RESEAERCH PROJECT REPORT

(NMBA-045)
DISSERTATION
ON

COMPARATIVE STUDY ON EMPLOYEE WELFARE IN

PUBLIC AND PRIVATE SECTORS
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR

MBA DEGREE PROGRAMME

OF

DR APJ ABDUL KALAM TECHNICAL UNIVERSITY, LUCKNOW

MASTER OF BUSINESS ADMINISTRATION

(MBA)
UNDER THE SUPERVISION OF

SUBMITTED BY:

MS. JAYA SARASWAT

SHILPI SHARMA

(MBA)
Deptt. of Business Administration

Roll No. 1434070023

MBA-4th Semester

DEPARTMENT OF MANAGEMENT
VIVEKANANDA COLLEGE OF TECHNOLOGY &
MANAGEMENT, ALIGARH

SESSION 2015-16

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DECLARATION
I hereby declare that the following documented project entitled - Comparative Study on

Employee Welfare in Public and Private Sectors is an authentic work done by me.
This report neither full nor in part has ever been submitted for award of any other degree of
either this university or any other university.

Shilpi Sharma

ROLL NO: 1434070023

MBA 4th SEM

Acknowledgement
This project is the part of the MBA Degree. We believe that the project report of this
kind cant be purely one-man-effort and we shall be failing in our duties if we dont say
feeling of thanks of those who spread their thoughts with us and without whom this study
would not have been possible. The first and foremost person I would like to thank my
Supervisor Ms. Jaya Saraswat, for her valuable guidance, encouragement, and generous
help in completion of the Report. This study is completed under the Guidance of Mr. Ran
Vijay Singh (HOD), Department of Business Administration Vivekananda College of
Technology & Management. The completion of this Project Report is also attributed to a
whole lot of individuals who have knowingly or unknowingly contributed in my study.

(Shilpi Sharma )
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TABLE OF CONTENTS
CERTIFICATE
DECLARATION
ACKNOWLEDGEMENT
Chapter 1 Introduction of Employee Welfare

1-42

Chapter - 2 Comparison of Employee Welfare in Public and Private

Sectors

43-61

Chapter 3 Objectives of the Study

62-63

Chapter -4 Research Methodology

64-65

Chapter 5 Data Analysis and Interpretation

66-83

Chapter - 6 Findings

84-85

Chapter - 7 Conclusions

86-87

Chapter - 8 Limitations

88-89

Chapter 9 Recommendations and Suggestions

90-91

Bibliography

92

Questionnaire

93-97

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CHAPTER-1
INTRODUCTION OF EMPLOYEE
WELFAREMEANING OF EMPLOYEE WELFARE
Employee welfare means the efforts to make life worth living for workmen. Employee
welfare means, such services, facilities and amenities such as canteens, rest and recreation
facilities, arrangement for travel to and for the accommodation of workers employed at a
distance from their home, and such other services, amenities and facilities including social
security measures as contribute to improve the condition under which workers are
employed.
Employee welfare refers to anything that is done for the comfort and improvement of
employees and is provided other than wages or salary. Welfare programs help organizations
to motivate its employees and keep their morale high so as to retain them for longer
duration. Employee welfare refers to promotion of industrial harmony through infrastructure
for health insurance against diseases, accident and unemployment for the employees and
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their families. Welfare includes all those activities by the employers directed toward
providing employees with certain facilities and services.
Welfare includes such activities as private advice on any type of personal Problem;
assistance with problems of heath or sickness; special responsibilities for young People and
elderly and retired staff and the provision of sports and social facilities. An Organization
concerned with these matters since the reputation for their showing Concern helps to
improve the local image of the firm as a good employer and thus assists in recruitment.
Welfare may not directly increase productivity but may add to general feelings of
satisfaction with the firm and cut down labor turnover.

CONCEPT OF EMPLOYEE WELFARE

Employee welfare may be viewed as a total concept, as a social concept and a relative
concept. The total concept is a desirable state of existence involving the physical, mental,
moral and emotional well-being. The social concept of welfare implies, of man, his family
and his community. The term employee welfare means to fare well or to do well. It refers to
physical, mental, emotional well being of an individual.
The relative concept of welfare implies that welfare is relative in time and place. Employee
welfare implies the setting up of minimum desirable standards and the provision of facilities
like health, food, clothing housing, medical allowance, education, insurance, job security,
such as to safeguard his health and protect him against occupational hazards. The worker
should also be equipped with necessary training and a certain level of general education.
The ILO (International Labour Organization) defined, welfare as a term which is
understood to include such services and amenities as may be established in or the vicinity of
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undertaking to perform their work in healthy, congenial surrounding and to provide them
with amenities conductive to good health and high morale.
According to Arthur James Todd, Welfare as anything done for the comfort or
improvement and social of the employees over and above the wages paid, which is not a
necessity of the industry.

According to the oxford dictionary, Employee welfare or labor welfare means the
efforts to make life worth living for workmen

According to committee of labor welfare (1969) - such services, facilities and

amenities as adequate canteen, rest and recreation facilities, sanitary and medical facilities,
arrangements for travel to and from work and for the accommodation of worker employed
at a distance from their homes, and such other services, amenities and facilities, including
social security measure as contribute to improve the conditions under which workers are
employed.

FEATURES OF EMPLOYEE WELFARE

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 Employee welfare includes various facilities, services and amenities provided to the workers
for improving their health, efficiency, economic betterment and social status.
Employee welfare schemes are very flexible and ever changing.
Employers get stable labor force by providing welfare facilities.
Welfare measures are in addition to regular wage and other economic benefits available to
workers due to legal provision and collective bargaining.
Employee welfare measures increases the productivity of the organization and promote
healthy industrial relations.
Employee welfare measures may be introduced by the employer, government and
employees or by any social for charitable agency.
Employee welfare is a comprehensive term including various services, facilities and

amenities provided to employees for their betterment.

The basic purpose in to improve the lot of the working class.
Employee welfare is a dynamic concept.
Employee welfare measures are also known as fringe benefits and services.
Welfare measures may be both voluntary and statutory.

OBJECTIVES OF EMPLOYEE WELFARE

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Im p ro v e
d
e m p lo y e
e lo y a lty

M o tiv
a tio n
e m p lo
yees

In c re a s e p ro d u c tio n le v e l

Im p ro v e in u s tria l re la tio n

O ra n iz a tio n a l im p ro v e m e n t

O ra n iz a tio n a l im p ro v e m e n t

O th e r o b je c tiv e s

O th e r o b je c tiv e s

Increase production level: - One of the primary concerns of employee welfare promotion is
to create happy employees. However, this type of objective has a greater purpose and is not
always due to the benevolence of the employer. Instead, good employers both genuinely
care for their employees and do so because they know that a happy employee is one that
will be productive and do his job correctly.
Improve employee loyalty: - Another reason to promote the well-being of an employee is
that it can improve employee loyalty. In the long run, employees who are taken care of by
their employers are less likely to jump ship and change companies or careers. Even in
situations where it might be possible to make more money with a different company, the
employee who feels accepted and needed by their employer may not even consider other job
offers when they come along.
Organizational Improvement: - Because employee welfare deals specifically with the wellbeing of employees, employee welfare programs adopted by employers are more effective
when the wants and wishes of employees are taken into consideration. In organizations
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where employees are well-cared for and employees are asked to provide suggestions as to
how to better improve the company, employees feel as if they play an important role in the
improvement of the organization.
Improved industrial relation: - Improved the industrial relation among the workers and
achieve industrial peace in also one of the main objective of employee welfare. With the
help of various welfare activities employer try to maintain balance between the workers in
order to achieve the maximum output.
Other objectives: - Other important objective of employee welfare are:

The primary objective of employee welfare is to improve the motivation level of the
employees.

It improves the loyalty and morale of the employees.

It reduces labor turnover and absenteeism.

Welfare measures help to improve the goodwill and public image of the enterprise.

It helps to improve industrial relations and industrial peace.

It helps to improve employee productivity.

HISTORY OF EMPLOYEE WELFARE

The history of employee welfare in India started with the abolition of slavery system in
1833. Based on the recommendation of the international labor conferences in 1870, held in
Berlin, the government of India modified the factories act in 1881. Considering the
suggestions given by International labor organization, which set in the year 1919, the
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government enacted the factories act in 1992, the government of India launched scheme of
labor welfare their ordnance ammunition and other factories in war production, to keep up
the moral of workers and also to increase their productivity.
After his independence the amendment of factories act in 1948, the labor welfare movement
acquired new dimensions for one thing, the massive investments in industry during various
plan increased in number of workmen. It was realized from the beginning that labor welfare
has a positive role in increasing productivity and reducing industrial tensions. At this state
government enacted various legislations, regarding the welfare of the workers. Modern
social welfare and social welfare institutions have undergone three distinct periods of
historical development. In the early and mid nineteenth country, in North America and in
western and central Europe, reformers tinkered with a variety of school insurance schemes,
mainly pension for the aged and certain voluntary or market-based remedies. They also
organized various institutions designed to care for the mentally ill, promote public health,
word of epidemics, expend public education and improve lots of entrepreneurs artisans,
poor and the mechanics. These programmes influenced only fractions of any nations
populations. This was an age of liberals and democratic idealism, and these efforts reflected
the spirit of the age. Between the 1870 and 1920, in the second period, the united states,
together with Grate Britain imperial Germany Sweden, Denmark, Austria and France, had
various social insurance schemes the embraced and hierarchy.

