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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.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.
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.
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10. Management tackles business problems and provides a tool for the best way
of doing things.
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.
ADMINISTRATION MANAGEMENT
1. Administration is a determinative Management is an Executive function.
function
2. Administration predetermines the Management is concerned with
specific goals and lays down the broad carrying out the broad policies laid
areas within which these goals are to down by the administration
attained
3. Forming various departments in the To keep the co-ordination among the
organization staff of various levels
4. Fixing of authority and To distribute work and machines
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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. Board of directors
2. Managing Director or Executive Director
3. General Manager
4. Proprietor
5. Financiers
6. 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.
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.
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.
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(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.
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2.0 DEVELOPMENT OF DIFFERENT SCHOOLS OF MANAGEMENT
THOUGHT
Criticism:
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Scientific management was an innovation and received tremendous opposition.
Opposition to this change retarded the spread of the basic idea of scientific
management in the beginning, 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. Later
on when, with the use of scientific management, greater efficiency was achieved
in industrial operations and productivity increased, principles of scientific
management started spreading rapidly throughout the industry,
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Henry Fayol, a French industrialist and manager, was one of the first writers who
propounded his theory of management. He is regarded as the father of modern
management theory, because he was the first who suggested the functions of
management. These functions have been recognized as the main task of
manager in modern management theories. Management thoughts of Fayol can
be classified into the following three categories
1. Functions of management
2. Principles of management
3. Abilities required from the managers
Criticism
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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.
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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.
Main aspects
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• It draws concept from psychology, sociology, human relations, inter-
personnel 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,
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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
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.
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5) Procedures
6) Rules
7) Programs and
8) Budgets
Rules : Specific required action, allowing no discretion. They are usually the
simplest type of plan. “ No smoking” is a rule that allows no deviation from a
state course of action. The essence of rule is that it reflects a managerial
decision that some certain action must or must not be taken.
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Establishing verifiable goals : Determine the current situation, including
examination of resources, market trends, economic indicators, and competitors.
Finding alternative courses of action: The next step in planning is to search for
and examine alternative course of action, especially those not immediately
apparent. 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. The more
common problem is not finding alternatives but reducing the number of
alternatives so that the most promising may be analyzed. Even with
mathematical techniques and the computer, there is a limit to the number of
alternatives that can be thoroughly examined. The planner must usually make a
preliminary examination to discover the most fruitful possibilities.
There are so many alternative courses in most situations and so many variables
and limitations to be considered that evaluation can be exceedingly difficult.
Selecting a course is a point at which the plan is adopted-the real point of
decision making. Occasionally, 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.
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Measuring and controlling the progress : After decisions are made and plans
are set, the final step in giving them meaning, as was indicated in the of types of
plans, is to numberize them by converting them into budgets by which the
progress can be controlled and measured. The overall budgets of an enterprise
represent the sum total of income and expenses, with resultant profit or surplus,
and the budgets of major balance sheet items such as cash and capital
expenditures. Each department or program of a business or some other
enterprise can have its own budgets, usually of expenses and capital
expenditures, which tie into the overall budget. Budgets become a means of
adding the various plans and set important standards against which planning
progress can be measured.
Proper Climate: The present and future external environment must be assessed
in terms of threats and opportunities. The evaluation focuses on Economic,
social, political, legal, demographic and geographic factors, Technological
developments and Competitive products and services on the market.
The firm’s internal environment is evaluated in respect to its resources and its
strengths and weakness in R&D, Production, Marketing, Human and financial
resources etc.,
3.2 ORGANIZING
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Sound organization can contribute greatly to the success of the enterprise. A
properly designed and balanced organization will facilitate both management and
operation of the enterprise for smooth functioning with growth. Organization is a
tool of management which leads to division of work and responsibilities. It
defines and fixes the duties and responsibilities of employees. Organisation is a
step towards the achievement of established goals.
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.
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Provision of right type of physical facilities and environment is essential for the
smooth running and prosperity of the organization which include machinery,
tools, proper lighting, ventilating, heating, cooling, reasonable working hours, rest
intervals, safety devices, human approach by management etc.,
Objectives
Specialization
Span of Control
Exception
Scalar Principle
Unity of command
Delegation
Responsibility
Authority
Efficiency
Simplicity
Flexibility
Balance
Unity of Direction
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higher level instead of spending their time for deciding routine matters
concentrate on more important matters.
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, nor should it be less. Authority and responsibility should be coexisting
and both must be present for smooth functioning of the organization, the entire
process of delegation can become ineffective unless authority delegated is
commensurate with responsibility.
Simplicity:
The organization structure should be simple with a minimum number of levels. If
the organization structure has a large number of levels, the problem of effective
co-ordination and communication may arise.
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work. Flexibility is the ability to bend and blend without experience any serious
setback.
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A few commonly known forms of organization types are
a) Line, Military or Scalar organization
b) Functional organization
c) Line and staff organization
Line organisation
It is a simplest form of organization structure. It was called military organization
because it resembled to olden military organization. Line organization is based
upon relative authority and responsibility rather than on the nature and kind of
operation or activities. The authority flows directly from the works manager (WM
to Superintendent to Foremen and from them to workers. Line organization is
direct and different levels know to whom they are accountable. The immediate
superior gives orders to the subordinates, assigns duties, dismisses and takes
disciplinary action against them. Any enterprise that starts small probably starts
with a line type of organization. Line organization is suitable for small concerns
free from all complexities and automatic and continuous process industries such
as paper, sugar, textile, etc.
