: Co-ordination is easier by direct personal contract among the people concerned. vertical and horizontal relationships of people in a business undertaking. which influences the activities of the business. a clearly defined authority helps the manager in case they violate the limits and for any other irregularities. In other words. Clear-cut objectives: Another requisite for securing effective co-ordination in an enterprise is the clear-cut objective. 2. co-ordination should not be rigid. 6. Clear-cut authority helps in reducing conflicts among the different officers and also helps in making them carry out their job with unit of purpose. internal actions and decisions may be changed or altered depending upon circumstances. Through communication. Effective communication . individual and departmental differences can be resolved. One special advantage of direct personal contact is that the concerned persons can avoid misunderstanding or misinterpretation. even dissimilar activities may also be put under one executive for ensuring effective co-ordination. Continuity: Co-ordination is the basis of an organization structure and so long as the enterprise continues to function. Co-ordination must start from the stage of planning and should go on all the time as it is a continuous process. Dynamism: There may be changes in the external environment. 7. Further. co-ordination is a must. A clear cut objective and its effective communication to the heads of different departments is bound to produce uniformity of action. Clear definition of authority and responsibility : A clear definition of authority and responsibility for each individual and department also facilitates effective co-ordination in an enterprise. Co-ordination can be achieved more easily by direct interpersonal.

b)cost standards. committee meetings and group meetings. but if the item is custom-made. Checking and comparing performance with standards If standards are appropriately drawn and if means are available for determining exactly what subordinates are doing. the first step in the control process logically would be to establish plan. it creates confidence in the subordinates and enhances their morale. Thus. It may be quite simple to establish labour0hour standards for the production of a mass-produced item. he may entrust the task to the supervisors. adjustment of programmes. There are many activities for which it is difficult to develop accurate standards. supervisors can also play an important role in achieving effective co-ordination. Since plans vary in detail and complexity. co-ordination of the activities of the people at all stages is ensured. every activity. and the mangers cannot usually watch everything. every budget become standards against which actual or expected performance might be measured. the various devices used for communication are the personal contact. programmes future etc. 9.6. The types of standards are a) Physical standards. Effective supervisions : Though it is the duty of the top executive to see that the subordinates perform their work as planned. every policy . They are the selected points in an entire planning programme at which measures of performance are made so that mangers can receive signals about how things are going and thus do not have to watch every step in the execution of plans. 3.changes. every goal. In addition. there will be a possibility for directing the efforts of the entire staff harmoniously towards the realization of enterprise objectives. and it may be quite simple to measure performance against these standards. Standards are simply criteria of performance. the 42 . any deviation from the planned course of action can be easily located and immediate steps may be taken to ensure that the activities of subordinates conform to the planned activities. With the help of supervisors. appraisal of actual or expected performance is fairly easy. 10.1 Techniques of control Establishing standards : Plans are the yardsticks against which managers devise controls. special standards are established. Effective leadership: Effective leadership also helps in proper communication. By effective leadership. written communications. Further. Every objective. c) capital standards d) Revenue standard e) program standards f) intangible standards 7) goals as standards and strategic plans as control points for strategic control.

materials. Budgeting and budgetary control Budgeting is the formulation of plans for a given future period in numerical terms. staffing and leading. budgets are statements of anticipated results. that financial budgets represent the dollarizing of plans. The various types of functional budgets are a) Master budget b) Sales budget c) Production Budget e) Financial Budget f) Capital Expenditure Budget g) Cash Budget h) Material and purchase budget I) Direct labour budget. Taking corrective measure An adequate system will disclose where failures are occurring and who is responsible for them. or units of production. As such. either in financial termsas in revenue and expense and capital budgets-or in non-financial terms as in budgets of direct-labour-hours. and it will ensure that some corrective action is taken. It has sometimes been said for example. Control is justified only if deviations from plans are corrected through appropriate planning. 43 . therefore.appraisal of performance may be a formidable task because standards are difficult to set. physical sales volumes. a process known as budgetary control is very helpful which is a “process of comparing the actual result with the corresponding budget data to know the actual cause of differences”. organizing. As we have already discussed the budget as an” estimate of future requirements about the activities of the concern for a particular period”.

a) Procurement and Maintenance of adequate work-force as regards to both number and quality of personnel.4. Functions of personnel management Based on the definition of Personnel Management . i. Personnel Manager and the staff of his department. b) Education and training of present employees c) Maintaining satisfactory Personal contacts and employee relationships e) Maintaining satisfactory group relationships f) Maintaining employees safety g) Maintaining employees health h) Maintaining employees service activities (employee welfare) Planning Manpower requirements 44 .1 Personnel Management Personnel management may be defined as the planning. employees) for the purpose of contributing to the organizational goals.e. Integration and Maintenance of people (i... organizing. Directing and controlling of the procurement. it is generally recognized that the following areas of the work situation in an industry are the province of the Personnel Department. Development. compensation.0 Human Resources Management 4.e.

selection. Job evaluation decides the relative values of different jobs in an organization and helps to formulate an appropriate and uniform wage structure. Differences in pay lead to resentment which in turn increases labour turnover. Employing people is one of the most critical steps in the establishment and growth of a business. Recruitment may be described as the process of getting potential employees willing to apply for a job with the concern or firm. Planning job requirements and description Job description is a broad statement of the purpose. therefore a planned comparison of jobs is necessary to restrict the concurrence of such situations. it leads to lowered production and employee morale and increased absenteeism and labour turn-over. Methods commonly used in job evaluation are 1) Ranking method Classification method. adding to job satisfaction and minimizing the labour turnover. the next stage is the selection process. The difference procedural steps involved in the selection process are a) Job description b) Application forms c) Employment tests d) Interviewing e) Physical examination and f) Induction or orientation 45 . It also provides a basis for recruitment. If the organization does not possess right kind of people. promotion and transfer of the employees. At this stage Job Evaluation technique comes to help of the management. 2) Recruitment : The first step in the development of a concern’s personnel activity is to employ the right type of persons to operate the organization.Man power requirements are determined by comparing the supply against the predicted demand and looking for manpower in future. Job evaluation is a systematic process of evaluating different jobs of an organization. This would give the number of people recruited or made redundant and will form the basis for the manpower plan. 3) factor comparison method and point method. training. clarifying the responsibility and authority connected with the job. However the assumptions for the supply and demand forecasts have to be modified for improved manpower utilization while drawing the manpower plan. Selection : After attracting a number of applicants through various source. Job evaluation: Equity in salaries of the persons working on the same job is essential in an organization. duties and responsibilities of a job or position.

