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A Cooperative Jute Mill In Assam Management Essay

3909 words (16 pages) Essay in Management

5/12/16 Management Reference this

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Assam Co-operative Jute Mills ltd. being in the cooperative is unique of its kind in the country. Though it has a glorious history it plunged into oblivion for running around one and a half decade due to its internal crisis. But with pressure from the public and the employees it was re-opened and since then it never looked back. Obviously the reasons behind the organization’s revival and sustenance are worth exploring. The study established the existence of Employee Commitment in the organization, which in turn was found to be related to organizational performance. The study also explored and revealed the reasons behind the lack of performance during certain periods.

Key words: employee commitment, work involvement, organizational performance

Introduction

The Assam Co-operative Jute Mills Ltd. is situated on the south bank of the river Brahmaputra at Silghat in the Nagaon district of Assam. This is the only Jute Mill in the country in Co-operative Sector. It was registered in the year 1959 under the Assam Co-operative Societies Act and after much struggle it was commissioned in the year 1970 with the initial investment of around Rs. 150 lakhs. But the Mill after running for about 14 years in rough weather had to close down during March 1984 for about 2 years due to acute financial crisis and other infrastructural problems.

Again, the Mill was re-opened on 1st January 1986 under public demand with the financial assistance from the Central Government as well as State Government. However, in spite of sufficient government assistance, financial depression developed again due to imbalance in the income and the expenditure. The mill experienced teething operational problems due to huge accumulation of unsettled liabilities, shortage of working capital etc. But, after continuous struggle and efforts, the Mill started improving its economy from the year 1992-93 and thereafter making progressive net profits. Now, the Mill is completely free from all loans and liabilities and achieved an economically viable position. The Mill is implementing the scheme for renovation/modernization of its plant and machinery from its own resources. Today it provides direct employment to about 800 men. The mill has institutionalized corporate governance and discipline in all aspects of its functioning. During the year 2007-08 the Mill achieved the highest ever turnover of Rs. 18.67 Crores and best ever profitability after tax of Rs. 1.83 Crores.

Looking at the above background it ignited the researchers to find out as to what are the reasons that prompted the organization to revive. Why the employees wanted the organization to sustain and above all what made these people to stay in the organization inspite of not being paid highly. The findings could be important learning for replication in other sick organizations and cooperative sector units. Thus the study was carried out with the following objectives.

i. To determine the level of employee commitment in ACJM.

ii. To explore the relationship between “Employee commitment” and the “Organizational performance” in ACJM.

Thus the study did not elaborately take into account other aspects of management.

Method

Sample included all executives and staff, and 50% of workers from each department (12 departments). The response rate of the former was 76% and that of the latter was 78%. Questionnaires and schedules were used to gather the primary data. An extensive study of the available secondary sources of data available in the organization was carried out.

In order to achieve objective one, the following variables and sub-variables were tested and analyzed. Thus, to find out the level of the employee commitment the variables considered were, continuance in the job, work involvement, work commitment, achievement & identification, organizational attachment, leadership and the management style, commitment of the employees towards the organization, mission .objective and the goals, values; job attitude, attitude towards the culture, absenteeism, trust, loyalty, motivation and satisfaction with the working condition.

The variable, Continuance in the job was assessed in terms of other sub -variables like intentions to stay in the organization, intention to leave the organization, scarcity of other alternatives are tested in order to find the continuance commitment of the employees.

Work involvement is another variable which was tested with the help of the sub-variables like satisfaction obtained as a result of authority being given to do the job, job meeting the expectation of the employees, work appreciation by the superiors, enough authority to plan, organize & execute own job.

In order to test the variable work commitment several other sub-variables were tested which include, independence at work or independence of doing the job at employee’s desire, satisfaction on working with superiors, satisfaction with the working condition, satisfaction with the level of their own performance, willingness to do the job , completion of the daily assignments irrespective of the time spent.

The sense of achievement & identification is another important variable which was tested with the help of the sub-variables like contribution to the organization’s overall productivity, willingness to accept organization’s problems as own problems, sense of belongingness.

Organisational attachment is another variable, which can be studied with the sub-variables like willingness to discuss about the organization with out-sliders, friendly/ unfriendly work place atmosphere, as being integral part of the organization in terms of responsibility & performance, emotional attachment/ involvement satisfaction as a part of the organization as a family.