Advantages :
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, develop and replace
top executives
Due to lack of specialization perhaps there is more wastage of materials and
man-hours.
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after production. 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. 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. The final decision whether to accept and implement the
recommendations of the staff executive remain in the hands of the line executive.
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.
Less wastage of material, 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.
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, thus weakening the line organization when its (i.e, staff
department’s) true function strengthen this organization.
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.
Line executives if they start depending too much on staff executives may lose
loose their initiative drive and ingenuity.
Functional organization
F.W. Taylor suggested functional organization because it was difficult to final
round persons qualified to work at middle management levels in the line
organization. Functional organization is also a line type of organization with the
difference that instead of one foreman there are eight functional foremen, four of
them located on the shopfloor and the remaining four in the office, but everyone
having direct and equal authority over the workers. Each functional foreman who
is a specialist in an activity is incharge of one function.
Advantages
• Since a foreman is responsible for one function, 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, specialized decision
• Expert guidance reduces the number of accidents and wastage of
materials, man and machine hours.
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• It relieves pressure of need to search a large number of all-round
executives.
• Quality of work is improved.
Disadvantages
• Coordination of the efforts of various functional foreman is difficult.
• 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.
• 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, initiative
and drive.
• All round executives cannot be developed.
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Differentiate between Authority and Power
AUTHORITY POWER
Institutionalized right of a superior to Ability of person to influence another
command and compel his subordinate person
to perform of certain act
It rests in position. With the change in Rests in the individual. Hence, even
position, the authority of the individual when his position changes, his power
also changes remains intact.
Delegated to an individual by his Earned by an individual through its
superior own efforts
Well defined, shown on the Undefined, inconspicuous and infinite
organization chart and commensurate
with responsibility
What exists in the eye of law What exists in fact
Serves as a basis of formal Serves as a basis of informal
organization organization
Delegation
Authority and responsibility must be delegated throughout a firm to promote the
efficiencies of an organizational structure. Delegation of authority is necessary
wherever a manger must rely on another to help accomplish an objective.
Decentralization
Organization authority is merely the discretion conferred on people to use their
judgement to make decisions and issue instructions. Decentralization is the
tendency to disperse decision-making authority in an organized structure. It is a
fundamental aspect of delegation, to the extent that authority is not delegated, it
is centralized.
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There could be absolute centralization of authority in one person implying no
subordinate managers and therefore no structured organization. On the other
hand, there cannot be absolute decentralization, for if managers delegated all
their authority, their status as managers would cease, their positions would be
eliminated and there would be no organization.
Advantages of Decentralization
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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.
c) Unit of command :This principle requires that the employees should receive
orders and institutions only from one superior. The violation of this principle may
lead to disorder, confusion and indiscipline which may affect the efficiency of
business
d) Direct supervision : Every superior must maintain direct contact with his
subordinates. Personal touch and face to face communication with the
subordinates ensure successful direction. Further, direct supervision also
develops feed-back information.
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
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management to provide continuous guidance, supervision, advice and help to the
subordinates in their activities.
Order giving
An order is a fundamental tool used by the management for directing its
subordinates. It may be stated that the terms “order” , “instruction”, “Directive”
and “command” are used interchangeably. An order can be issued by a superior
only and he has the right to enforce the order to be followed by his subordinates.
According to Koontz and O’Donnell, “ As a directional technique, an instruction is
understood to be a charge by a superior requiring a subordinate to act or refrain
from acting in a given circumstance”.
The techniques of direction that are used by the mangers are as follows:
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time, the subordinate may consider it his right to be consulted before the
executive takes a decision.
c) Autocratic direction : Under this method , the subordinates the not allowed
to take any initiative in solving the problem. 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.
3.4 Communication
Introduction
Communication is the art of developing and attaining understanding between
people. It is process of exchanging information and feeling between two or more
people, and is essential to effective management.
Process of Communication
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There are seven steps in the process of communication. They are:
Step 2: Encoding
Encoding involves selecting the medium through which to communicate the
planned message. The object of encoding is to select the best medium that will
be most accurately comprehend by the receiver. The goal is mutuality of
understanding between sender and receiver; lack of mutuality results in
misunderstanding and improper response to the message.
Step 4: Receiving
This simply involves the physical reception of the message, hearing, seeing,
feeling, sensing and so on.
Types of communication
Formal communication
It implies the flow of information along the lines of hierarchy formally established
in each enterprise. Orders by superiors to subordinates, reports and suggestions
by subordinates to superiors as per the routine evolved in the administration,
constitute formal communication
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Informal communication.
It has no procedural basis, but is associated with expression of gesture, smile,
nod, glance etc., without any formalities. Informal communication is not official or
authoritative but spontaneous expression of ideas. It is often termed as
“Grapevine”.
Written communication
It means transmission of messages in the form of letters, memos, circulars,
boards, magazines, reports, instruction cards, publications etc. 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.
iv) Written communication constitute reliable records for future reference
v) Written messages can be quoted as legal evidence if the situation
demands.
Downward communication
It signifies the transmission of orders, instructions etc., 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,
instructions.
Upward communication
It is the flow of facts from the lower layers of the organization to the top levels of
authority such as reports, suggestions, grievances, representations etc. The
purpose is to inform the superiors about the work and difficulties encountered by
them, suggestions they have in mind about improvements grievances which they
desire to settle etc.
Horizontal communication
This is interchange of ideas among the managers at the same level and other
personnel of the same rank. Consultations between managers, meetings of
workers of the same class to discuss a problem, belong to this mode of
communication.
