Chapter 5 - Productivity Settlement

Summary

The demand for improvement of working conditions by the workers and their union has become a common practice in Indian Industries. They always strive to negotiate on the basis of cost of living, comparability and the ability of the industry to pay more. In the past, the management used to consider their demands based on their financial position mainly to maintain industrial peace and harmony. The additional expenditure on the wage settlement was passed on to the customers, as the competition was not severe at that time. However, with the changing economic scenario and fierce competition, the management is now concerned with increasing productivity so that the additional financial requirement is squarely met. The main belief of the management is that any change in terms and conditions of service of the workmen should be based on productivity improvement.

Quality, Cost and Delivery

The collective bargaining process in arriving at long-term wage agreements has undergone a significant change. In view of the globalisation of trade and business, every business entrepreneur is aiming to be highly competitive in terms of product quality, cost and delivery (QCD). It has been the endeavour of every entrepreneur to develop and nurture a healthy work culture, which keeps the morale of the working force high to adapt themselves to the changing requirements of the business. The working environment demands flexibility in deployment, multi-tasking, optimum utilisation of resources, reduction in production cost, etc.

On receipt of the charter of demands by the Union, it becomes a responsibility of the management to examine the same to ascertain the financial implications, if those demands are to be met.