Challenge of change: Industrial relations in Indian industry PDF
Preview Challenge of change: Industrial relations in Indian industry
7 , 6 INDUSTRIAL RELATIONS IN INDIAN INDUSTRY E R S SLU Np CHALLENGE OF CHANGE: INDUSTRIAL RELATIONS IN INDIAN INDUSTRY CHALLENGE OF CHANGE: INDUSTRIAL RELATIONS IN INDIAN INDUSTRY Editors C.S. VENKATARATNAM InternationalManagementInstitute, NewDelhi ANILVERMA FacultyofManagement UniversityofToronto Toronto, Ontario Canada C 98 - 00187 A ALLIED PUBLISHERS LIMITED NewDethi eMumbai e Caicutta e Lucknow e Chennai Nagpur e Bangalore e Hyderabad e Ahmedabad ALLIED PUBLISHERS LIMITED RP3er-5ag-rd1t.1hO1nf4a/fF1:la1Kt5as.c(Jh.2iNng.duHdFealroeoCrdr)io,asNsMaRavorragad,n,gBpaHulylrdaaer,rdaAEbshtamadteed,—aMbu5a0md0b0sa2iee 16A Ashok Marg, Patiala House, Lucknow —226001 Sth Main Road,Gandhinagar, Bangalore— 560009 FOREWORD part 17Chittaranjan Avenue, Calcutta —700072 81 Hill Road, Ramnagar, Nagpur — 440010 13/14, Asaf Ali Road, New Delhi — 110002 THomas A. KOCHAN* 751 AnnaSalai,Chennai — 600002 The collection of essays presented in this book seek to analyse and discuss the dramaticchangesoccurringinsomeoftheIndianindustriesandtheirimplications © 1997,Allied PublishersLimited forhuman resource andindustrial relations policy and practice. I amparticularly delighted that most authors take an international perspective by organising the industry analyses around the general framework that we are using in similar exercises in othercountries. Thiswill give the analyses additional leverageby not No ofthiisworkmay bereproducedortransmitittedtedii nanyformorbyany only allowing cross industry comparisons within India but by providing bench- chelectronicorachantcalincludingphotocopyingandrecording,or markstocomparedevelopmentsinIndiawith thoseofothercountriesinAsiaand by any information storage and retrieval system, without prior written around the world. It is exactly this type of research project, involving teams of permissionofAllied Publishers Ltd. experts who have the needed knowledge and experiencein theculture, traditions andinstitutionsofaparticularcountryworkingcollaborativelywithsimilarteams fromothercountries,usingacommonanalyticframework,thathasthebestoppor- tunitytoadvancethestateoftheoryandpracticeinindustrialrelationsand human ISBN 81-7023-651-7 resourcemanagementtoday. Thechapters presented in this volumeclearlydemonstrate that Indian indus- trial relations and humanresource professionals face enormous challenges. The 1991 shift in governmentpolicy to open the economy and change from an import AssociateEditor : JyotiMehrotra substitutiontoanexportorienteddevelopmentstrategyanditsassociateddomestic DIP : PrintoGraphicSystems policieswill,iffullyimplemented,placeseverepressuresonalllevelsoftheexisting CoverDesign : KamStudio employmentrelations system. The need for sustained productivity improvement will require significant investments in education and continuing training and * Thomas A Kochan is the George M Bunker and Leaders for Manufacturing Professor at the PublishedbySunilSachdev andprintedbyRaviSachdevarAlliedPublishersLimited Massachusetts Institute ofTechnologySloan School ofManagementandis the Presidentof the (PrintingDivision),A-104Mayapuri,PhaseII, New Delhi - 110064. InternationalIndustrialRelationsAssociation. ChallengeofChange vi Foreword Vii developmentalong with an accelerated effort to introduce innovations in work bepoliticallyandadministrativelyimpossibletoregulatecollectivebargainingand ractic4es and human resource policies that more fully utilise employeeskills and workerrepresentation andparticipation through single national policy. How to Raevanon. At the sametime, the need to cope with the displacement of workers design a set of policies that can reflect and respondto this diversity would also affected by the industry restructuring that will occur will severelystrainIndia’s appear to me tobeworthy ofthoughtand debate. cfluoarmbteohfuerrrmwoaomrrkketeotrspalnadansdnsooacciniadalmluanwrneealsgtf.earTtehhesryqosuuetgsehtmisotnhatishnedrreepsfotosrreuecictousnrwisnihgdeerprreaobwclieelslsrti?hskeIsloeftahiednreceri,sthifinopgr