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Barriers of communication:
A barrier to successful communication does not permit the transmission of
accurate and full information at the receiving end. It breaks down, obstructs,
delays, distorts and tends to give another colour to the information by the time it
reaches the destination. The various barriers to communication are:
• Long and ill-instructed channels of communications
• Heavy work-loads at certain levels in the organization structure.
• 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.
• Receiver ignoring conflicting information
• Receiver tending to evaluate information from his own angle
• Receiver emotionally upset.
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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. Every piece of conversation is
treated as a transaction.
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Transactional Analysis is a theory developed by Dr. Eric Berne in the 1950's.
Originally trained in psychoanalysis, Berne wanted a theory which could be
understood and available to everyone and began to develop what came to be
called Transactional Analysis (TA). Transactional Analysis is a social psychology
and a method to improve communication. The theory outlines how we have
developed and treat ourselves, how we relate and communicate with others, and
offers suggestions and interventions which will enable us to change and grow.
Transactional Analysis is underpinned by the philosophy that:
Theoretical concepts within the Transactional Analysis world are constantly being
challenged and developed making it a rich dynamic process. Berne died in July
1970 at the age of 60. However, Transactional Analysis has not stood still and
continues to develop and change, paralleling the processes we encourage in
ourselves and others.
All of us transact from all three states from time to time, each one of us generally
tends to have a dominant ego from which we transact most of the time. The
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parent ego is authoritarian (protective and critical), the adult ego is rational
(mature and objective) and the child ego is impulsive (immature, joyful and
rebellious).
Berne devised the concept of ego states to help explain how we are made up,
and how we relate to others. These are drawn as three stacked circles and they
are one of the building blocks of Transactional Analysis. They categorise the
ways we think, feel and behave and are called Parent, Adult, and Child. Each
ego state is given a capital letter to denote the difference between actual parents,
adults and children.
This is a set of feelings, thinking and behaviour that we have copied from our
parents and significant others.
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people to learn and take in from. When we do this, it is called introjecting and it is
just as if we take in the whole of the care giver. For example, we may notice that
we are saying things just as our father, mother, grandmother may have done,
even though, consciously, we don't want to. We do this as we have lived with this
person so long that we automatically reproduce certain things that were said to
us, or treat others as we might have been treated.
The Adult ego state is about direct responses to the here and now. We deal with
things that are going on today in ways that are not unhealthily influenced by our
past.
The Adult ego state is about being spontaneous and aware with the capacity for
intimacy. When in our Adult we are able to see people as they are, rather than
what we project onto them. We ask for information rather than stay scared and
rather than make assumptions. 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. So this can be called the Integrating Adult.
Integrating means that we are constantly updating ourselves through our every
day experiences and using this to inform us.
In this structural model, 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. For example, the internal Parent ego state may beat up on the internal
Child, saying "You are no good, look at what you did wrong again, you are
useless". The Child may then respond with "I am no good, look how useless I am,
I never get anything right". Many people hardly hear this kind of internal dialogue
as it goes on so much they might just believe life is this way. An effective
Integrating Adult ego state can intervene between the Parent and Child ego
states. This might be done by stating that this kind of parenting is not helpful and
asking if it is prepared to learn another way. Alternatively, 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.
The Child ego state is a set of behaviours, thoughts and feelings which are
replayed from our own childhood.
Perhaps the boss calls us into his or her office, we may immediately get a
churning in our stomach and wonder what we have done wrong. If this were
explored we might remember the time the head teacher called us in to tell us off.
Of course, not everything in the Child ego state is negative. We might go into
someone's house and smell a lovely smell and remember our grandmother's
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house when we were little, and all the same warm feelings we had at six year's of
age may come flooding back.
Both the Parent and Child ego states are constantly being updated. For example,
we may meet someone who gives us the permission we needed as a child, and
did not get, to be fun and joyous. 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. We might ask ourselves "I
wonder what X would say now". Then on hearing the new permissions to relax
and take some time out, do just that and then return to the work renewed and
ready for the challenge. Subsequently, rather than beating up on ourselves for
what we did or did not do, what tends to happen is we automatically start to give
ourselves new permissions and take care of ourselves.
The word contamination for many conjures up the idea of disease. For instance,
we tend to use the word for when bacteria has gone into milk. Well, this is similar
to the case with the contaminated Integrating Adult ego state. This occurs when
we talk as if something is a fact or a reality when really this is a belief. Racism is
an example of this. The Integrating Adult ego state is contaminated in this case
by the Parent ego state. If we are white we might have lived with parents or
significant others who said such things as "Black people take our jobs". Growing
up it is likely, that having no real experience to go by, we believed this. We might
also have been told that Black people are aggressive. 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". This would mean that there would be
a double contamination of the Integrating Adult ego state. However, we would
think that such statements were facts rather than beliefs and when this happens
we say that this is Integrating Adult ego syntonic. That is, 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, objectively, such
beliefs are just that and therefore they can be changed.
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Transactional Analysis - The Descriptive Model
This model shows how we function or behave with others. The model used here
is divided up into nine and we have used S. Temple's (1999) term "mode" as it
differentiates it from the structural ego state model mentioned above. We colour
the different modes in red and green for those who find colour helpful as a tool.
Effective communication comes from the green modes, (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). When we
come from the red modes we invite a negative response, and vice versa from the
green modes.
3.5 Motivation:
Motivation is the need or drive within an individual that drives him or her towards
goal oriented action. The extent of drive depends on the perceived level of
satisfaction that can be achieved by the goal. Motivation refers to the drive and
effort to satisfy a want or goal.