Effectiveness of the leadership and the management style was tested in the study with the help of the sub-variables like satisfaction with authority being given by their leaders to do the job, faith of the employees with the supervisors’ competency, effective communication with the supervisors, leader & seniors, opportunity to participate in decision making, acceptance by the superiors in the workplace.

In order to assess the commitment of the employees in terms of organizations, mission .objective and the goals, the sub-variables like obligation, compliance to the organization’s, mission, objective & goals, commitment to the values of the organization & willingness to grow with the growth of the organization were analyzed.

The variable job attitude was assessed with the help of the sub-variables like attitude towards the present remuneration, attitude towards the punctuality in the work places, and willingness to put extra effort as and when required.

Attitude towards the culture of the organization was assessed with the help of the sub-variables culture like co-operation in the workplace.

Absenteeism is another factor, which measures the level of employee commitment. This was assessed with the help of the sub-variables like frequency of absenteeism in the work place, attendance in the teamwork etc.

Trust is an important variable to be tested in order to assess the level of commitment of the employees. The other sub-variables of the variable includes, the trust in other members and trust in the seniors were assessed.

Loyalty of the employees is an important variable to measure the employee commitment. In order to test this variable the sub-variables like trust of the management on the employees regarding retention in the job or whether the employees feel like violating this trust was seen..

Motivation of the employees is another variable that was assessed to find the commitment level. The motivation level was tested with the help of the sub-variables like remuneration as a motivational factor for the employees or non-monetary factors like work appreciation.

Satisfaction with the working condition in the organization was tested with sub-variables like the employee satisfaction with the working conditions and absence of work stress.

Findings and discussion

The study reveals that the majority (66%) of the Executives & Staff and the Workers (86%) are willing to spend the rest of their career in the ACJM, which shows there is a strong commitment in terms of intention to stay in the organization. This reflects the continuance commitment of the employees of the ACJM. It was found that majority of workers mentioned that a slight increase in pay may not motivate them to leave the organization but at the same time responded that money was important. Though majority of the executives and staff disagreed that they stay in the ACJM because of scarcity of available alternatives but it is significant that majority (64%) of workers agreed that they are continuing their job in ACJM as because they do not have available alternatives if they leave the job.

In order to find out the level of ‘work involvement’ of the employees ACJM, an effort was given to find out whether they feel that they have enough authority to do the job, as they desire; whether the job meets their expectation they had from the ACJM; and whether appreciation of work by supervisors make them feel greatly involved. Work independence and authority to do the job or less the interference, more is the satisfaction level among the employees. Though majority of the Executives & Staff and also workers mentioned that they have enough authority to do the job, but the sense of commitment in terms of the work independence seems to be more in the former (88%) than that of the Workers (77%) in ACJM. Majority of the employees both Executives & staff (68%) and a large majority of the Workers (95%) are satisfied with their job as it meets the expectation they had from the organization .This feelings bring the employees a sense of involvement in their job and to the organization in turn which is a determining factor of the level of commitment of the employees. Though majority of the executives & staff feel that they are involved in their work not because of the superiors’ appreciation of the work however, 58 % of the workers feel that their superiors’ appreciation of their work make them feel more involved in their work.

Data was also collected related to work commitment of the respondents like whether the independence at work resulted in work commitment; whether the employees are satisfied with the prevailing working condition; whether they intend to complete the daily assignments irrespective of time spent in the organization. All Executives & Staff feel that they are given independence or they work as they desire hence, are committed to their work. 90% of the workers also feel the same. Majority of the employees are satisfied with the working condition of the ACJM. Majority of the employees in each category agreed that they would complete their daily assignments irrespective of the time spent in the workplace.

The study also showed that all employees had a high level of identification with the organization. Almost all the respondents considered the problems of ACJM as their own. A higher number of executives and staff (83%) and workers (85%) felt that complementing the organization was like complementing them.

Majority felt that ACJM is a friendly place to work. They felt themselves an integral part of the organization and highly responsible for organizational performance (90%). Majority believe that emotional attachment to the organization is important for better organizational performance.

The kind of positive attitude reflected by the respondents led the researcher to explore certain other variables like the leadership and management style, commitment to the mission, objectives and values of the organization, organizational culture, motivational factors etc. Majority of executives and staff (85%) and workers (72%) are satisfied with the leadership and management style. A large majority mentioned that they can communicate effectively with their seniors. A large majority over 90% agreed to being committed to the mission, objectives and values of the organization. All executives and staff, and 84% of workers felt that the organization culture should be based on cooperation and trust. Majority of workers in contrast to the executives and staff felt that quitting the organization would mean violating the trust. Large majority of executives and staff (85%) in contrast to moderate number (53%) felt that remuneration is an important motivational factor. Though majority of both the categories mentioned that appreciation of work is an important motivational factor but at the same time a higher percentage (35%) could not make a comment hinting that perhaps the same may not be practiced often. A good majority is satisfied with the working conditions in ACJM and do not feel the work stress.

