Sameer Amale, Mohsin Dalvi - Industrial Relations and Collective Bargaining, Ethics and Justice in...

8/13/2019 Sameer Amale, Mohsin Dalvi - Industrial Relations and Collective Bargaining, Ethics and Justice in HRM

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Concept of Labour Relations

“ Labour relations can refer broadly to any dealings between

management and workers about employment conditions.”

‘Labour Relations’ comprises of two terms:

• Labour

• Relations

“Labour ” refers to any individual (or a group of individuals) is

(are) engaged by “relations” that exist within the industry

between the employer and his workmen.”

The term ‘labour relations’ explains the relationship between

employees and management .



Three partners in Industrial Relations

Trade Unions: -

Protect the interests of workers

Insist upon the development of cultural and educational

qualities of their members

Employers & their organizations:

Protect the interest of employers and create healthy industrial

atmosphere, so as to attain the objectives of the organization

Obtain full co-operation of workers for achieving this objective

Government:

Pass laws to protect the interest of both employers and

employees and establish better industrial relations



Objectives of Labour Relations

Safeguard interests of labour and management by highest

level of mutual understanding for better production

Avoid industrial conflict and develop harmonious relations

Raise productivity to a higher level in an era of full

employment



Establish and promote the growth of an industrial democracy

based on labour partnership in sharing profits and in

managerial decisions

Eliminate strikes, lockouts by providing reasonable wages,

improved living and working conditions

Improve economic conditions of workers in existing state of

industrial managements and political government

Objectives of Labour Relations (cont’d)



Causes of Poor Labour Relations

Attitude of management and labour towards each other

Inadequate fixation of wages or improper wage structure

Indiscipline

Unhealthy working conditions at the workplace

Desire of workers for higher bonus, wages or daily allowances

Desire of employers to pay as little as possible to its workers



Inadequate welfare facilities

Dispute on sharing the gains of productivity

Retrenchment, dismissal and lockouts by the management.

General economic and political environment such as rising

prices, strikes by others and general indiscipline having their

effect on the employees attitudes

Causes of Poor Labour Relations (cont’d)



Effects of Bad Labour Relations

Effect on Workers:

Loss of wages

Physical injury or death on account of violence during labour

unrest

Economic losses

Bitterness in relations

Adverse affect on career



Effects of Bad Labour Relations (cont’d)

Effect on Employers / Industrialists:

Less production

Less Profit

Bad effect on human relations

Damage to machines and equipments

Adverse effect on development of companies

Effect on Consumers:

Rise in prices

Bad effect on quality of goods



Effect on Government:

Loss of revenue (less recovery of income tax. sales tax, etc.)

Lack of order in society, (iii) Blame by different parties

Other Effects:

Adverse affect on International Trade (Fall in exports and

rise in imports) Economic Development of the country

Uncertainty in economy

Effects of Bad Labour Relations (cont’d)



Requisites for Successful Labour Relations

Top Management Support

Sound Personnel Policies

Adequate Practices should be developed by professionals

Detailed Supervisory Training

Follow-up of Results



What is a Dispute?

Every human being has certain requirement like economic

needs, social needs, security requirements.

When these requirements do not get satisfied, then result isDISPUTE between worker & capitalist/employer.

“ Dispute is a type of human behavior which occurs when twoor more parties are in opposition or in battle. ”



Disputes in Industries

Industrial dispute refers to any dispute or differences

between employers and employees or workmen, or between

workmen and workmen, and is connected with fulfillment or

non-fulfillment of the terms of employment or the condition

of work of any person.

Industrial disputes are of two types:

Individual disputes - related to reinstatement,compensation etc.

Collective disputes - related to wages, bonus, profit sharing,

hours of work etc.



Causes of Industrial Disputes

Psychological causes:

Authoritarian leadership

Clash of personalities

Difficulty in adjusting in given conditions or with one another Demand for self respect & recognition by workers

Institutional causes:

Non recognition of trade/ labour union by the management

Unfair conditions and practices

Matter of collective bargaining

Pressure on workers to avoid participation in trade unions



Economic causes:

Terms & condition of employment:

• Dispute on promotion, lay off, retrenchment

• More work hours• Working in night shift

Working conditions:

• Working condition such as too hot, too cold, dusty, noisy etc.

• Improper plant and work place layout

• Frequent product design changes etc.

Causes of Industrial Disputes (cont’d)



Wages & other benefits:

• Inadequate wages

• Poor fringe benefits• No bonus or other incentive etc.

