GUIDELINES FOR A PRODUCTIVITY MOVEMENT IN INDIA

M. L. Puri (1970s)

---

This book addresses the issue of productivity in a comprehensive manner. It discusses separately the role of the State, management and labour in productivity. The author suggests the establishment of a chain of productivity research and development centres. He says while drawing on the experience of industrialized nations, we have to tailor their knowhow to suit our specific needs. These are the Personal views of the author Written in the 1970s.

---

PRODUCTIVITY IN EARNEST OUR ONLY ECONOMIC SALVATION

PART I - ANALYSIS

PART II - GUIDELINES FOR PRACTICE

 

INTRODUCTION

1.1 Productivity, as applied to industry, implies a deliberate and organized approach towards betterment in every sphere of industrial activity. It aims at getting the best value from the human and material resources available in the country.

1.2 National development calls for dynamic self-reliant economy geared to welfare of the common man – to give him an adequate standard of living, security, opportunity and freedom; and not the least, leisure and facilities for relaxation and culture. The function of productivity is to mobilize all the factors in the country to achieve this goal in the shortest time.

1.3 Productivity is versatile in its meaning and applies equally to capital, materials, labor, management, services and allied specialized functions. As such, its criteria have to be relative; but they must all correspond to the central purpose of enterprise, viewed in the border perspective of national development.

1.4 In the ultimate analysis, productivity rests on specialized attention to detail to the point of perfection and skillful integration of the perfected detail for specific tasks. As such, the crux of our productivity movement is to produce industrial specialists duly backed with codified know-how pertaining to their activities; and industrial managers to coordinate the activities of specialists and motivate labor and other cadres to accept and cooperate in specialized activity.

1.5 In India, as in other newly developing countries, this process is made difficult and, at times, even frustrating by inertia or per-independence psychology and methods. In the circumstances, we have to tackle two-fold problems: to create a psychology captive to productivity and develop a machinery to perfect and propagate the methods of productivity.

1.6 This problem offers no easy solution: the issues involved are delicate and controversial. And yet, the problem has to be faced and solved with some dedicated effort, if we have to survive as a nation with our basic values in tact. There is no other alternative and there is no time to waste.

1.7 We must first of all dispel genuine doubts with regard to productivity and evolve a line of action for the common good, which the State, Management and Labor may be able to implement with enthusiasm and without reservation or distrust. This line of action should be evolved jointly by the partners concerned, so that they may be able to cooperate in making productivity a success; and carry a clear conception of what each one has to do for productivity and what productivity would do for each one of them.

The forthcoming Seminar is being convened with the object of starting an earnest move in this direction; and the notes that follow are intended to provide food for thought.

2. THE CONCEPT OF PRODUCTIVITY AND WHAT IT IMPLIES

2.1 There is more than one definition of productivity. However, in the overall context, we may regard it as the index of effectiveness with which the factors of production in the country are employed to achieve the objective of a self-reliant and prosperous economy. Applied to individual units or activities, the index would be relative to the task targets set out for the unit or activity. The purpose of productivity is to continuously increase this effectiveness in every sphere of activity.

2.2 In practical terms, productivity is the most profitable enterprise requiring the least capital investment, in which every one can and must take a share to ensure his own well being and that of the community. Experience has proved that the nations who have prospered the most are the nations who devoted the most attention to productivity. Productivity is the core of our development also; and this needs to be grasped at every level with the earnestness that it deserves. The object of our productivity movement is to win support for this vital concept in actual practice.

2.3 The productivity movement must, first of all, create a psychology in the country, so that productivity may be accepted without controversy and reservation. The next step would be to bring about a harmony between individual interest, industry’s interest and the national interest. This will have to be done through proper orientation of attitudes and perspectives and with the aid of deliberate social and economic mechanisms. In such a climate, the individual, while pursuing his own interests, will automatically serve the industry’s and national interests.

2.4 Along with the psychology for productivity, we must consider the incentives for productivity. Our development arrears are large and we should provide matching incentives to yield large enough gains from productivity to provide the necessary resources.

The strongest incentive in this direction is the promise of material gains: higher standard of living, social amenities and opportunity for advancement, at the individual level; and profit at the corporate level. There is also considerable strength in the non-material incentives: congenial environment of work, social status for honest and efficient work, a sense of partnership in one’s work, and recognition and respect for service to the community. The non-material incentives, however, take time to mature and their development should be taken up on a long term basis.

