Unit 1:Industrial Relations (IR): LH 7
Concept, Purposes of Industrial Relations, Approaches to Industrial Relations - System Approach, Marxist Approach, Pluralist Approach. Actors of Industrial Relations and their roles
Concept of Industrial Relations
Industrial relations may be defined as the relations and interactions in the industry particularly between the labor and management as a result of their composite attitudes and approaches in regard to the management of the affairs of the industry, for the betterment of not only the management and the workers but also of the industry and the economy as a whole.
The term industrial relations explain the relationship between employees and management which stem directly or indirectly from union-employer relationship.
Industrial Relations – Meaning and Definition
The term ‘Industrial Relations’ comprises ‘Industry’ and ‘relations’. Industry means any productive activity in which an individual is engaged. It includes- (a) primary activities like agriculture, fisheries, plantation, forestry, horticulture, mining etc. etc. and (b) Secondary activities like manufacturing, construction, trade, transport, commerce, banking, communication etc.
Economically speaking, industry means the secondary sector where factors of production (land, labor, capital and enterprise or four M’s – men, materials, money and machines) are gainfully employed for the purpose of production, and where a business organization exists.
‘Relations’ means ‘the relations that exist in the industry between the employer and his work-force. Different authors have defined the term industrial relations in somewhat different way.
Some of the very oft-quoted definitions are given below:
According to Bethel and Others, “Industrial relation is that part of management which is concerned with the manpower of the enterprise whether machine operator, skilled worker or manager.
According to V. Agnihotri, “The term industrial relations explains the relationship between employees and management which stem directly or indirectly from union-employer relationship.”
Conclusion
Industrial relations are the relationships between employees and employers within organizational settings.
Industrial Relations – Salient Characteristics
The salient characteristics of industrial relations are discussed herein below:
1. Parties in the Industrial Relations Activities:
Basically, two parties-workers and management are involved in the process of establishing relations. However, the government agencies regulate /maintain industrial relations.
2. Interactive Process:
Industrial relations arise out interactions between different persons/parties. They are supervisors, workers trade unions, employers’ associations.
So, interactive process takes place between –
I. Supervisors and industrial workers
ii. Supervisors and group/team members
iii. Management and trade union leaders
iv. Employers’ federations and workers’ unions.
3. Two-Way Communication:
IRs is a two-way communication process. One party gives stimuli, other party responds to the stimuli. So, the transaction occurring through such mechanism is either complementary or cross. More the complementary transactions, better will be the industrial relations situations.
4. HRM Practices:
Effective human resource planning system, identification and stimulating prospective employees, designing the most suitable selection technique to choose the right kind of people help to organization to get a committed and willing workforce that want to grow, develop and achieve. Such employees in the process like to develop better relations with their bosses. So, HRM practices influence IRs pattern in the industry.
5. Approaches to IRs:
Various approaches contribute to shape IRs pattern in industrial organizations. These approaches include sociological, psychological, socio-ethical, human relations, Gandhian, system approaches etc.
6. State Intervention:
State plays a vital role to influence industrial relations situations through its activities as facilitator, guide, counsellor for both the parties in the industry.
7. It is a set of functional: Industrial relations do not constitute a simple relationship, but they are set functional, inter-dependent complexities involving various factors or various variables such as economic, political, social, psychological, legal factors, or variables.
8. Employee-employers relationship: Without the existence of the minimum two parties, the industrial relationship cannot exist such as:
Workers and their organizations.
Employers or management of the enterprise.
The government is the three participants or parties in industrial relations.
9. It is a product:
Industrial relations are the product of economic, social, and political systems arising out of employment in the industrial field.
10. Development of healthy labor management:
The important purpose of industrial relations is the development of healthy labor-management or employee-employer relations, maintenance of industrial peace, avoidance of industrial strife, development, and growth of industrial democracy, etc.
Purposes of Industrial Relations
The primary objective of industrial relations is to maintain and develop good and healthy relations between employees and employers or operatives and management. Maintenance of harmonious industrial relations is on vital importance for the survival and growth of the industrial e enterprise.
It establishes industrial democracy: Industrial relations means settling employees problems through collective bargaining, mutual cooperation and mutual agreement amongst the parties i.e., management and employees unions. This helps in establishing industrial democracy in the organization which motivates them to contribute their best to the growth and prosperity of the organization.
It contributes to economic growth and development: Good industrial relations lead to increased efficiency and hence higher productivity and income. This will result in economic development of the country.
It improves morale of the work force: Good industrial relations, built-in mutual cooperation and common agreed approach motivate one to contribute one’s best, result in higher productivity and hence income, give more job satisfaction and help improve the morale of the workers.
It ensures optimum use of scare resources: Good and harmonious industrial relations create a sense of belongingness and group-cohesiveness among workers, and also a congenial environment resulting in less industrial unrest, grievances and disputes. This will ensure optimum use of resources, both human and materials, eliminating all types of wastage.
It discourages unfair practices on the part of both management and unions: Industrial relations involve setting up a machinery to solve problems confronted by management and employees through mutual agreement to which both these parties are bound. This results in banning of the unfair practices being used by employers or trade unions.
It prompts enactment of sound labor legislation: Industrial relations necessitate passing of certain labor laws to protect and promote the welfare of labor and safeguard interests of all the parties against unfair means or practices.
