International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421
Volume 1, No. 1, October 2012
i-Xplore International Research Journal Consortium www.irjcjournals.org 49 Measuring Impact of Trade Unions on Workmen Satisfaction in a Manufacturing unit Rajnish Ratna 1 , Tanpreet Kaur 2 1 Ph.D. Scholar (IIT Kharagpur) & Assistant Professor (HR & OB), Amity Business School, Amity University, Noida, Uttar Pradesh, India 2 Assistant Manager, Amity Center of Excellence, Amity University, Noida, Uttar Pradesh, India
ABSTRACT
Trade unions are always a matter of concern for the employers as well as employees in an organization. Major conflicts and downfalls in organizations happen because of labour unions and the conflicting demands. This paper aims to study the correlation among various parameters of trade unions, find out the correlation between these factors and the satisfaction of workers corresponding to them and do the factor analysis of various parameters. Data was collected from 120 workers of a Compact Disk (CD) manufacturing unit in Delhi NCR, using convenience sampling method. Data was analyzed through SPSS Software to find out the Correlation and Factor Analysis. Based on the questionnaire taken for study, five factors selected were Decision making, Rational feedback mechanism, Healthy electioneering process, Membership services, and Accountability. It was found out that no two factors were very strongly correlated. In fact accountability and involvement in decision making, and accountability and rational feedback mechanism were not correlated at all, while the presence of membership services contributed most to the satisfaction of the workers followed by accountability displayed. The factor analysis converted them into two components in which component 1 contributed more to the satisfaction of workers.
1.1 TRADE UNION Trade unions are always a matter of concern for the employers as well as employees in an organization. Major conflicts and downfalls in organizations happen because of labour unions and the conflicting demands.
Section 2(h) of the Trade Union act1926 defines a Trade Union as: any combination, whether temporary or permanent formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions provided that: Any agreement between partners as to their own business. Any agreement between an employer and those employed by him as to such employment or Any agreement in consideration of the sale of the goodwill of a business or of instruction in any profession, trade or handicraft - Sec. 2 (h).
In other words a trade union or labour union is a combination of workers that have banded together to achieve common goals for its members , where the leader of the trade union bargains with the employer on behalf of union member and negotiates labour contracts (via collective bargaining) with employers which may include negotiation of wages, work rules, complaint procedures, rules governing hiring, firing and promotion of workers, benefits, workplace safety and policies. Thus, the agreements negotiated by the union leaders are binding on the members and the employer and in some cases on other non-member workers as well.
1.2 OBJECTIVES OF TRADE UNIONS Trade unions are formed to protect and promote interests of their members, with a greater focus on their primary function of protecting the interests of workers against discrimination and unfair labour practices. However their major objectives can be enumerated as follows:
1.2.1 Representation: Trade unions represent individual workers when they have a problem at work. For e.g. unfair treatment, legal representation, financial compensation for work-related injuries or assist people who have to take their employer to court. 1.2.2 Negotiation: Trade unions negotiate with the employers to find out solutions to difference of opinion between management and union members on different issues like Pay, working hours, holidays, changes to working practices etc. International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 1, No. 1, October 2012
i-Xplore International Research Journal Consortium www.irjcjournals.org 50 1.2.3 Voice in Decisions affecting workers: The evaluation criteria for decisions related to policies such as Selection, layoffs, retrenchment, promotion and transfer may not be fair. So, the intervention of unions in such decision making is a way through which workers can have their say in the decision making to safeguard their interests. 1.2.4 Member services: During the last few years, trade unions have increased the range of services they offer their members. These include Education and training, Legal assistance, Financial Welfare benefits etc.