By framing several hypothesis, relationship between different variables were explored by performing chi- square tests and finding out the level of significance. These are mentioned below-

Tenure of work was positively related to employee commitment towards the organization.

The job meeting employee expectation is positively related to employee intention to continue working in the organization.

Now that it was established that the employees were committed to a greater extent, the researchers went forward to explore the second objective that is to find out whether this commitment had any relationship with the organizational performance by taking up several hypotheses. Thus the result proved the following as true for ACJM.

There is a relationship between commitments of employees (intention to stay) with employee satisfaction with performance in the organization.

There is a relationship between the commitment in terms of loyalty of an employee and the productivity in the organization.

There exists a relation between commitment in terms of low absenteeism & the organization’s overall performance.

A variety of secondary data pertaining to the average rate of production over the period, employee turnover, absenteeism trend, absence rate, profit earned, sickness rate, accident trend, hands per metric ton, machine capacity utilization and wear & tear, achievement of target etc. were considered. This data belonged to the period 2005-2011.

The Average production in (MT)/day the period 2005-2011 is depicted in fig. 1 below.

Fig 1: Average production in (MT)/day

The data in the above chart clearly show a gradual increase in the production from 2005-06 to 2009-10. However, the production level dropped by 1.09 M.T in the period of 2010-11. That was a subject of significant interest to the researchers because in a situation where the employees are committed, the production of the organization should not decrease as the committed employees put their effort to gain organization’s performance. The decrease in production in the period 2010-11 cannot attribute its cause to the level of the employee commitment. Therefore, there might be some other factors, which hindered the gradual increase in the production despite the commitment of the employees of the ACJM. Thus the researchers tried to find out the other probable causes behind this like, the number of accidents, employee sickness, wear and tear of machines, reluctance of employees, absenteeism, labour turnover, influence of market demand, other external factors etc. These are discussed below.

The Percentage of the Accidents in the Factory from 1999 to 2011is depicted in figure 2.

Fig 2. Percentage of accidents from 1999 to 2011

It is observed that the percentage of accidents have been reduced over the period from 1999 to 2011. Hence, accidents being very less in numbers cannot be the cause behind the decreased production in 2010-2011.

Data pertaining to sick employees for the period 2010-11 is depicted in fig.3

Fig: 3. Rate of sickness (percentage) of over the period of three years

In order to analyze whether the percentage of the sickness of the employees in the ACJM can be a cause of decrease in production, requisite data were collected from the Medical & Health Officer of the Hospital of ACJM. These data show that the number of permanent employees, who were recorded as sick, has increased in the period of 2010-11 from2.22% to 2.51%. More number of the patients was advised to go on leave.

Increase in the number of sickness may be a cause behind lowering the production during that period. It is observed that even if the patient gets recovery from sickness, he may not be able to work efficiently as usual immediately after the recovery as the work is related to handling heavy machineries and the need to stand constantly for long hours while working. However, the rate of sickness is not alarming at present.

Effort was also given to find out whether the wear & tears of machines can be a cause of drop in the production in the period of 2010-11.

It was observed that though the machines and the tools of the ACJM are old and they are carrying out regular preventing maintenance (overhauling, cleaning, etc).The preventing maintenance may not enhance the efficiency of the machinery. Wear and tear is common.

Whereas this may not explain the drop in production in a particular year but definitely it is a critical signal for bad days ahead. This may be the reason for the organization not meeting and targeting a higher level of production.

The researchers also tried to explore whether the employees deliberately were reluctant to enhance the production by utilizing their capability.

Fig. 4. Hands per ton

Fig. 5. Hands per ton 2012 (january to August)

Fig. 4 shows that over the period of 2008-09, 2009-10 & 2010-11, there is a gradual decrease from 38.32 hands per Metric ton in 2008-09 to 37.97 hands per metric ton in 2010-11. In addition, on analysis the 1st quarter of the 2011-12 financial year, it seem that the average has dropped remarkably nearer to the standard set (standard hands per metric ton=35) .which has never been achieved before this period. The gradual decrease in the ‘Hands Per Metric Ton’ indicates that the workers have been putting their effort to enhance the level of production.