SOCIAL WELFARE AND NINETEENTH CENTAURY LIBERALISM

In the early to mid 19th centaury three nations, Great Britain, the German
speaking state that Otto von Bismarck unified under Prussians hegemony in
1871, and the united state did the most with social welfare. These three nations
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had vigorous public and political histories, large middle classes, considerable
industrial development and laissez- fair market capitalism.
SOCIAL WELFARE IN AN AGE OF HIERARCHY, EFFICIENCY
AND SYSTEM
Between 1870s and 1920s western world was dominated by a new set of ideas
about how to organize human experience. It was an age of science, of
expertise, of hierarchy, of orderly system of nature and of society and
efficiency. How to make society work at peak efficiency was the underline
issue to many European and Americans. Such notions embraced social welfare
and its institutions as well. Many of these changes came from new political
situations as well as world views. In Scandinavia, for example it was farmers,
not the progressive middle classes or the socialist left, that led fight for taxsupported universal pensions in Denmark in 1891 and in Sweden in 1913, after
protracted political struggles. In imperial Germany it was the Iron
Chancellor Bismarck, who pushed for workers pensions on a contributory,
not a tax based, scheme, hoping, to dampen workers enthusiasm for socialism
and revolutions and to make them beholden to conservative Junker classes and
the Prussian states.
THE WELFARE STATE IN DEPRESSION AND WORLD WAR
In the years between the1920s and 1950s notions that government and private
sector could work together were the watchwords of the age. While
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Scandinavian countries had already established fairly comprehensive social

welfare states, the united states took steps towards the modern and embracing
welfare states with the adoption of social securitys through the social security
act of 1935. A large difference between the American and the European system
had to do with the lack in the former of a national health scheme, whether
national health insurance or nationalized medicines. The for this was the
raising power and the prestige of American doctors. In the 20 th century based
on their identifications and experimental science. Social security made
possible old age pension on a tax basis as a supplement to private pension
schemes. Through the AID TO DEPEN-DENT CHILDREN, later aid to
families with dependent children, child welfare became part of the new federal
program of welfare, just as unemployment insurance, disability insurance and
other program came to constitute the American welfare state. In the 1960s the
American welfare state began to expend dramatically in the number of its
client populations.

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SIGNIFICANCE OF EMPLOYEE WELFARE

Employee welfare is in the interest of the employee, the employer and the society as a
whole. Significance of employee welfares are: It helps to improve recruitment .as the job becomes more attractive more efficient employee
can be recruited.
Employee welfare improves the morale and loyalty of workers by making then happy and
satisfied.
It reduces labor turnover and absenteeism thereby building a stable working management
helps to increase employee.
Productivity or efficiently by improving their physical and mental health.
Improvement in material, intellectual and cultural conditions life protects workers form
social evils like drinking. Gambling, prostitution etc.
Employee welfare helps to improve industrial relations and industrial peace.
Welfare measures help to improve the goodwill and public image of the enterprise.
Voluntary efforts for the welfare of worker reduce the threat of further government
intervention.

DUTIES AND ROLE OF EMPLOYEE WELFARE OFFICER

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 To advise and assist the management in providing welfare facilities such as housing
facilities food, social and recreational facilities, education of children and advise on
individual personnel problem.
To bring to the notice of workers their right and liabilities under the standing orders
of the establishments and other rules which grant right to and define the duties of
workers of which are directed to the discipline safety and protection of workers and
establishment..
To advise and assist management in the provision of amenities such as canteen,
shelters for rest, adequate latrine facilities drinking water, sickness and benevolent
scheme payments, pension and provident funds and gratuity payments.
To maintaining harmonious relations between the management and workers.
To promote relations between management and workers which will ensure
productive efficiency as well as working conditions and to help workers to adjust
and adopt themselves to their working environment

To encourage the formation of workers and joint production committees, cooperative societies and safety and welfare Committees and supervise their works.

EMPLOYEE WELFARE IN INDIA

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Compared to other countries, India has much greater need and importance of labor welfare
work. Such a condition is caused by certain deficiencies in Indian labor force that are not
found in its counterpart in other countries. It is these defects of deficiencies that increase the
importance of labor welfare activity in the country. In India there is need to improvement in
employee welfare activities. Briefly, the following are the reasons why labor welfare work
in India assumes greater importance than in other countries.

Lack of strong labor union movement:-In India, even today the workers are no
united into a class. Keeping in view the numbers, labor Union movement is still in

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its infancy. Even in the labor union that does exist, there is a lack of enlightened
leadership, and there is no unity between these unions themselves. In absence of
properly organized labor Union the workers can neither, place their demands
effectively before the employer, nor can they think clearly and systematically of
their own interests. As this is force lacking in India, it is essential that the welfare
of laborers in the country be efficiently looked after by the employers and the
Government.

Lack of proper management policies: - Management policies regarding

employee welfare are also not very much clear in India. This is the main reason
for undesirable condition of employee because unclear management policies
decrease the morale of workers.

Illiteracy: - As compared with other countries, the percentage of educated

workers is very low, most of them being illiterate. Consequently, they are not in a
position to receive advanced industrial training, understand the problems in
industries their own interests and those of nation as a whole. This can prove a
source of harm not only to the workers but also to the country. Hence efficient,
and become responsible citizens of the country.

Problem of absenteeism and migration: - Compared to the workers of other

countries the Indian laborer is more restless and does tendentious towards frequent
migration because life in the town does not provide for his needs, and the
atmosphere in general does not suit him. Also due to inadequate level of wages the
laborer cannot comfortably settle down in one place. This may in turn also give

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rise to Absenteeism. This workers migratory tendency can be curbed by providing

him with adequate facilities and conditions, and this also shows a positive effect
over the absenteeism in the factory.

Low level of health and nutrition: - The Indian worker as compared with his
counterpart in most European countries is unhealthy and ill fed. This shows a
definite affect over the production potential. Hence, he is very great need of
inexpensive nutritive food and good facility in case of hospitalization.

Extreme poverty:

The percentage of people under the poverty line in our

country is comparatively high than other countries. So the standard of living is

very low. An Indian worker is unable to provide a healthy living for his family and
in the case off female workers she is not provide with assistance in case of need.
Hence, the labor welfare has much to do in the country. It must assist them by
providing them maternity benefits, in old age i.e., provident fund, pensions and
gratuity etc.

Lack of training: - As the percentage of trained workers in India is very low, it is

necessary to have training facilities for such a vast labor force.

Lack of healthy recreation: - Healthy recreation is also at a premium in the

country, the efficiency of labor force is diminished by energy being employed in
all kinds of undesirable channels. Hence, it is essential that recreation and
enjoyment of a healthy kind be provided.

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AGENCIES OF EMPLOYEE WELFARE

STtradeGovmn
e
u nio
ni
In dia

C e ntral G ov m

E m p loy e r

Central Government- The central government has made elaborate provisions for the
health, safety and welfare of workers under the factories act-1948, and mines act, 1952
these acts provide for canteens, crches, shelters, rest room, lunch rooms, washing facilities
etc. similar facilities are provided under the plantation labor act, 1951, and motor transport
workers act 1961.

State Governments- Governments in different states and union territories provide

welfare facilities to worker. State governments prescribe rules for the welfare of workers
and ensure compliance with the provisions under various labor laws.

Trade unions in India- Trade unions have done little for the welfare of workers.
Labour unions have contributed their share for the betterment of the employees. Mention
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may be made here of the textile labour association of headband and the railway mens union
and the mazdoor sabha of Kanpur, which have rendered invaluable services in the field of
labour welfare. The welfare activities of the textile labour association. Ahmedabad, are
worth nothing.

Employers- Until recently, employer in India did little for the welfare of workers baring
a few exceptions. The employers in general looked upon welfare work as fruitless and
barren though some of them in deed had done pioneering work. They take interest in
welfare work both voluntarily and under statutory provisions. A TISCO, for example, wellequipped hospital, school, gymnasiums, clubs, canteens, crches and cooperative societies
are being provided.

BENEFITS OF EMPLOYEE WELFARE MEASURES

They provide better physical and mental health to workers and thus promote a
healthy work environment.

Facilities like housing schemes, medical benefits, and education and recreation
facilities for worker's families help in raising their standards of living. This makes
workers to pay more attention towards work and thus increases their productivity.

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Employers get stable labor force by providing welfare facilities. Workers take active

interest in their jobs and work with a feeling of involvement and participation.
Employee welfare measures increase the productivity of organization and promote

healthy industrial relations thereby maintaining industrial peace.

The social evils prevalent among the labors such as substance abuse, etc are reduced

to a greater extent by the welfare policies.

