What is Grievance Management and Why is it Important?

Explore the comprehensive overview of grievance management in organizations, detailing the definition of grievances, their types, causes, and the importance of effective grievance handling procedures. Learn about proactive methods for identifying grievances and the mechanisms in place for resolving employee dissatisfaction, particularly in the context of Indian industries.

Grievance Management: An Overview

Organizations, as integral parts of society, must address employee expectations. Due to diverse social and psychological factors, employees may experience discomfort or dissatisfaction with managerial decisions, practices, or service conditions. This can manifest as complaints from employees against employers, or vice versa. Prompt attention to these grievances and complaints is crucial for smooth organizational functioning.

Defining Grievances

A grievance is essentially an employee’s feeling of personal injustice or dissatisfaction related to their employment. This feeling doesn’t need to be expressed or factually correct to be considered a grievance; even imaginary conditions or incorrect reasoning that cause a feeling of injustice constitute a grievance.

Several definitions highlight this concept:

• Dale Yader: A written complaint from an employee claiming unfair treatment.
• Keith Davis: Any real or imagined feeling of personal injustice an employee has regarding their employment.
• Michael J. Jucius: Any discontent or dissatisfaction, expressed or not, whether or not connected to the company, that an employee perceives as unfair, unjust, or inequitable.
• Flippo: A more formal complaint, valid or ridiculous, stemming from company operations or policy, often involving the interpretation or application of a labor contract.
• International Labour Organisation (ILO): A complaint from one or more workers concerning wages, allowances, working conditions, and the interpretation of service stipulations (e.g., overtime, leave, transfer, promotion, seniority, job assignment, termination).
• National Commission on Labour (NCL): Complaints affecting one or more individual workers regarding wage payments, overtime, leave, transfer, promotion, seniority, work assignment, and discharges.

In essence, a grievance, with its narrower focus on contract or award interpretation, often leads to unhappiness, discontent, low morale, inefficiency, low productivity, and absenteeism.

Meaning and Definitions in Detail

It’s rare to find a company without employee grievances, which can be real or imaginary, valid or invalid, genuine or false. Grievances foster unhappiness, discontent, indifference, low morale, and frustration, ultimately impacting employee concentration, efficiency, and productivity.

Many industrial disputes, even those with severe consequences, stem from minor grievances. Amicable and timely settlement of these can prevent numerous disputes, underscoring the importance of an effective grievance procedure for corporate managers.

“Grievance” broadly refers to any employee discontent or dissatisfaction, expressed or not, valid or not, arising from anything connected to the company that the employee perceives as unfair, unjust, or inequitable.

• Keith Davis: Defines it as “any real or imagined feeling of personal injustice which an employee has concerning his employment relationship.”
• Pigors and Myers: Distinguish between dissatisfaction (anything disturbing an employee), complaint (spoken or written dissatisfaction to a supervisor or shop steward), and grievance (a complaint that has been ignored, overridden, or dismissed without due consideration).
• Prof. Flippo: States that a complaint becomes a grievance when an employee feels an injustice has occurred. If ignored, dissatisfaction grows into a grievance, which is always expressed (verbally or in writing) and more formal than a complaint. It can be valid or ridiculous and must relate to company operations or policy, often involving labor contract interpretation.

Ultimately, a grievance signifies an employee’s feeling that something unfavorable has happened or is imminent, leading to a sense of unfairness, injustice, or inequity. Examples include long work hours, unfulfilled service terms, unfair promotion treatment, or poor working facilities.

Concept of Grievance Management

Grievances naturally arise from human interaction, both within and outside organizations. In a corporate setting, employees may have grievances against employers, and vice versa. A grievance signifies dissatisfaction with employment-related issues, and its expression constitutes a grievance.

The National Commission on Labour (India) considers complaints from one or more individual workers concerning wage payments, overtime, leave, transfer, promotion, seniority, work assignment, and discharges as grievances.

Based on these definitions, key takeaways include:

1. A grievance is an employee’s feeling of injustice.
2. This feeling can be valid or untrue and may stem from work-related or organizational issues.

Unaddressed grievances lead to frustration, discontent, indifference, poor morale, and low productivity, potentially causing turmoil within the organization.