1.3 IMPORTANCE OF TRADE UNIONS Trade unions help in accelerated pace of economic development in many ways as follows: 1.3.1 By helping in the recruitment and selection of workers. 1.3.2 By inculcating discipline among the workforce 1.3.3 By enabling settlement of industrial disputes in a rational manner 1.3.4 By helping social adjustments. Workers have to adjust themselves to the new working conditions, the new rules and policies. Workers coming from different backgrounds may become disorganized, unsatisfied and frustrated. Unions help them in such adjustment. 1.3.5 promoting and maintaining national integration by reducing the number of industrial disputes 1.3.6 incorporating a sense of corporate social responsibility in workers achieving industrial peace
1.4 REASONS FOR JOINING TRADE UNIONS The important forces that make the employees join a union are as follows:
1.4.1 Greater Bargaining Power: An individual employee possesses very little bargaining power as compared to that of his employer; hence, a better course for him is to join a union that can take concerted action against the employer. The threat or actuality of a strike by a union is a powerful tool that often causes the employer to accept the demands of the workers for better conditions of employment. 1.4.2 Minimize Discrimination: A trade union can compel the management to formulate personnel policies regarding pay, work, transfer, promotion, etc. that press for equality of treatment to the workers. All the labour decisions of the management are under close scrutiny of the labour union. This has the effect of minimizing favouritism and discrimination. 1.4.3 Sense of Security: The employees may join the unions because of their belief that it is an effective way to secure adequate protection from various types of hazards and income insecurity such as accident, injury, illness, unemployment, secure retirement benefits etc. They compel the management to invest in welfare services for the benefit of the workers. 1.4.4 Sense of Participation: The employees can participate in management of matters affecting their interests only if they join trade unions. They can influence the decisions that are taken as a result of collective bargaining between the union and the management. 1.4.5 Sense of Belongingness: Many employees join a union because of their co-workers or under a group pressure; if he does not, he often has a very difficult time at work. On the other hand, those who are members of a union feel that they gain respect in the eyes of their fellow workers. They can also discuss their problem with the trade union leaders. 1.4.6 Platform for self expression: The desire for self- expression is a fundamental human drive for most people. A trade union provides a forum where the feelings, ideas and opinions of the workers could be discussed. The collective voice of the workers is heard by the management and give due consideration while taking policy decisions by the management. 1.4.7 Betterment of relationships: Unions help in betterment of industrial relations among management and workers by solving the problems peacefully.
1.5 JOB SATISFACTION Job satisfaction describes how content an individual is with his /her job. Factors influencing job satisfaction include the management style and culture, employee involvement, empowerment autonomous work position etc. Job satisfaction is a very important attribute which is frequently measured by organizations. Weiss (2002) has argued that job satisfaction is an attitude but points out that researchers should clearly distinguish the objects of cognitive evaluation which are affect (emotion), beliefs and behaviours. This definition suggests that we form attitudes towards our jobs by taking into account our feelings, our beliefs, and our behaviours.
1.5.2 FACTORS INFLUENCING JOB SATISFACTION 1.5.2.1 Organizational Factors Salaries and wages: Play a significant role in influencing job satisfaction, as it satisfies the first and basic level need of human beings, also pointed out by Maslows need hierarchy theory for Motivation, it shows a greater sense of achievement on the part of the individual and often seen as a reflection of managements concern for the employees as well. Promotional avenues: Promotion chances considerably affect the job satisfaction as it indicates an employees worth to the organization which is highly morale boosting, apart from being an addition in the career lifecycle. It inflicts positive changes like higher pay, less supervision, more freedom, increased responsibilities, status etc. Company Policies: Organizational structure and policies also play an important role in affecting job satisfaction of employees. An autocratic and highly International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 1, No. 1, October 2012
i-Xplore International Research Journal Consortium www.irjcjournals.org 51 authoritative structure causes resentment in the employees as compared to a structure which is more open and democratic in nature. 1.5.2.2 Work Environmental Factors Supervision: Supervision is a moderately important source of job satisfaction. It could be employee centered or participative in nature. Work group: A friendly and co-operative work group provides opportunities to the group members to interact with each other. In fact, it could be a stronger source of satisfaction when members have similar attitudes and values. Apart from it, the size and quality of interpersonal relations play a significant role as well. Working conditions: Result of various studies show that working conditions are an important factor. People desire that there should be clean and congenial atmosphere of working as the opposite working condition lead to job dissatisfaction. 1.5.2.3 Work Itself Job Scope: It provides the amount of responsibility, work pace and feedback. Higher the level of these factors, higher the job scope and higher the level of job satisfaction. Variety: Excessive variety of work produces confusion and stress and too little variety causes fatigue and monotony. Lack of Autonomy and Freedom: Lack of autonomy and freedom over work method and work pace also contribute to job dissatisfaction. Role ambiguity and role conflict: Role ambiguity and role conflict also lead to job dissatisfaction and monotony 1.5.2.4 Personal Factors Age and Seniority: Age has also been found to be a contributory factor to job satisfaction, in some groups, job satisfaction is higher with increasing age in some groups it is vice versa and in some there is no difference at all. Tenure: Employees with longer tenure are expected be highly satisfied with their jobs, tenure assures job security, which is highly satisfactory to employees. Personality: Personality traits like self-assurance, self-esteem, maturity, decisiveness, sense of autonomy, challenge and responsibility are some of the traits that are directly related to Job satisfaction. This type of satisfaction comes from within the person and is a matter of personality
2. LITERATURE REVIEW
Jagannath M. and Roy (1990) noticed, although trade unions at the grassroots were aligned to larger state and national unions, these alignments appeared to be only formal in nature and devoid of the ideological richness that they should have yielded. Great asymmetries in their power were very well visible. After interviewing seven trade union leaders, the authors were able to discern the expression of alienated connectedness characterized by powerlessness, self estrangement, normlessness, socio- cultural isolation and disenchantment.