The task of filling jobs with right people is known as vocational selection. behaviour etc. There should not be a square peg in round role. Placement : Once the selection and training are over. In short training is a must for fitting employees to the job. intelligence. The main of object of all individual training is to prepare employees to do efficiently in their field or to do another job equally well.Training : Training of employee is an absolute necessity . Training is an evercontinuing process in all concerns and it is employed as technique of control. A good turner is to be placed to work on turning job. Merit rating assess the merit of the person doing the job. is undertaken with a view to find out the factors necessary for success at these jobs. Merit rating determines the extent to which an employee meets job requirements. Training imparts knowledge and develop employees aptitude and skill. depending upon the merits. If a proper placement of employees is not given due weight age the industries going to face loss in many things. Placement of employees is placing the right man for the right job. It also prepares an individual so that he can accomplish his individual task efficiently and effectively. So after the selection and training employees. placement of employees is to be made with due care. Merit rating is a systematic and orderly approach to assess the relative worth of an employee working in an organization in terms of his job performance. Merit rating is commonly referred to as Employee Rating. which suits him. An analysis of the occupations. Methods used are a) Rating scale method b) Check list method Career Planning : Career planning means helping the employees to plan their career in terms of their capacities within the context of organizational needs. integrity. 46 . The employees must be fitted in right job. Merit rating or performance appraisal : Job evaluation evaluates the job. placement of employees is to be made. Today due to modern advancement and mass production a very high skill is required which can only be developed by proper training. leadership. the right man should be selected.. Many industries stop with selection of employees. Few industries go for training of employees and only a very few industries consider and adopt placement of employees. Intelligence tests are designed to indicate the mental caliber of the candidates and on the basis of the result some jobs are dropped from consideration as being higher or lower than the candidates general mental level. It is described as devising and organizational system of career movement and growth opportunities from the point of entry of an individual in employment to the point of his retirement. The task of guiding person as to what sort of job he should have is known as counseling or vocational selection. Merit rating decides the reward an employee should get in addition to his wages. Counseling : For each job. The employee should have the job. which they may adopt. Employee appraisal or staff reporting.

It minimizes grievances and raises the morale of the workers. assign duties. Such leaders give orders. b) Democratic or Consultative leader These leaders always work according to the wishes of their followers. Leadership may also be defined as the process of influencing a group in a particular situation at a given point of time and in a specific set of circumstances that stimulate people to strive willingly to attain objectives of an enterprise. and responsibilities without consulting their employees or caring for their opinion. Leadership means to inspire confidence and trust so that there is maximum co-operation from the employees within the control of a manager.4. He gives directions personally and whole lot of 47 . to join with them in getting the things done. It promotes healthier relations between workers and management. c) Persuasive Leaders : Such leaders influence his followers due to their personal contacts. voluntarily and without force from The followers. Democratic leadership motivates subordinates to work and improve their attitude towards work. Difference leadership styles a) Authoritarian or Autocratic Leader This type of leaders drive their workers through command and by developing fear in them.2 Leadership : Leadership is the ability to get desirable action. They frame the policies and procedures in consultation with their workers.

Programmes and plans of the industry and are also responsible for its execution. because they love and respect him and have full confidence in him.e. d) Persuasiveness Pursuance is also a good quality of a leaders which helps him in implementing his decision. Lack of decisiveness results in loss of efficiency. This sort of leadership can work only if the subordinates are highly educated. he intervenes least and avoids power. They then organize themselves into trade unions. behaviour and action. experience and association with the organization. e) Responsibility 48 . i. They should work in close cooperation with the worker leaders. The contribution. co-ordination and control. They are capable to convince the people and bring them around their view point. but leaves them entirely to themselves. d) Functional Leaders : Such leaders because of their expert knowledge and win the confidence of their followers by their superior knowledge. These leaders are responsible for formulating or assistance in the formulation of policies. order etc. b) Initiative He must initiate good activities and must be capable of taking initiative. organization. The responsibility for accomplishing most of the work lies on the shoulders of the subordinates. Qualities of Good leader a) Intelligences and Technical Knowledge A good leader must have an intelligence which is more than that of his followers. g) Administrative leaders These leaders obtain this position by virtue of their ability. f) Labour leaders These leaders come to prominence due to their qualities of speech. e) Free Rein or Laissez-Faire Leaders These leaders do not lead the subordinates. brilliant and they possess good sense if responsibility. planning. c) Decisiveness He must be able to make proper decision at proper time ad must stick to it. He must also be technically sound. He must be able to understand and solve the problem in accordance with the prevailing situation.workers responds to his call. The subordinates group establishes its own goals and solves its own problems.

in his department. Supervisors role in the organization and functions and qualities of good supervisor Supervisor is a member of lower level management. he has to look after the proper placement of men.. He is expected to know certain basic points regarding the maintenance of machines as per operation and maintenance manuals. c) Maintenance of quality . He has to send regular reports to his superior (works manager) about observations and actions taken by him. status and efficiency of machines etc. i) Technical functions are a) Planning and organizing – He has to plan for the present and future works of his sections. Materials and Machines. The object of planning is to ensure full utilization of Men. time taken for production. tools. d) Maintenance of machines – Supervisor is responsible for proper maintenance of machines. Best inspiration is from the conduct and personality of the leader and the standards set by him g) Social Consciousness He must always realize that he is dealing with human beings. b) Maintenance of records – like productions.He is responsible for the quality of production. progress of productions. That is right person for the right job and taking more care regarding the quality of raw material. equipments. who are also having feelings of social status and self respect. A leader has to inspire his inspire his men so as to get the work done from them. equipments etc. He has to obtain the right type of raw materials at right time and in right quantity. To maintain the quality. wastage of materials. tools etc. His role of functions can be categorized as technical functions and personal functions. f) Ability to inspire. i) Other qualities a) Faith and respect from followers b) Enthusiasm c) Affection d) Skill in imparting instructions e)Vigilant f)Open mindedness g)Independent thinking.A leader must be able to know and fee his responsibilities. so that quality of the product is maintained as per standards. He must not shrink his responsibilities and must be in a position to take the burden of decisions on his shoulder. 49 . h) Positive attitude He should always have a positive attitude towards the problems of the industry and workers.

f) Job evaluation and consideration of merits . suitable placement to the worker is made by the supervisor. and help him to adjust for the new e) Communication – It is an important function of the supervisor and supervisor with bad communication abilities may result in workers failure in performing a particular job. instructions which are complete in all respects without ambiguity in simple language so that work is performed successfully.e) Maintenance of control – Effective supervision means control at many points right from the control of men to control of wastages of materials.After training. where strength is considerably high. solve the problems and redress the problem.Earlier days. ventilation and cleanliness of his section. since he knows the job details and number of persons required to perform that job. qualification etc. He should ensure safer working conditions by providing proper guards and fencing and advice the workers regarding safety practices. ii) Personal functional a) Selection of workers . supervisor did not have a say in selection of workers. supervisor should bear in mind the standards. When there are large number of workers in a factory. of the candidate to be selected. But now-a-days the supervisor is given a place in the recruitment committee for the selection of workers. c) Placement . Supervisors should listen to the problem of workers.Supervisors of big organization are expected to help in job evaluation of workers. d) Induction – This is inducting the workers for a particular job. g) Dealing with employers and employees – This is a difficult job on part of the supervisor and should be handled tactfully. b) Training and development – After selection. if supervisor is careful. at the same time he has to fulfill requirements of production while dealing with the higher 50 . Wastages can be minimized. it will be difficult for the management to know about the individual performance and their merits and hence supervisor should make suitable recommendations after job evaluation. f) Maintenance of working condition – This is most important in the part of supervision. experience. During the selection. Hence he should be able to convey the correct information. Every supervisor has to look after lighting. manufacturing processes etc. He should analyze the working before the start production so that there is minimum wastages. supervisor has to ensure that the training is imparted to the workers about operations.