Kinds of motivation
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financial or non financial. To give more wages for work is the financial
motivation, while appraisal of the worker’s work, promotion, appreciation etc. are
non-financial position.
1. Physiological needs : These are the basic needs for sustaining human life
itself, such as food, water, warmth, shelter and sleep. Untill these needs are
satisfied to the degree necessary to maintain life other needs will not motivate
people.
3. Affiliation, or acceptance needs : Since people are social beings, they need
to belong, to be accepted by others.
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4. Esteem needs: According to Maslow, once people being to satisfy their need
to belong; they tend to want to beheld in esteem both by themselves and by
others. This kind of need produces such satisfaction as power, prestige, status
and self –confidence.
5. Need for self actualization : Maslow regards this as the highest need in the
hierarchy. It is the desire to become what one is capable of becoming to
maximize one’s potential and to accomplish something.
Theory X
People have an inherent dislike for work and will avoid it whenever possible
People must be coerced, controlled, directed or threatened with punishment in
order to get them to achieve the organizational objectives.
People prefer to be directed, do not want responsibility, and have little or no
ambition
People seek security above all these.
Theory Y
Work is as natural as play and rest
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People will exercise self –direction if they are committed to the objectives (the are
NOT lazy).
Commitment to objectives is a function of the rewards associated with their
achievement
People learn to accept and seek responsibility
Creativity, ingenuity, and imagination are widely distributed among the
population. People are capable of using these abilities to solve an organizational
problem.
People have potential.
Theory X is the view that traditional management has taken towards the
workforce. Many organizations are now taking the enlightened view of Theory Y.
A boss can be viewed as taking the Theory X approach, while a leader takes the
Theory Y approach.
Dissatisfiers : In the first group of needs are such things as company policy and
administration, supervision, working conditions, interpersonal relations, salary,
job security and personal life. These were found by Herzberg and his associates
to be only dissatisfied and not motivators. If they exist in a work environment in
high quantity and quality, they yield no dissatisfaction. Their existence does not
motivate in the sense of yielding satisfaction; their lack of existence would,
however, result in dissatisfaction. Herzberg called them maintenance, hygiene or
job context factors.
Satisfiers: In the second group, Herzberg listed certain satisfiers all related to
job content. They include achievement, recognition, challenging work,
Advancement and growth in the job. Their existence will yield feelings of
satisfaction or no satisfaction.
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The satisfiers and disatisfiers identified by Herzberg are similar to the factors
suggested by Maslow as shown in the figure below.
The first group of factors, the dissatisfiers, will not motivate people in an
organization, yet they must be present or dissatisfaction will arise. The second
group, the job contents factors, Herzberg found to be the real motivators because
they have the potential of yielding a sense of satisfaction.
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2. If the efforts of employees are closely co-ordinate, their total accomplishment
will be far greater than the sum total of individual achievements. Co-ordination by
preventing duplication of efforts increases total production.
5. 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 may be confusion as to where the staff authority ends and
line authority begins. Further, there may be friction between the line and staff
officers. All these would lead to the violation of the principle of unity of command.
Hence, there is need for the management to co-ordinate the functions of line and
staff authority.
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and integration in the process of implementation of the plan will be easier and
also there would be any resistance from the concerned officials.
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changes, adjustment of programmes, programmes future etc. In addition, there
will be a possibility for directing the efforts of the entire staff harmoniously
towards the realization of enterprise objectives, the various devices used for
communication are the personal contact, written communications, committee
meetings and group meetings.
10. Effective supervisions : Though it is the duty of the top executive to see
that the subordinates perform their work as planned, he may entrust the task to
the supervisors. With the help of supervisors, 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. Thus,
supervisors can also play an important role in achieving effective co-ordination.
Establishing standards :
Plans are the yardsticks against which managers devise controls, the first step in
the control process logically would be to establish plan. Since plans vary in detail
and complexity, and the mangers cannot usually watch everything, special
standards are established. Standards are simply criteria of performance. 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. Every
objective, every goal, every activity, every policy , every budget become
standards against which actual or expected performance might be measured.
The types of standards are a) Physical standards, b)cost standards, 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.
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appraisal of performance may be a formidable task because standards are
difficult to set.
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4.0 Human Resources Management
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Man power requirements are determined by comparing the supply against the
predicted demand and looking for manpower in future. This would give the
number of people recruited or made redundant and will form the basis for the
manpower plan. However the assumptions for the supply and demand forecasts
have to be modified for improved manpower utilization while drawing the
manpower plan.
Job evaluation:
Equity in salaries of the persons working on the same job is essential in an
organization. Differences in pay lead to resentment which in turn increases
labour turnover; therefore a planned comparison of jobs is necessary to restrict
the concurrence of such situations. At this stage Job Evaluation technique
comes to help of the management.
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Training : Training of employee is an absolute necessity . Training is an ever-
continuing process in all concerns and it is employed as technique of control.
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 imparts
knowledge and develop employees aptitude and skill. It also prepares an
individual so that he can accomplish his individual task efficiently and effectively.
Today due to modern advancement and mass production a very high skill is
required which can only be developed by proper training. In short training is a
must for fitting employees to the job.
Placement : Once the selection and training are over, placement of employees
is to be made with due care. 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. Placement of employees is placing
the right man for the right job. There should not be a square peg in round role.
The employees must be fitted in right job. A good turner is to be placed to work
on turning job. If a proper placement of employees is not given due weight age
the industries going to face loss in many things. So after the selection and
training employees, placement of employees is to be made.