AN OVERALL APPROACH TO EMPLOYEES' WELFARE

Many organizations have created environments and conditions that have appealed to the
emotional, professional, and economic interests of the employees. They use complete
reward and recognition systems via:

Job design

Decision making process

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Pay equity

Performance planning and management systems

Self-direction

Communication

Leadership styles

Professional development

An overall system is open to incorporate anything that influences the employees- to ensure
profitability, even survival, during harsh economic times. Many middle managers have lost
their jobs. People that remain, managers and non-managers alike, have had to demonstrate
their value to their organization to stay employed. Gone is the old style psychological
contract for lifelong employment. As one manager expressed; "Loyalty is dead, we can no
longer afford it." The bad news: While companies have been getting meaner and leaner,
work commitment and personal drive to go all out have been lost. The good news:
Employees have become more resourceful at finding ways to demonstrate and increase their
worth to current prospective employers. Smart employees see themselves as free agents and
are continuously looking for ways to improve their skills, competencies, reputation, and
marketability.
Smart managers recognize the needs of free agents by engaging in the practices that say;
"I'll meet your needs, I expect you to meet mine, let's work together!" Free agents want
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flexibility to move through organizational systems without being locked in to one

department. They want to be recognized and valued for the talents they bring and for result
achieved. They prefer teams in which they can realize a more self-directed environment
than they can in a single job reporting to a supervisor. While rewards are important, so, too,
are responsibility, respect, recognition, and relationships. Moreover, because of their
concern for independence and marketability, they have a critical need to protect their
reputation; they gravitate to assignments that enhance their standing in the eyes of others.
The new currency that managers must use in today's workplace is based on respect. Even
the organizations are known to or intend to downsize, smart managers understand the
importance of respecting people's intelligence and telling it like it is. They work
collaboratively with employees. They make conscious decisions to join forces instead of
subordinating or dominating. As newer systems such as skill-based pay, total-reward
programs, pay-for-performance plans, and open-book management become more main
stream, the challenge for management will be to avoid any suggestion that they are
manipulative or disrespectful. In fact, placing too much emphasis on pay and pay systems
will distract from the intrinsic value of work itself.
True recognition is a whole-person experience. The approach is holistic. It begins with
feelings. Smart managers know they may engage the head, but they must also engage the
heart of every employee. It's the only way to recognize and reward employees in the
workplace of the new millennium.

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VISION, MISSION AND VALUES OF EMPLOYEE WELFARE

ACTICITIES
WELFARE VISION
The purpose of welfare vision is to assist individuals needs and to be the best servicedisabled, veteran -owned, small business providing quality services and resources for small,
medium, and large businesses. Welfare mission is to explore all kind of thing which a
common person wants in his life.

WELFARE MISSION
To provide better life and health to people.
To make the people happy and satisfied.
To develop, implement and support programs and processes which add values to the
company and its employee leading to improvement employee welfare and
empowerment growth and retention while committed to the company its
management and prosperity and its customers, employee and shareholder.
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 To provide solutions of any kind of problems through the well qualified and
experience person.

WELFARE VALUES
Culture makes a difference in social society policy. Political ideologies, religious beliefs,
moral conceptions of the poor and normative perceptions of gender roles are among the
cultural factors that shape welfare states and welfare policies. On the other hand, social
policies may have cultural impacts for instance regarding work ethics, family values, civil
morality and solidarity. Organizations are effectively run by the people working over there.
To improve the productivity, profitability, and image and to retain its crucial ASSETS
(PEOPLE), they have to provide minimum welfare facilities as being provided in the
Factories Act 1948.

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TYPES OF WELFARE SERVICES

I n

E
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t r a m

t r a m

r a l

r a l

Intramural: - Intra-mural activities consist of facilities provided within the factories and
include medical facilities, compensation for accidents, provision of safety measures,
activities relating to improving of employment, and the like. These are provided within the
organization like:

Canteen,

Crche

Uniform

Drinking water

Toilets

Rest shelters

Protective clothing

Recreating facilities

Extramural:- Extra-mural activities cover the services and facilities provided outside the
factory such as housing accommodation, indoor and outdoor recreational facilities,
amusement and sports, educational facilities for adults and children and the like. These are
provided outside the organization, like:

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Housing,

Child welfare,

Leave travel facilities,

Interest free loans,

Workers cooperative stores,

Vocational guidance

Education facilities

Maternity benefits

Transportation

Sports facilities

Holiday homes

Cooperative stores

Fair price shops

Social insurance

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TYPES OF EMPLOYEE WELFARE SCHEMES

Employee welfare programs serve different objectives. The most important objective is to
provide better and healthy life to workers. Secondly welfare benefits are provided in order
to make employee happy and satisfied. Other purpose of benefits is to relieve employees
from exhaustion and improve cultural and living conditions of the employees. As an
employer if you employee anyone (irrespective of time period short or long) you must as
reasonably provide adequate welfare facilities for employees while they are at work.
Welfare facilities are those necessary for the wellbeing of your employees. Organizations
provide welfare benefits to their employees to motive them. Employee welfare schemes can
be divided into two categories:

Statutory schemes
Non- statutory schemes

Statutory welfare schemes: -

Statutory schemes are required by law to be

provided to the employees. These schemes are those required by law and organizations must
be provided in order to meet statutory obligations. Employers are required to made
provisions for Health and safety, first Aid appliances, drinking water, latrines, canteens,
lighting, washing places and changing rooms etc. The most important of such statutory
schemes are health and safety and first aid facilities at workplace. These schemes are

Health and safety at workplace: - Every employer must take practical steps to
provide, safe working environment and safe access to and from working place, a
safe system of work, safe tools, equipment and appliances, protection hazards and
necessary training for employees. Apart from this if an organizations employee five
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or more employees it must have written health and safety policy. Employers have a
duty towards general public as well and must ensure health and safety of visitors.
Employees also have a duty to ensure health and safety at work and must not take
steps which can affect others health and safety.
First Aid facilities at workplace: - As an employer you are required to provide first
aid appliances at the work place. These facilities will depend on, the number of staff,
type of work, size of the working premises and location of staff and location of
working premises. As far as number of staff is concerned it depends on the above
factors but generally there should be one first aider for 50 to 100 employees. Where
hazards are greater there should be one first aider for every 50 employees.
Medical Services: - According to the factory act 1948 (under sec. 45) where the no.
of employees who are employed is less than 500, there must be provided many first
aid boxes at various places by their employees in the factory. According to statutory
rule at least one first aid box must be provided as per the 150 employees and where
the no. of employees who are employed is 500 or more than 500, there must be
provided a dispensary cell by their employers. In this way, the factory is providing
all these medical facilities:Occupational Health Center (O.H.C.):- This center constitutes three person, one female
nurse, one asst. and one senior Doctor.
Company is installed many first aid boxes at various places under a responsible and
trained person so as employees could relief very quickly.
Medical officer visits the plant daily to check the employees who are sick or suffered
any minor injury.

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The main task of OHC is to provide the instant and quick relief to the ailing
employees, so that he can carry on with his work.
If an employee wants to get the treatment outside the factory instead of companys
dispensary cell, he may be allowed for it.
This OHC has all first aid facilities and medicines which are must for the first
condition.
Domiciliary Treatment: - This is very important facility which is being provided by the
company to its employees. Here the employees can have treatment outside the factory and
all the expenses they incur are reimbursed by the company. This amount provided to the
employees vary as per there grates in the organization structure.
Hospitalization Benefits: - This is one another facility which is provided to the employee.
Example for workers it Is Rs. 60,000 per annum for four members. Special accident benefits
schemes are also provided to the employees at Aligarh factory. A person is given 75% wages
while on leave (Under Special Accident Leave).
Ambulance facility: - This facility is very essential for the ailing and injured patient. In
case when a person has to be rushed to the hospital in any critical condition for this purpose
one ambulance is always present in the factory. This ambulance has two people one is driver
and second one is asst. male nurse. This ambulance is also having one oxygen cylinder and
first aid box, so as patient can go to the city hospital with very safety.
Housing: -Under this scheme the central government provides loans and subsidies
for the construction of houses for industrial workers, The committee on labor
welfare stressed the need for state governments acquiring land hear industrial areas

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and renting houses at reason all rates. Fiscal and monetary incentives should be
provided.
Education: - In 1957 the government of India formulated an all India scheme of
workers education. The central board of workers education was constituted to
administer the scheme. The program of workers education operates in three tiers.
a)
b)
c)

Education officers trained at the central place, who in turn.

Train worker teachers all regional level and
The worker teachers conduct classes in various industrial establishments.
Recreation Recreation in the form of music, art, theatre, sports and games can
play an important role in the physical and mental development of employee. The
I.L.O. has urged upon the member countries to take appropriate steps to provide
recreational facilities for the workers in or near the undertaking which they are
employed. Under the plantation labor act 1951, it is obligatory for employers to
provide recreational facilities, excursions, youth clubs and holiday homes can be

provided for employee.