Administration of incentives would have to be with due regard to claims of development, optimum level at which incentives would yield the best overall returns and the optimum price levels that need to be achieved. The approach in this regard has to be flexible and pragmatic, with the over-riding consideration of making the best of every situation, without sacrifice of fundamental principles.

2.5 Productivity has to be organized for maximum volume effect. On one hand there should be emphasis on broadening area of application of the best known techniques of productivity. On the other hand there has to be continuous striving to make the best better. The best way need not be the most mechanized or automated way. In our environment, it could actually be the reverse. The real criterion is that is should embody the most rational course of action under the circumstances, with due regard to limitations of resources and time.

2.6 Actual processing of productivity is called Industrial Engineering whose primary tools are: Work study, Rationalization and Cost Accounting. Work study subjects factors of production and elements of work to systematic objective criticism and measurement, in order to locate sources of waste. Rationalization judiciously eliminates the waste pointed out by work study. Cost accounting provides the most equitable measure of productivity in checking the results of rationalization. It also offers the most rational structure of incentives for productivity.

2.7 Industrial engineering and its allied functions require specialists, essential data and adequate specialized know-how for the reference or specialists. Accordingly, alongside creating psychology and incentives for productivity, productivity movement must also concentrate on specialist training and compilation of essential date and specialized know-how applicable to our working conditions. Equally important is the development of suitable machinery to enable effective exchange and propagation of experience on productivity.

2.8 Successful industrial engineering requires proper coordination of specialized activities. Further, since specialized activities have to cover the entire fabric of industry, it is essential that labour and others concerned at different levels understand the significance of specialized activities and co-operate in their development. This underlines the need for management to be enlightened and well-versed in using the ‘tools’ of productivity. Management must also possess the leadership to motivate all ranks to accept, learn and practice the techniques of productivity falling within their respective spheres. This would naturally require basic changes in attitudes and methods; and in this context, the necessity for more than ordinary attention to human relations hardly needs to be stressed.

Points for consideration

1. To give a real meaning to cooperation between the State, Management and labour, an earnest effort should be made by each side to gather the points of agreement, so that a strong enough foundation may be built to resolve the points of disagreement. For the same reason, emphasis should be on self-criticism and not criticism of the other party.

2. Productivity movement can only succeed if those in key positions in State, Management and Labour become enthusiastic to make productivity a success. As such, top priority must be given to develop suitable induction courses, discussions and study visits to orient such people in regard to the promise and problems of productivity and to answer their legitimate questions. Practical steps in this direction may be discussed.

3. Success of a productivity movement will depend, to a large measure on the efficiency of productivity services viz. specialists, data and know-how. As such, utmost care should be exercised to ensure that specialists entrusted with the several tasks of productivity are of the right caliber, with a practical background and adequate insight of our working conditions. Similarly, data and know-how of productivity made available to the industry should be authentic and fully relevant to our working conditions. Experience in this direction, as also suggestions for improvement, may be discussed.

4. The question of material and non-material incentives of productivity will be taken up under the heading “Sharing the Gains of Productivity”.

3. SHARING THE GAINS OF PRODUCTIVITY

3.1 The question of sharing the gains of productivity cannot be considered in isolation. A gain has to Materialize before it can be shared and no share in a gain can be larger than the gain itself. Producing and sharing the gains of productivity are two facets of the same problem, which cannot be separated and have to be treated together: the machinery for sharing productivity gains must be interlocked with the machinery for producing these gains.

3.2 In practice the aforesaid interlocking is achieved through appropriate schemes of industrial Incentives: incentives provide the motive force for productivity on one hand, and determine share values of the respective share-holders in productivity gains on the other. Accordingly, the core of this composite problem is to evolve a rational basis, on which schemes of industrial incentives may be developed to suit different purposes and situations.

3.3 Any scheme of incentives that we adopt should harmonize with the broad pattern of development in the country, so that energies and resources may be automatically channelized along the desired lines. This is all the more essential for us, since we have large development arrears to overtake and are pressed for both resources and time.
Industrial morale is vital for productivity and we cannot afford to disturb it through shifts in our incentive policies. As such, it is essential that, from the start, we should be very clear about implications of our environment with regard to industrial incentives, so that they may be oriented accordingly.