Mefford R. (1986) examined the effect of unions on productivity in 31 plants of a large multinational firm in the period 1975-82.Results obtained by estimating a production function indicated that unionization's overall effect on productivity is positive. Specific findings were that unionization increased the capital-labour ratio and improved management performance, but it also raised the absenteeism rate. A net positive effect on productivity remained even when these channels of union influence were controlled for, a result that, the author suggested, may reflect an improved labour relations climate or improved labour quality associated with unionization.
Morikawa M. (2010) analyzed the relationship between labour union and firm performance in areas such as productivity and profitability by using data on more than 4000 Japanese firms. The presence of labour unions had statistically and economically significant positive effects on firm productivity. Unions effects on wages were also positive, their magnitude being slightly larger than those on productivity. The decrease in the number of employees was greater at unionized firms than at non-unionized firms. The difference in employment growth was mainly attributable to the change in the number of part-time workers.
Powdthavee N. (2011) studied the past, contemporaneous, and future effects of union membership on job satisfaction. By separating union "free-riders" from union-covered non-members in fixed-effects equations, the author found significant anticipation effects to unionism for both prospective and covered non-members of both genders. Workers reported, on an average, a significant net increase in their overall job satisfaction in the year unionization occurred, although it decreased with time. Moreover, adaptation to unionism was complete within the first few years of unionization. One explanation for this was that workers adapted their reported satisfaction over time to support their union bargaining efforts, which was consistent with at least one explanation given for a union's role in fanning the flames of discontent with management during contract negotiations, i.e. members may not actually have been as dissatisfied with their jobs as it appeared.
Rose P., Kumar and Ramasami D. (2001) contributed to the understanding of barriers to trade unionism in Malaysia by analyzing the perspectives of employees from unionized companies. The survey analysis revealed that non-union employees did not view their unions favourably and perhaps it raised doubts among employees on the International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 1, No. 1, October 2012
i-Xplore International Research Journal Consortium www.irjcjournals.org 52 ability of unions to protect workplace issues critical to workers. Employees seemed to lack knowledge concerning trade unions, indicating unions' failure to reach out to the broad workforce and a possible problem in union organizing.
Schnable (1991) provided a brief review of the empirical evidence on union productivity effects in Germany. As noted by him, the influence of trade unions on productivity was the net effect of conflicting forces which could lead to higher or lower productivity. Although the German dual system of workers' representation via unions and works councils was quite favourable to the existence of productivity- enhancing 'voice' effects, various empirical studies were not able to detect significant positive net effects of these institutions on productivity.
Syverson T. (2000) examined the determinants of productivity and pointed out that labour and trade unions are also major factors in influencing productivity in an organization. The paper surveyed and evaluated recent empirical work addressing the question of why businesses differ in their measured productivity levels. The causes were manifold, and differed depending on the particular setting. They included elements sourced in production practices and therefore, over which producers had some direct control, at least in theory, as well as from producers external operating environments.
Warr P. (1999) very rightly discussed that, dissatisfied workers tend to be less productive than they otherwise would be. More satisfied workers increase work output as a result of more committed job performance, lower absenteeism and a lower probability of quitting a job. Some studies have also suggested that life expectancy is increased by greater work satisfaction
3. RESEARCH METHODOLOGY
3.1 Objectives 3.1.1 To study the correlation between various parameters of trade unions. 3.1.2 To find out the correlation between these parameters of Trade union and the satisfaction of workers corresponding to them. 3.1.3 To do the factor analysis of various parameters
3.2 Rationale of the study: A trade union is an organization of employees formed on a continuous basis for the purpose of securing diverse range of benefits. Therefore, this area of study could help us in exploring the relationship between the demands of labour unions and the productivity of the workers.