Counseling : For each job, the right man should be selected. The task of filling
jobs with right people is known as vocational selection. The employee should
have the job, which suits him. The task of guiding person as to what sort of job he
should have is known as counseling or vocational selection. An analysis of the
occupations, which they may adopt, is undertaken with a view to find out the
factors necessary for success at these jobs. 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.
Merit rating or performance appraisal : Job evaluation evaluates the job, Merit
rating assess the merit of the person doing the job. Merit rating determines the
extent to which an employee meets job requirements. Merit rating decides the
reward an employee should get in addition to his wages, depending upon the
merits. 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,
integrity, leadership, intelligence, behaviour etc., Merit rating is commonly
referred to as Employee Rating, Employee appraisal or staff reporting. 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. 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.
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4.2 Leadership :
Leadership is the ability to get desirable action, voluntarily and without force from
The followers. Leadership means to inspire confidence and trust so that there is
maximum co-operation from the employees within the control of a manager.
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.
c) Persuasive Leaders :
Such leaders influence his followers due to their personal contacts, to join with
them in getting the things done. He gives directions personally and whole lot of
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workers responds to his call, because they love and respect him and have full
confidence in him.
d) Functional Leaders :
Such leaders because of their expert knowledge and win the confidence of their
followers by their superior knowledge.
f) Labour leaders
These leaders come to prominence due to their qualities of speech, behaviour
and action. They are capable to convince the people and bring them around their
view point. They then organize themselves into trade unions.
g) Administrative leaders
These leaders obtain this position by virtue of their ability, experience and
association with the organization. These leaders are responsible for formulating
or assistance in the formulation of policies. Programmes and plans of the industry
and are also responsible for its execution. They should work in close co-
operation with the worker leaders.
b) Initiative
He must initiate good activities and must be capable of taking initiative.
c) Decisiveness
He must be able to make proper decision at proper time ad must stick to it. Lack
of decisiveness results in loss of efficiency.
d) Persuasiveness
Pursuance is also a good quality of a leaders which helps him in implementing
his decision, order etc.
e) Responsibility
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A leader must be able to know and fee his responsibilities. He must not shrink
his responsibilities and must be in a position to take the burden of decisions on
his shoulder.
f) Ability to inspire.
A leader has to inspire his inspire his men so as to get the work done from them.
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, who are also
having feelings of social status and self respect.
h) Positive attitude
He should always have a positive attitude towards the problems of the industry
and workers.
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.
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e) Maintenance of control – Effective supervision means control at many
points right from the control of men to control of wastages of materials.
Wastages can be minimized, if supervisor is careful. He should analyze
the working before the start production so that there is minimum wastages.
f) Maintenance of working condition – This is most important in the part of
supervision. Every supervisor has to look after lighting, ventilation and
cleanliness of his section. He should ensure safer working conditions by
providing proper guards and fencing and advice the workers regarding
safety practices.
a) Selection of workers - Earlier days, supervisor did not have a say in selection
of workers. But now-a-days the supervisor is given a place in the recruitment
committee for the selection of workers. During the selection, supervisor should
bear in mind the standards, experience, qualification etc. of the candidate to be
selected.
b) Training and development – After selection, supervisor has to ensure that the
training is imparted to the workers about operations, manufacturing processes
etc.
d) Induction – This is inducting the workers for a particular job, and help him to
adjust for the new
g) Dealing with employers and employees – This is a difficult job on part of the
supervisor and should be handled tactfully. Supervisors should listen to the
problem of workers, solve the problems and redress the problem, at the same
time he has to fulfill requirements of production while dealing with the higher
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executives and implement their directions without affecting the sentiment of
workers.
Definition of Team
A team is a small number of people with complementary skills who are committed
to a common purpose, common performance goals, and an approach for which
they hold themselves mutually accountable.
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• They may hire their own replacement or assume responsibility for
disciplining their own members.
• Team work depends on cooperation, trust , training and rewards.
Types of teams
In view of their wide spread popularity, various types of teams have come to stay.
Teams can be classified by functions they discharge. The most common type of
teams are work teams, problem solving teams, management teams and virtual
teams.
Work Teams are primarily concerned with the work done by the organizations,
such as developing and manufacturing new products, providing services for
customers and so on. Their principal focus is on using the organisation’s
resources effectively. Towards this end, work teams are highly empowered.
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. Engineers in U.S for example can contact
audibly and visually with counterparts all around the globe, sharing files via
internet, electronic mail and other communication network. Decisions are made
much faster with electronic communication systems and team members can
move in or out of a team as the issues demand.
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4.2.2 Creativity
Definition of creativity
Organizational culture promotes creativity and innovation. Creativity refers to the
process by which novel but situationally appropriate outcomes are brought about.
The essence of creativity is the element of freshness, originality and novelty that
is also appropriate to the context.
What is Creativity?
Believe it or not, everyone has substantial creative ability. Just look at how
creative children are. In adults, creativity has too often been suppressed through
education, but it is still there and can be reawakened. Often all that's needed to
be creative is to make a commitment to creativity and to take the time for it.
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A Process. Creative people work hard and continually to improve ideas and
solutions, by making gradual alterations and refinements to their works. Contrary
to the mythology surrounding creativity, very, very few works of creative
excellence are produced with a single stroke of brilliance or in a frenzy of rapid
activity. 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, always trying to make
it a little better.
The creative person knows that there is always room for improvement.
