Technological Changeand

Industrial Relations

Contents• Industrial Relations• Concept of Technological Change• Rationalization and Automation• Implementation and Progress of

Rationalization and Automation in India• Automation at LIC(1963)• Impact of Technological Change• Appropriate technology

IR AND TECHNOLOGY

• Rapid state of technological change is creating vigorous controversy and problems in different functional areas of management specially in the domain of Industrial Relation.

The two major concerned factors are :

1. The impact of technological change on levels of employment and the nature of skills.

2. The growing resistance of trade unions to technological changes .

• There are varied types of motivations underlying innovations or proposal for change having different relevance for industrial relations.

Cont..Following are some reasons which have motivated different organizations to engage in innovative behavior :

1. In order to minimize labour cost and reduce the supply price of prospective employees.

2. Automation of production areas where there is a skill shortage.

3. Changes are more concerned with “Product Market” rather than “Labour Market” .

4. To replace worn out and obsolete equipment .

5. Innovations are have been introduced by employers to accomplish administrative purposes.

Concept of Technological Change

• Technology is an instrument of development.• Affects various aspects of economic and social

life.

Types of Technological Changes.

Scientific ManagementOr time and

Motion Studies

Change inlocation of

plants

Shift in Productdemand

Change inMachinery

Automation

RATIONALISATION & AUTOMATION

Rationalisation implies a basic change in the structure and control of industrial activities. Its techniques can be applied to methods, material and men.

In Automation, technology itself controls the operations. The machine provides data from its operations and feeds it back to its own controls which governs the production process

Implementation of Rationalisation and Automation in India

• Influenced by American Model• To increase productive efficiency• Vast surplus of labour after II World War• Safeguards by Labour Ministry and Planning Commission

-Fixing the work load

-Stopping fresh Recruitment

-Offering higher wages

-Voluntary Retirement

-Sharing of Gains.

Second Five year plan- Rationalization was to be attempted only when it did not lead to unemployment.

Progress of Rationalisation and Automation in India

• 3 Industries-Cotton-textile, Jute and Coal• Cotton-textile -Workers accepted it

-Introduced in the form of efficiency measures.

-Additional strain & Inadequate increase in earnings.• Jute -International Competition

-Progress Slow, Dependence on foreign country for Raw Material• Coal-Rationalization in larger mines, old methods in small

mines.

Automation at LIC (1963)

• Central trade union organization opposed it.

• Loss of employment and addition to cost

• Management argued accelerated industrialization, increased productivity, raised standard of living.

• In order to bring reconciliation – meeting Standing Labour Committee to consider the impact of Automation and remedial measures.

• There was underutilization of computers because they were introduced without adequate preparation, planning and thought.

Cont….

• The question of installation of computers in these established industries were to be governed by two criteria, namely:

1) The effect on employment in relation to the whole economy

2) The effect on employment in the relevant departments of these establishments.

Impact of Technological Change

NEGATIVE IMPACT• Redundancy • Occupational Adjustment• Allocation of Gains• Transfer & Retraining Problems • Resistance to Change—Strikes, Absenteeism, resignations etc.• Job satisfaction • Worker & Union Reactions• Changes in job content thereby creating new jobs to replace

old ones• Fitting new jobs into the existing incentive scheme

POSITIVE IMPACT

• Labour savings• Improves level of earnings• Higher productivity• Reduction in cost and increases in benefits• Product standardization.

Appropriate Technology: Its relevance to the Indian Context

• The kind of technology which would be found appropriate to the conditions found in the country where it was being introduced.

• Less developed countries do not possess requisite labour skills to replace the machine skills, technical know how and infrastructure.

• Example- the solar pimp developed by a French firm which is being used in Mexico.

CONCLUSION

• Thus, one must not only examine very carefully the cost benefit analysis from the economic point of view but also take into account the repercussions on industrial relations.

Thank You