3.4 Our primary national objectives is to develop, in the shortest time, a self-reliant economy, which may be able to supply bulk of the means of production and trained manpower, that would be needed to feed rapid industrialization in the country.

This calls for a high rate of capital formation, particularly in the ‘mother’ industries; and a substantial rate of investment in training, specialization, experiment, research and allied services, to ensure that the capital formed yields optimum return. Our incentive schemes would be expected to ensure that an adequate volume of productivity gains is made available for these purposes; and that this materializes with willing support of all the parties concerned.

3.5 The partners in productivity are:

3.51 Labor or those actually engaged in production.

3.52 Capital embodied in the means of production and represented by Management of the production unit.

3.53 State representing interests of the community as a whole, including the consumer interests.

The roles of Labor, Capital and State in relation to productivity are comparable to the roles of tiller, soil and weather in relation to harvest. These roles are closely interdependent and equally vital. In the circumstances, we may proceed on the hypothesis that by and large these partners are entitled to equal shares in the gains of productivity; but that the shares will have to be received in forms, which are considered desirable from the standpoint of development.

Although no hard and fast rule can be laid down, as a general principle, in the context of our environment, it may be accepted that labor and capital should receive up to 50% of their shares of productivity gains in cash and the balance in kind. Suitable weightage may be given to the ‘kinds’ according to their importance for national development; and additional weightage should also be offered when a part or whole of the cash share is accepted by labor or capital in kind. The weightage component itself would be debited to the share of state in productivity gains. On the other hand if labor or capital is unable to produce suitable programs for fully utilizing their shares due in ‘kind’, any balance so left over should be taken over by the state at par or discount and the recipients given the equivalent value in long-term convertible or non-convertible Government paper.

3.7 The selection of forms in disbursing productivity gains and determination of weightage for individual forms will vary from time to time depending on the development priorities of the situation, prevailing standards of living and the prevailing attitudes and perspectives. The overriding consideration would be to obtain the largest volume of net overall gain from productivity for capital formation and nation building activities. However, in dealing with individual cases, the approach should be pragmatic and reasonably flexible, so as to keep in step with local initiative and application for development. This would greatly assist in the rapid development of several ‘living examples of success’ which would inspire and guide others to follow suit.

3.8 The foregoing approach is intended to stream-line the national effort for rapid industrialization, with the full play of individual initiative and thrift, and with the maximum measure of decentralization. It seeks to create a climate where the individual may appreciate the close interdependence of his own interest and that of the community, accept the discipline of national priorities, acquire a taste for self-betterment, gain experience in taking responsibility and strive enthusiastically to take himself and the community forward. This outline of this approach, as finally adopted, should be incorporated in a set of Directive Principles, which should govern the development of incentive schemes for individual production units, and provide the basis for reciprocal responsibility of state, Management and Labor in respect of productivity.

Points for consideration

1. In our effort for rapid industrialization, we are seriously pressed for capital, particularly foreign exchange. Productivity can offer substantial relief in this direction, with the added advantage of saving in time and trained manpower. We must, therefore, carry out a survey of the potential capital gains through productivity, which may be utilized to reduce the capital estimates for new industry in the Fourth Five Year Plan, or to enlarge the scope of the plan itself. The promise of capital gains would be particularly attractive in the vital machine building and other engineering industry, if the vast capital resources of Public Sector Undertakings, Railway Workshops and Ordinance Factories can be utilized at optimum productivity.

2. The following or any other suitable method may be adopted in estimating the capital gains, reckoned at the existing level of productivity at which the Fourth Plan estimates would be normally based:

C - Present day value of the existing capital.
Ta - Turnover in unit time at the present level of productivity.
To - Turnover in unit time at the estimated optimum level of productivity.
Cg- Capital gain (reckoned at the present level of productivity) if productivity of the existing capital reaches the optimum level

Cg = C x (To – Ta)/ Ta

Thus, if a production unit costing Rs. 100,000 at present day value is yielding an annual turnover of Rs. 40,000 whereas at optimum productivity level its estimated annual turnover would be Rs. 100,000, then a successful effort to reach the optimum level of productivity would result in a capital gain of Rs. 150,000 ( 100,000 x 100,000 – 40,000)/40,000. Apart from this immediate gain, the achievement of optimum level of productivity would be projected in the utilization of similar capital that may be added in future; and the additional capital estimate would be only 40% of what it would have been at the prevailing level of productivity.