• They set their own goals and inspect their own work • They often create their own schedules and review their performance as group. there will be difficulty in interacting and influencing each other. 51 .executives and implement their directions without affecting the sentiment of workers. Importance of Team Building A team includes few people. 4. because the interaction and influence processes. common performance goals. control and improve their own work processes. can only occur when the number of members is small. and an approach for which they hold themselves mutually accountable. because it is often the approach that differentiates one team from others. Having a common purpose and common approach is particularly important for teams. Characteristics of Effective Teams The following are the important features of teams • They are empowered to share various management and leadership functions • They plan. When more people are involved. Teams include people with mix of skills appropriate to the task to de done. vital for a team to function. • They may prepare their own budgets and coordinate their work with other departments • They usually orders materials.1 Team Building Definition of Team A team is a small number of people with complementary skills who are committed to a common purpose.2. keep inventories and deal with suppliers • They are frequently responsible for acquiring any new training they might need. same as a small group described in the previous chapter.

Team work depends on cooperation.• • They may hire their own replacement or assume responsibility for disciplining their own members. Second most important tasks of management teams is to co-ordinate work between work teams that are interdependent in some manner. Problem Solving Teams are temporary teams established to attack specific problems in the work place. The most common type of teams are work teams. 52 . Decisions are made much faster with electronic communication systems and team members can move in or out of a team as the issues demand. Engineers in U. Problem solving teams are often cross-functional. such as developing and manufacturing new products. Management teams must concentrate on the teams that have the most impact on overall corporate performance. Their principal focus is on using the organisation’s resources effectively. allowing members to return to their normal work. meaning that team members come from different functional areas. electronic mail and other communication network. the team is usually disbanded. management teams and virtual teams. Management Teams consists of managers from various areas and co-ordinate work teams. Types of teams In view of their wide spread popularity. Work Teams are primarily concerned with the work done by the organizations. sharing files via internet. trust .S for example can contact audibly and visually with counterparts all around the globe. Teams can be classified by functions they discharge. work teams are highly empowered. They offer recommendations for others to implement. Virtual Teams are the teams that may never actually meet together in the same room their activities take place on the computer via teleconferring and other electronic information systems. various types of teams have come to stay. Towards this end. problem solving teams. training and rewards. Their primary job is to coach and counsel other teams to be self managing by making decisions within the teams. They are relatively permanent because their work does not end with the completion of a particular project or the resolution of a problem. providing services for customers and so on. After solving the problems.

originality and novelty that is also appropriate to the context. like peanut butter and banana sandwiches. or reapplying existing ideas. good. We are socialized into accepting only a small number of permitted or normal things. like chocolate-covered strawberries. Just look at how creative children are. 53 . the habit of enjoying the good. while looking for ways to improve it. Creativity refers to the process by which novel but situationally appropriate outcomes are brought about. Creativity is also an attitude: the ability to accept change and newness. A simple definition is that creativity is the ability to imagine or invent something new. while others are just simple. everyone has substantial creative ability. for example.2. As we will see below. creativity is not the ability to create out of nothing (only God can do that). Often all that's needed to be creative is to make a commitment to creativity and to take the time for it. a willingness to play with ideas and possibilities. The creative person realizes that there are other possibilities.2 Creativity Definition of creativity Organizational culture promotes creativity and innovation. practical ideas that no one seems to have thought of yet. changing. or chocolate-covered prunes. but it is still there and can be reawakened. a flexibility of outlook. In adults. The essence of creativity is the element of freshness.4. An Attitude. but the ability to generate new ideas by combining. What is Creativity? An Ability. creativity has too often been suppressed through education. Some creative ideas are astonishing and brilliant. Believe it or not.

54 . always trying to make it a little better.A Process. speech recognition. it would be helpful to do some research to see what other people have thought about the topic. and to learn more about advertising. like the principles governing machine vision. Contrary to the mythology surrounding creativity. The creative person knows that there is always room for improvement. you need to know more about the target audience and the product in question. You need to find some systematic way to gather and organize the relevant material. Creative people work hard and continually to improve ideas and solutions. Whatever topic we are interested in. Other information might be general. you need to know what other people have done and where the current limitations are. etc. Some of the information might be specific. we need to understand more about the relevant topic to obtain more background information. by making gradual alterations and refinements to their works. If you are a scientist who wants to design a better robot. very. then we don't have to waste our time to reinvent the wheel. very few works of creative excellence are produced with a single stroke of brilliance or in a frenzy of rapid activity. If there are already good solutions that can be used. But even if the problem has not been solved. like how much time and money do you have for making the robot. there is a lot of information that we can gather. Importance of creative thinking When we need to come up with an idea to solve a problem. If you have to help market a product. Much closer to the real truth are the stories of companies who had to take the invention away from the inventor in order to market it because the inventor would have kept on tweaking it and fiddling with it..

moulds and strengthens the individual behaviour. efficiently and profitably. Several methods have been suggested and tried for ensuring workers participation in management. More important among them are 1) Co-partnership 2) Suggestions scheme 3) Joint consultation. The workers must be increasingly associated with the management of industrial undertaking so that they develop an awareness of problems of industry and begin to feel that they have a positive contribution to make to the operation of their units. Discipline Employee discipline is the backbone of industrial relations. It is also a force which promotes an individual or group to observe certain rules. There are two types of discipline negative discipline and positive discipline. but from the desire to cooperate in achieving the common goal of the organization. Such association with management should gradually give place to labour participation in Management. Discipline means orderliness.4. obedience and maintenance of proper subordination among employees and a check or restrain on the liberty of individual. regulations and procedures that are considered necessary for the attainment of an objective. it is extremely important to give the workers the place of partners in industry. It is the training that corrects. 55 .3 Labourers participation in Management For higher productivity and sound industrial relations. Negative discipline is the traditional aspect of discipline and is identified with ensuring that subordinates adhere strictly to rules and punishment is meted out in the event of disobedience or indiscipline. In Positive discipline subordinates comply with the rules not from fear of punishment. In fact the function of management is to keep an enterprise going on smoothly.