ftohratitbBseuvatarblseucyeaorniednftguhlueissdteiusndpgyetcahinefdifrcuetquvurieeestwoifaosnesmmlpuiclehosfyaomredniettepspeorrleialnceavylayintnciecIanfldo,iraho.itsTthoherreiccqaouluensqttuireoisnetisisao:sn example adequate integration in national policy making of those responsible for Howcould acountrythatled thebattle againstcolonialismandachievedindepen- macroeconomic andtradepolicies and those responsible for human resource de- denceandestablishedademocraticsocietyearlierthanmostofitsAsianneighbours velopment andindustrial relations policies? To put it more directly, is there a coordinated industrial strategy that considers the links between the market hliavvien,gotvoelrostehegrcoouunrdsreeloaftsievveertaolsdoemceaodefs,itaslslmoalwleedr,itmsoerceonraopmiydlayngdrsotwainndgarAdssiaonf liberalisation policies and a long term strategy for competing on the basis of neighbours? Morespecifically, what role, if any, did India’s industrial relations anything other than low wages? This is specially critical for India, given its high policies and labour managementrelations systemsplayin the failure of India to wageposition relative to other NIC’s in Asia and other parts of the world. A long advance and prosper? The chaptersin this volumeprovidethe rich raw materials termstrategyforhumanresourcedevelopmentandindustrialrelationspoliciesthat needed to address this verybroad and deep question as well as the more specific reformsandrestructuresthewageprocesstocreatestrongerincentivesforworkers contemporarychallenges facingpolicymakersandpractitionersinourfield. individuallyandcollectively to acquire greaterskills and toparticipate incontinu- EditorsVenkatandVermahighlightthemajorconclusionsandimplicationsof ous productivity and quality improvements on their jobs would appear to be the various industry studies and arguethe case forcarrying future debates on the essential. How to achievethisis a questionworthyofconsiderable discussion. subject,transcendingthetraditionaldomainsofindustrialrelationspolicymakers, The chapters also documentthat, like the experience of the OECD countries to the testing of the strategic choice model through further empirical studies and discussedelsewhere,thereisagreatdealofinnovationinworkplacepracticesand international comparisons.Ihopethatitisjustthe firstphaseinpursuingthis type human resource strategies underwayin selected firms and employmentrelation- of work andentering it into the international community of scholars and profes- ships.Yet theseeffortsappeartobeevenmoreisolated anddifficulttosustain and sionals in the Industrial Relations Association and related research networksthat diffuseinIndiathanmostothercountries.Thequestion,therefore,iswhethersome share aninterestinthesetopics. government, academic, or other agency or organisationcan take the lead in docu- Theeditors andauthorsare tobecommendedformakingthisinitialcontribu- menting and learning from these cases and using them to develop a coherent tionto theory,methodandpolicyanalysis. Thisbookshould provideconsiderable strategytopromotebroaderdiffusionandenhancetheprobabilitythattheinnova- foodforthoughtanddebateintheIndianindustrialrelationscommunityformany tionprocesswillbe sustainedovertime.Whatare thekeyobstaclesto diffusion of years to come. workplaceinnovationsinIndia? Another key questionreflects the broad diversity of the Indian economy and Cambridge,Massachusetts, society.Inaneconomythatrunsthefullrangefromtheclassdivisionsobserved in January, 1997. employmentrelations ontea plantations to the informationworkersinhigh tech- nologyindustriessuchasinformationprocessing,telecommunications,etc.,itmay * ThomasAKochan,key-noteaddresstothe“NationalConferenceonChangesinHumanResources andIndustrialRelationsinIndianIndustry”organisedbytheInternationalManagementInstitute, NewDelhi,19-21August,1993. PREFACE This book is the product of networking among academics and professionals in differentindustriesinIndiawiththeobjective ofattempting a systematicanalyses of the changesat the industry level and the consequent implications for human resource andindustrialrelationspolicies andpracticesina cross-section ofIndian industries. Wepresenthereperspectivesonthechangesinhumanresourcesandindustrial relations in 13 industries