Consumer cooperative stores The national cooperative development board set
up a committee in 1961.The committee suggested that employees should introduce
consumer cooperative stores in their labor welfare program. The Indian labors
conference in 1963 adopted a scheme for setting up consumer cooperative store in
all industrial establishments including plantations and mines employing 300 or more
workers. The employer was required to give assistance in the form of share capital,
working capital, loan, free accommodation and other amenities.
Others statutory facilities: - some other statutory services provided to the workers

are.
Facilities of washing the clothes: - As the facility of washing the clothes also
comes in welfare activities. So in this way company also provides the washing

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facility to their employee is provided a uniform by the company. The color of their
uniform are fixed as per their department. For washing and drying these, company
hired a washer man on a contract base. Every day takes the soiled clothes away and
bring the washes ones the next day (for ensuring that no interruption occurs in this
daily routine the worker have been provided with four pair of uniform). In this way

the personal hygiene of the worker is also take care by the company.
Facility of Locker Room: - Workers are provided with the lockers room. The
lockers room is a part of the washing facilities that are provided to the employees by
the company. Employees can have their personal clothes in the locker room. Every
employee has locker room. This lockers room has two types of codes; one is
permanent serial no. and second one is lockers no. so employees can have their

personal dresses in the lockers with safety.

Facility of Rest Room: - At Aligarh factory, company is arranged the rest rooms for
the employees. The basic purpose of rest room is to provide some rest to employees
(when they dont feel well) and if they want to some rest (if they allowed by the
company).Besides it, those employees who have to work in night can also use the
rest rooms during the period of finishing their night duties.

Non- statutory schemes: -

Such schemes provide a quantifiable value for

individual employees and may be contingent like a pension scheme, sick pay and insurance
cover. Such benefits also include elements which are not strictly remuneration such as
annual holidays. The objectives of such employee benefits policies and practice of an
organization might be, to increase commitment of the staff to the organizations, to provide
for the actual personal needs of the employees such as personal security, financial security,
to demonstrate that organization cares for the needs of its employees, to ensure that a
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competitive compensation package is provide in order to attract and retain highly valuable
staff and to provide a method of remuneration which reduces tax liabilities. The schemes
include:i.

Pension schemes: - Pension has always been an important and valuable element of
remuneration package. The question arises here is why organizations provide
pension schemes for its employees and what are the benefits of providing it. An
employer perceived moral obligation to provide a standard of post retirement living
for employees particularly for those with long service. The logic also extends to
providing pensions arrangements for dependents on a current or retired employee's
death. Similarly a pension scheme demonstrates that employer has a long interest of
employees at heart. Apart from this pension scheme may help organizations in

ii.

retaining and attracting staff.

Personal security: - Personal security includes benefits that enhance employees'
personal and family life security with regard to illness, health, accidents and
redundancy or life insurance. This also include death in service benefits which is
provided as a part of pension scheme or as a separate life assurance cover, such
benefits include a multiple of salary to be paid to employees dependents if he or she
dies before retirement. The range of salary payable ranges from one to four times
and may be dependent on employees' status. Personal accident cover is another form
of personal security which provides compensation if an employee is involved in an

iii.

accident causing serious injury or death.

Financial Assistance:- Another kind of welfare benefits is giving employees some
sort of financial assistance. Company loan schemes either provide sums of money to
be lent interest free or at favorable interest rates to employees. Small sum to be lent

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where there is personal hardship. While larger loans are to be lent for defined
purposes such as house improvements and purchasing car etc. Repayments are made
on regular deductions from salary as agreed by employee and employer. A good
employer provides relocation charges to its staff when they moved from one place to
another. Companies which offer products and services provide discounts to its
employees on such products and services. Another kind of financial assistance is
iv.

payment of fees for any professional course undertaken by employees.

Sports club: - Public and private sector also focused on sport club committee by
which company is consider not only on the mental development of employees also
on physical development. This committee is formed by 14 members. Every
employee may be selected for the member of this committee at any designation by
the work force. This club arranges the various sports games yearly, both indoor and
outdoor games. E.g. Long jump, high jump, badminton, volleyball, table tennis,
chess etc. this club also provides the tours for the employees e.g. picnic tours,
religious tour, educational tour, educational tour etc. yearly. Company also provides
the sweets and gift packets to the employees on the occasion. Recently, one addition
feature has been added to the activity of this club. Company has started given a sum
of rupees one thousand as a reward to the meritorious student of its employees
(student who obtained first division in the class 10 th and 12th ) to motivate them.
Every year an annual function is held in which these student are awarded. For
organize these program company as well as employees of management side are
contributed Rs.4 per month and the workers side contributed Rs.8 per month to the
sport club. The annual contribution is around rupees 90,000.

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v.

Personal protective equipment: - Safety and security of its men and materials is
the prime concern of Heinz. For this purpose the employees are provided with P.P.E.
The equipment provided varies depending upon the nature of job. Extra precaution
has to be taken by those working with boilers, rollers and spray dryers etc. The P.P.E.
provided is safety goggles, helmets, aprons, shoes etc. In this way company ensures
that a safe environment is provided to its employees, so that they are able to carry on
their activities without any interruption.

vi.

Transportation facilities:- The company provides transportation facility to its

employee at very nominal rates. For this purpose its employees which operates in
shifts. The cost incurred in operating these buses comes around 24 lack per annum.
In this manner the company provides easy excess to its employees to the factory
premises from all part of Aligarh city. The buses are hired for this purpose on a
contract based.

vii.

Sundry allowance:- In addition to other facility the staff at Heinz is also provided
with a variety of sundry allowance.

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First aiding allowance

Fire fighting allowance

Heavy vehicle allowance

Cash handling allowance

Sunday cleaning allowance

Field duty allowance

Misc allowance to tanker drivers

viii.

Uniform washing allowance to the drivers

Bank work allowance at city

Opportunities for learning, training and development: - Employees learning

means to develop firms' resource based capability. According to Human Resource
Management principle it is necessary to invest in employees in order to develop
human capital required by firm and to increase its stock of knowledge and skills.
According to Human capital theory the skills and knowledge that an employee has
Which comes from learning and training generates a stock of productive capital.

VARIOUS ACTS OF EMPLOYEE WELFARE

THE FACTORIES ACT, 1948
The first factory act in India was passed in 1881. It was designed primarily to protect
children and to provide for some health and safety measures. It was followed by new
factories act 1891, 1911, 1922 and 1934. The act of 1934 was passed to implement the
recommendations of the royal commission on labor in India and the conventions of the
international organization. The experience of the working of this act revealed a number of
defects and weaknesses which hampered effective administration of the act. Further, the

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provisions of this act regarding safety, health and welfare of workers were also found to be
inadequate and unsatisfactory.
Hence, a new factories act was passed in 1948 and came into force w.e.f 1 April, 1948. The
objective of passing the factories act, 1948 was to consolidate and amend the law regulating
labor in factories. The factories act, 1948 is a piece of legislation covering all aspects
regarding factories namely:

Approval , licensing and registration of factories

The inspecting authorities
Health, safety, welfare working hours, employment of workers
Annual leave and penalties
Various safety measures for workers.

OBJECTIVES OF FACTORY ACT, 1948

First aid boxes or cupboards one for every 150s worker and ambulance facilities if here are
more than 500 workers.

Facilities for storing and drying clothes

Sitting facilities for occasional rest for workers.

Canteens if more than 250 workers are employed.

Crche where more than 30 women are employed.

Welfare officer, wherever more than 500 workers are employee.

Adequate, suitable and clean washing facilities separately for male and female worker

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THE PLANTATION LABOR ACT 1951

A crche, if employing 50 or more women workers.

Recreational facilities for the workers and their children.

A canteen where 150 or more workers are employed.

Housing facilities for every worker and his family residing in the plantation.

Medical aid to workers and their families.

Sickness allowance and maternity allowance subject to any rules.

Framed by the state government.

Appointment of a welfare officer in plantations employing 300 or more workers.

THE MINES ACT 1952

Shelters for taking food and rest, whenever 150 more workers are employed.

A canteen whenever 250 more workers are employed.

First aid boxes and first aid form in mines employing more 150 workers.

Pit head baths equipped with shower baths, sanitary latrines and lockers. Separately for been
and women workers.

Appointment of a welfare officer whenever more than 150 workers are employed.

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THE MOTOR TRANSPORT WORKERS ACT 1961

Canteen of prescribed standards if employing 100 or more workers.

First aid facilities in every transport vehicle.
Prescribed medical facilities at the operating centers.
The prescribed amount of washing allowance to the above mentioned staff.
Uniforms, raincoats to drivers, conductors and time checkers for protection against rain and

cold.
Clean, well-lighted and comfortable rest rooms at every place where motor transport
workers are required to halt all night.

WORKERS COMPENSATION ACT, 1923

The workers compensation act, 1923 is one of the earliest labor welfare and social security
legislation enacted in India. It recognizes the facts that if a workman is a victim of accident
or an occupational disease in course of his employment he needs to be compensated.

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To consider compensation payable by an employer to his workmen in case of an accident as

a measure of relief and social security.

To enable a workmen to get compensation irrespective of his negligence.
It lays down the various amount payable in case of an accident upon the type and extent of
injury.