The productivity due to this is known as “ Labour Productivity”. the productivity may or may not be increased. Power. If productivity is increased. The most common unit of Input is man hours. It suggests when to inspect. The essence of production is the creation of goods. It is also defined as the total number of products produced in unit time. management. The four recognized factors of production are nature. Resources may be men. Productivity implies the development of an attitude of mind and constant urge to find better. manufacturing a product or providing a service. may be by the transformation of raw material or by assembling so many small parts (as in TV or Scooter manufacturing). capital and enterprise. O = Unit of output. Materials. machines Money. easier. In addition. capital. Production in every day life can be noticed in factories. how often to inspect and how much to inspect. Difference between Production and Productivity Production is a sequence of technical processes. It is given by P = O/M. Money.Production Production in any process or procedure developed to transform a set of input elements like men. materials. etc. Time etc. Output is obtained by the combined input of number of factors such as Men. information and energy into a specified set of output elements like finished products and services in proper quantity and quality. It is defined as an organized activity of transforming raw material into finished products. labour. offices etc. It is the fitness for purpose. hospitals. it incorporates a feed back mechanism which explores the causes of poor quality and takes corrective action Productivity Productivity is a method of reduction in wastage of resources. thus achieving the objectives of an enterprise. Control : Control is a system for measuring and checking (inspecting) a phenomenon. the production is 5000 units. then the production is increased. This is 56 . If 5000 units are produced in a year. Quality Control Quality: Quality is a relative term and is generally explained with reference to the end use of the product. where P = Labour productivity. Productivity is increased to have better standard of living. M = Man hours Input. quicker and safer means of doing a job. if the production is increased. cheaper. material. Space. methods of production. On the other hands. Productivity is the ratio of output to input of the factor of production.

Hence productivity. material handling. a) In terms of Money Productivity = Output in Revenues from Production -----------------------------------------------------------------Expenditure on Laobur. the following should be minimized. a)External factors National resources. man-hours. excessive handling. There are two firms manufacturing similar products with the same input resources like Money. Availability of capital. materials etc. quality control. Machines. Government laws. then we say the productivity of firm B. and the other firm B is producing 5000 units in a year. wastage on part of men and machines. an element of efficiency is added to resources. product design. machine breakdowns. poor working conditions and political interference. Men. Technical and Training facilities b) Internal factors Plant layout. workstudy techniques. management techniques How to increase productivity To increase productivity in an industrial enterprise. Market competition. capital on raw material Or Productivity = Profit ----------------Investment b) In terms of Indirect Labour to Direct Labour Productivity = Number of indirect labour hours to serve direct labour ------------------------------------------------------------------------Number of direct labour hours.. Taxation. Materials etc. If one firm A is producing 5500 units in a year. poor management.understood by the following example. Measurement of productivity Productivity is the ratio of output to input. Wastage of material. Factors affecting productivity can be classified into external factors and internal factors. The units may be in terms of money. 57 .

Technical causes . An accident is an unplanned incident and for each such incident there is usually a specific cause or causes if one could but discover them. Distribution or Administration Productivity Productivity = Selling.unsafe conditions which includes mechanical and environmental factors 2. accompanied by a injury. Human causes – unsafe acts like personal factors. Accident prevention is highly essential in an industry.c) In terms of standards hours Productivity = Production in standard hours ________________________ Actual Man hours This is also known as Machine Productivity d) Materials Productivity Productivity = Material cost ___________ Numbers of units produced. in order to i) prevent injury to and premature death of employees ii) reduce operating and production costs iii) have good employer-employee relations iv) high up the morale of employees. Role of management 58 . suddenly occurring and originating from external sources which is associated with the performance of a paid job. followed by disability or even death. distribution or Administrative cost ______________________________ Total cost Prevention of accidents. Above all. Accident may be caused due to 1. An accident my happen to any employee under certain circumstances. detrimental to the health of man. prevention of accidents is a true humanitarian concern. e) Selling. An Industrial accident may be defined as an event.

3) It should be asked to report periodically about any further improvements required regarding safety. supervisors and shop floor worker. 3. 1) it should be assigned specific problems and duties such as planning safety rules and publicizing them etc 2) Its members should be asked to go to the shop floor and observe the workers regarding safety practice. It was observed that those organizations which had safety committees had less accident than those without such committees. 2. there should be consistent implementation of safety programmes emphasizing the need for the following where the role of management is necessary.Accident prevention does not occur by itself. 4. The safety committee aid in developing safety consciousness as well as it is a policy making body on safety matters. 1. The safety manager requires a degree of firmness and ready discrimination to exclude personal and union matters. Safety committees should be assigned with the following responsibilities. 59 . Safer workplace layout and working conditions Safe material handling Personal protective devices Safety measures essential in industry Safety Committee A safety committee may consists of executive.

they are entitled to pay for the period of slow down Picketting – The workers or their sympathizers place themselves at the entrances of the factory. Hence in the interest of both the employer and employees.0 Industrial Relations and Industrial legislations 5. and do not allow the officer to leave his room for a considerably long period so as to press for their demands. Go slow or slow down – In this. Usually strikes are done for one of the following purposes a) getting their demands sanctioned b) Preventing changes. If these relations are strained. Sit down strike – In this.5. They do not leave the premises of the factory until the strike is over. but refuse to work. Industrial Disputes : Strike – A common form of Industrial dispute is strike which means abstaining from work until the demands are met. causing obstruction to people who want to go in or come out. industrial disputes occur and industrial progress suffers. which is harmful to the workers c) Getting recognition for the union. The employer suffer losses. 60 . as well as society in general. but at a much slower rate. industrial relations should be cordial and harmonious. Since they do not totally abstain from work. thus slowing down the production. the workers do not get wages. workers continue to work. These person are termed “pickets” and the method is know as “picketing” Gherao – In this workers enters the room or chamber of the officer.1 Industrial Relations Introduction: Industrial relation represents the relationship between the employer and employees in an Industrial undertaking. workers go to the work place.

which are designed to create a friendly atmosphere with give and take attitude to settle the differences. He gives a hearing to both parties and offers his solution to the dispute. which is legally binding on them.Lockout – It is opposite procedure of strike and consists of closing of factory by the employer because of a dispute with the employees and refusal of entry to them. 61 . Conciliation consists of a series of conferences. c) Arbitration When the above two methods fail. Causes of Industrial Disputes a) If industrial work is done under severe restrictions and control. medical facilities etc. b) Conciliation and Mediation. the worker looses his freedom and discontented b) If the workers feel that the remuneration they get for their labour is not sufficient. The mutual rights and obligations of both parties. the process is known as “Mediation”. c) If the employer refuses to pay bonus d) If the employer refuses to recognize trade union e) Due to retrenchment and discharge of employees f) Due to unsatisfactory working conditions. then this method can be adopted. When the conferences are held with an outsider as chairman. The presence of an outsider or third party acts as a moderating influence on the two contending parties. that are agreed to them through negotiations are set down in the form of an agreement or contract.the process of direct negotiation on a collective or group basis between the representatives of employers and their employees for the settlement of disputes. In this a third person is chosen as the ‘Arbitrator” by agreement between the employer and employees. including informal sitting between representatives of two parties. If collective bargaining fails. hours of work. this method is adopted. Settlement of Industrial Disputes The methods adopted are a) Collective Bargaining . lack of welfare measures. The matters generally dealt through collective bargaining are i) Recognition of union ii) Workers participation in the management iii) Wages and other benefits iv) Procedure for disciplinary action v) Accident and safety vi) Hours of employment vii) Pension. sickness.