Denial of Legal & Other Right of Workers:

• Proceedings against labour law and regulation

• Violation of already made agreement

Causes of Industrial Disputes (cont’d)



Strike

Boycott

Picketing

Gheraos

Lockout

Termination of service of striking employees

Results of Industrial Disputes



Collective Bargaining

Conciliation

Mediation

Negotiation

Arbitration

Adjudication

Procedures for Settling Labour Disputes



Collective bargaining is a technique used for compromising

the conflicting interests of employees and employer.

It is called collective because the employees as a group select

representatives to meet and consult with management.

What is Collective Bargaining?



Characteristics of Collective Bargaining

Group action

Flexible and mobile

Two party process

Continuous process

Dynamic

Industrial democracy at work

Not a competitive process

An art



Increase the economic strength of unions and management

Maintaining stable peace in the industry

Avoid interruptions in work like strikes, go-slow tactics etc.

Lay down fair rates of wages and norms of working conditions

Importance of Collective Bargaining



Forms of Collective Bargaining

Single plant bargaining

Multiple plant bargaining

Multiple employee bargaining



Forms of Collective Bargaining in India

Negotiated by officers

Negotiated by parties

Negotiated on voluntary basis



Equal bargaining power of trade union and management

Free consultation and free enterprise

Representative union

Mutual confidence and good faith in each other

Proactive approach by management

Conditions for Success of Collective

Bargaining



Increase economic strength of employees and management

Establish uniform conditions of employment

Secure prompt and fair redressal of grievances

Lay down fair rates of wages and norms for working conditions

Promote stability and prosperity of the company

Ensure old age pension benefits

Extend the democratic principles from political to the

industrial field

Functions of Collective Bargaining



Collective Bargaining process

Collective bargaining process has the following stages:

1) Identification of problem

2) Preparing for negotiations

3) Negotiations of agreement

4) Contract administration



Concept of Ethics

Ethics refers to the standards or principles of moral conduct

governing an individual or a group of individuals within the

framework of an organisational entity. Ethical behavior depends on the person’s frame of reference

It is not always clear when one’s decisions are ethical.

Usually unethical decisions are followed by shame and/or guilt



“Ethics means taking decisions that represent what you stand

for, not just what is legal.”

An behavior has legal and ethical aspects

Lack of ethics erodes trust

Infosys and Tata Group vs Satyam and General Motors India

Globalisation dictates more open discussion on ethics

Ethical business practices influence brand value

Ethics And The Law



Components in Ethical Decisions

Normative judgments

• Judging something as good or bad, right or wrong, better or

worse.

Moral standards (Morality)

• Society’s accepted standards for behaviors that have serious

consequences to its well-being.

• Behaviors that cannot be established or changed bydecisions of authoritative bodies.

• Behaviors that override self-interest.



Factors Affecting Ethical Behaviour at Work

The person:

Conscience of the employee

Awareness of existence of moral issues in the situation

Influence of managers

Managers’ interpersonal dealings with employees

Urgency in meeting unfulfilled goals Walking the talk

Reprimanding wrongdoings

No taking credit or shifting blame



Factors Affecting Ethical Behaviour at Work

The organisation:

Realignment of moral compass on joining new organisation

Moral engagement within the organisation

Openly talking about ethical conduct - “ethically toxic

organisations suffer from moral muteness”

Punishing unethical behaviour

Training on ethics codes

Whisleblower policies



What Is Organizational Culture?

The characteristic values, traditions, and behaviors a

company’s employees share.

How is culture is revealed?

Ceremonial events

Written rules and spoken commands

Office layout

Organizational structure

Dress codes

Cultural symbols and behaviours

Figureheads



Employees and Ethical Dilemmas

Questions employees must ask when faced with ethical dilemmas:

Is the action legal?

Is it right?

Who will be affected?

Does it fit the company’s values?

How will it feel afterwards?

How will it look in the newspaper? Will it reflect poorly on the company?



