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1-2. Nature ofIndustrial Relations:
Traditional & ChangingPerspectives
Debi S. SainiProfessor & Chairperson—HRM Area
Management Development Institute, Gurgaon
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The issues discussed in this presentation are:
1. Conflict dynamics & different approaches of IR Mgt.
2. Working of an IR system: Dunlop’s System Model
3. IR & related terms: IR—LR—ER
4. Has Globalizations changed IR scene? How?
5. IR: Actors—Issues—Institutions—Procedures
6. Traditional issues in IR
7. Frames of reference of IR: Unitarist––Pluralist––Marxist
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Two Main Components of this Course:
Management of Personnel/People(Systems, effectiveness, engagement, productivity)
Management of Industrial Relations (Conflict, interests, rights, peace)
Lately, the two perspectives are gettingmerged into an integrated HRM framework
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The Roots ofIndustrial Conflict
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Peace Requires: Balancing of Business Needs & People Needs
• High Earnings
• Speed to Marketplace
• Market Share
• Product Quality
• Customer Service
• Customer Responsiveness
• Low Costs
• Efficiency/Productivity
• Flexibility
• Benchmarking
• Responsive/Innovative
• Future Oriented
• Customer Satisfaction
• Reward & gain sharing
• Reasonable job security
• Work-life balance
• Flexibility
• Empowerment
• Welfare facilities
• Social security
• Learning Atmosphere
• Respect for their Diversity
• Growth opportunities
• Recognition/ belonging
• Participation/ Involvement
• Management style
People Needs are Managed differently in
Different Orgs.
IBMTata Steel
Ballarpur IndustriesHero MotoCorp
NDPL
Business Needs People Needs
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First know: Why Labour-Mgt. Conflict Occurs
Conflict is at the centre in organizational working
Why:
Industrial Conflict: a Complex & difficult issue
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Difference in interests, values, goals, attitudes
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Mgts. differently handle conflict:
Positive or Negative Meaning of Work
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• Work is interesting
• Reflects good quality of life
• Gives us meaning of life(WM feels: meditating/ bldg. a temple)
What does work mean to People: Two extremesPositive (win-win) Negative (lose–lose)
Sheer Drudgery/unpleasant
A way to kill time
Just a means to living
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Can we think ofsome basic approaches to
managing employer-employee relations?
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• Graziano: CEO killed • Maruti-Suzuki HR Chief burnt
• HMSI Violence 2005• Tata Steel (35 K workers; no strike since 1958)
• Classic Stripes: 3-6 best employer co.
How do we go about understanding these issues?
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500 WM including contract WM—Most are blue-collared
4 WM 25 yrs. ago (in 10’ x 10’): Built 44 acre campus in Vasai3 plants now: Mumbai; Vasai; Hardwar— No Union
Kishore Musale Charitable Trust:
Main motto: “dignity at work.”—Believes in: “valuing every individual, giving people their due,
freedom, respect, opportunity backed by lots of training.”
Classic Stripes (Mfg.): Come Out of Control Mindsethttp://classicstripes.com/manufacturing_plants.html
Won Safety & Environt. 2003 award (SIGA given to 5 cos. worldwide)
— Kaizen Training: 2½ hrs per month
A relationship committee: Meets twice in a month
Has a library with trade journals, magazines & books
DM: 1/3 Women workers; also physically-challenged
Shares with employees a %age of its annual profits
Classic Stripes: Some HR Initiatives contd…
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Tata Steel Ltd.: HRM Model
• Sr. Mgt. work at less than 60% of market worth; don’t leave
• Meets need for dignity, stability, security: No strike since 1958
• Participation, paternalism (kin employment), family focus
• Ethical working
• CSR creates a sense of pride in employees
Comparing two US Cos.: South West Comparing two US Cos.: South West && American AirlinesAmerican Airlines
• On same day (May 2010): AG meeting of airlines: SWA & AA
--AA meeting was picketed by AA Pilots Assn.--Southwest celebrated 37 yrs. of service by founder, Herb Kellehar
• Paper carried picketing news; same paper carried an ad: “Kellehar knew, knows & will always know that
the secret to bus. success, small or large, is to put people first.”