CHAPTER-2
COMPARISON OF EMPLOYEE WELFARE IN
PUBLIC AND PRIVATE SECTORS

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INTRODUCTION
There has been much debate over whether public sector employees are overpaid or
underpaid, relative to their private sector counterparts, and how to make an "apples-toapples" comparison of the compensation received by each since job functions are oftentimes
quite different. The following seeks to address this issue in light of a new report that
suggests that state and local government workers receive less total compensation than
comparable private-sector workers, and to examine how issues not addressed in the study
might affect those conclusions.
Even if we were to assume that the productivity of public and private sector workers is
equal, or that differences in job security were not a factor, this would not speak to the
necessity or sheer number of government employees, and thus to the overall cost or
necessity of government programs. Unlike the private sector, where decisions on the
number and compensation of employees are driven by supply and demand and economic
realities, the size and cost of government employees is driven by the political
process. Thus, government employees' labor unions are constantly pressuring legislators
(who are frequently indebted to the unions for campaign contributions and other help
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provided to get them elected) to increase workers' wages and benefits, and legislators are
always creating or expanding government programs that may or may not be needed or
effective. These pressures are independent of economic constraints, and are limited only to
the extent that taxpayers refuse to consent to additional borrowing or tax increases. This has
allowed governments at all levels to continue to add employees even during the severe
recession that has forced a significant contraction in the private sector. Between December
2007 and December 2009, the private sector lost more than 7.3 million jobs, yet the number
of government jobs actually.

PUBLIC-SECTOR PENSION AND RETIREE HEALTH-CARE

BENEFITS DIFFERENCES
As with job security, there is a value to the guaranteed nature of public sector benefits that is
not captured in the Bender and Heywood report. In most states, including California,
government workers' benefits are protected by state constitutions, and the benefits of current
employees cannot be reduced. This is a protection that is not available in the private sector,
where pension plans may be frozen, benefits may be reduced, and companies can go
bankrupt, which could cause employees to receive fewer benefits than promised. In
addition, the value of public sector benefits seems to be understated. Granting that the BLS's
Employer Costs for Employee Compensation (ECEC) survey does not account for
differences in worker education, job experience, or job duties, the survey can nonetheless
prove instructive. The survey estimated that public sector workers, in aggregate, earned an
average 35 percent more than private sector workers, and the Bender and Heywood report
found that, after controlling for the aforementioned variables, public sector workers actually
earned 11-12 percent less than comparable private sector workers. Yet, while the ECEC
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survey reported a much greater 69 percent advantage for public sector benefits, the Bender
and Heywood total compensation gap narrowed only slightly, from 11-12 percent to roughly
7 percent (public employees received more benefits than comparable private-sector workers,
but the difference was much smaller than that reflected in the ECEC survey). The relatively
small impact of the greater benefits of public employees also appears to fly in the face of the
fact that in California and elsewhere, many state and local governments have increased
government employees' benefits by as much as 50 percent in the past decade or so, allowing
many workers to retire as young as 50 or 55 years old with pensions equal to as much as 90
percent of their final salaries. These are benefits unheard of in the private sector.
In the Bender and Heywood report, the authors assumed that the determinants of
benefit values-factors such as education, age, and other demographic characteristics-affect
the results in the same way that the determinants affect the calculations of hourly
earnings. The authors acknowledge that this assumption is debatable. If the determinants
affect the comparability of benefits in a different way than they affect wages, then this could
skew the results. Perhaps this could account for at least some of the apparent discrepancy.
Moreover, the report cannot account for expected increases in benefits that would result in
greater compensation for public employees, relative to comparable private-sector
employees. The report is necessarily a snapshot in time, as it would be impossible to predict
all future changes to employees' wages and benefits. Yet, we can safely assume that health
care costs, and thus the costs of employees retiree health care benefits, which have risen on
the order of 10 percent a year for most of the last decade, will continue to rise, particularly
since demand for health-care services will increase as the Baby Boomer generation enters
retirement (and, it could be argued, the supply of health care practitioners might be reduced

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by increased government involvement in the health care industry, thus exacerbating these
cost increases). Retiree health benefits are typically much more generous in the public
sector than they are in the private sector, if they are provided at all in the private sector. In
California, the state pays 100 percent of health care costs for retired state workers and 90
percent of costs for retirees' families. Barring any commensurate reductions to these
benefits, which, unlike pension benefits, can, in fact, be reduced, we should expect to see
the gap between public and private employee benefits widen and the differences in
comparable public and private employees' total compensation to adjust accordingly.

PUBLIC SECTOR RETIREMENT BENEFITS 337% GREATER THAN

PRIVATE SECTOR
Retirement is a goal that employees in both the public and private sector work towards, but
the difference between the retirement benefits in the two sectors is monumental.
Government workers are getting better deals than employees in the private sector and their
pensions are partly paid for by taxpayers.
The state governments have been increasing the fringe benefits of their employees.
As Bob Williams explains, this is because the government cannot afford the cost of
employee union demands-often regarding retirement and health care benefits. State Budget
Solutions found that heavily unionized government worker states, like California and New
York, have the largest unfunded pensions and retiree health care.

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According to the Bureau of Labor Statistics Databases, there is an increase in state and
local government fringe benefits. Public employees are receiving pension and retirement
benefits that are 337 percent greater than private sector employees.

BENEFITS
Government employees enjoy excellent benefits, including health insurance, dental
insurance, vacation time, sick leave and other income security benefits. Benefits make a
position valuable even if the salary offered is lower than a private-sector salary. Government
employees more often get retirement benefits from their employer,

JOB SECURITY
Government employees enjoy more job security in two respects. First, government jobs are
generally more stable than private-sector jobs unless a government employer cuts jobs due
to serious economic problems. Second, government jobs are often permanent appointments;
once an employee passes a probationary period, usually one year, he can only be fired for
gross errors or illegal actions.

EFFECTS OF COMPETITION
Private-sector employees face higher vulnerability to market forces, including wage levels
according to fluctuating market conditions. They must remain competitive in terms of skills
and job performance so they won't be replaced. Government employees must meet
performance standards, too; but, as noted, it's harder to get rid of them. Private-sector
workers may be laid off more readily by businesses that close or suffer economic setbacks.
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COMPENSATION
In 2009, the federal government worker averaged the highest at $67,756, followed by the
private-sector worker at an average of $45,155 and finally by the local government worker
at an average of $43,140. But when comparing exact occupations, such as a medical doctor
or a certified public accountant, a person in the private-sector averages more. Compare a
government salary with a private-sector salary before making a job change.

ACCOUNTING
Accounting methods used in both private and public sector financial management differ
significantly. For instance, in the private sector, financial managers and accountants are
bound by the Generally Accepted Accounting Principles, or GAAP, methodology for
accounting. This is a set of practices, such as the double-entry accounting method, used to
ensure financial accuracy and uniformity. In the public sector, these methods may also be
used, but it is not that unusual to deviate from them, as well. This is seen in areas such as
budgeting where public sector financial managers are not necessarily bound by accrual
accounting methods.

PROFIT
Government agencies are not necessarily profit-driven in the same way that private
businesses and corporations tend to be. In the private sector, financial managers are
generally motivated by profit and pushed to maintain a bottom line or a minimum level of
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profitability. On the other end of the spectrum are the financial managers in the public sector
who do not necessarily have a bottom line to maintain. Instead, they may be task-oriented or
driven by some other motivating force endemic to the specific type of work the organization
is focused on daily.

CONTEXT
Another fundamental difference between public and private financial managers is the
context in which they operate. This context can make all the difference when it comes to
how each approaches his work. The profit-driven financial manager in the private sector
will generally have the leeway to get done what needs to be done in order to maintain the
bottom line. With public sector financial managers, various constraints may prevent the
manager from acting with a great deal of autonomy. The manager may be subject to
legislative and regulatory constraints that prevent autonomous action. The political
framework of the public sector may pit bureaucratic financial managers against elected
officials on occasion, causing significant limitations to getting the job done.

DECISIONS
The differences in the decision-making process between public and private sector financial
managers are closely related to the context of operation. In private sector financial
management, decisions are generally made from the top and are filtered down through the
hierarchy of the business as the financial manager hands off the orders or directions to those
below him on the company food chain. In public sector management, it is not so simple.
Public sector financial managers often have to work with political constituencies and
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navigate between competing interest groups. Important financial decisions are often
rendered by creating coalitions and support. Decisions cannot typically be handed down and
passed off to the next in command without some type of public sanction or approval.

UNIONS
Federal law gives private sector, but not public sector, employees the right to join unions,
have them negotiate with employers for wages and working conditions and take group
action concerning their employment, including the right to strike. Private sector employers
may not fire, discipline or lower the salaries of employees for joining a union or exercising
their collective bargaining rights. Many states have granted public employees the right to
join unions and collectively negotiate for certain benefits. However, in some of these states,
such as New Jersey, unions do not have the right to bargain for employment subjects that are
not controlled by federal or state law or that prevent the government agency from
performing its duties.