2 Trade Unions Most of the workers are ignorant and require guidance and advice from persons who have the genuine interest of the workers. As a group.In case of “Voluntary Arbitration” the obligation to abide by his decision is moral one. the workers faced all sorts of difficulties and had many grievances. the parties have to abide by it under compulsion of law. 5. Recognition If the employer refuses to recognize a trade union. 62 . When they represented individually to the management. the mater is referred to the labour court. the grievances were not redressed. Indian Trade union Act 1947 As per this act. an audited settlement of receipt and expenditure. Thus the trade union movement started. and can settle terms with the employers in a better way. the workers can organize themselves. The association formed by the workers is known as “ Trade Union”. This wrong attitude of the management resulted in the workers to join and collectively approach the management and get their grievances redressed. rather they were even punished. by himself is unable to fight against the injustice done to him. In old management. Trade union may be defined as an association or union of workers engaged in particular trade and formed chiefly with the object of helping the members in times of distress and getting their grievances settled and legitimate rights established. any seven or more workers in a factory may form a union and by subscribing their names can apply for registration with Registrar of Trade Union. History of Trade Union Movement in India. appointed by the Government. Each worker. Under compulsory Arbitration. Registration Rights and Liabilities i) To collect the membership fees in the premises of the factory ii) To put notices of the union in the premises of the factory iii) To use general funds for specific purpose iv) To conduct strike by peaceful methods v) To raise funds for political purpose at the option of members vi) To send the Registrar every year.

worker. week.5.3 The Indian Factory Act. adolescent. transmission machine.female 63 . young person. factory and occupier. viii) Latrines and urinals : There must be separate latrines and urinals for female and male workers. manufacturing process. previous permission must be obtained by a factory inspector and the factory has to be registered along with the license fees. power. vi) Drinking water : Drinking water should be made available during the working hours and they should be kept at suitable points vii) Bath rooms: If the works in the factory involves the dirt. calendar year. iii) Artificial humidification : In case of artificial humidification. There must be one Latrine for every 2. sufficient bath rooms shall be provided. must be of prescribed standard and water used for such humidification shall be clean and free from dust. i) Cleanliness : Every factory should be kept clean from gases and fumes ii) Ventilation and temperature : Adequate ventilation and prevention of excessive temperature. License and Registration Before a factory can be started. 1948 Definition : The Act defines the followings: Adult. This is only possible by circulation of the fresh air in the work room and by insulating the hot parts of the machinery. v) Lighting : Sufficient and suitable lighting whether artificial or natural or both shall be maintained at working place or passage. Health Provisions : This act prescribed the following provisions to maintain the health of the workers and reducing the possibilities of injuries to the workers. child. This can be prevented by providing sufficient space to the worker. iv) Over crowding : No room in the factory shall be over crowded. the process. prime mover.

every part of the transmission should be safeguarded. Every moving part of machine fly wheel 2. 6) Revolving machinery In case of revolving machineries. 3) Casing machinery To prevent injuries to the worker every set screw. Safety provisions The following safety provisions must be provided and maintained. these should be of good construction and adequate strength. pulley blocks etc. 1) Fencing of machinery The following should be properly fenced 1. This work is done by specially trained adult male worker wearing tight fitting clothing. ix) Spittoons : Sufficient number of spittoons shall be kept at convenient places and they shall be cleaned and washed regularly. They should be maintained well and they should be inspected once in a year atleast. are the lifting machines. 2) Work on or near machinery in motion No woman or young workers are allowed to clean or lubricate any part of prime mover or transmission machinery when it is in motion. encased or otherwise effectively guarded. spindle. wheel or pinion shall be sunk. Head race and tail race water turbine.workers and one latrine for 20 to 100 male workers. They should be constructed in prescribed norms. Devices for cutting of power from running machines in emergency shall be provided. a notice should be affixed as regards its peripheral speed and as regards the speed of the shaft of the spindle upon which the grinding wheel is mounted. They should be sufficiently protected by an enclosure fitted with gates 5) Lifting machines. 3. chains ropes etc Cranes crab winches. Every toothed or friction gearing shall be completely encased. a motor or rotary convertor. 7) Excessive weights 64 . 4) Hoists and lifts Every hoist and lift shall be tested and inspected for its strength before use and it should be marked with maximum safe working load. Every part of an electric generator. bolt or key on any revolving shaft.

i) Washing facilities – Adequate and suitable washing facilitiy for male and female should be provided separately. which may cause him injury. Foe every 500 workers there should be one ambulance room with necessary equipments. vi) Creches – If there are more than 30 female workers suitable room or rooms should be provided for the use of their children. Suitable precautions should be taken as prescribed to protect the workers against dangerous fumes 10) Precautions against fire To protect the worker against fire. 65 . suitable precautions as prescribed should be provided. 9) Precautions against dangerous fumes No person shall be allowed to enter the space where there is a dangerous fume as it causes risk to the person. Welfare Provisions Under this provision following facilities should be provided. rest rooms and lunch rooms – This facility should be provided in a factory where more than 150 workers are working with suitable drinking water facility.No person should be allowed to lift the heavy machinery. vii) Welfare Office – Welfare officers should be appointed in factories employing more than 500 workers. iv) Canteen – A canteen should be provided in a factory where 250 workers are working v) Shelter. iii) First aid appliances – At least one first aid box containing the prescribed contents for every 150 workers should be provided. ii) Sitting facilities – Suitable arrangements for sitting should be provided for the workers who work in standing position. and they should be allowed to lift the weight as prescribed by the State Government 8) Protection of eyes To protect the eyes against watching and dressing the metal or stone the goggles and screens should be used.