Nature of Grievance Management

Grievances are indicators of workplace conflicts and require prompt and efficient handling. A manager’s ability to deal with grievances reflects their effectiveness in managing subordinates and building a satisfied workforce. Understanding the nature of grievances is crucial.

i. Expressed or Implied:

• Expressed grievances are easier to identify, manifesting as gossiping, jealousy, criticism, argumentation, increased labor turnover, carelessness, untidy housekeeping, or poor workmanship.
• Implied grievances are indicated by indifference, day-dreaming, absenteeism, and tardiness. These are often more serious as their potential impact is unknown. Executives must develop sensitivity to anticipate grievances, even subtle ones like casual remarks about discomfort or disliked assignments. Personnel departments can assist by training supervisors in observation techniques and utilizing attitude surveys and statistical analyses of turnover, complaints, transfers, and suggestions.

ii. Valid, Legitimate, Rational, or Untrue, Irrational, Ludicrous:

Management cannot simply dismiss a grievance as irrational or untrue; all grievances demand attention. A significant portion of human behavior is irrational, often due to distorted perceptions. Emotional grievances, driven by sentiments like love, hatred, resentment, anger, envy, or fear, misconceptions, and lack of critical thinking, are particularly challenging.

Broadly defining “grievance” helps managers avoid overlooking complaints, even those not yet formally presented (e.g., casual remarks or grumbling). Opinion surveys, group meetings, periodical interviews, and collective bargaining sessions are valuable tools for gathering information about employee dissatisfaction before it escalates into a formal grievance.

Forms of Grievances

Grievances can take three primary forms:

1. Factual: Arise when legitimate employee needs are unmet (e.g., agreed-upon wage hike not implemented).
2. Imaginary: Occur due to an employee’s wrong perception, attitude, or misinformation. Management is still responsible for addressing these, even if not at fault.
3. Disguised: Employees may experience dissatisfaction for unknown reasons, perhaps due to external pressures (family, friends). Unequal treatment, such as a new recruit receiving a new table and cupboard while others have not, can also lead to disguised grievances.

Identification of Grievance: 5 Proactive Methods

A proactive approach to grievance redressal focuses on preventing grievances rather than just reacting to them. This means addressing the root causes to prevent their emergence. Reactive approaches only resolve the immediate grievance, leaving the underlying cause to persist.

Here are five proactive methods for identifying grievances:

1. Exit Interview: Information from departing employees about working conditions is often more credible than that from current workers.
2. Gripe Box System: Allows employees to submit anonymous complaints without fear of victimization, especially useful when trust between employees and supervisors is low.
3. Opinion Survey: Morale, attitude, job satisfaction, or comprehensive surveys provide vital insights into negative organizational aspects. Conducted by external parties with anonymity, the information gathered is likely reliable.
4. Meetings: Group meetings, periodical interviews, collective bargaining sessions, and informal gatherings can be used to gather grievance-related information.
5. Open-Door Policy: Encourages upward communication by allowing any employee to lodge a complaint or grievance with a designated manager.

Causes of Grievances in Industrial Organizations

Efficiently tackling grievances requires identifying and analyzing their causes. Genuine grievances necessitate immediate corrective action. Grievances stemming from imagination or a disturbed state of mind require explanation and clarification. Diagnosing causes is paramount before addressing grievances.

When subordinates don’t express grievances, managers must detect potential issues and their causes, which may be indicated by high labor turnover, absenteeism, and poor work quality. Ignoring these causes will exacerbate problems.

Grievances typically arise from daily working relationships, often as protests against management actions or omissions that employees or trade unions perceive as violating worker rights. Common issues include discipline and dismissal, wage and fringe benefit payments, working hours, overtime, time-off, promotions, demotions, transfers, seniority rights, job classification, work rules, and safety and health obligations. Unresolved grievances can embitter working relationships and lead to industrial strife.

In summary, the causes of grievances in industrial organizations include:

(i) Grievances Resulting from Personal Maladjustment:

(a) Over-ambition

(b) Excessive self-esteem

(c) Impractical attitude to life

(ii) Grievances Arising from Management Policy:

(a) Wage payment

(b) Job rates

(c) Leave and overtime

(d) Seniority and promotion

(e) Role ambiguity

(f) Disciplinary action

(g) Absence of employee development plan

(h) Transfer

(iii) Grievances Resulting from Working Conditions:

(a) Strained employer-employee relationship

(b) Unfavorable physical conditions (e.g., excessive heat, low temperature, humidity)

(c) Tight production standards

(d) Non-availability of proper tools, machines, and equipment

(e) Changes in schedules or procedures

(f) Mismatch between the job and the worker

Grievance Handling Procedures: A 4-Step Process

A grievance handling machinery outlines the process for filing and resolving grievances through various hierarchical steps. Every organization needs a permanent procedure, though variations exist based on organizational policies, decision-making structures, and size (larger organizations typically have more formal, multi-step procedures).