• Kellehar sees “employees as my principal customer.”
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UnderstandingEmployee Relations& related Terms?
Employees as Individual (Market operates here)
Employees as collective(Class solidarity operates here i.e. Unions)
Org. needs: Employee retention & engagement, indl. peace in both situations
2 Sets of Concerns for Employer & Employee
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ER & IR both deal with all aspects of employment relationsi.e. unionized & non-unionized [Today, Global focus: cooperation—decent work]
—But IR’s key focus is unionized workers, & —ER’s key focus is individualized workers
ER: is ongoing relations-building process with employees
through HR practices & orgl. culture-bldg. efforts
for securing employee commitment/engagement
• LR (labour Relations) focuses exclusively onemployment relations in a unionized environment (i.e. Unions & mgt.)
Employee Relations, IR & LR
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What does good ER Involve: Research?
1. Dialogue & communication for trust & culture
2. Partnership through involvement & feeling valued
3. Proactive, not reactive efforts (Hero MotoCorp)
4. Employee rights, fairness, just grievance mgt.
5. Employee discipline (Tata Steel; Classic Stripes)
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Employee Relations
Employee Communication
for Trust bldg.
Partnership& Employee Involvement
Employee Rights/fairness/Grievance mgt.
EmployeeDiscipline
Fig.: Key Dimensions of Employee Relations
ProactiveEfforts
Manifestations of Poor Employee Relations
Unionization
Poor Performance
Employee Absenteeism
Employee dissatisfaction & Turnover
Litigation
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What do youthink is meant by
Industrial Relations?
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Industrial Relations: Simply Speaking:
Industrial relations (IR)
is the process of rule making
that mediates between divergent interests
of capital and labour
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How can we view Industrial Relations
J. H. Richardson (Leeds University)
• “Industrial relations is
the art of living together
for purposes of production”
ImportantSome
regulation is needed
inall relations;
State determines
the regulatory framework
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How can we view Industrial Relations contd…
Hugh Clegg (Clegg & Flanders pioneers of Classical Oxford School of IR)
“Industrial relations is a study of
workers and their unions,
employers and their associations,
and State & its institutions/agencies
concerned with regulation of employment.”
Imp.: Different powers, roles, interests, duties of Actors
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Is Globalization Syndromelinked to
Industrial Relations: How?
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What Does Globalization mean?
• Global movement of capital
• Global movement of businesses
• Driven by principles of free market economy
• & less obstructed people movement
• Across borders within companies
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Globalization & Other Causes of Changes in Business1. GLOBALIZATION Syndrome
2. Information Revolution/Internet
3. New Technology
4. Emergence of Service Industry
5. HR Philosophy:
M. Thatcher has been named UK’s most effective prime minister of the 20th centuryby BBC History Magazine 30 Aug, 2006, TOI
Globalization has led to:• Internl integration of economies• PSU reforms & privatization• Collaborations & jt. ventures• Dominance of market
rationality• Decline of welfare state
Psychological Contract &Focus on: Employee Relations
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What is meant by:•IR Actors
•IR Institutions•IR Procedures
•IR Issues
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Focus of the Discipline of IRA. Characters (or actors) in IR
––Union leaders
––HR Managers
––Conciliation Officers/ Mediators
—Arbitrators/judges
––Labour Courts/
––Labour Lawyers/Management Consultants
––Others
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Focus of the Discipline of IRB. IR Institutions
(permanent form of custom or law)
––Unions––Employer associations ––State/Labour Bureaucracy
––ILC––ILO––Tribunal/Labour Court ––Labour law––Higher judiciary
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Focus of the Discipline of IR cond…
C. IR procedures (aim at: Procedural justice)
––Bargaining/Negotiation
––Conciliation —Arbitration—Adjudication––Reference––Procedure for going on strikes/ lockouts––Inquiries/Disciplinary procedure
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IR is studied by many academic disciplines• Economics
• History
• Law
• Sociology
• Political Science
• Management
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What do you thinkare some of the key issues
in IR?