Register of child workers indicating their particulars and nature of work shall be maintained by the factory manager and be made available to Inspector at all times during hours of work. Such dangerous operations may also be restricted and in such cases women workers. It may be extended to 12 hours with the special permission of the Chief Inspector. No child shall be permitted to work for more than four hours on any day. 10 p. which is given by a certifying surgeon after examining him. ii) Holidays : No worker is allowed to work. Working hours should not be more than 10 ½ hours per day inclusive of rest intervals.m. Annual leave with wages The worker should be paid for the holiday in week. 66 .Working hours i) Hours of works : No worker is allowed to work in a factory for more than 48 hours in a week. i. Female workers are only allowed to work in Employment of young persons No child under 14 years of age shall be allowed to work in any factory. iv) Restriction on double employment : Double employment is not allowed to any employee.m.m.e. and there is a holiday on Sunday unless the worker enjoys holidays for whole day immediately after three days or before three days of Sunday iii) Over time wages : If a worker works for more than 9 hours per day or 48hours per week he should be paid over time wages for over time at twice the rate of his ordinary wages. If a worker works continuously for 240 calendar days he is entitled to get earned leave benefit. There is at least half an hour interval for 5 hours of working. to 6 a. to 7 p. adolescents.m. and during the night.00 a. children are prohibited to work. v) Employment of women : between 6. Dangerous operations Proper safeguard should be provided against any dangerous operation which causes the injury to the worker. A child who has even completed his 14 years of age shall not be allowed to work in a factory unless he carries while at work a token giving reference to certificate of fitness. for more than 10 days continuously without a holiday.

if done so he shall be punished with up to 3 months imprisonment of a fine of Rs.10000 3 lakhs or both. No Inspector should disclose any information relating to manufacturing processes. 1000 or both. 500. there will be a fine of Rs.Accidents and diseases If a worker is met with an accident which causes him bodily injury and due to which he is unable to work for more than 48 hours immediately following the accident. the manager of a factory or the doctor who is attending the patient has to send the report to the factory inspector. An inspector who does so shall have up to 6 months of imprisonment or a fine of Rs. Penalties In case of any contravention of any of the provision of this act. he shall be punishable with fine upto Rs.000 or both if he fails to produce register or other documents on demand by Inspector and prevents any factory worker from being examined by the Inspector. etc which comes to his knowledge in course of his official duties. If any worker contravenes any provision of the act. he shall be punishable with imprisonment upto 3 years. If contravention continues after conviction. Miscellaneous The manager of the factory may appeal to the next higher authority against the order of the factory inspector within 30 days from the date of serving the order. No worker should misuse any appliance provided for the purpose of securing health.100.000 or both. a fine upto Rs. An occupier Manger shall be punishable with imprisonment upto 6 months or fine upto Rs.100 or both. 1000 per day. 67 . if the person does contravention of the same provision again. safety and employee welfare. After being convicted for an offence.10. the occupier and factory manager shall each be guilty of an offence and punishable with upto 2 years of imprisonment or fine up to Rs.

canals.4 Payment of wages Act 1936 The payment of Wages Act was enacted in 1936 and it came into force in March 1937. quarry or oil filed v) Plantation vi) Workshop. while in employment and includes a) basic wages b) D. 68 . where construction. 2) Time of payment of wages Any industrial establishment employing less than 1000 workers must make the payment of wages before the expiry of 7th day after the last day of the wage period. Wages means all remuneration expressed in terms of money payable to persons. where articles are produced with a view to their use vii) Establishment. or water works relating to generation. transmission and distribution of electricity is being carried out. roads. This Act defines the i) Industrial establishment and ii) Wages Definition Industrial establishment means any i) Tram way service or motor transport service ii) Air transport service iii) Dock.A c) Bonus d) Payment under any award or order of court e) Over time allowance f) Leave salary Main provisions of the Act are as mentioned under: Methods of payment of wages 1) Responsibility of payment of wages Ever employer shall be responsible for the payment to the persons employed by him at all wages required to be paid under this act.5. The Act was passed to give effect to the recommendations of Royal commission on Labour. bridges. Jetty iv) Mine. Object The object of this Act is to regulate the payment of wages to the specified classes of persons employed in certain industries and to remove irregularities in payment of wages and unauthorized deductions from wages by the employers. development or maintenance of buildings.

The fine should be recovered within 60 days from the date of imposing the fine on an employee.If there are more than 1000 workers.F and payments co-operatives to societies. The payment should be done in current coins and in currency rates and not in kind. 4) Maintenance of Register and Record The employer should maintain the registers and records giving details of payment and deductions if any and these registers should be maintained at least for a period of 3 years from the date of entry. Any deduction made in the wages should be authorized by the Act. If an employee is terminated. 3) Fixation of wage period. his wages should be paid before the expiry of the second day from the day on which the employee is terminated. The following deduction may be made: i) Fines 2) Deduction for absence from duty 3) Deductions for damage made by the workers 4) Deduction for the house accommodation 5) Deduction for income tax 6) Deduction for recovery of advance made to him 7) Deduction for P. 69 . Fines Fine should not be imposed on worker till it is approved by the prescribed authority. The maximum fine amount should not exceed thirty second part of the wage in on wage period. The fine recovered should be entered in register. The wage period is fixed by the person who is responsible for the payment of wages and this period will not exceed one month. While imposing fine on an employee a sufficient times should be given to him to show against the fine. Deductions from wages The payment made by the employed person to the employee is considered as deduction. the wages should be paid before the expiry of 10th day after the last day of the wages period.

500 to Rs. Such an inspector may examine or make enquiry to ascertain whether the provision of this act are being observed.4 Workmen’s Compensation Act 1923 70 .Inspection under the Act Inspectors of Factories or otherwise appointed shall be responsible for the enforcement of the Act. Violation of the Act Violation of the Act is subjected for punishment with a fine to the extent of Rs. 5.000 and imprisonment of 3 months. Inspector may enter. 1. The inspector can seize such registers or other documents relevant in respect of an offence under this Act. inspect or search any factory premises and supervise the payment of wages for the purpose of carrying out the objects of the act.

This act defines the following 1) Dependent 2) Partial Disablement and 5) Workman Definition i) Dependent means any of the following relatives of a deceased workman namely. disablement as reduces the earning capacity of a workman in any employment in which he was engaged at the time of the accident resulting in the disablement. iii) Total Disablement: It means such disablement whether of a temporary or permanent nature. a parent other than a widowed mother.This Act provides compensation to the employees for injury by accidents. v) Workman : It means any person (other than a person whose employment is of a casual nature and is employed otherwise than for the purpose of employers trade or business) who is employed in any such capacity on monthly wages not exceeding Rs. where the disablement is of a permanent nature. a minor child of deceased son. which is capable of being estimated in money other than traveling allowance or any other contributions paid towards pension etc. 500. where the disablement is of temporary nature.6 Employees State Insurance Act 1948 71 3) Total Disablement 4) Wages . which has been amended to Rs. an unmarried or widowed sister. It came into force from 1st July 1924. a daughter legitimate if married and a minor or if widowed. which incapacitates a workman from all work which he was capable of performing at the time of accident resulting in such disablement. a minor brother. such disablement as reduces his earning capacity in every employment which he was capable of undertaking at that time. a husband . or a widowed mother b) If wholly or in part dependent on the earnings of the workman at the time of his death. Permanent total disablement shall be deemed to result from injuries where the aggregate percentage loss of earning capacity amounts to one hundred percent or more. iv) Wages: It includes any privilege or benefits. and unmarried legitimate daughter. Thus this Act protects the workers as far as possible from hardship arising from accidents. a minor legitimate son and unmarried legitimate daughters. 5. a widowed daughter-in-law. a) a wife. a minor legitimate son . 1000 from May 1976 by the Government. and. ii) Partial Disablement : means.