General principles for effective grievance administration include:

1. Prompt adjustment of grievances.
2. Easy-to-use and well-understood procedures and forms for employees and supervisors.
3. Direct and timely appeal avenues for rulings from immediate supervision.

According to T.O. Armstrong, a well-designed grievance procedure provides:

1. A channel for aggrieved employees to present their grievances.
2. A systematic handling process for every grievance.
3. A method for employees to release dissatisfaction with their job, working conditions, or management.
4. A mechanism to ensure prompt grievance handling.

Grievance procedure details vary due to organizational size, union strength, industrial traditions, practices, and cost factors.

The most common grievance procedure involves four steps:

1st Step:

The employee presents their grievance to their immediate supervisor. In unionized organizations, a union representative may join. Most grievances are settled here. However, policy-related grievances may necessitate moving to the next step.

2nd Step:

If dissatisfied with the first step’s decision or lack of response, the employee (alone or with a departmental representative) presents the grievance to the designated head of department. A fixed time should be allotted for this. The departmental head must respond within three days, documenting reasons for any delay.

3rd Step:

If the departmental head’s decision is unsatisfactory, the employee can request forwarding the grievance to the Grievance Committee. The committee makes recommendations to the manager within seven days, documenting reasons for delays. Unanimous recommendations, member views, and relevant papers are then presented to the manager for a final decision. The personnel officer communicates the management’s final decision to the employee within three days of receiving the committee’s recommendations.

4th Step:

If the management’s decision is not communicated promptly or is unsatisfactory, the employee can appeal for revision. They can bring a union official to facilitate discussions. Management must communicate its decision within a week of receiving the revised petition.

5th Step (Voluntary Arbitration):

If no agreement is reached, the union and management can refer the grievance to voluntary arbitration within a week of the employee receiving the management’s decision.

Formal conciliation machinery should only intervene after all steps of the model grievance procedure are exhausted. A grievance becomes a dispute only when the top management’s final decision is unacceptable to the employee.

Special procedures apply to grievances arising from employee discharge or dismissal. Such employees have the right to appeal to the dismissing authority or a superior authority designated by management within a week of the dismissal date.

Indian industries currently use either the Model Grievance Procedure or modified versions tailored to their needs. These procedures are generally voluntary, as is the constitution of the Grievance Committee.

Mechanism for Handling Grievance Management

Every organization needs a grievance handling mechanism, typically a multi-step hierarchy. The number of steps varies with organization size (e.g., small organizations may have two, large ones up to ten). The first and last steps are generally consistent across organizations. While not essential, a labor union is an important factor in establishing and operating a grievance procedure.

Grievances are first reported to the frontline supervisor, who is the initial point of contact. In unionized environments, a union representative may be present. This step is vital for preserving the supervisor’s authority. However, supervisors cannot resolve all grievances, especially those involving policy or those they fail to redress.

Therefore, a second step is provided, often involving the personnel officer or a middle-level line executive. If the concern is unionized, a higher-ranking union official may join. Injecting the personnel office into the process is important.

Grievance Procedure: Features and Benefits

Desirable Features of a Grievance Procedure:

• Conformity with Existing Legislation: The procedure should complement existing statutory provisions and, where possible, utilize established legal machinery.
• Acceptability: The procedure must be accepted by all, ensuring fair play and justice for workers, reasonable exercise of managerial authority, and adequate union participation.
• Simplicity: It should be easily understood by all employees, with minimal steps and clear channels for handling grievances. Information about the procedure should be widely disseminated.
• Promptness: Grievances should be settled quickly (“justice delayed is justice denied”). This can be achieved by:
  • Settling grievances at the lowest possible level.
  • Limiting matters to no more than two levels.
  • Referring different grievance types to appropriate authorities (e.g., personnel relationship grievances to immediate line management, then to a grievance committee; other grievances to designated management, then committee, then top management).
  • Strictly adhering to fixed time limits at each step.
• Training: Supervisors and union representatives require training in grievance handling for effective procedure functioning.
• Follow-up: The personnel department should periodically review the procedure’s effectiveness and implement necessary structural changes.