in different sectors of the Indian economy during the post-Independenceera, and moreparticularlysince the 1980s. Considering (a) the shiftinindustrialisationpoliciesinthewakeofstructuraladjustmentreformswhich will call for complementary changes in human resource and industrial relations policies; (b) thegrowingconcernabouttheimplications—particularlyintheshort- term—ofthestructuralchangesonemployment,jobsecurity,collectivebargaining andindustrialrelations;and,(c) thesearchforcreativeapproachestodealwithjob redundancies,retraining,skillsimprovementandattitudinalreorientationforcop- ingwith the challenges ofthe changing economic scenario, the reflective perspec- tives and the rich insights the research reported here offer, we hope, will be immenselyuseful. The initiative to organise such a network was borneout of the efforts of ThomasKochan, Anil Verma and Russel Lansburyin successfully steering sim- ilar, but larger international networkings among OECD countries and subse- quently in the Asia-Pacific region. While one of us (Anil) was among the prime moversintheOECDnetworkingalso,bothofusparticipatedinthe firstmeeting of the networking in the Asia- Pacific region at Singapore in September 1992.It wasfelt at this meeting that it would be useful to spread the networking more x ChaliengeofChange intensivelyatthenationallevel also for greater impact and morerigorous study and analysis. When we approached ourcolleagues in the academic and indus- trial circles in December1992 the response was spontaneous. While somecol- leagues had to back out due to other professional commitments,‘on the whole the response to ourmaideneffort in India hasbeenveryencouraging, given the constraints of time and resources. This is a project which began without any funding fromany source. Yet, once we launchedthe project, resources were not a major constraint. The selection of industries is by no means exhaustive. A number of key industries we wishedto include in this book were perforce omitted dueeither to CONTRIBUTORS lack ofprevious research orbecause the promised help did not materialise. Also, wewerenotabletofullyexploreallpossiblesourcesofexpertisewhichcouldhave helpedthecoveragebemorecomprehensiveandrepresentative.Itisourhopethat our modesteffort will encourage and stimulate further research at the industry level. Itisalso ourwishthatthecontributors to thisbookand otherswill continue with furtherresearch—perhapsmorerigorous and focussed empirical research of SunilAbrol C-DOT, a representative sample of firms in each industry that could contribute to the New Delhi. developmentoftheoryandpolicyanalysis. K BAkhilesh DepartmentofManagementStudies, Weare grateful to the International ManagementInstitute, in particular to IndianInstituteofScience, NitishKSengupta,fortheencouragementand supportatall stagesofthisproject. Bangalore. WeappreciatethesupportoftheInternationalLabourOrganisation,particularlyto SBalakrishnan FormerExecutiveDirector(Safety), E G Mabare and P H Chandrasekharan. We thankThomas A Kochan for writing SteelAuthorityofIndiaLimited, the foreword. NewDelhi. WeappreciatetheacademicsupportofV.ChandraandD.K.Panigrahi,admin- AK Bhat IndianInstituteofPetroleumManagement, Gurgaon. istrative supportofAnup Sarin and DeepakPandhi andthesecretarial assistance ofKaulandLeena.Finally,wewouldliketoacknowledgetheenthusiasticsupport, SharitBhowmick DepartmentofSociology, throughouttheproject,ofSureshGopal,ourPublishingConsultantatAllied. UniversityofBombay, Mumbai. U KDikshit IndianInstituteofPetroleumManagement, Gurgaon, C. S. VENKATARATNAM ANILVERMA MRGera AllIndiaMaanagementAssociation, NewDelhi. DVGiri DepartmentofPersonnelManagement and IndustrialRelations, BerhampurUniversity,Berhampur AnilKKhandelwal BankofBaroda, Mumbai JacobMankidy NationalInstituteofBankManagement, Pune. xii ChallengeofChange BSMurthy DepartmentofPersonnelManagement andIndustrialRelations, AndhraUniversity,Waltair. VPParanjpe CentralInstituteofRoadTransport, Pune. BRPatil IndianInstituteofManagement, Bangalore. PSubbaRao DepartmentofManagementStudies, SriKrishnadevaRayaUniversity, Anandapur. ABBREVIATIONS JibiteshRath BhilaiSteelPlant, Bhilai. RatnaSen IndianInstituteofSocialWelfare