Industrial Relations & Human Resource Management

Introduction to Industrial Relations

Definitions Relevance

Key Players Frames of reference Historical Milestones

Key Processes Change

INDUSTRIAL RELATION EVOULTION

PaternalismPersonnel departmentRecord keepersScientific managementGrowth of trade unionismGovt’s intervention & legislative measuresIndustrial relations department

Industrial Relations is –

“The art of living together for purposes of production”(J.Henry Richardson)

“Includes the study of workers and their trade unions, management, employers’ associations and the state institutions concerned with the regulation of employment.” (H.A.Clegg)

Industrial Relations“Problems of human relationship arising from the sale of services for

a wage and working on the premises of employers and under

their control from the subject matter of industrial relations”

(Dale Yoder)

Industrial Relations:…has acquired a deserved reputation for being dull

…because it has too often failed to relate in any meaningful way to the reality of people’s working lives, how these were formed, how they are constrained and how they might be changed.(Blyton & Turnbull, 1998)

Industrial Relations Affects:

Economic Performance

Business Success

Employees Experience of Work

Every employment relationship:

• Economic exchange• Power relationship• Continuous & open-ended• Interdependent• Asymmetrical

Employers cannot rely on coercion or even compliance to secure high performance. Need active consent & co-operation.

Key PlayersGOVERNMENT

INDEPENDENT 3RD PARTIES

EMPLOYEES EMPLOYERS

Traditional I.R. System- Power- Rights

- Interests- Negative behaviours- Information hoarding

Labour-Management Relationship

Armed OpenCollaborative Truce Warfare------------------------------------------------1. Most labour-management relationships

fall to the right of the continuum2. Partnership rarely attempted as matter

of course3. Organisational change forces adaptation

(Adams, 2000)

Characteristics of IR1. An outcome of relationship in industry.2. It create rules and regulations to

maintain peace and harmony.3. Important parts of IR are employees

and their organization, employer and their association and government.

4. It has a role of management, union and government.

Forms of Industrial Relations Managing by Contending: The stakeholders engage in a contest of

will with the dominant stakeholder holding the reins and steering the choice-making processes as well as choices.

Contd Managing by Conceding:The dominant stakeholder manages

interactions with other less dominant and dominated stakeholders by making concessions to buy peace on an ad hoc, situational basis. Ploy employed is “divide and rule”.

Contd Managing by colliding:The dominant stakeholder strikes up

equations with individual stakeholder representatives or with coalitions of stakeholders, through which mechanism of choice-making as well as choices are influenced to favor the dominant stakeholder.

Contd Managing by Collaborative

Problem: The dominant stakeholder in today’s

deregulated environment is likely to be the Corporation and the onus is on corporations to create a new ethos, revolving around collaboration and mutuality though what can be termed as the Transformational Process Model.

Objective of IR1. To promote and develop labor

management relation.2. To regulate the production by minimizing

industrial conflicts3. To provide opportunity to workers to

involve in decision making process with management.

4. To encourage and develop trade unions in order to improve the workers' strength.

SIGNIFICANCE OF INDUSTRIAL RELATIONS

To help in economic progress of a country.To help in establishing & maintaining true industrial democracy.To help management both in the formulation of informed labor relations & policiesTo encourage collective bargaining and boost morale of workers.To help Govt in making laws forbidding unfair practices.

FUNCTIONS OF IREMPLOYEE-EMPLOYER RELATIONSwages & salary admncareer prospectsretirement benefitsgrievance handlingtraining & developmentcounselingcompensation on accidents

ContdLABOUR-MANAGEMNT RELATIONS

recognition of union collective bargainingindustrial disputestripartite dispute settlingwelfare measures health & safety

ContdINDUSTRIAL

DEMOCRACYHumanism in industryFocus on employeesSocial orientationPublic relationsParticipative managementFormation of works committee

ContdINDUSTRIAL PEACE & PRODUCTIVITY

Improve union mgmt relationAvoid strikes & go-slow tacticsPrevent lock-outs & lay offsUpgrade technologySecure employee co-opMinimize loss of man days/year

ContdLIAISON FUNCTIONS

Formulation of IR policy.Employee-attitude survey.Liaison with local Govt authorities like labor officers.Liaison with state & central Govt industrial department.Participation in labour conferences.Formulation of labour & industrial policies.

Factors affecting Industrial Relations 

Institutional factors : Include factors like state policy, labor laws, collective bargaining agreements, employers organizations / federations, etc. Economic factors : Include factors like type of ownership, individual, company – whether domestic or MNC, government, etc., source of labor supply, level of unemployment, etc.

 

Contd Social Factors : Include factors like social

values, norms, social status (high or low) Technological factors : Include factors

like work methods, type of technology used, rate of technological change, R&D activities, etc. These factors directly influence employment status, wage level, collective bargaining process in an organization.

Contd Psychological factors : These factors

affect workers’ job and personal life that directly or indirectly influences industrial relations systems.