3.3 Questionnaire Design: The questionnaire measures the impact of trade unions on workers satisfaction.
3.4 Research Design: Descriptive Research: Through Survey Method
3.5 Statistical Tools 3.5.1 Sample Size: The overall sample size in this study is one hundred and twenty (120). 3.5.2 Sampling Technique: The sampling technique used is convenience sampling. 3.5.3 Sample description: The sample included in this study can be divided on the basis of gender, age and experience of working in the organisation. The study has included both, male and female workers. The age of these workers lies within a range of 20 and 50 years. The experience of these workmen varies from 3 to 25 years.
3.6 Data Collection Techniques 3.6.1 Primary Data: was collected by personal interviews with the respondents, who were the workers, with the help of the questionnaire made for the purpose. 3.6.2 Secondary Data: was collected from newspapers, magazines journals, online resources etc.
4. DATA ANALYSIS AND INTERPRETATION
4.1 To study the correlation among various parameters of trade unions.
Table 1: Correlation among various parameters of trade unions Correlation Matrix
International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 1, No. 1, October 2012
i-Xplore International Research Journal Consortium www.irjcjournals.org 53 Interpretation: The above table shows the correlation between various parameters of trade unions, on which the study is conducted. It states whether the importance placed in one parameter affects the importance placed in the other. From the above table we see that no two factors are very strongly correlated. In fact accountability and involvement in decision making, and accountability and rational feedback mechanism are not correlated at all and therefore give negative values.
4.2 To find out the correlation between these parameters of Trade union and the satisfaction of workers corresponding to them.
Table 2: Correlation between various parameters of trade union and satisfaction Factors Correlation Involvement in decision making 0.097108 Rational feedback mechanism 0.056259 Electioneering process 0.090348 Membership services 0.517406 Accountability 0.245356
Interpretation: The above table shows correlation between various parameters of trade unions and satisfaction that the workers receive because of their existence. From the analysis we can see that the presence of membership services contribute the most to satisfaction of the workers followed by accountability displayed.
4.3 To do the factor analysis of various parameters
Table 3 Component Matrix a
Component 1 2 decision making .727 -.338 rational feedback mechanism .803 -.279 healthy electioneering process .746 .296 membership services .349 .727 Accountability -.009 .517 Extraction Method: Principal Component Analysis. a. 2 components extracted.
Interpretation: Out of the five factors taken under study, the factor analysis converted them into two components from which we can see that component 1 contributes more to satisfaction of the workers.
5. SUGGESTIONS AND RECOMMENDATIONS
Trade unions are always a matter of concern for the employers as well as employees in an organization. Major conflicts and downfalls in organizations happen because of labour unions and the conflicting demands. Therefore, this area of study could help in exploring the relationship between the demands of labour unions and the satisfaction of the workers. This study gives an idea of correlation between different parameters of trade unions. An insight on the level of importance workers place for different parameters and the corresponding satisfaction, the presence of that factor provides to them. Now this study can help the respective manufacturing units to alter the parameters measured in a way that the overall satisfaction the workers derive from their jobs is maximised. Based on the study, few recommendations that can be made are:
5.1 The membership services contribute most to satisfaction of the workers and therefore the units must focus greatly on them. 5.2 Workers of the units do not feel that they are greatly involved or consulted before the decisions are made. Hence, due consideration should be given to it. 5.3 Transparency should be maintained between the trade union leaders and the members. 5.4 The electioneering process must be just and fair to increase the satisfaction of the workers.
6. LIMITATIONS
A study like this can not be conducted smoothly through out. This study involves the responses from workmen who have certain targets of production to be achieved and therefore were not willing to waste their time on answering questions regarding their work also; it was also not easy to make them understand the relevance of the study.
CONCLUSION
In the recent years, attention to the quality of work and, in particular, to working conditions is increasing. The empirical question regards, which parameter of the existence of trade unions help the workmen derive maximum satisfaction in an organization. Using the data of a CD manufacturing unit in Delhi NCR, considered under the study, we have tried to answer that question. The study found out evidence of a positive and statistical relationship between workmen satisfaction and membership services available to them as a benefit of the existence of a trade union. Also there exists a high degree International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 1, No. 1, October 2012
i-Xplore International Research Journal Consortium www.irjcjournals.org 54 of correlation between satisfaction and accountability granted to them. However, accountability, rational feedback mechanism and Electioneering process, still need to be focused upon by these companies as the benefits under the union membership are not viewed to contribute to workmen satisfaction.
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