Unethical Behaviours

Abusive or intimidating behaviour towards other employees

Lying to employees, customers or public

Placing personal agendas before company interests

Violating safety regulations

Misrepresenting working times Discrimination on basis of gender, caste, age

Sexual harassment

Stealing

Bribing, accepting kickbacks

Internet abuse Intentionally providing non-conforming goods or services

Alteration of documents

Falsification or manipulation in reports and records

Improper use of competitor’s inside information



Ethics in HRM Activities (cont’d)

Ethics in Selection:

Prospective employees must perceive screening process as

being fair so that they may see the importance of ethical

behaviour in the organisation Using screening tests to select applicants having strong ethics

Applicants’ expectations from screening process:

• Formal procedures will give chance to show competence

• Respectful interpersonal treatment• Receiving useful feedback about own performance

Matching between job and employee




Ethics in Training and Development:

Employees must be trained to

• Recognize ethical dilemmas

• Use ethical frameworks to resolve problems• Use HR functions (eg. Interviews) in ethical ways

Use various tools (videos, bulletins) to train employees on ethics

Successful training requires

• Comprehensively identifying employees’ training needs

• Qualified trainers

• Commitment on the part of employees and trainers




Ethics in Performance Appraisal:

Clear standards to emphasise fairness

Employees must understand the basis of appraisal

Using appraisal for political gains is damaging to company

Ethics in Rewards and Disciplinary systems

Ethical behaviour must be rewarded and unethical behaviour

punished

Employees expect swift and harsh disciplinary actions for

misdemeanours



Ethical Issues - Employee Privacy

Employee privacy violations upheld by courts:

Intrusion (locker room and bathroom surveillance)

Publication of private matters

Disclosure of medical records Appropriation of an employee’s name or likeness

Actions triggering privacy violations:

Background checks

Monitoring off-duty conduct and lifestyle

Drug testing

Workplace searches and Monitoring



Ethical Issues - Employee Privacy (cont’d)

What do employers monitor about employees:

E-mail and activity

Telephone calls

Employers monitor employees to: Improve productivity

Keep tabs on attendance

Protect from computer viruses

Detect leaks of confidential information

Guard against liability for illegal acts and harassment suits

caused by employee misuse



Dismissal

Involuntary termination of an employee’s employment with

the firm

Avoidance best way to handle dismissals Effective hiring can reduce many dismissals

Terminate-at-will rule

In absence of a contract, the employee can resign for anyreason, at will, and the employer can similarly dismiss the

employee for any reason (or no reason), at will

Ethical Issues - Employee Dismissal



Wrongful discharge

Employee dismissal not complying with the law or with the

contractual arrangements stated or implied in the employment

application forms, employee manuals or other promises Limitations imposed by wrongful discharge on terminate-at-will:

• Statutory exceptions to certain types of dismissals

• Common law exception - implied contract

• Violation of public policy• Good faith exception

Ethical Issues - Employee Dismissal (cont’d)



Misconduct in the workplace

• Deliberate and willful violation of the employer’s rules:

stealing, rowdy behavior, and insubordination.

InsubordinationWillful disregard of the boss’s authority or legitimate orders

Criticising the boss in public

Disregard for the chain of command

Deliberate defiance of clearly stated company policies, rules,regulations, and procedures

Participating in an effort to undermine and remove the boss

from power

Grounds For Dismissal (cont’d)



Bases for wrongful discharge suits:

Discharge not complying with the law

Discharge not complying with contractual arrangement stated

or implied by firm via its employment application forms,employee manuals, or other promises

Avoiding wrongful discharge suits

Set up employment policies and dispute resolution proceduresthat make employees feel treated fairly

Do the preparatory work that helps to avoid such suits

Avoiding Wrongful Discharge Suits



Employment application must contain a clear statement that

employment and can be terminated anytime.

Have clear written rules listing infractions that require

discipline and discharge and religiously follow them.

If a rule is broken, get the worker’s side of the story in front of

witnesses, and get it signed. Then get both sides of the issue.

If an employee shows evidence of incompetence, give a

warning and provide opportunity to improve. All evaluationsshould be in writing and signed by the employee.

Keep careful confidential records of all actions such as

employee appraisals, warnings or notices, memos.

Avoiding Wrongful Discharge Suits (cont’d)



Plan the interview carefully

• Make sure the employee keeps the appointment time

• Never inform an employee over the phone

• Allow 10 minutes as sufficient time for the interview• Use a neutral site, never your own office

• Have employee agreements, the human resource file, and a

release announcement prepared in advance

• Be available at a time after the interview in case questionsor problems arise

• Have phone numbers ready for medical or security

emergencies

The Termination Interview



Get to the point

• Avoid small talk

• As soon as the employee enters, give the person time to get

comfortable and then inform him or her of your decision Describe the situation

• Briefly explain why the person is being let go

• Remember to describe the situation rather than attack the

employee personally• Emphasize that the decision is final and irrevocable

The Termination Interview (cont’d)



Listen

• Continue the interview until the person talks freely and calmly

about the reasons for termination and support package

Review all elements of the severance package• Describe severance payments, benefits, access to office

support people, and the way references will be handled.