Political factors : Most of the trade unions are controlled by political parties, so the trade relations are shaped by the gravity of involvement of political parties in trade union activities.

Contd Enterprise-related factors : Include

factors like style of management, its philosophy and value system, organizational climate, extent of competition etc.

Global factors : Issues included are international relations, global conflicts, international trade agreements and relations, international labour agreements (role of ILO) etc.

Industrial relations operates at

at the national level: At this level the industrial relations

operates so as to formulate labour relations policy. In market economies this is usually done through a tripartite process involving government, employers and workers and their representative organizations.

Contd at the industry levelAt this level industrial relations often takes the

form of collective bargaining between employers' organizations and unions. This process may result in determining wages and other terms and conditions of employment for an industry or sector. It may also result in arrangements on issues which are of mutual concern such as training, ways of avoiding or settling disputes, etc.

Contd at the enterprise level. the relationship between employers and

workers is more direct, but the interests of workers may be represented by unions. Employers' organizations, however, are not usually involved at the enterprise level in representing the employers' interests with workers or their union, but this does not mean that they do not have an important promotional role at this level.

Industrial Relations machinery in India

Preventive Machinerya) Trade Unionb) Joint Consultation

1. Work Committee2. Joint Management Council

c) Standing Ordersd) Grievance Proceduree) Code of Discipline

ContdSettlement Machinery

a) Conciliation1. Conciliation Officer2. Board of Conciliation3. Court of Inquiry

b) Voluntary arbitrationc) Compulsory Arbitration

1. Labor Court2. Industrial Tribunal3. National Tribunal

TYPE OF LEGISLATIONS:

LAWS ON WORKING CONDITIONS

Factories ActShop and Establishments ActMines ActPlantation Labour ActIndian Merchants Shipping Act

ContdLAWS ON WAGES

Payment Of Wages ActPayment of Bonus ActEqual Remuneration ActMinimum Wages Act

Contd

ContdLaws on Industrial Relations

Industrial Dispute ActIndian Trade Union ActIndustrial Employment Act

ContdLaws On Social Security

Workers Compensation ActMaternity Benefit ActEmployee Provident FundPayment Of Gratuity ActEmployees State Insurance Act

Functional Requirements of a successful Industrial Relations Programme

Top management support Sound personnel policies Adequate practices should be developed by professionals Detailed supervisory training Follow up of results

PluralisticCo-operation

Conflict

Authoritarian

Paternalism

Unitary

Humanresource

managementSystems

Evolution

Revolution

Marxist

Control ofthe labour

process

Input Conversion Output

Conflict(differences)

Institutionsand

processesRegulation

(rules)

Approaches to organisations

Approaches to industrial relations

Social action

Wider approaches to industrial relations

Approaches to industrial relations

Labour market Comparative

Unitary perspectiveAssumptions

Capitalist societyIntegrated group of people within the work organizationCommon values, interests and objectives

Nature of conflict and its resolutionIrrational and aberrant ( straying from the path)If there is/are conflict, they are Frictional and personalCoercion (force) or paternalism (limiting freedom through regulation)

Role of Trade UnionsIntrusion from outsideHistorical anachronism (relating to a wrong period)Management only forced to accept trade unions in economic relations

Unitary viewOrganization is:A group that united Having same objectivesauthority,common value, interest and objectives Managers have the right to manage, managers have prerogative to make decisions.

Pluralist perspectiveAssumptions

Post-Capitalist society, where a relatively widespread distribution of power and authority within the society, a separation of ownership from mgt. a separation ,acceptance and institutionalization of political and industrial conflictCoalescence of sectional groups within work organisationDiffering values, interests and objectivesCompetitive authority/loyalty structures (formal & informal)

Nature of conflict and its resolutionRational and inevitableStructural and institutionalizedCompromise, negotiate and agreement

Role of Trade UnionsLegitimate and accepted in both economic and managerial relationsInternal and integral to organization

Pluralistic PerspectiveRelatively widespread distribution of authority and power within the society Separation of ownership from management Separation of political and industrial conflict Acceptance and institutionalization of conflict in both spheres.

Pluralistic ApproachOrganizations is in a permanent state of dynamic tension resulting from the inherent conflict of interest between the various sectional groups. Trade Unions as legitimate representatives of employee interestStability in IR as the product of concessions and compromises between management and unions

Radical Marxist Perspective Assumptions

Capitalist society Division between labor and capital. Imbalance and inequities in society.

Nature of conflict and its resolution Inherent in economic and social Change societyRole of Trade Unions Employee response to capitalism Expression and mobilization of class consciousness Develop political awareness and activity.

Radical Marxist Perspective Class conflict is the source of

societal change-without such conflict society would stagnate

Class conflict arises primarily from the disparity in the distribution of and access to economic power within the society

Contd The nature of the society’s social and

political institutions is derived from this economic disparity and reinforces the position of the dominant establishment group.