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4.3 Labourers participation in Management
Discipline
Employee discipline is the backbone of industrial relations. In fact the function of
management is to keep an enterprise going on smoothly, efficiently and
profitably. Discipline means orderliness, obedience and maintenance of proper
subordination among employees and a check or restrain on the liberty of
individual. It is the training that corrects, moulds and strengthens the individual
behaviour. It is also a force which promotes an individual or group to observe
certain rules, regulations and procedures that are considered necessary for the
attainment of an objective. There are two types of discipline negative discipline
and positive discipline.
In Positive discipline subordinates comply with the rules not from fear of
punishment, but from the desire to cooperate in achieving the common goal of
the organization.
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Production
Production in any process or procedure developed to transform a set of input
elements like men, materials, capital, information and energy into a specified set
of output elements like finished products and services in proper quantity and
quality, thus achieving the objectives of an enterprise. The essence of
production is the creation of goods, may be by the transformation of raw material
or by assembling so many small parts (as in TV or Scooter manufacturing).
Production in every day life can be noticed in factories, hospitals, offices etc. The
four recognized factors of production are nature, labour, capital and enterprise.
Quality Control
Productivity
Productivity is a method of reduction in wastage of resources. Resources may
be men, material, machines Money, Power, Space, Time etc. Productivity
implies the development of an attitude of mind and constant urge to find better,
cheaper, easier, quicker and safer means of doing a job, manufacturing a product
or providing a service.
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understood by the following example. There are two firms manufacturing similar
products with the same input resources like Money, Men, Machines, Materials
etc. If one firm A is producing 5500 units in a year, and the other firm B is
producing 5000 units in a year, then we say the productivity of firm B. Hence
productivity, an element of efficiency is added to resources.
Factors affecting productivity can be classified into external factors and internal
factors.
a)External factors
National resources, Availability of capital, Taxation, Government laws, Market
competition, Technical and Training facilities
b) Internal factors
Plant layout, material handling, product design, workstudy techniques, quality
control, management techniques
Measurement of productivity
Productivity is the ratio of output to input. The units may be in terms of money,
man-hours, materials etc.,
a) In terms of Money
Or Productivity = Profit
-----------------
Investment
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c) In terms of standards hours
d) Materials Productivity
Total cost
Prevention of accidents.
An Industrial accident may be defined as an event, detrimental to the health of
man, suddenly occurring and originating from external sources which is
associated with the performance of a paid job, accompanied by a injury, followed
by disability or even death. An accident my happen to any employee under
certain circumstances.
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. Accident may be
caused due to
1. Technical causes - unsafe conditions which includes mechanical and
environmental factors
2. Human causes – unsafe acts like personal factors.
Role of management
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Accident prevention does not occur by itself, there should be consistent
implementation of safety programmes emphasizing the need for the following
where the role of management is necessary.
Safety Committee
A safety committee may consists of executive, supervisors and shop floor worker.
It was observed that those organizations which had safety committees had less
accident than those without such committees. The safety committee aid in
developing safety consciousness as well as it is a policy making body on safety
matters. The safety manager requires a degree of firmness and ready
discrimination to exclude personal and union matters.
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5.0 Industrial Relations and Industrial legislations
Industrial Disputes :
Sit down strike – In this, workers go to the work place, but refuse to work. They
do not leave the premises of the factory until the strike is over.
Go slow or slow down – In this, workers continue to work, but at a much slower
rate, thus slowing down the production. Since they do not totally abstain from
work, they are entitled to pay for the period of slow down
Gherao – In this workers enters the room or chamber of the officer, and do not
allow the officer to leave his room for a considerably long period so as to press
for their demands.
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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.
c) Arbitration
When the above two methods fail, then this method can be adopted. In this a
third person is chosen as the ‘Arbitrator” by agreement between the employer
and employees. He gives a hearing to both parties and offers his solution to the
dispute.
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In case of “Voluntary Arbitration” the obligation to abide by his decision is moral
one. Under compulsory Arbitration, the parties have to abide by it under
compulsion of law.
Most of the workers are ignorant and require guidance and advice from persons
who have the genuine interest of the workers. Each worker, by himself is unable
to fight against the injustice done to him. As a group, the workers can organize
themselves, and can settle terms with the employers in a better way.
The association formed by the workers is known as “ Trade Union”. 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.
Registration
Recognition
If the employer refuses to recognize a trade union, the mater is referred to the
labour court, appointed by the Government.
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5.3 The Indian Factory Act, 1948
Definition :
The Act defines the followings:
Adult, adolescent, child, calendar year, young person, week, power, prime
mover, transmission machine, manufacturing process, worker, factory and
occupier.
Health Provisions :
This act prescribed the following provisions to maintain the health of the workers
and reducing the possibilities of injuries to the workers.
i) Cleanliness : Every factory should be kept clean from gases and fumes
iv) Over crowding : No room in the factory shall be over crowded. This can be
prevented by providing sufficient space to the worker.
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, sufficient bath
rooms shall be provided.
viii) Latrines and urinals : There must be separate latrines and urinals for
female and male workers. There must be one Latrine for every 2- female
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workers and one latrine for 20 to 100 male workers. They should be constructed
in prescribed norms.
Safety provisions
1) Fencing of machinery
The following should be properly fenced
1. Every moving part of machine fly wheel
2. Head race and tail race water turbine.
3. Every part of an electric generator, a motor or rotary convertor, every part
of the transmission should be safeguarded.