3. In order to reach the optimum level of productivity, the following steps are usually necessary:

3.1 Rationalization of the administrative set-up.
3.2 Measurement of productivity through scientific cost yard-sticks.
3.3 Incentives calculated to strengthen the critical factors in production.
3.4 Improvement in industrial relations in order to cultivate a sense of partnership and consciousness of the individual ‘stake’ in the enterprise.
3.5 Review of the product designs and specifications.
3.6 Close specialized attention to specifications, procurement and utilization of capital assets and materials; and provision of the necessary marginal equipment to ensure optimum productivity of the primary factors of productions.

The investment in the aforesaid factors should be linked to the estimated value of the program of capital gains, so that a correct perspective is maintained in evaluation and vital productivity measures are not delayed or handicapped through secondary considerations of procedure. It would be a great asset for the productivity movement, if an expert body is created to exercise productivity pre-audit leading to productivity measures and productivity post-audit to evaluate the results of the measures adopted vis-à-vis the original estimates.

4. The design of industrial incentives should be such that the most powerful impulse for productivity comes from labor and there should exist the machinery for labor to assert itself at all levels, including the highest level, in the course of productivity, vis-à-vis both management and the state. If labor realize that productivity is the natural fountain to satisfy their needs and they have a clear conception of their share in productivity, then for any one of their needs, they would not have to bargain in the normal way. Their correct line of approach would then be to propose a productivity program, which would give them an adequate share to satisfy their legitimate needs.

4. ROLE OF THE STATE IN PRODUCTIVITY

4.1 As guardian of the community as a whole, the state has a vital stake in productivity, since productivity is the most dependable source to feed dynamic industrial development and essential nation building activities. However, successful development of productivity itself depends in no small measure upon the State’s policy in the industrial sphere and how that policy is implemented in practice. This is particularly so in our economy, which is centrally planned and controlled. It is, therefore, essential to examine ways and means whereby the State, with due regard to national objectives and principles, can help to stimulate interest in productivity and lend support to a productivity movement in the country.

4.2 The state apparatus that we inherited at the time of independence was not designed to serve the ends of dynamic development. Its primary purpose was to maintain the colonial status quo and, accordingly, it was characterized by a system of checks and restraints calculated to ‘contain’ rather than ‘cultivate’ human initiative and zeal for creative work. Much has since been done by way of reform but even now, at more than one point, inertia of old practices and traditions contradicts the spirit of development and causes despondency and frustration at the work level. As such, the most valuable contribution that the State can make towards the cause of productivity is to re-orient and streamline, with a vigorous productivity bias, the organizational set-up and procedures of its organs dealing with matters pertaining to industrial development. This contribution would go a long way in building up industrial morale, particularly in the public sector, where the State exercises a direct control.

4.3 The most effective method of re-orienting the operating machinery of the State is to infuse the spirit of productivity in the agencies to which that machinery is ultimately accountable: Parliament, Planning, Commission, Finance, and Audit, Press and organized Labor and Industry. Productivity consciousness is growing in these agencies but it has not yet sufficiently advanced, and instances continue to occur when, with the best of intentions, pressure gets applied at the wrong point and consequently effort gets misdirected. In the circumstances, there is need for a more organized and vigorous effort to ensure that the meaning and practical implications of productivity are properly grasped in the aforesaid agencies and they are provided with authentic productivity know-how and data, which can be directly applied in their respective jurisdictions.

In this manner when these agencies engage themselves in evaluating development schemes and operation results in terms of scientific productivity yardsticks, possibility of any ‘shadow’ passing for ‘substance’ would be greatly eliminated: and the state apparatus as a whole would respond, as an examinee responds to the syllabus of the examination, in re-aligning itself for the efficient discharge of development tasks, which the state is now called upon to undertake. The same apparatus would then become an effective instrument for translating national objectives in to individual tasks and for generating and co-ordinating the development effort necessary for achieving the objectives.