It facilitates change: Good industrial relations help in improvement of cooperation, team work, performance and productivity and hence in taking full advantages of modern inventions, innovations and other scientific and technological advances. It helps the work force to adjust themselves to change easily and quickly
Dynamic and Developing Concept:
The concept of “Industrial Relations” is dynamic and developing. It is described as a relationship between employers and management of the enterprise and the employees or among employees and their organizations or Employers, Employees, and their trade unions and the government.
Importance of Industrial Relation
Reduction in Industrial Disputes: It reduces industrial disputes. Disputes are reflections of the failure of basic human urges or motivations to secure adequate satisfaction or expression which are fully cured by good relations. Strikes, Lockouts, Go-slow tactics, and grievances are some of the reflections of industrial unrest that do not spring up in an atmosphere of industrial peace.
Uninterrupted production: It means, continuous employment for all from manager to workers. The resources are fully utilized, resulting in the maximum possible production. There is an uninterrupted flow of income for all. The smooth running of the industry is of vital importance for several other industries.
Promote Industrial Democracy: Industrial democracy means the government-mandated worker participation at various levels of the organization about decisions that affect workers. It is mainly the joint consultations, That pave the way for industrial democracy and cement the relationship between workers and management.
Approaches to Industrial Relation – Top 3 Approaches: Systems Approach, Pluralistic Approach and Marxist Approach
The scenario of industrial relations is perceived differently by different people. For some, industrial relations are related to class conflict, others perceive it in terms of mutual co-operation, and still others understand it in terms of competing interests of various groups. HR managers are expected to understand these varying approaches because they provide the theoretical underpinnings for much of the role of HRM.
Systems Approach
John Dunlop gave the systems theory of industrial relations in the year 1958. He believed that every human being belongs to a continuous but independent social system culture which is responsible for framing his or her actions, behaviour and role.
The industrial relations system was based on three sets of different variables:
Actors: By actors here we mean that the individuals or parties involved in the process of developing sound industrial relations. This variable is denoted by ‘A’.
Contexts: The contexts refer to the setup in which the actors perform the given tasks. It includes the industry markets (M), technologies (T) and the power distribution in the organization and labour unions(P).
Ideology: The similar ideas, mentality or beliefs shared by the actors helps to blend the system. It can be expressed by the initial (I)
Based on these variables, the following formula was derived by Dunlop:
John Dunlop’s Systems Approach Formula:
This formula represents that the industrial relations system can be seen as a joint function of all the elements mentioned above.
Pluralist Approach
The pluralist theory also called the ‘Oxford Approach’, was proposed by Flanders in the year 1970. This approach explained that the management and the trade unions are the different and robust sub-groups which unanimously form an organization.
Collective bargaining was considered to be a useful technique for resolving organizational conflicts. Due to this, the management’s role has transformed from imposition and control; to influencing and coordinating with the workers.
Following are some of the highlights of this approach:
The organization should appoint personnel experts and industrial relations specialists to act as mediators between the management and trade unions. They need to look into the matters of staffing, provide consultation to the managers and the unions, and negotiate with both the parties in case of conflicts.
The organization should ensure that the trade unions get recognized and the union leaders or representatives can perform their duties freely.
In the case of industrial disputes, the organization can avail the services of the external agent for settlement of such issues.
The managers should resolve to a collective bargaining agreement when there is a need for negotiation and settlement with the trade unions.
The following formula denotes the Flanders pluralist theory:
Where,
‘R‘ is the rules of industrial relations;
‘b‘ is collective bargaining;
‘c‘ is resolving conflicts through collective bargaining.
It depicts that the rules of industrial relations are a function of collective bargaining, or in other words, it is a function of handling conflicts through collective bargaining.
Marxist Approach
Lenin came up with the concept of a Marxist approach in the year 1978, where he emphasized the social perspective of the organization.
This theory perceived that the industrial relations depend upon the relationship between the workers (i.e., employees or labor) and the owners (i.e., employer or capital). There exists a class conflict between both the groups to exercise a higher control or influence over each other.
The assumptions of this approach are as follows:
Industrial relations are a significant and never-ending source of conflicts under capitalism which cannot be avoided. However, cases of open disputes are quite unusual.
Understanding the conceptions of capitalized society, capital accumulation process and the pertaining social relations, give a better overview of the industrial relations.
The Marxist theory assumed that the survival of the employees without any work is more crucial than the survival of the employer without the labors.
We can have three parties or participants or actors in an industrial unit:
1. The workers and their unions,
2. Employees and their associations, and
3. Government.
1. Workers and their Unions:
The total work plays an important role in industrial relations. The total work includes working age, educational background, family background, Psychological factors, social background, culture, skills, attitude towards other work, etc. Workers organization prominently in trade union activities.
The main purpose of trade unions is to protect the workers economic interest through collective bargaining and by bringing pressure on management through economic and political practices. Trade union factors include leadership, financial, activities, etc.
2. Managers or employer or management and their Associations:
The prominent role is of work group, the differences in their sizes, constitutions and the degree of specialization they press upon. Of course, there is the necessary provision for mutual communications for the structure of status and authority and for such other organization as trade unions and employer’s associations.
3. Government:
Government plays a balancing role as a custodian of the nation; government exerts its influence on industrial relations through its labor policy, industrial relations policy, implementing labor laws, the process of conciliation and adjudication by playing the role of a mediator, etc. It tries to regulate the activities and behavior of both employee’s organizations and employer organizations.
Thus the three groups of employees, employers and the government work within the social and economic environment that prevails at a particular time. Whatever industrial relations system may be in vogue, it has in its framework the intricate rules and regulations which enforce the workplace and the working community.
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