Every employee has certain expectations that he thinks must be fulfilled by the organization. When the organization fails to meet his expectations, he develops a feeling of discontent or dissatisfaction. This feeling is a grievance. Grievances are caused due to the differences between employee expectations and management practices. In the democratic style of management, it is accepted that employees should be able to express the dissatisfaction whether it be a minor irritation, a serious problem or a difference of opinion with the supervisor over terms and conditions of employment. There must be an accepted grievance procedure to ventilate the dissatisfaction.

Personal administrators must assist the line executives, particularly foremen and supervisors, in handling employee grievances. They must study and analyze the grievances in the plant, in the department, individuals involved and the kind of grievances and the pattern of grievances. This is done so that they may help the top management decide policies, procedures and programs to handle grievances, and they may train supervisors and other line executives in handling grievances and dealing with unions.

Complaints of employees relating to interpretation and implementation of awards, agreements, labor legislations, various personnel policies, rules and regulations, past practices, code of conduct, code of discipline are grievances. Thus, grievances have narrow implications and are related to interpretation and implementation. They may relate to either one employee (individual grievances) or a group of employees (group grievances). Trade unions play only a minor role in grievance procedure.

Differences between employees and employer relating to various personnel policies, wage levels and variety of benefits, award agreements, code of conduct, code of discipline, rules and regulations are conflicts. Conflicts are settled through collective bargaining for settling disputes. Thus conflicts have wider policy implications.

When an employee is dissatisfied with his job for genuine or factual reasons like a breach of contract or any other reasons that are clearly attributed to the management or any deviation in the implementation of organization policies, he is said to have a factual grievance. Thus, factual grievances arise when the legitimate needs are not fulfilled.