INTERROGATIONS AND INVESTIGATIONS

Public employers may not force employees to make statements that can be used against
them in criminal prosecutions. The United States Supreme Court in Garrity v. New Jersey
said that threatening to fire police officers who did not speak with investigators violated the
Fifth Amendment's protection against self-incrimination. A public employer may require an
employee to answer questions in an internal agency investigation if the employee is told that
no answers will be used to prosecute the employee. Workers in the private sector do not
have these "Garrity" rights since the Fifth Amendment applies only to the government, not
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private actors. However, a private sector employee has the right to the presence of a union
representative during an investigation by the employer.

LEGAL HOLIDAYS
Private employers are not required to give employees any holidays, according to Texas
state law and the federal Fair Labor Standards Act, which treat all holidays like any other
workday. Most public sector employees receive 10 legal and paid holidays as ordered by
federal law. These holidays include: New Years Day, Martin Luther King Day, Presidents
Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day,
Thanksgiving Day and Christmas Day. Depending on the class of employee, some
employees working on government contracts are also granted holiday privileges. Those
working on contracts over $2,500 or of certain status may receive holidays and fringe
benefits under the McNamara-OHara Service Contract Act or the Davis-Bacon Act.

HOURS AND PAY

Private employers are not required to give employees overtime or bonus pay for working on
holidays. Paid holidays are also not counted toward overtime pay or for Family and Medical
Leave Act eligibility.

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RELIGIOUS HOLIDAYS
According to the TWC, private employers are not required to grant religious holidays,
unless they have 15 or more employees. Businesses greater than 15 are subject to
discrimination laws and may need to grant the necessary religious holidays to employees
wishing to celebrate. That said, an employer may deny an employee a religious holiday if
the company will struggle unduly without them.

CONSIDERATIONS
According to employeeissues.com, although not legally obligated, private employers grant
many of the legal and religious holidays, because it helps retain employees, boosts morale
and attracts new employees.

COMPARING PRIVATE AND PUBLIC WORKER SALARIES

ARE PUBLIC SECTOR WORKERS OVERCOMPENSATED?
Several analyses of average wages and benefits in the public and private sectors reveal that
state and local government workers earn more than private sector workers. According to the
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most recent Employer Costs for Employee Compensation survey from the U.S. Bureau
of Labor Statistics, as of December 2009, state and local government employees earned
total compensation of $39.60 an hour, compared to $27.42 an hour for private industry
workers-a difference of over 44 percent. This includes 35 percent higher wages and nearly
69 percent greater benefits. Data from the U.S. Census Bureau similarly show that in 2007
the average annual salary of a California state government employee was $53,958, nearly 32
percent greater than the average private sector worker ($40,991). In addition, as noted by
reporter and Calpensions.com blogger Ed Mendel, in 2006 the state conducted a
comparison of state and private sector compensation for the first time in two
decades. While the Department of Personnel Administration survey did not include all
job classifications, the analysis determined a number of benchmark job classifications and
found that state compensation was greater than private sector compensation for clerical jobs,
accountants, custodians, electricians, stationary engineers, and analysts, but lagged in
medical occupations. Moreover, data from the Bureau of Economic Analysis illustrate that
average state and local government compensation has been increasing at a faster rate than
average private sector compensation over the past 30 year.

ARE PUBLIC SECTOR WORKERS UNDERCOMPENSATED?

But according to a new study published by the Center for State & Local Government
Excellence and the National Institute on Retirement Security, these aggregate compensation
comparisons are misleading. The authors, University of Wisconsin-Milwaukee economics
professors Keith A. Bender and John S. Heywood, assert that state and local government
workers are better educated and have more work experience, on average, than do private
sector workers, so it is natural that their overall average compensation would be

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higher. "Thus," they conclude, "the fact that public sector workers receive greater average
compensation than private sector workers should be no more surprising than the fact that
those with more skills and education earn more."
Furthermore, after attempting to control for such variables, they find that state and local
government workers actually earn less than their private sector counterparts. According to
the analysis, state government workers earn an average of 11.4 percent less than privatesector workers of similar education and work experience and local government workers earn
12.0 percent less. Due to the greater benefits received by public sector workers, the gap
narrows when these benefits are factored in, to 6.8 percent and 7.4 percent, respectively.
Even this appears to underestimate the cost of the benefits provided government
workers, as discussed below.

THE DIFFICULTY OF COMPENSATION COMPARISONS IN PUBLIC

AND PRIVATE SECTOR
As the report notes, it is difficult to do a real "apples-to-apples" comparison of public and
private sector compensation because public sector job descriptions and duties may be very
different from those in the private sector, and vice versa, so oftentimes there are no good
positions to compare to in the other sector.
It would be interesting to take a closer look at the education statistics. Knowing the
percentage of workers with a college degree, for example, is helpful, but not all college
degrees are equal. Some fields of study are more rigorous than others, and some
universities and colleges are more prestigious than others. One who earns a degree in a
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more rigorous field, or who attends a more prestigious (and usually a more costly)
university, would expect to earn a higher salary after college than one who did not. While
data with this level of detail do not seem to be available, it would be interesting to see if
there are any differences in these more specific educational categories between public and
private sector employees.
It is also worth asking whether higher education levels are actually required to perform
many government jobs. The Bender and Heywood study presumes that we should expect
public employees to be paid more because they tend to be better educated than comparable
private sector employees, but is this additional education necessary? It may be that state and
local governments hire more educated people not because job duties demand more
education, but rather simply because they can, as they have access to the public's money
and, as such, government budgets are not so constrained as private firms' budgets. In the
private sector, firms have strong incentives to keep costs down and pay no more for labor
than they need to. The public sector, by contrast, is infamous for its lack of efficiency, and
budgets are determined by political means, resulting in budgets that are usually much
different-and more wasteful-than those determined by economic means this is why
governments typically achieve significant cost savings by outsourcing the provision of
services to the private sector. Thus, it may be that governments are paying higher wages to
better-educated employees not because those employees' educational skills are required to
perform their job duties, but rather because they are overqualified for their jobs. It is worth
noting that private sector compensation might also be skewed higher by a relatively small
number of very high income earners, such as large corporation CEOs and senior officers,
entertainers, and professional athletes, for which there is no equal in the public sector.

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PRODUCTIVITY DIFFERENCES
Even taking the study's analysis as given, this does not mean that the value of an average
government worker's labor is equal to that of an average private sector worker with similar
education and work experience. This is because private sector workers tend to be more
productive. As Cato Institute Director of Tax Policy Studies Chris Edwards notes in a
recent paper, according to the U.S. Bureau of Labor Statistics (BLS) National
Compensation Survey, private-sector employees worked an average of 2,050 hours in 2008,
12 percent more than the 1,825 hours worked by the average public-sector employee.
Even on an hour-for-hour basis, one would expect private sector workers to be more
productive due to the lack of competitive forces in government. Private sector businesses
face constant pressures of competition to innovate and improve their goods and services,
lest they lose business to their competitors. Government agencies, by contrast, are typically
monopolies protected by law, and thus are not subject to such competitive incentives and
pressures.

JOB SECURITY DIFFERENCES

The notion that public employees are significantly undercompensated begs the question: if
they are so underpaid, why would they agree to take government jobs when they could earn
more by performing similar jobs in the private sector? Some might cling to the romantic
idea of "public service," but public-sector employees are every bit as self-interested as
private-sector workers, so this answer is wholly unsatisfying.
One major factor not discussed by the report's authors that could provide an explanation
(setting aside the possibility that public-sector workers are actually overcompensated,
relative to their private-sector counterparts) is the significant difference in job
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security. Government job security is famously, and notoriously, ironclad, oftentimes making
it practically impossible to fire or lay off public-sector workers for the same reasons
employees are terminated in the private sector, even in cases of poor performance or
unethical activity. This job protection has tremendous value which is not captured in the
Bender and Heywood report.
Whether for job security or other reasons, the attraction to government jobs is evidenced by
job-quit

rates. Lower

quit

rates

indicate

lack

of

better

job

opportunities

elsewhere. Indeed, as the Cato Institute's Chris Edwards points out , BLS data reveal that
the quit rate is significantly lower in the public sector than in the private sector. Between
2001 and 2009, the public sector layoff and discharge rate is only about one-third of the
private-sector rate. Surely, if government workers were so poorly compensated and were
qualified to earn significantly more in the private sector, they would leave for those private
sector opportunities and the quit rate would be much higher.
In California, the state's prison guards provide a good example of the lack of dissatisfaction
with public-sector compensation. According to a February 2008 Legislative Analyst's
Office report, correctional peace officer costs make up the largest share of General Fund
personnel expenses. The approximately 30,000 state correctional peace officers make up
nearly 10 percent of all state employees. The report described correctional officers' overall
compensation levels as "very attractive," particularly considering that the job requires only a
high school or equivalent education, and noted that the California Department of
Corrections and Rehabilitation (CDCR) boasts that the job "has been called 'the greatest
entry level job in California'-and for good reason," and that "Along with the great salary, our
peace officers earn a retirement package you just can't find in private industry." Perhaps

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this, along with the CDCR's inability to control sick leave and overtime benefits, is why the
state receives roughly 130,000 applications to become a prison guard each year.