The responsibility of paying the employer’s and employee’s shares of contribution is placed on the Principal employer. The Act recognized only a very small number of diseases. 72 . There was much delay in payment due to the clumsy administration. Definitions The law defines the following Contribution : Contribution of employee covered by this law is as specified in the law. Object The benefits given to the workers under the Workmen’s Compensation Act of 1948 did not reach them due to the following reasons. maternity and employment injury and makes provision for certain other materials. i) ii) Lack of finance always made it impossible to file suit in the court of law for claiming compensation for injury. the Government of India passed the Employee’s State Insurance Act.Introduction This Act provides benefits to the workers working in a factory in case of sickness. With a view to remove these difficulties and defects met with the Compensation Act. the submits and returns in prescribed form Inspectors are appointed by corporation to inspect the records and to investigate the defects if any. Benefits: Following are the benefits provided by this Act. in 1948. Every Principal employer maintains the records. The central and State Governments and local bodies give grants to the State Insurance Fund. The contribution of employee depends on the rate of his emoluments and it is deducted from his wages by the employer.

The employer deducts employees contribution from their salaries and the same along with his own share.i) Sickness Benefit : This benefit if extended to a person in case of his sickness for the period not more than 56 days in the continuous period of 365 days. The ESI corporation may appoint Inspectors to check the particulars about the amount submitted by the employer. iii) Disablement Benefit : This is extended to the insured workers who receive injuries during their employment which cause disablement. ii) Maternity Benefit : This is made in the form of periodical payments to a women in case of her confinement duly certified in the manner specified in the Act. shall submit in a bank nominated for the purpose. v) Medical Benefit : Free medical care is extended to the injured person during his sickness period. This is given as the periodical payment. In case of permanent disablement the persons are entitled to get pension for life. iv) Dependents Benefits : If a person dies due to his (employment ) injury his dependents will be paid benefit amount not exceeding one half of the amount payable to the diseased person in case of permanent total disablement. This has all the powers of the civil court. Such council can investigate complaints against medical practitioner (attending the workmen) in connection with medical treatment and attendance Contribution: Contribution towards making the fund is mainly from the Employer and Employees of the undertaking. Finance and Audit The Act makes provisions for creation of fund called Employee’s State Insurance fund. Scope: If there is any dispute it will be set right by the Employee’s Insurance court. An appeal may be filed in high court only against the order of the insurance court within 60 days from the date an order. The fund is created mainly by the contribution made by the employer and 73 . For the temporary disablement which lasts for more than seven days the amount of benefit will be fixed at half of the average wages for the period of disablement. 1000 is made for the funeral of the insured person. vi) Funeral Benefit : Payment not exceeding Rs. if he dies. Administration : A medical benefit council is set up to advise on matters relating to administration of medical benefits. though Central and State Governments also give grants and donations in the funds.

Employee’s Provident Fund Act 1952 Introduction This Act was passed in February 1952 and it came into effect from Nov. salaries. Rate of wages of an employee. Penalties For the false statement and representation there will be 3 months imprisonment or Rs. payment of fees. For failure to pay the contribution there will be six months imprisonment of Rs.1000 fine or both. Rate of contribution to be paid by principal employer. The fund is held and administered by the corporation and utilized for payment of benefits and provisions of medical treatment to workmen and their families. Adjudication of disputes and claims State Government shall constitute Employees Insurance court to decide all matters. 74 . establishment and maintenance of ESI hospitals and dispensaries etc. allowances. 1952. questions and disputes arising from the Insurance of workmen. etc to officers and servants of the corporation and for many other purposes related to proper functioning of ESI corporation. 500 fine or both. Whether any person is an employee within the meaning of this Act and if he has to pay the contribution. Right of any workman to any benefit and as to the amount and duration thereof. Any dispute between the employer and ESI corporation.the employees.

vi) The Act was amended in 1956 and gives power to Government to extend it to new factories. 8. v) Violation of the Act leads to 6 months imprisonment or Rs. their respective contributions as well as the contributions of their employees. The salient features of the Act is follows: i) Contribution : The employee should contribute.1. establishments. Employers are also to contribute at a similar statutory rate. also. Salient features of Employees Provident Fund Scheme The scheme is administered by a Board of Trustees at the Centre and similar boards in States. Industrial Disputes Act. iv) The Government shall appoint the inspector to see that the Act is participated. as per this act. ii) The amount standing to the credit of any member in the fund shall not in any way be capable of being assigned or charged and shall not be liable to attachment under any degree or order of the court in respect of any debt due from him.F at the time of his death shall be paid to the nominee.000 as penalty or both. The Government shall pay interest on the provident fund contributions at a rate to be specified by it. 1. Average Pay : It is the average of the wages payable to the workmen 75 . the benefit is extended to the dependent. Provision This Act makes provision for the future of the individual worker when he retires and in case of his death in services. 1947 This is an Act to make provision for the investigation and settlement of industrial dispute and for certain other purposes. The employers are held responsible for remitting to the fund. iii) The amount standing to the credit of any member in the P.It applies to every factory employing 20 or more persons. The Government can also introduce the scheme in any other establishment employing less than 20 persons by giving at least ten months ‘notice’.4% of his basic wage and dearness allowance etc.

In 4 complete weeks for weekly paid workman c. In case when a worker is fully exonerated after the enquiry. manufacture or calling of employers. If after enquiry misconduct is proved. carried on by or on behalf of a local authority. or non-employment or the conditions of labour. Dismissal of workers A worker dismissed after obtaining the written permission from the regional conciliation officer by the employer does not validate the dismissal but only removes the ban on the right of the employer. 76 . employment. he would remain in service and would be entitled to his full wages of the suspension period. the head of the department. Suspension of workman A workman may be suspended pending enquiry and disciplinary action. the worker is dismissed and is not entitled to any wages of the suspension period. 4. the chief executive officer of that authority. 2. when the worker has worked for less than this period. 3. Industry: “Industry” means any business.) In relation to an industry. his agent or manger to dismiss the worker. 6. even then dismissal may be industrial dispute. Employer : Employee means a. then the average pay is calculated as the average of the wages payable to a workman during the period he actually worked. Award : “Award” means an interim or a final determination by an labour court. 5. In 12 full working days for daily paid workman Preceding the date on which the average pay becomes payable.) In relation to an industry carried on by or under the authority of any department of the central or state government. trade. It includes any calling service. the authority prescribed in this behalf or where no authority prescribed in this behalf or where no authority prescribed in this behalf or where no authority is prescribed. In 3 complete months for monthly paid workman b. handicraft or industrial occupation. undertaking. b.a. Industrial Dispute “Industrial Dispute” means any dispute or difference between Employers and employers or Employers and workman or Workman and workman or which is connected with: The employment . 7. Industrial tribunal or National Industrial tribunal.