POINTS FOR CONSIDERATION
(Section IV)

1. A forum may be set up with the specific purpose of providing mediums for induction, instruction and exchange of ideas relating to the fundamental aspects of productivity for the benefit of Ministers, Parliamentarians, leaders from Press, Organized, Labor, Organized Industry and top ranking State Officials. The forum should be assisted by a body of specialists, who would process the induction and instructional material with due regard to our own environment, and would undertake special studies and investigations required by the forum.

As a matter of high priority, the forum should evolve a sound ideological basis for productivity which should conform to our development objectives and principles and which should command unqualified support in the country. This ideological basis should be expressed in the form of Directive Principles.
Thereafter, in terms of the directive principles, self-contained papers should be prepared outlining the basis approach that the aforesaid controlling agencies may adopt towards productivity in their respective spheres. Supplementary to the above papers, the forum should process basis data and operating techniques, which these agencies could employ in practices.

In this manner, a sound and comprehensive frame work would be created that would effectively direct and co-ordinate productivity effort in the country.

2. During the first three Five year plans, bulk of investment has been in state undertakings and this pattern of investment will continue in future also. The invested capital must yield adequate returns to feed further industrial development and nation building activities; and this aspect places a heavy responsibility on the State with regard to the productivity of these undertakings. The following measures calculated to step up the productivity of State undertakings may be considered:

2.1 Introduction of all-in performance budgets for individual production units including the departmental undertakings such as railway workshops.
2.2 Separation of cadres for individual production units up to the highest level practicable, to give each unit a distinct personality.
2.3 Deliberate policy to grant autonomy to a production unit to any extent in proportion to its proved capacity to manage its affairs for the objectives laid down for the unit.
2.4 Deliberate policy to introduce effective participation of all the staff in a production unit in the operation and development of the unit.
2.5 Deliberate policy to fill the highest positions by promotion from within and to encourage and assist deserving individuals from all ranks to equip themselves for higher responsibilities without any ceiling.
2.6 Insistence upon scientific productivity yardstick in terms of which the performance of the individual, section and the whole unit may be tangibly evaluated and introduction of rational incentives to ensure a high standard of performance.
2.7 Introduction of the maximum measure of internal competition for like units through ‘considered’ mechanisms calculated to substitute the natural mechanisms of the market.
2.8 Deliberate policy to closely monitor the utilization of capital assets and materials through specialist personnel of the right caliber. As a corollary, deliberate policy to train adequate number of specialists for all spheres of production.
2.9 Deliberate policy to evaluate productivity proposals on a sound commercial basis linked to: saving in capital, reduction in unit cost, promise of development, etc. The usual State procedure of examining proposals in the light of precedents should be avoided, as productivity always employs a fresh approach, necessarily demanding a departure from precedents.

3. The state can play an important role in fostering productivity in the private sector through a deliberate policy of taxation relief and preferential treatment in grant of development facilities and material quotas to industrial units, who are progressive in respect of productivity.
This would raise the issue of equitable measurement of productivity in Industry and the machinery that should undertake such measurements. The other considerations would be the forms of relief and preferential treatment, and conditions to be attached thereto.
It would be desirable to set up one or more study Groups duly assisted by a body of specialists to make recommendations with regard to the following:

3.1 Measurement of productivity in different types of industry in the Private Sector.
3.2 Forms and scale of taxation relief and preferential treatment to be given to the industry and the way it should be linked to productivity.
3.3 Conditions to be attached to the aforesaid taxation relief and preferential treatment to make it obligatory on the recipients to fulfill certain development tasks.
3.4 Machinery which whould be entrusted with assessing the eligibility of an industrial unit to receive the aforesaid benefits of taxation relief and professional treatment, as also to evaluate the actual results of the benefits given.

5. ROLE OF MANAGEMENT IN PRODUCTIVITY

5.1 Productivity of an enterprise is the cumulative effect of three productivities: environmental productivity or productivity of economic and social set-up in the country and industrial apparatus employed by the state, management productivity, and operative or labor productivity. Amongst the three, management productivity plays the central role: apart from its direct contribution, it governs labor productivity and influences Environmental productivity.

This position needs to be properly grasped in order that the productivity movement may be steered correctly.

5.2 Direct contribution of management is reflected in important functional areas of the enterprises: selection of line or lines of production and product design for the available and anticipated markets; organizational set-up of the production unit; location of the production unit; credit, purchases and sales policies; and policies with regard to investment, research and development. The aggregate effect of the management’s functional productivity sets the tone as well as the limits for productivity in the operative areas.