• Don’t promise benefits beyond those in the support package

Identify the next step.• The terminated employee may be disoriented and unsure

what to do next. Explain where the employee should go next,

upon leaving the interview.

The Termination Interview (cont’d)



Exit interviews are conducted with employees who are

leaving the firm for any reason

Its aim is to elicit information about the job or related

matters that might give the employer a better insight intowhat is right or wrong about the company

The assumption is that because the employee is leaving,

he or she will be candid

The quality of information gained from exit interviews isquestionable

Interviewing Departing Employees



Layoff are not terminations.

Temporary layoffs occur when:

• There is no work available for employees.

• Management expects the no-work situation to be temporaryand probably short term.

• Management intends to recall the employees when work is

again available.

Layoffs



Voluntarily reducing employees’ pay to keep everyone

working

Concentrating employees’ vacations during slow periods

Taking voluntary time off to reduce the employer’s payroll Taking a ―rings of defense approach‖ by hiring

temporary workers that can be let go early

Offering buyout packages to find enough volunteers to

avoid dismissing people

Alternatives to Layoffs



Implemention of reduction in force:

Identify objectives and constraints

Form a downsizing team

Address legal issues

Plan post-reduction actions

Treatment of departing employees during a merger:

Avoid the appearance of power and domination

Remain businesslike and professional

Maintain a positive feeling about the acquired company

How the organization treats the acquired group will affect

those who remain

Adjusting to Downsizings and Mergers



Apart from compensation, employees expect fair treatment

Fairness is inseparable from justice

Components of organisational justice:

• Distributive justice - fairness and justice of the result of adecision

• Procedural justice - the fairness of the process by which the

decision was reached

A just company is equitable, fair, impartial and unbiased

Fair Treatment And Justice



Need for Fair Treatment

Courts consider fairness of employer’s disciplinary procedures

while reviewing disciplinary decisions

Positive employees outcomes related to fairness:

• Enhanced commitment• Enhanced satisfaction

• Take more steps to support employer’s interests

Job applicants who felt unfairly treated expressed desire to

appeal to the outcome, while those who felt fairly treatedreacted favourably



HR’s Role in Fostering Ethics and Fair

TreatmentWhy treat employees fairly?

“They’re not employees, they’re people” - Peter Drucker

Avoidance of employee litigation

Enhanced employee commitment

Enhanced satisfaction with the organization, with jobs, and with

leaders

Increased organizational citizenship behaviors



Fair Interpersonal Treatment Perceptions

Ethical behaviours:

Employees are praised for their work

Employees are trusted

Employees complaints are treated with effectively

Employees are treated with respect

Employees questions and problems are responded to quickly

Employees are treated fairly

Coworkers help each other out

Coworkers treat each other with respect



Fair Interpersonal Treatment Perceptions

Unethical behaviours:

Supervisors yell and swear at the employees

Supervisors play favourites

Employees are treated like children

Employees are lied to

Employees’ suggestions are ignored

Employees are threatened to be fired or laid off Coworkers argue with each other

Coworkers put each other down



Fairness Guidelines for Supervisors

Perceptions of fair treatment depend on:

Engagement - Involve individuals in decisions affecting them by

asking for inputs and allowing them to refute the merits of

others’ ideas and assumptions

Explanation - Ensure everyone involved and affected

understands why final decisions are made and the thinking that

underlies the decisions

Expectation clarity - Make everyone know upfront by what

standards they will be judged on and the penalties for failure



Basis For Fair And Just Discipline Process

Clear rules and regulations

• Define and address workplace issues

• Inform employees what behaviours are unacceptable

System of progressive penalties

• Range and severity of penalty depends on type of offense

and number of occurrences

An appeals process

• Right of employee to grieve the decision ensures that

supervisors mete out discipline fairly and equitably



Template Slide

Ethics in Performance Appraisal:

Clear standards to emphasise fairness

Employees must understand the basis of appraisal

Using appraisal for political gains is damaging to company

• recognize ethical dilemmas

Successful training requires

• Comprehensively identifying employees’ training needs

Sameer Amale, Mohsin Dalvi - Industrial Relations and Collective Bargaining, Ethics and Justice in...

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