PUBLIC VS PRIVATE SECTOR

Government Sector Vs Private Sector is a debate which seems to be a never ending topic. It
is very difficult to take stand for either of these forms of administration. The reason behind
that is not unknown but obvious as both provide scopes in different ways. The first
allegation that can be put up for this debatable issue is that Government Sector is more
divided than organized. What this means is that a public sector administration runs on the
shoulders of many sub divisions. For example human resource has a ministry and has
many governmental organizations working under it to collect the data from. This may seem
to be organized but ultimately it becomes divided and creates a problem in the long run.
A Private Sector is also divided into departments which work closely. They need to have a
coherent working structure or else business will falter. The organization and separation of
departmental power is very strict. This does not create any kind of rift between the different
departments as they work together. They operate on different functions and so cannot
override each others functions.
Again, Private Sector employees have to be visible and accountable for each and every
action they take. In other words they have to be visible in order to promote their business
but can work in their own comfort. However, Government Sector employees have to work
showing complete transparency to their jobs. They have to work under the public eye. So it
can be said that they work with the governmental radar on and under public scanner! It is
56 | P a g e

said that the Government Sector is not clear with its endeavors. The objectives of the public
sector are more confusing and indefinite in comparison to the Private Sector. The Private
Sector supposedly provides more clarity to their apparent subjectivity. This makes the sector
more evident. Well this lucidity could go against the Private Sector as this sector is accused
of only profit oriented work. This sector will never take anything until and unless it sees
profit in it. This whats in it for me mentality is very dangerous as it eventually does not
do any good for the community. The dream of this sector is to make more money at the cost
of anything and everything. Hence the need of a public sector arises which can look into and
offer its services to the well being of a nation. Apart from all this, there is another positive
point for the Government Sector in this contest of Government Sector Vs Private Sector,
that it has elected representatives. These representatives are chosen by the public who are
more trusted than any corporate honcho like Bill Gates, Steve Jobs or a Rupert Murdoch. It
is needless to say that the Private Sector has no such intentions of using popular voting or
veto power to ensure its working. It is private and that is how it has to be treated. No
trespassing is surely allowed on the private properties.
In fact to take liberty at the discussion of Government Sector Vs Private Sector, it can be
said that both are equally important for any nation. It should be Government Sector and
Private Sector which should be the area of discussion. A harmony between the two is
required for any nation to prosper and grow.

57 | P a g e

CHPTER- 3
OBJECTIVES OF THE STUDY

OBJECTIVES
To identify impact of various "Employee welfare" activities on employees morale and
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organizational productivity in public and private sector?

To know the amount of investment which was being made on welfare activities in public
and private sector.
To know how flexible are the welfare policies in nature. Do they satisfy
the needs of every class of employees or not.
To identify that all the employees of public and private sector are well satisfied by these
policies i.e. the facilities they are being provided or do they want any amendments in the
existing policies being followed by the managements?
Which sector provides better employee welfare services to their employees?

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CHAPTER-4
RESEARCH METHODOLOGY

METHODOLOGY
Research design:- Exploratory research design
Approach of study:- Questionnaire based study
Sample size:- 100 (50 employees of private sector organizations and 50
employees of public sector organizations)
Type of data:- Primary data as well as secondary data

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Sampling method:- Convenience sampling

Sampling area:- Aligarh
Sample unit:- Employees of private and public organizations in Aligarh

PRIMARY AND SECONDARY DATA

To carry out the study, I used both primary and secondary data. The secondary data and
information have been collected from various sources like business newspapers, journals,
magazines, RBI Reports and publications, Indian Banking Association publications etc.
Primary data has been collected through structured questionnaire.

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CHAPTER-5
DATA ANALYSIS AND INTERPRETATION

DATA ANALYSIS AND INTERPRETATION

1. Are you aware about all welfare activities provided to the employees in public and
private sector?

Yes

No
SECTOR
PUBLIC
PRIVATE

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YES
80%
75%

NO
20%
25%

20%

100%

25%

90%
80%
70%
60%

NO

50%

YES

40%

80%

75%

PUBLIC

PRIVATE

30%
20%
10%
0%

INTERPRETATION
We found from the above graph that 80% of the public sector and 75% of the private sector
employees are well aware about welfare activities of their organization and on the other side
20% of the public sector and 25% of the private sector employees are not well aware about
the welfare activities of their organization.

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2. Are you satisfied with the amount being invested on employee welfare activities in
public and private sectors?

Satisfied

Dissatisfied
SECTOR
PUBLIC
PRIVATE

64 | P a g e

SATISFIED
70%
65%

DISSATISFIED
30%
35%

100%

30%

90%

35%

80%
70%
60%

DISSATISFIED
SATISFIED

50%
40%

70%

65%

PUBLIC

PRIVATE

30%
20%
10%
0%

Interpretation:
The given graph show that 70% of public sector and 65% of private sector employee think
that sufficient amount is invested on welfare activities and remaining 30% of public sector
and 35% of private sector employee do not think that sufficient amount being invested on
these welfare activities.
3. Are you satisfied with the level of flexibility in welfare policies provided by public
and private sector organizations?

SECTORS
PUBLIC
PRIVATE

65 | P a g e

Satisfied

Dissatisfied
SATISFIED
65%
55%

DISSATISFIED
35%
45%

100%
35%

90%

45%

80%
70%
60%

DISSATISFIED

50%

SATISFIED

40%

65%

30%

55%

20%
10%
0%
PUBLIC

PRIVATE

Interpretation:
The given graph show that 65% of public sector and 55% of private sector employee think
that welfare policies are enough flexible in nature. While 35% of public and 45% of private
sector do not think the same.
4. Are employee welfare activities able to increase the morale of employees?

Yes

No

SECTOR
PUBLIC
PRIVATE

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YES
80%
72%

NO
20%
28%

20%

100%
90%

28%

80%
70%
60%

NO

50%

YES

40%

80%

72%

30%
20%
10%
0%
PUBLIC

PRIVATE

Interpretation:
It can be interpreted from the above table and graph that most of the employee of both
public and private sector think that welfare activities increase their morale.

SAFETY FACILITIES

5. Are you satisfied with various safety facilities provided by public and private sector
to their workers?

SECTOR
67 | P a g e

Satisfied

Dissatisfied
SATISFIED

DISSATISFIED

PUBLIC
PRIVATE

70%
32%

100%

30%
68%

30%

90%
80%

68%

70%
60%

DISSATISFIED

50%

SATISFIED

40%

70%

30%
20%

32%

10%
0%
PUBLIC

PRIVATE

Interpretation:
It can interpreted through the above table and graph that public sector provide better safety
facility to their employees as compare to private sector.
6. Does public and private sector take care of their employees, working in night shift?

SECTOR
PUBLIC
PRIVATE

68 | P a g e

Yes

No
YES
55%
40%

NO
45%
60%

100%
90%

45%

80%

60%

70%
60%

NO

50%

YES

40%
30%

55%
40%

20%
10%
0%
PUBLIC

PRIVATE

Interpretation:
The given graph shows that 55% of public sector and 40% of private sector employee think
that company takes care of them while working in night shift. Rest 45% of public and 60%
of private sector employees are not satisfied with safety facilities of their organization.

CANTEEN FACILITIES
7. What quality of food being provided to the employees?

SECTOR
PUBLIC
PRIVATE
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Good

Satisfactory

Bad
GOOD
20%
35%

SATISFACTORY
60%
63%

BAD
20%
2%

2%
100%

20%

90%
80%
70%

63%

bad

60%
50%

satisfactory

60%

GOOD

40%
30%
20%

35%
20%

10%
0%

PUBLIC

PRIVATE

Interpretation:
The given graph shows that 20% of public sector and 35% of private sector employee think
that foods quality is good, 60% of public sector and 63% of private sector employee think
food quality is satisfactory and remaining 20% of public and 2% of private sector
respondents are not satisfied with this quality food.
8. What level of hygiene is maintained in the canteen?

SECTOR
PUBLIC
PRIVATE

70 | P a g e

Good

Satisfactory

Bad
GOOD
30%
45%

SATISFACTORY
50%
53%

BAD
20%
2%

2%
100%

20%

90%
80%
53%

70%

BAD

60%

50%

50%

SATISFACTORY
GOOD

40%
30%

45%

20%

30%

10%
0%

PUBLIC

PRIVATE

Interpretation:
It can be interpreted from the above table and graph that, level of hygiene is maintained
more in private sector as compare to public sector.

9. What type of lunch room and rest room facilities provided to the employees in
public and private sectors?

SECTOR
PUBLIC
PRIVATE

71 | P a g e

Good

Satisfactory

Bad
GOOD
25%
30%

SATISFACTORY
60%
60%

BAD
15%
10%

10%

15%

100%
90%
80%
70%
60%

60%

60%

50%

BAD
SATISFACTORY
GOOD

40%
30%
20%
10%

25%

30%

PUBLIC

PRIVATE

0%

Interpretation:
The given graph shows that 60% of public sector and 60% of private sector employee think
that lunch room facility is satisfactory and 15% of public sector & 10% of private sector
employee are not satisfied with these facilities.

