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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.

Keywords

Trade Union, Compact Disk (CD), Job Satisfaction,
Accountability, Electioneering process, Rational Feedback
mechanism, Correlation

1. INTRODUTION

1.1 TRADE UNION
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.

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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

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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

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

decision
making
rational feedback
mechanism
healthy electioneering
process
membership
services accountability
Correlation decision making 1.000 .488 .281 .050 -.018
rational feedback mechanism .488 1.000 .413 .060 -.043
healthy electioneering process .281 .413 1.000 .285 .049
membership services .050 .060 .285 1.000 .009
Accountability -.018 -.043 .049 .009 1.000


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

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

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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International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421

Volume 1, No. 1, October 2012

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