As such, it must be ensured, above all, that functional competence of management matches the productivity tasks that management have to perform. Otherwise, there would be serious weakening of morale for productivity down the line.

This underlines the need for utmost care in selections of top management personal for their professional competence, administrative caliber and vision. It also underlines the need for an adequate ‘staff’ organization with the necessary specialist support, to assist the top management and to provide them dependable and objectively proceed date, as a basis for decisions.

5.3 Management’s indirect contribution towards productivity in the operative areas is no less important. It has to fulfill the basis conditions for labor productivity: motivation of labor towards productivity, training them to practise productivity, and giving them a working environment that would spontaneously tap their potential capacity.

The mediums for this contribution are personnel policy and production organization. The personal policy should be objective and dynamic from the standpoint of productivity, but basically human – it should reflect trustee’s genuine interest in the workers for their own sake and not merely for the sake of production results. Similarly, the production organization should be streamlined for a clear line of authority, but it should incorporate sufficient flexibility and decentralization to derive full benefit of constructive contribution from every level in the circuit of production.

Spheres of personnel policy requiring special attention are: conditions of services, recruitment, training, placement, promotion, conditions of work and amenities, joint consultation, incentives and, not the least, redundancy. Similar spheres of the production organization are: work study, production planning and control, maintenance of machinery and plant, tooling and methods development, and cost accounting.

5.4 Management influences environmental productivity through the agency of public opinion. It influences public opinion by convincing the public that the primary objective of the enterprise is service to the community: fair price and good quality of products; guidance and service to the consumer, with due regard to legitimate consumer interests; interest in the health, housing, education and development of workers and their dependents: ancillary gainful occupations for workers family members, particularly women; support for social and cultural life of the community residing in the immediate neighborhood of the enterprise etc.

In this manner, the workers and community connected with the enterprise would begin to identify themselves with the enterprise and press for such facilities as would enable the enterprise to serve them even more effectively. State and public bodies concerned, who are subject to public opinion, would respond and external environment for the enterprise would progressively get streamlined, resulting in higher environmental productivity and, therefore, higher overall productivity of the enterprise.

Points for Consideration
(Section V)

1. In our country, productivity is a pioneering enterprise. It needs industrial pioneers with functional competence and spirit of service to be in top positions and promote productivity with their initiative and dedicated effort. Three type of personnel are principally concerned; a directive group, for which administrative aptitude is required; senior management, which needs to be familiar with the technology of the enterprise as well as able to organize its operations; and senior technical staff whose professional guidance is decisive in the success of the enterprise.

Ways and means must be urgently considered for prospecting, training, grooming and retaining the above categories of personnel.

2. Actual processing of productivity falls on intermediate levels of management and specialists associated with them: industrial engineer, cost accountant, work study staff, jig and tool designers, etc. Direct responsibility for motivating and training labor for productivity also comes on intermediate management, and day by day their task is rendered more difficult due to increasing complexity of the production organization and increasing specialization of production processes and equipment.

As such, even more urgent steps need to be taken to ensure that intermediate management and associated specialist functions, which constitute the backbone of productivity, are provided with the right type of individuals in adequate number. Otherwise, shortage of staff in these vital categories would become a serious bottleneck in development.

Since we have to feed a rapidly developing industry, we shall have to adopt methods of intensive training, duly backed by instructional material and competent instructors, both within the industry as also in technological institutes. The approach in this direction has to be crystallized, considering the requirements of both the staff already in position and the newcomers.

3. The next equally important productivity task is the induction and training of workers. This would apply to both newcomers and the workers already in position. For the latter, the task is to made more difficult in proportion to their age, lack of education, prejudices and incorrect habits that have already been formed; and induction as also instructions would have to be tailored to suit individual requirement. Here again, the requirement would be intensive instruction and critical factors would be: comprehensive test specifications, effective screening machinery, instructional material and competent instructors.

4. For all categories of staff our resources for formal instructions would be very limited compared to the requirements. As such, maximum possible encouragement and facilities should be provided for ‘self betterment’. Details of incentives and facilities for self betterment need to be examined.