MEDICAL FACILITIES
10. Are you satisfied with the various medical benefits provided by organization for the
employees and their family?
Highly Satisfied
Satisfied
Dissatisfied
SECTOR

HIGHLY
SATISFIED

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SATISFIED

DISSATISFIED

PUBLIC
PRIVATE

100%

30%
50%

65%
40%

5%

10%

5%
10%

90%
80%
70%

40%
65%

60%

DISSATISFIED
SATISFIED

50%

HIGHLY SATISFIED

40%
30%

50%

20%

30%

10%
0%

PUBLIC

PRIVATE

Interpretation:
The given graph shows that 30% of public sector and 50% of private sector employee think
that sufficient medical benefits are provided to them while 5% of public sector & 10% of
private sector employees are dissatisfied with these medical benefits.
11. How effective are medical facilities during emergencies?
Very quick
Normal
Need improvement
SECTOR

73 | P a g e

VERY QUICK

NORMAL

NEED
IMPROVEMENT

PUBLIC
PRIVATE

45%
60%

20%
25%

35%
15%

15%

100%

35%

90%
80%

25%

70%
60%

NEED IMPROVEMENT
20%

50%

NORMAL

VERY QUICK

40%
30%

60%

45%

20%
10%
0%

PUBLIC

PRIVATE

Interpretation:
It can be interpreted from the above table and graph that 45% of public sector and 60% of
private sector employee think that the medical facilities are very quick during emergencies,
while 35% of public sector & 15% of private sector employees need some improvement in
these facilities.

TRANSPORTATION FACILITIES
12. Are you satisfied with the conveyance allowances offered by organization?

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Highly satisfied

Satisfied

Dissatisfied

SECTOR

HIGHLY

SATISFIED

DISSATISFIED

PUBLIC
PRIVATE

SATISFIED
40%
20%

55%
50%

5%
30%

5%
100%
30%

90%
80%
70%

55%

DISSATISFIED

60%

SATISFIED

50%

HIGHLY SATISFIED

50%

40%
30%

40%

20%

20%

10%
0%
PUBLIC

PRIVATE

Interpretation:
The given graph shows that 40% of public sector and 20% of private sector employees are
highly satisfied with conveyance allowances offered for employees while 5% of public
sector & 30% of private sector employees are dissatisfied with these conveyance allowances
offered by organization.
13. Do you think employee welfare activities of the organization give a feeling of
satisfaction and improve your performance?

SECTOR
PUBLIC
75 | P a g e

Yes

No
YES
75%

NO
25%

PRIVATE

65%

100%

35%

25%

35%

90%
80%
70%
60%

NO

50%

YES

40%

75%

30%

65%

20%
10%
0%
PUBLIC

PRIVATE

Interpretation:
The given graph shows that 75% of public sector and 65% of private sector employees think
that various welfare services contribute in improvement of employees performance. While
25% of public sector & 35% of private sector employees do not think like this.
14. Rate the overall employee welfare activities provided to the employees of public and
private sector?

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Highly satisfactory

Satisfactory

Average

SECTOR

Dissatisfactory

Highly dissatisfactory

HIGHLY

SATIFACTOR

AVERAG

DISSATISFACTOR

SATISFACTOR

DISSATISFIE

7%
10%

D
1%
5%

Y
25%
15%

PUBLIC
PRIVATE

52%
30%

15%
40%

1%
100%

70%

DISSATISFACTORY

10%
AVERAGE

SATISFACTORY

40%

60%
50%

5%

7%

90%
15%
HIGHLY DISSATISFACTORY
80%

HIGHLY

52%

40%
HIGHLY SATISFACTORY
30%

30%

20%
10%

25%

15%

0%
PUBLIC

PRIVATE

Interpretation:
It can be interpreted from the above graph that, 25% of public sector and 15% of private
sector employees are highly satisfied with the welfare services provided by their
organization, 15% of public sector and 40% of private sector employees think that these

77 | P a g e

services are just average while, 1% of public sector and 5% of private sector employees are
highly dissatisfied with the welfare services provided to them by their organization.

15. Which sector actually provides better welfare services to their employees?

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Public sector

Private sector

Public Sector

Private Sector

40%
60%

Interpretation:
This given graph shows that 60% respondents think that public sector actually provides
better welfare services as compare to private sector and remaining 40% respondents say that
private sector provides better welfare services.

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CHAPTER-6
FINDINGS

Most of the employees of public and private sector are aware from welfare activities

provided in the organization.

Maximum number of employees of public and private sector feels that there

organization invest sufficient amount on employee welfare activities.

During this research we found that both public and private sector adopt flexible

welfare policies for employee welfare.

Public sector employees are well satisfied with safety facility of their organization as

compare to private sector.

Employees of private sector are highly satisfied from the medical facilities provided

to them but public sector employees want some improvement in this area.
Whatever the transportation facilities provided by public sector organization to their

employees are much more attractive then private sector.

Most of the employees of public and private sector response that such type of
welfare activities give them feeling of satisfaction and contribute to improve their
performance.

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CHAPTER- 7
CONCLUSIONS

In this project, we had tried to cover all the welfare services provided to the employees in
public and private sector. After conducting the research work we have arrived at the
conclusion that both sectors have some positive as well as negative aspects. As 100% result
cannot be achieved in any circumstances, but still both sectors consistently focusing on
welfare activities to provide maximum satisfaction to their employees.

Private sector employees are satisfied but not up to full extent as they want some
more changes regarding their welfare policies.

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Canteen facility such as food quality is provided at highly subsided rate and most of
the employees of both sectors are satisfied with hygiene, which is maintained in the

canteen.
The staff bus service being provided by the company is convenient and charges of

bus are nominal.

The medical facilities provided by the public and private sector are good, first aid
boxes are easily reachable to the employees, and the facilities during emergencies
are efficient and quick. Public sector organization also provides early medical
checkup to their employees.

The company always provides good safety equipments so the employees are ensure
of their safety.

At last if the company wants to enhance their productivity then they should bring out some
changes as per the workers requirement because welfare is a major part of their motivation
through which they could be motivated to do more work effectively and efficiently.

CHAPTER- 8
LIMITATIONS

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LIMITATION

Due to tight schedule of working, the employees interaction was difficult. Most of

the employees were often too busy to spare time for filling up the questionnaire.
Some employees were hesitant to fill up the questionnaire.
Time period for the survey was very limited.

There might be a sense of bias crept in answers given by the respondents.

83 | P a g e

CHAPTER- 9

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RECOMMENDATIONS AND SUGGESTIONS

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Both public and private sector organization should increase the amount of
investment in employee welfare activities to provide maximum satisfaction to the
employees.

Private sector organization should try to make more flexible policies like public
sector.

Public sector organization should more focus towards canteen facilities provided to
their employees.

Both public and private sector should also concentrate towards crche facilities for
their female employees.

Private sector organization should try to increase the level of transportation facilities
for their employees.

BIBLIOGRAPHY
www.google.com
www.wiki.com
www.wikianswers.com
www.hrmguide.com

BOOKS
Human resource management written by Dr. C.B. Gupta
Aspect of labor welfare and social security written by Mr. A.M.
Sharma
86 | P a g e

QUESTIONNAIRE
1. Are you aware about all welfare activities provided to the employees in
public and private sector?
Yes
No
2. Are you satisfied with the amount being invested on employee welfare
activities in public and private sectors?
Satisfied
Dissatisfied
3. Are you satisfied with the level of flexibility in welfare policies
provided by public and private sector organizations?
Satisfied
Dissatisfied
4. Are employee welfare activities able to increase the morale of
employee?
Yes
87 | P a g e

 No

SAFETY FACILITIES

5. Are you satisfied with various safety facilities provided by public and
private sector to their workers?
Satisfied
Dissatisfied
6. Does public and private sector take care of their employees, working in
night shift?
Yes
No
CANTEEN FACILITIES

7. What is quality of foods being provided to the employees?

Good
88 | P a g e

 Satisfactory
Bad
8. What level of hygiene is maintained in the canteen?
Good
Satisfactory
Bad
9. What type of lunch room and rest room facilities provided to the
employees in public and private sector?
Good
Satisfactory
Bad
MEDICAL FACILITIES
10. Are you satisfied with the various medical benefits provided by
organization for the employees and their family?
Highly Satisfied
89 | P a g e

 Satisfied
Dissatisfied
Highly dissatisfied
11. How effective are medical facilities during emergencies?
Very quick
Normal
Need improvement

TRANSPORTATION FACILITIES

12. Are you satisfied with the conveyance allowances offered by

organization?
Highly satisfied
Satisfied

90 | P a g e

 Dissatisfied
13. Do you think employee welfare activities of the organization give a
feeling of safety and improve your performance?
Yes
No
14. Rate the overall employee welfare activities provided to the employees
of public and private sector?
Highly satisfactory
Satisfactory
Average
Dissatisfactory
Highly dissatisfactory

15. Which sector actually provides better welfare services to their

employees?

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 Public sector
Private sector

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