Benefits of a Grievance Procedure:

• Transparency: Brings grievances to light, allowing management to address them.
• Prevention of Escalation: Helps resolve grievances before they become serious disputes.
• Emotional Release: Provides a formalized outlet for employee dissatisfaction, fostering a sense of emotional security even if not directly used.
• Work Culture Establishment: Interprets problems, guiding employee responses to established policies.
• Checks on Arbitrary Action: Managers become more careful in decision-making, knowing their actions are subject to challenge and review.

Grievance Management in Indian Industries

In India, the Industrial Employments (Standing Orders) Act, 1946; the Factories Act, 1948; and the Industrial Disputes Act, 1947, indirectly address industrial employee grievances. However, their effectiveness has been limited.

Beyond these Acts, the Model Grievance Procedure (or modified versions based on the Code of Discipline) used. A study of 12 textile mills in Coimbatore found no systematic, formal grievance procedure, instead observing informal, traditional processes. Some large units lacked any defined procedure.

Most Indian organizations lack systematic grievance record-keeping. Union representatives play a significant role in grievance settlement where a single majority union exists. Labor officers or welfare officers often handle grievances in their respective organizations. Works Committees (under the Industrial Disputes Act, 1947) also play a role, albeit less significant. Most grievances in Indian industries relate to wages and allied issues. The number of grievance handling levels varies from two to six.

Suggestions for grievance procedure stages:

• Small organizations (under 500 employees): 3 stages.
• Medium-sized units (501 to 2,000 employees): 5 stages.
• Larger organizations: 6 stages.

A formal grievance handling procedure is crucial for redressing employee grievances, boosting morale, increasing productivity, and ultimately contributing to organizational growth.

Settlement of Grievances in Indian Industry

Grievance settlement has received inadequate legislative attention in India. Existing enactments that indirectly address individual grievances include the Industrial Employment (Standing Orders) Act, 1946; the Factories Act, 1948; and the Industrial Disputes Act, 1947.

The Industrial Employment Act mandates Standing Orders for establishments with 100+ workers, including provisions for redressal against unfair treatment or wrongful exactions. Section 49 of the Factories Act requires Welfare Officers in factories with 500+ workers, who generally tasked with handling complaints and grievances. Section 2-A of the Industrial Disputes Act (1965 amendment) broadens “industrial dispute” to include individual worker differences concerning discharge, dismissal, retrenchment, or termination, allowing such grievances to pass through the Act’s settlement machinery.

However, none of these Acts provide a specific procedure for employers to handle day-to-day worker grievances. This often leads to accumulated discontent, culminating in indiscipline and strikes. To address this, the unenforced Industrial Disputes (Amendment) Act, 1982, provides for Grievance Settlement Authorities and the referral of certain individual disputes to them.

Section 9-C of the Amended Act stipulates:

(i) Employers in industrial establishments with 50+ workmen must establish a Grievance Settlement Authority for individual worker disputes.

(ii) Workman or their trade union can refer such disputes to this Authority for settlement.

(iii) The Authority must follow prescribed procedures and complete proceedings within a specified period.

(iv) No reference under Chapter III (Industrial Disputes Act) can made unless the dispute has been referred to the Grievance Settlement Authority and its decision is unacceptable to any party.

Recommendations of the National Commission on Labor:

The National Commission on Labor advocates for statutory backing for an effective, simple, flexible, less cumbersome, and time-bound grievance procedure, similar to the existing Model Grievance Procedure. It should have a limited number of steps (e.g., supervisor, departmental head, then a “Grievance Committee” with management and union representatives) and apply to units with over 100 workers.

The Industrial Disputes (Amendment) Act, 1982 (Section 9C), though not yet in force, mandates a time-bound grievance redressal procedure for establishments with 100+ workmen.

An effective grievance procedure, whether formal or informal, statutory or voluntary, must satisfy individual workers, allow managers reasonable authority, and provide unions an opportunity to participate (as they are accountable to members). It should be simple, with at least one appeal provision, and a limited number of steps (ideally no more than four, even in large units). A typical procedure involves: (a) immediate supervisor, (b) departmental head/manager, and (c) a bipartite grievance committee (management and recognized union). If no unanimous decision reached, the unsettled grievance may be referred to an arbitrator.