5. Fear of displacement and redundancy in the minds of labor is very real handicap in the way of productivity. Management must have a clear and positive policy to allay this fear and enlist unreserved support of labor in productivity. Similarly, there should be an effective machinery for communication and joint consultation, so that labor are correctly informed with regard to management objectives and policy, their doubts and questions are properly answered and their constructive suggestions duly entertained and acted upon.

The ideal objective would be: “to make each industrial unit a harmonious co-operating community, spontaneously working together for a common purpose, which is understood and accepted by all the members”.

6. ROLE OF LABOR IN PRODUCTIVITY

6.1 Ultimately, the main objective of industrial development is to provide more jobs and to increase real wages. This is also the main objective of productivity, which is the vehicle of industrial development. As such, labor is the principal beneficiary from productivity and should be its principal advocate. This, of course, pre-supposes that the gains of productivity will be correctly utilized, and labor will have to do its part of monitoring to ensure that this is actually done.

6.2 In the modern complex industrial structure, a worker, on his own, cannot develop productivity beyond the limits set by his working environment and his skill. To develop productivity further, basic changes in working environment and skill are necessary. These changes are processed by management. The worker can co-operate in these changes being carried out, but he cannot make the changes himself. As such, labor’s stake in productivity would naturally lead to labor’s interest being developed in good management and an external environment that would foster good management.

In the circumstances, externally, labor should press for: acceptance of productivity as the core of industrial policy; fair deal to labor interests in the gains of productivity; and appropriate action by State and management to play their role in productivity effectively, as also to enable labor to do likewise. Internally, labor should motivate its rank and file to accept, learn and practice the latest techniques of productivity in close co-operation and the management and the specialist agencies associated with the management.

6.3 Labor must also cooperate with the State and management to find a practical solution to displacement and temporary redundancy that result from productivity. If labor wants higher wages and expanding employment, then they have to get adjusted to change of position and locality and become more ‘mobility’ minded. The same would apply to shift working. Higher productivity would necessitate multiple shift working, and the proper course of action would be to ask for amenities to make shift working congenial rather than resist multiple shifts.

A satisfactory understanding with regard to job security, mobility and multiple shift working would go a long way in preparing the foundations of productivity.

6.4 In our country, the biggest handicap facing labor in respect of productivity is the lack of suitable machinery at their disposal to educate their rank and file in respect of productivity and train a cadre of well versed productivity specialists from within its own ranks to negotiate on equal terms with management and State officials, as also to make constructive contributions to the administration of productivity.

Accordingly, in national interest the State and management should support proposals for establishing such machinery and labor should generate interest in its ranks to make it a success.

Points for Consideration
(Section VI)

1. The basic problems and tasks facing labor with regard to productivity would be as under:

1.1 An understanding with the State and management with regard to labor’s share in the gains of productivity in cash and kind.
1.2 An understanding with management with regard to job security, mobility, and multiple shift working, as effected through productivity.
1.3 Development of competence within labor’s own ranks to objectively evaluate productivity proposals put forth by management, formulate counter proposals and actively participate, on equal footing with the management, in the actual processing of productivity.
1.4 Appropriate machinery for motivating its rank and file towards productivity and keeping them correctly informed with regard to productivity developments. This machinery should provide a two-way channel so that the reactions of the rank and file can be properly crystallized and put up to the management, and where necessary, to the State.
1.5 An effective machinery to ensure on behalf of labor that the management and the State perform their allotted tasks in respect of productivity, as jointly agreed.

The practical ways and means for tackling the aforesaid problems and tasks have to be initiated, with due regard to the limited resources of labor and the assistance that the State and management should render in this direction in common interest.

2. Labour’s principal handicap in our country is ignorance, which, quite often, makes them resist the right things and support the wrong ones. Their next serious handicap is inadequacy of professional skill, particularly specialized skill. As such, it would be most profitable to plough back a good part of saving in labor time achieved through productivity for purposes of education and instruction, both formal and informal. This would also assist in tiding over the problem of temporary displacement and redundancy.