Data was also collected to find out whether labour turnover can be a cause of lower production certain period(s).

Fig:6. Employee Turnover rate

The above figures show that labour turnover may not be significant enough to lower the production in the period 2010-11. However, an increase in turnover rate of the executives has to be noted down carefully for future action.

Data was also collected to find out the Rate of absenteeism over the period of 2008-09, 2009-10and 2010-11, so as to ascertain whether this can be a reason for a low level of production in the ACJM during those periods.

Fig .7. Rate of absenteeism

A slight increase in absenteeism rate is observed in 2010-2011. The researchers tried to explore whether accidents and sickness can be the reasons because from the feedback received from the respondents, it could be said that they do not wish to be willingly absent. The rate of accidents may not be the cause, as depicted in figure 2, the rate of accidents is lower during this period. Figure 8 and 9 depicts the rate of absenteeism and the percentage of Employees who were advised by the doctor of ACJM to take leave on account of sickness respectively.

Fig 8: % of absenteeism

Fig:9. % of Employees who were advised by the doctor of ACJM to take leave.

The year 2010-11 has recorded the highest rate of absenteeism. Analysis was done by taking the month wise data of the period 2010-11 in relation to the percentage of employees who fell sick and the rate absenteeism. The above two figures show that the increase in the percentage of the sick employees increased the rate of absenteeism. These employees are advised to go on leave depending on the nature of sickness.

The researcher also tried to find out whether any other external causes had negative impact on the level of production. Table 1 shows the influence of the market on production due to fluctuation of the demand of the products.

Twine Production @Rs 32/kg

Sack/[email protected] 55kg

July 2010

Restricted

Produced

August 2010

Restricted

Produced

Sept 2010

Minimized

Produced

Oct2010

Restricted

Produced

Nov 2010

Minimized

Produced

Dec 2010

Minimized

Produced

Jan 2011

Restricted

Produced

Feb 2011

Restricted

Produced

March 2011

Minimized

Produced

Table 1: Influence on market demand on production

During the month of July 2010 to March, the production of Twine (sutli) was either restricted or minimized depending on the market demand. In the month of July & August 2010, the Twine production was totally restricted and then minimized in the month of November 2010 & December 2010. Again, the production was restricted in the month of January 2011 and again it is produced in the month of March 2011, in this period the market demand of the twin reduced. While the production management considered it imperative not to produce Twine or to minimize its production. The management had decided to produce the sack/cloth by using that thread instead of making the Twine looking at the selling price of the sack. As the selling price of the Twine was Rs 32/kg & that of sack Rs 53/kg. Hence, ACJM could earn the enhanced profit even if the production level dropped.

Artificial flood due to rain led to production stoppage for 15 hours in August 2010, which though not very significant but brought down the average production.

Conclusion

This study could establish the fact that the revival of this unique organization, a jute mill in the cooperative sector was possible because of the commitment of the employees towards the organization, their work, mission, objectives and values of the organization and their positive attitude towards the organization culture. Nevertheless it can be seen that the leadership styles and the kind of management has an enormous contribution in building up this commitment, providing employee satisfaction at workplace and a good organization culture. A positive relationship between this employee commitment and performance could also be proved by the researchers. However it is heartening that inspite of this high level of employee commitment, the organization is restricting its performance leading to underutilization of the capabilities of their human resources. A threadbare analysis of the case revealed that the organization is still using very old machines and technology which face frequent wear and tear. Hence, its time that ACJM has to take up action to bring in new technology. Perhaps that can help to reduce absenteeism due to sickness. Modernization and restructuring including gearing up the Human Resource department could be useful. The researchers found that the employees are not highly paid. Majority of the executives and staff, and a moderate number of workers agreed that money is an important motivating factor to continue a job in an organization. Further it is observed that majority workers are continuing working in ACJM because lack of other job opportunities in the vicinity. But as executives and staff belong to other places (non-locals in contrast to workers who are locals) lack of adequate remuneration and permanency of the job force them to leave. This is reflected in the turnover rate of this category of employees. Hence, the organization can very well think of some effective remuneration plan for the good performers. ACJM should also try to appreciate their employees more for the good work done. It was good to see that the employees greatly identified themselves with the organization and worked with great zeal. Thus, ACJM can take advantage of this mindset of their people to set an example to others in the cooperative sector through their performance.

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