3) Casing machinery
To prevent injuries to the worker every set screw, bolt or key on any revolving
shaft, spindle, wheel or pinion shall be sunk, encased or otherwise effectively
guarded. Every toothed or friction gearing shall be completely encased.
6) Revolving machinery
In case of revolving machineries, 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.
7) Excessive weights
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No person should be allowed to lift the heavy machinery, which may cause him
injury, 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.
Welfare Provisions
Under this provision following facilities should be provided.
i) Washing facilities – Adequate and suitable washing facilitiy for male and
female should be provided separately.
ii) Sitting facilities – Suitable arrangements for sitting should be provided for the
workers who work in standing position.
iii) First aid appliances – At least one first aid box containing the prescribed
contents for every 150 workers should be provided. Foe every 500 workers there
should be one ambulance room with necessary equipments.
iv) Canteen – A canteen should be provided in a factory where 250 workers are
working
v) Shelter, 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.
vi) Creches – If there are more than 30 female workers suitable room or rooms
should be provided for the use of their children.
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Working hours
i) Hours of works : No worker is allowed to work in a factory for more than 48
hours in a week. There is at least half an hour interval for 5 hours of working.
Working hours should not be more than 10 ½ hours per day inclusive of rest
intervals. It may be extended to 12 hours with the special permission of the Chief
Inspector.
ii) Holidays : No worker is allowed to work, for more than 10 days continuously
without a holiday, 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.
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.
Dangerous operations
Proper safeguard should be provided against any dangerous operation which
causes the injury to the worker. Such dangerous operations may also be
restricted and in such cases women workers, adolescents, children are prohibited
to work.
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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.
Penalties
In case of any contravention of any of the provision of this act, 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.100,000 or both.
If contravention continues after conviction, there will be a fine of Rs. 1000 per
day. After being convicted for an offence, if the person does contravention of the
same provision again, he shall be punishable with imprisonment upto 3 years, a
fine upto Rs.10000 3 lakhs or both.
No worker should misuse any appliance provided for the purpose of securing
health, safety and employee welfare, if done so he shall be punished with up to 3
months imprisonment of a fine of Rs.100 or both.
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.
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5.4 Payment of wages Act 1936
The payment of Wages Act was enacted in 1936 and it came into force in March
1937. The Act was passed to give effect to the recommendations of Royal
commission on Labour.
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.
Definition
Industrial establishment means any
i) Tram way service or motor transport service
ii) Air transport service
iii) Dock, Jetty
iv) Mine, quarry or oil filed
v) Plantation
vi) Workshop, where articles are produced with a view to their use
vii) Establishment, where construction, development or maintenance of
buildings, roads, bridges, canals, or water works relating to generation,
transmission and distribution of electricity is being carried out.
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If there are more than 1000 workers, the wages should be paid before the expiry
of 10th day after the last day of the wages period.
If an employee is terminated, his wages should be paid before the expiry of the
second day from the day on which the employee is terminated.
The payment should be done in current coins and in currency rates and not in
kind.
Fines
The maximum fine amount should not exceed thirty second part of the wage in
on wage period.
The fine should be recovered within 60 days from the date of imposing the fine
on an employee.
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Inspection under the Act
Inspectors of Factories or otherwise appointed shall be responsible for the
enforcement of the Act. Such an inspector may examine or make enquiry to
ascertain whether the provision of this act are being observed. Inspector may
enter, inspect or search any factory premises and supervise the payment of
wages for the purpose of carrying out the objects of the act. The inspector can
seize such registers or other documents relevant in respect of an offence under
this Act.
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This Act provides compensation to the employees for injury by accidents. Thus
this Act protects the workers as far as possible from hardship arising from
accidents. It came into force from 1st July 1924.
Definition
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Introduction
This Act provides benefits to the workers working in a factory in case of sickness,
maternity and employment injury and makes provision for certain other materials.
Object
The benefits given to the workers under the Workmen’s Compensation Act of
1948 did not reach them due to the following reasons.
i) Lack of finance always made it impossible to file suit in the court of law
for claiming compensation for injury.
ii) The Act recognized only a very small number of diseases. There was
much delay in payment due to the clumsy administration.
With a view to remove these difficulties and defects met with the Compensation
Act, the Government of India passed the Employee’s State Insurance Act, in
1948.
Definitions
Contribution :
Contribution of employee covered by this law is as specified in the law.
The central and State Governments and local bodies give grants to the State
Insurance Fund.
Every Principal employer maintains the records, the submits and returns in
prescribed form
Benefits:
Following are the benefits provided by this Act.
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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. This
is given as the periodical payment.
iii) Disablement Benefit : This is extended to the insured workers who receive
injuries during their employment which cause disablement.
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.
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.
v) Medical Benefit : Free medical care is extended to the injured person during
his sickness period.
vi) Funeral Benefit : Payment not exceeding Rs. 1000 is made for the funeral of
the insured person, if he dies.
Scope:
If there is any dispute it will be set right by the Employee’s Insurance court. This
has all the powers of the civil 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.
Administration :
A medical benefit council is set up to advise on matters relating to administration
of medical benefits. 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; though Central and State Governments also give
grants and donations in the funds. The employer deducts employees
contribution from their salaries and the same along with his own share, shall
submit in a bank nominated for the purpose. The ESI corporation may appoint
Inspectors to check the particulars about the amount submitted by the employer.
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the employees. 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; establishment and maintenance of ESI hospitals and dispensaries etc,
payment of fees, allowances, salaries, etc to officers and servants of the
corporation and for many other purposes related to proper functioning of ESI
corporation.