The aforesaid education and instruction, which would apply to staff already in position, will have to be tailored to suit individual requirements. This would necessitate:

2.1 An efficient screening machinery to guide staff as to the ‘betterment’ courses for which they are most suited, as also the theoretical instruction and training that they would require for the purpose.
2.2 Instructional material in self-contained unit form that the trainees may employ as text for their betterment.
2.3 Cadres of qualified full time and part time instructors who could guide and instruct trainees for betterment.
2.4 Machinery for giving proficiency tests to the trainees.
2.5 Incentives for the teacher / instructor and the trainees to put in their best in reaching the stipulated tests standards.

The aforesaid scheme would start a powerful movement for self betterment which would automatically reorient labor attitude towards productivity and make them zealous.

7. PRODUCTIVITY RESEARCH AND MODEL DEVELOPMENT:

7.1 The concept of productivity is new in our country and our environment – social, economic and technological - is basically different to that in the industrially advanced countries, where this concept has matured. As a result of our colonial background during the crucial period when the technological and organizational pattern of industry was changing fast, we have to reckon with problems arising from lack of industrial tradition, psychological inertia and prejudices, for which no parallels exist in the industrialized countries. Nor can these countries provide us with readymade solutions to our peculiar problems, because the present generation in the industrialized countries has no direct experience of such problems.

7.2 And yet, we cannot afford to be overwhelmed by the problems if we want to accelerate our development. In a new field where there are several influencing factors, mistakes are bound to be made; but what really matters is the total cost of the mistakes and the time that is taken to come to the right path. In our case this aspect becomes all the more crucial, since our resources are meager and we are pressed for time.

We must take advantage of the experience and know-how on productivity that already exists in the industrialized countries, and which those countries are today willing to share with us. This can only be done if we know precisely that we want and how external assistance can help us. We must, therefore, develop suitable machinery to analyze our problems realistically and so process and channelize the data and know-how available from foreign countries that, in combination with our own experience and know-how, it would enable us to employ our limited resources with maximum effect for development.

7.3 Productivity calls for a multi-pronged approach developing individual factors and suitably integrating them for the largest volume effect. In our case, there are serious weaknesses in practically all the factors, and our knowledge of these weaknesses is not adequate or precise. In the ordinary course, this would dilute the effectiveness of the correctives that we apply and introduce the risk of the results expected from productivity not materializing in practice.

Such a situation should not be allowed to develop, as that would give a serious set-back to the productivity effort and even the concept of productivity could go in disrepute. Accordingly, steps have to be taken to ensure that energies and time are not wasted in confusion and contradiction that usually arise when imperfectly developed productivity methods are applied on a relatively large scale in an uncontrolled environment.

7.4 In practical terms, we need a chain of centers for research and development in productivity, which should scientifically study and experiment with the different factors of productivity and perfect the methods to be universalized.

To start with, one such centre should be set up, which should develop as the ‘mother’ centre for bringing into position the aforesaid chain of centers. By its very nature, this centre should be treated as a ‘quality’ project. Its functions would include precise and comprehensive break-up of internal problems, documentation of dependable information / data on the best available practices, processing and selective adoption of foreign practices and equipment, and filling up by independent research and experiment, the gaps that may be left.

7.5 Activities of the aforesaid centre will have to be conducted in planned cycles, with appropriate coordination of requirements at home and developments abroad. It would be a painstaking process, which in order to be successful, would require a well knit team of hand-picked workers, intensive technical support from the best available sources, and comparative freedom of action in the conduct of its activities. It would need to be placed on a special footing so that it may not be handicapped by secondary considerations of the procedure and may function as an autonomous institution, commanding confidence of all the partners in productivity.

7.6 When the aforesaid centre gains sufficient maturity, it should be given the assignments to develop selected enterprises as models combining high productivity with progressive outlook. These assignments should be in the nature of ‘package’ deals so that requisite attention may be given to any factor that may need such attention. These models, which would constitute ‘living example of successes’ would have important possibilities. Argument and controversy with regard to productivity would be terminated and all concerned would concentrate on enlarging the success that has already been achieved. Attention would also get focused on the methods that made high productivity possible, and there would also be the guidance with regard to the development of correct methods and imparting of correct training to the staff.

In short, these models would enable people in our country to ‘taste’ productivity and thereafter strive to feed the taste that they acquire. Accordingly, establishment of the aforesaid centre of productivity research and development, which is the primary instrument for developing these models and propagating the lessons learnt from their development, deserves high priority and full support from the State, Management, labor and not the least, the international agencies associated with our productivity movement.