8. Experience has shown the “lockout” is the weapon of employer to compel the employees to accept his proposals. Authorities under this Act 1. technical or electrical work for hire or reward. Closure In case of “closure” employer closes the business and this closure means the final and irrevocable termination of the business itself. The lockout indicates the closure of the place of business and not the closure of the business itself as in “closure”. Workman “Workman” means any person (including an apprentice) employed in any industry to do any skilled or unskilled manual. just in the reply of the strike. 11. Settlement “Settlement” means a settlement. 13. 10. 77 . Strike “Strike” is refusal under a common understanding of any number of workers to continue to work or to accept employment. Work committee A works committee is constituted in any industrial establishment in which 100 or more workers are employed and have been employed on any in the preceding 12 months by an employer. Lockout “Lockout” means a) closing of a place of employment b) suspension of work or c) refusal to continue to employ any number of persons employed. Retrenchment It is the termination of the service of a workman for any reason whatever except as a punishment inflicted by way of disciplinary action. 9. It does not involve retirement of worker or termination of the service of a worker on the ground of continued ill health. arrived at during the conciliation proceedings and includes a written agreement between the employer and workmen. supervisory. 12. the weapon of the employees to compel the employer to accept their demands.

Main duty of works committee is to promote the measures for securing and preserving amity and good relations between the employers and workers 2. Courts of enquiry These courts of enquiry are also appointed by the State Government by notification in the official gazette. Chairman is an independent person and members are persons appointed in equal numbers to represent the parties of the dispute. The matter specified in the second schedule are a) The legality of an order passed by an employer b) The application and interpretation of standing orders. Board of conciliation A board of conciliation is constituted by the State Governments by notification in the official gazette. Power of the board. Main duty of conciliation officer is to mediate in the settlement of industrial disputes. 78 . Labour courts State Government constitute Labour courts for the adjudication of industrial dispute for any matter specified in the second schedule. i) A member of the board can enter the premises of the establishment for the purpose of enquiry into any industrial dispute after and reasonable notice. After conducting the enquiry into the matters referred. they report to the Government within 6 months from the commencement of its enquiry. 3. The duty of the board is to promote the settlement of an industrial dispute. 5. ii) Every board has the same powers as vested in a civil court iii) Every enquiry of a board is treated to be a judicial proceeding within the meaning of sections 193 and 228 of the India Penal Code. Conciliation officers Conciliation officers are appointed by the State Govt. for the industries in a specified area permanently or for a limited period. 4. to inquire into any matter appearing to be connected with industrial dispute. It consists of a Chairman and two or four other members.This committee consists of representatives of employer and workers but the number of representatives of the employee should not be more than that of worker.

No person can continue in the office of the presiding officer of a Labour court. The tribunal adjudicates of industrial disputes relating to any matter in the second schedule (jurisdiction of labour courts) or the third schedule.c) Discharge and dismissal of workers including reinstatement or grants of relief to workmen wrongly dismissed. State Government may also constitute one or more Industrial Tribunals for the adjudication of industrial disputes. 6. f. Wages including the period and mode of payment Compensatory and other allowances Hours of work and rest intervals Leave with wages and holidays Bonus. provident fund and gratuity. h. It can also take up the industrial disputes which are of such a nature that industrial establishments situated in more than one state are likely to be increased in or affected by such disputes. The third schedule mentions the following matters. d) Withdrawal of any customary privilege. Classification by grades Rules or discipline Rationalisation Retrenchment of workers and closure of establishment. National tribunals Central Government may constitute one or more National Industrial Tribunals for adjudication of disputes involving question of national importance It consists of only one person and who should have the qualifications as mentioned for that of labour courts. within 6 weeks before striking or b. c. Strikes and Lock outs Strikes No persons employed in a publicity utility services shall go on strike: a. e. Within 14 days of giving such notice or 79 . d. g. profits sharing. i. b. A tribunal shall consist of one person only to be appointed and he should have the minimum qualification as required for that of labour courts. Tribunal or National Tribunal after he has attained the age of sixty five years. Without giving a notice of strike to the employer. a. 7. Industrial Tribunals.

Penalty for instigation Any person who instigates other to take part in strike or lockout which is illegal under this act. actually worked for not less than a) 190 days in the case of a workman employed below the ground in a time and b) 240 days in other cases The number of days in which a workman has actually worked under an employer shall include the days on which: a. If during a period of twelve calendar months preceding the date with reference to which calculations is to be made. A. she has been on maternity leave upto 12 weeks. 1000 or both. He has been on leave with full wages earned in the previous years b. Right of workmen laid off for compensation 80 . 1000 or both. power or raw materials of the accumulation of stock or the breakdown of machinery or for any other reasons to give employment or workman and who has been retrenched. Before the date mentioned in the notice or during the pendency of conciliation proceedings Lock outs No employer carrying on any public utility service shall lock out a) Without giving a notice of lockout to the workers in a prescribed form within 6 weeks before locking out. Penalty of illegal strikes and lock outs Any worker. shall be punishable with imprisonment upto six months or fine upto Rs. Continuous service As per section 25-B a workman shall be deemed to be in continuous service under an employer.c. Lay –off “Lay off” means the failure. refusal or inability of an employer on account of shortage of coal. which is illegal under this act. In the case of female. who commences or continues strike. He has been absent due to temporary disablement caused by accident arising of and in the course of his employment c. shall be punishable with imprisonment upto six months of fine upto Rs. b) Within 14 days of giving such notice c) Before the date specified in the notice d) During the pendency of any arbitrary conciliation proceedings.

every man who has completed the continuous service of at least one year in that undertaking. Retrenchment As per section 25-F. Workmen not entitled to compensation in certain cases No compensation shall be payable to a workman who has been laid off in following conditions a) if he refuses to accept any alternative employment in the same establishment or in any other establishment belonging to the same employer situated within 8 Kms from the establishment to which he belongs: b) If he does not present himself for work at the establishment at the appointed time during normal working hours at least once a day. compensation equal to 50% of the total of the basic wages and dearness allowance. B. Provided that if a person so laid off is retrenched. wages for the period of notice: Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date of the termination of service. as if the workman had been retrenched). He should also be served with a notice as mentioned earlier. he shall be paid by the employer for all days during which he is so laid off ( for a maximum period of 45 days).Whenever a workman who has completed more than one year of continuous service under an employer is laid off. no workman employed in an industry who has put in more than one year’s continuous service under an employer shall be retrenched until: a) The workman has been given one month’s notice in writing indicating the reason of retrenchment and the period of notice. compensation which shall be equivalent to 15 days average pay for every completed year of continuous service or any part thereof in excess of 6 months. b) The workman has been paid at the time of retrenchment. 81 .e. then the compensation paid to the workman for having been laid off during the preceding 12 months may be set off against compensation payable for retrenchment. Closure of an undertaking Where an undertaking is closed down for any reason whatsoever. c) If such laying off is due to strike or slowing down of production on the part of workmen in another part of the establishment. is entitled to notice and compensation in accordance with the provisions of section 25-F (i. This compensation shall be paid before such closure.

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