Penalties
For the false statement and representation there will be 3 months imprisonment
or Rs. 500 fine or both.
For failure to pay the contribution there will be six months imprisonment of
Rs.1000 fine or both.
Introduction
This Act was passed in February 1952 and it came into effect from Nov. 1952.
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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’.
Provision
This Act makes provision for the future of the individual worker when he retires
and in case of his death in services, the benefit is extended to the dependent.
i) Contribution : The employee should contribute, as per this act, 8.4% of his
basic wage and dearness allowance etc. Employers are also to contribute at a
similar statutory rate. The employers are held responsible for remitting to the
fund, their respective contributions as well as the contributions of their
employees. The Government shall pay interest on the provident fund
contributions at a rate to be specified by it.
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.
iii) The amount standing to the credit of any member in the P.F at the time of his
death shall be paid to the nominee.
iv) The Government shall appoint the inspector to see that the Act is
participated.
vi) The Act was amended in 1956 and gives power to Government to extend it to
new factories, establishments, also.
This is an Act to make provision for the investigation and settlement of industrial
dispute and for certain other purposes.
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a. In 3 complete months for monthly paid workman
b. In 4 complete weeks for weekly paid workman
c. In 12 full working days for daily paid workman
Preceding the date on which the average pay becomes payable, when the
worker has worked for less than this period, then the average pay is calculated
as the average of the wages payable to a workman during the period he actually
worked.
4. Industry:
“Industry” means any business, trade, undertaking, manufacture or calling of
employers. It includes any calling service, employment, handicraft or industrial
occupation.
5. 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 , or non-employment or the conditions of labour.
6. 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, his agent or manger to dismiss the
worker, even then dismissal may be industrial dispute.
7. Suspension of workman
A workman may be suspended pending enquiry and disciplinary action. If after
enquiry misconduct is proved, the worker is dismissed and is not entitled to any
wages of the suspension period.
In case when a worker is fully exonerated after the enquiry, he would remain in
service and would be entitled to his full wages of the suspension period.
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8. Closure
In case of “closure” employer closes the business and this closure means the
final and irrevocable termination of the business itself.
9. 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.
The lockout indicates the closure of the place of business and not the closure of
the business itself as in “closure”.
Experience has shown the “lockout” is the weapon of employer to compel the
employees to accept his proposals, just in the reply of the strike, the weapon of
the employees to compel the employer to accept their demands.
10. 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.
11. Settlement
“Settlement” means a settlement, arrived at during the conciliation proceedings
and includes a written agreement between the employer and workmen.
12. Strike
“Strike” is refusal under a common understanding of any number of workers to
continue to work or to accept employment.
13. Workman
“Workman” means any person (including an apprentice) employed in any industry
to do any skilled or unskilled manual, supervisory, technical or electrical work for
hire or reward.
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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.
Main duty of works committee is to promote the measures for securing and
preserving amity and good relations between the employers and workers
2. Conciliation officers
Conciliation officers are appointed by the State Govt. for the industries in a
specified area permanently or for a limited period.
3. Board of conciliation
A board of conciliation is constituted by the State Governments by notification in
the official gazette.
4. Courts of enquiry
These courts of enquiry are also appointed by the State Government by
notification in the official gazette, to inquire into any matter appearing to be
connected with industrial dispute. After conducting the enquiry into the matters
referred, they report to the Government within 6 months from the commencement
of its enquiry.
5. Labour courts
State Government constitute Labour courts for the adjudication of industrial
dispute for any matter specified in the second schedule.
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c) Discharge and dismissal of workers including reinstatement or grants of relief
to workmen wrongly dismissed.
d) Withdrawal of any customary privilege.
6. Industrial Tribunals.
State Government may also constitute one or more Industrial Tribunals for the
adjudication of industrial disputes.
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.
The tribunal adjudicates of industrial disputes relating to any matter in the second
schedule (jurisdiction of labour courts) or the third schedule. The third schedule
mentions the following matters.
7. 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.
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.
No person can continue in the office of the presiding officer of a Labour court,
Tribunal or National Tribunal after he has attained the age of sixty five years.
Strikes
No persons employed in a publicity utility services shall go on strike:
a. Without giving a notice of strike to the employer, within 6 weeks before striking
or
b. Within 14 days of giving such notice or
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c. 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.
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.
Continuous service
As per section 25-B a workman shall be deemed to be in continuous service
under an employer. If during a period of twelve calendar months preceding the
date with reference to which calculations is to be made, 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. He has been on leave with full wages earned in the previous years
b. He has been absent due to temporary disablement caused by
accident arising of and in the course of his employment
c. In the case of female, she has been on maternity leave upto 12
weeks.
Lay –off
“Lay off” means the failure, refusal or inability of an employer on account of
shortage of coal, 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.
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Whenever a workman who has completed more than one year of continuous
service under an employer is laid off, he shall be paid by the employer for all
days during which he is so laid off ( for a maximum period of 45 days),
compensation equal to 50% of the total of the basic wages and dearness
allowance.
Provided that if a person so laid off is retrenched, 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.
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.
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.
Retrenchment
As per section 25-F, 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, 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.
b) The workman has been paid at the time of retrenchment, 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.
Closure of an undertaking
Where an undertaking is closed down for any reason whatsoever, every man
who has completed the continuous service of at least one year in that
undertaking, is entitled to notice and compensation in accordance with the
provisions of section 25-F (i.e. as if the workman had been retrenched). This
compensation shall be paid before such closure. He should also be served with
a notice as mentioned earlier.
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