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Traditional Problems/Issues in IR
1. Job satisfaction: Job design––Working conditions––supervision
2. Negotiating Wage/salary/VRS/bonus/benefits
3. Alienation & discontent
4. Grievance management
5. Trade union, strikes, lockouts
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Traditional Problems in IR6. Industrial dispute settlement
7. Indiscipline, absenteeism & mobility
8. Labour Laws
9. Labour welfare/QWL
10. Communication
11. Joint consultation, participation, involvement
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Three Basic Approachesto looking at IR:
Pluralism, Unitarism, RadicalismWhat are these?
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Frames of Referencein Industrial Relations
& New Issues in IR
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Frames of Reference: Unitarism & PluralismUnitarism
1. Assumptions about Interests—Common interest/objectives
2. Assumptions about conflict—Inevitable, destructive: Be avoided —Caused by: Poor mgt/communication
3. Assumptions about trade unions—Unwanted intrusion
4. Assumptions about collective bargaining—CB generates workplace conflictrather than resolve it
Pluralism1. Assumptions about Interests
—Mgrs. & employees have: different objectives
2. Assumptions about conflict—Inevitable—Be negotiated—Caused by difference of opinions/values
3. Assumptions about trade unions—Not the cause of conflict: Conflict inherent—Legitimate part of workplace relations
4. Assumptions about Collective bargaining—CB ensures fairer outcomes —Balances employee & mgt. power
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III. Marxist (Radical/ Critical) Perspective
• Market economies are social arrangements created by historical forces
• Private property is a social construct, not created by nature
• Owners of capital accumulate capital; take all or most of it
• Power of ownership & control cause WM’s impoverishment
• Classes struggle: for control of industry, economy & state
• Differential access to education, media, government jobs
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III. Marxist (Radical) Perspective contd…
• View of society based on post-capitalism is wrong––Capitalist profit is key influence on co. policy
•Control enforced downwards by capital’s agents––Surplus value generation by capitalist
• Employees socialized into accepting status quo
•Class conflict is the source of societal change––Without conflict society will stagnate
•Capitalism will collapse due to its inherent contradictions
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III. Marxist Perspective contd…
• CB: limited accommodation of fundamental divisions––Unions/IR instts. deal with marginal issues
• Law not independent referee
• Industrial Justice: only if revolution
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How do we Conceptualizethe Different Workings of
IR System?
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I. Traditional Pluralism(German Pharma)
II. Paternalistic Pluralism(Tata Steel/NDPL)
III. Ambivalent Pluralism(Most unionized cos.Maruti-Suzuki Ltd.)
IV. Repressive Pluralism(Simran Foods Ltd.)
V. Coercive Unitarism(Glaziano before the violence; SMEs)
VI. Ambivalent Unitarism(Or manoeuvredunitarism through law, shenanigans, paternalism, collusion with bureaucracy)
VII. Paternalistic Unitarism
(Most Indian SMEs, Flaxo Exports)
VIII. IBM type Unitarism(New Unitarism)
(Hero-Honda, Air Tel)
Eight Broad Typologies of IR Models
© Debi Saini 2010
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What can be Learnt from these two Sessions:• Conflict in industry is inevitable, given different interests
• Variegated models of IR are practiced by different organizations
• IR is a system of rule-making about gains of & power in industry
• IR concept is changing into employee relations in new era
• IR focuses on actors, institutions, procedures
• Unitarism & Pluralism are 2 broad approaches to IR
• IR can be divided into 8 broad typologies