Social and political conflict in whatever form is merely an expression of the underlying economic conflict within the society.

Theories of Industrial Relations Dunlop’s System Theory(1958) An Industrial relations system at any

one time in its development is regarded as comprised of certain actors, certain contexts, an ideology which binds the industrial relations system together and a body of rules created to govern the actors at the workplace and work community.

Contd IR = f(a, t, m, p, i) Where a = Actors, employers, workers

and government T= Technological context M= Market context P= Power context I= Ideological context that helps to

bind them together

Contd The significant aspects of the

environment in which the actors interact are:

1. The technological characteristics of the organization, the workplace and work community.

2. The market or budgetary constraints which impinge on the actors.

Contd 3. The locus and distribution of power in

the larger society.

Acc to Dunlop theory , the actors, working within contexts (environment), developing a body of rules, held together by an ideology

System producing rules (IRS) and system governed by rules (production)

Naturally stable and orderly Emphasis on roles rather than people Importance of environmental influences

Criticisms 1. that it is essentially a non-dynamic model

of industrial relations form which it is difficult to explain industrial relations change.

2. that it concentrates on the structure of the system, ignoring the processes within it.

3. that it tends to ignore the essential element of all industrial relations that of the nature and development of conflict itself.

Contd That it focuses on formal rules to the neglect of

important informal rules and informal processes. That it may not be integrated and it is

problematic whether or not the actors share a common ideology.

That it fails to give an account of how inputs into the system are converted into outputs.

That it is environmentally biased and provides no articulation between the internal plant level systems and the wider systems.

Contd That it favors an analytical approach

based on comparison rather than a problem solving approach built on description and

That it makes no special provision for the role of individual personalities in industrial relations as the actors are being viewed in a structural rather than in a dynamic.

Contd Pluralist Theory of Flanders (1971) Conflict is inherent in an industrial system. Collective bargaining is central to industrial

relations system. Rules of the system are determined through

the rule-making process of collective bargaining, regarded as a political institution involving power relationships between employers and employees.

Contd r= f(b) or r= f (c) r= rules governing industrial

relations b= collective bargaining c= conflict resolved through

collective bargaining

Criticism Too narrow Overemphasizes the significance of the

political process of collective bargaining and gives insufficient weight to the role of the deeper influences in the determination of rules.

Institutional and power factors are viewed as of paramount importance, while variables such as technology, market, status of the parties and ideology are not given any prominence.

Contd Structural Contradictions Theory

of Hyman 1971 Marxian analysis of IR + Trade union =

Pessimistic & Optimistic approach Both represent structural contradictions Pessimistic approach – Lenin, Michels,

Trotsky – limitations of trade union consciousness – Working class + intellectuals = New social order

Contd Optimistic approach – Marx & Engels –

role of working class not only maintenance & enhancement of wage level but also carry class struggle against capital class thrust creating classless society

Trade unions – represent workers response to the deprivations inherent in their role as employees within a capitalist economy – opposition & conflict can’t be divorced from their existence & activity

Contd Inherent deprivation cause conflict

of trade unions with employers in politico-economic structure

Analysis – focus on not only structure but also deprivations & socio-economic inequalities (inherent components of capitalist mode of production)

Contd Human Relations Theory Human are not inanimate or passive. Human are very complex to understand

i.e. to manage. Integration of people into work-situation

that motivates them to work together productively, cooperatively, &with economic, psychological & social satisfactions

Contd Goals

to get people to produce To cooperate through mutuality of interest To gain satisfaction from their relationships

Highlights – policies & techniques – improve employee morale, efficiency & job satisfaction

Encourages small work group to exercise considerable control over its environment & in the process helps to remove a major irritant in labour-management relation

What Influences Human To Work Style of leadership

Autocratic style Democratic style

Motivation (satisfy the dissatisfied needs) Physiological needs (food, water, clothing,

shelter) Safety needs (physical, finance and job security) Social needs (belonging, affection) Egoistic needs (self-esteem and esteem from

others)

Contd  Trusteeship Theory of Mahatma

Gandhi Gandhi ji had immense faith in goodness

of man. He believed that many of evils of the

modern world have been brought about by wrong systems, not by wrong individuals.

He laid down certain conditions for successful strikes,

Contd Truth, Non-violence, Non-

possession, Non co-operation (Satyagarah), trusteeship...

Workers’ right to strike.

Concept of equality

Contd There is no room for conflict of interests

between the capitalist and the labourers.

But what IF conflicts occur...?o Should they go for strikes/lockouts...!

Contd Two things that Gandhiji expect from

workers

i. Awakeningo Nurturing faith in their moral

strengtho Awareness of its existence

ii. Unity

ContdGandhi ji advocates

Demands should be reasonable and through collective action.

Avoid strikes as far as possible. Avoid formation of unions in

philanthropic organizations. Strikes should be the last resort only. In case of organizing a strike, workers

should remain peaceful and non-violent.