andBusinessManagement,Calcutta. PSudarsanam CentralInstituteofRoadTransport, Pune. CSVenkataRatnam InternationalManagementInstitute, AIBEA AllIndiaBankEmployees’ Association NewDelhi. AIBEF AllIndiaBankEmployees’Federation AIBOA AllIndiaBankOfficers’Association AnilVerma FacultyofManagementStudies AIBOC AllIndiaBankOfficers’Confederation andCentreforIndustrialRelations, AICOBOO AllIndiaConfederationofBankOfficers’Organisation UniversityofToronto. AICPI AllIndiaConsumerPriceIndex AdministrativeStaffCollegeofIndia, AIDEF AllIndiaDefenceEmployees’Federation Hyderabad. AIOE AllIndiaOrganisationofEmployers AIPDWF AllIndiaPortandDockWorkers’Federation AIPWF AllIndiaPetroleumWorkers’Federation AIRF AllIndiaRailwaymen’sFederation AISBISF AllIndiaStateBankofIndiaStaffFederation AITUC AllIndiaTradeUnionCongress ASP AlloySteelPlant BCCL BharatCokingCoalLimited BHEL BharatHeavyElectricalsLimited BPCL BharatPetroleumCorporationLimited BPE Bureau ofPublicEnterprises (India) BRL BharatRefractoriesLimited CCA CityCompensatoryAllowance CCPA ConsultativeCommitteeofPlanters’Association CCTPW CoordinationCommitteeofTeaPlantationWorkers CDPWR CommitteeforDefenceofPlantationWorkers’ Rights CIL CoalIndiaLimited CIRM CentralIndustrialRelationsMachinery CITU CentreofIndianTradeUnions CLE ChiefLabourCommissioner-General xiv ChallengeofChange Abbreviations XV CMIE CentreforMonitoringIndianEconomy MECON Metallurgyand EngineeringConsultancyLimited COPU CommitteeonPublicUndertakings MEL MaharashtraElectrosmeltLimited CPI CommunityPartyofIndia MOU MemorandumofUnderstanding CPI(M) CommunityPartyofIndia(Marxist) MTWAct MotorTransportWorkerAct CPPRI CellularPaperandPulpResearchInstitute NASSCOM NationalAssociation ofSoftwareandServicesCompanies DLB DockLabourBoard NCL NationalCommission onLabour(1969) DPE DepartmentofPublicEnterprises NCWA NationalCoalWageAgreement DA DearnessAllowance NFIR NationalFederationofIndianRailwaymen EFI Employers’FederationofIndia NFPM NationalFederationofPetroleumWorkers FCI FoodCorporationofIndia NJCCSI NationalJointConsultativeCommitteeforSteelIndustry FICCI FederationofIndianChambersofCommerceandIndustries NJCS NationalJointCommitteeforSteelIndustry HindMazdoorKisaanPanchyat NMDC NationalMineralDevelopmentCorporation HMS HindMazdoorSabha NPC NationalProductivityCouncil HindustanPetroleumCorporationLimited NTPC NationalThermalPowerCorporation OECD OrganisationforEconomicCooperation andDevelopment HRM HumanResourceManagement ONGC OilandNaturalGasCommission HSL HindustanSteelLimited OSOA OilSectorOfficers’Association HSCL HindustanSteelCorporationLimited IBA IndianBank’sAssociation PDWWFI Port, DockandWaterfrontWorkers’FederationofIndia PLC PlantationLabourCommittee ICISI IndustrialCommitteeonIronandSteelIndustry PNM PermanentNegotiatingMachinery ISCO IndianIronandSteelCompany PPC &E Performance,Planning,CounsellingandEvaluation ILC IndianLabourConference RBI ReserveBankofIndia ILO InternationalLabourOrganisation RINL RashtriyaIspatNigamLimited InternationalMonetaryFund (AlsosameasVisakhapatnamSteelPlant) INPDWF IndianNationalPortandDockWorkers’Federation SAIL SteelAuthorityofIndia INPMWF IndianNationalPaperMillWorkers’Federation SBI StateBankofIndia INRWF IndianNationalRailwayWorkers’Federation SCOPE StandingConferenceonPublic Enterprises INTUC IndianNationalTradeUnionConference SEB StateElectricityBoard IOC IndianOilCorporation SIDA SwedishInternationalDevelopmentAgency IPA IndianPorts’Association SLC StandingLabourCommittee IPT InstitutionofPaperTechnology SOP StandardOperatingProcedure IR IndustrialRelations SSP Salem SteelPlant IRB IndianRailwayBoard TISCO Tata Ironand SteelCompany InformationTechnology TPA Tea Planters’ Association ITA IndianTeaAssociation Tata Workers’Union IndianTelephoneIndustries UPASI United Planters’ Association ofSouth India JBCCI JointBipartiteCommitteeonCoalIndustry JWNC UTUC United TradeUnionCongress JointWageNegotiationCommittee LTS VISL Visvesvarayya IronandSteel Limited Long-TermSettlement VSP VisakhapatnamSteelProject MAIT Manufacturers’AssociationofInformationTechnology WTWFI WaterTransportWorkers’ FederationofIndia MBO ManagementofObjectives
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