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  • 8/6/2019 Employee Relations - Copy


    Industrial Relations/ Employee


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    Concept of IR

    Subjects under IR

    Theories Perspectives

    Roles of Workers, Management and Govt.

    IR scenario in India

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    What is Industrial Relations?

    Relation between Employer - Employee?

    Relation between Employer Employees?

    Synonymously used as Employee Relations

    No more unions

    Its about dealing with individuals

    Regulation of employment relationship between employer

    and employee

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    What is Industrial Relations?


    Industry refers to any productive activity in which anindividual (or a group of individuals) is (are) engaged

    Relations means the relationships that exist within theindustry between the employer and his workmen/ employees.

    Basically it is the:

    Relationship between union and management

    Conducted within a legislative framework devised by Govt.,institutions

    Have implications for all including society

    All aspects of employment relationships

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    IR is considered as a system of rules and regulations, whichgovern the relationship between the major parties i.e.employer and employees.

    Various Schools of Thoughts:

    1. Industrial relations is a rule making process.

    2. Industrial relations is the process of interaction amonginstitutions of job regulation.

    3. Industrial relations is a process of struggle for controlover work structures and work processes.

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    IR includes

    Relationships between: individual workers, workers - their employer, employers -

    employers, employers and workers - organizations

    formed to promote their respective interests Processes through which these relationships are

    expressed: collective bargaining, workers participation in decision-

    making, and grievance and dispute settlement Management of conflict between

    employers, workers and trade unions

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    How is it Different from HRM?

    Industrial Relation pertains to the study and

    practice of collective bargaining, trade unionism,and labor-management relations.

    Human resource management is a separate,largely distinct field that deals with nonunion

    employment relationships and the personnel

    practices and policies of employers.

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    Why are we studying IR?

    Is it relevant in todays organizations?

    Industrial progress is impossible without cooperation oflabors and harmonious relationships It is in the interest of all to create and maintain good

    relations between employees (labor) and employers(management)

    Ensures continuity of production

    Reduction in Industrial Disputes Improves Morale

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    Objectives of IR System is to:

    Safeguard the interest of labor and management

    Avoid industrial conflict or strife and develop

    harmonious relations Raise productivity by reducing cost

    Establish and promote the growth of an

    industrial democracy Minimize industrial unrest (strike, lockout)

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    IR System

    Actors in the IR system:

    Three main parties are directly involved in industrial relations:

    Employers: Employers possess certain rights vis--vis labors. They have the rightto hire and fire them. Management can also affect workers interests by exercising

    their right to relocate, close or merge the factory or to introduce technologicalchanges.

    Employees:Workers seek to improve the terms and conditions of theiremployment. They exchange views with management and voice their grievances.

    They also want to share decision making powers of management. Workersgenerally unite to form unions against the management and get support from

    these unions.

    Government:The central and state government influences and regulatesindustrial relations through laws, rules, agreements, awards of court etc.. It alsoincludes third parties (arbitrators and adjudicators) and labor and tribunal courts.

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    Approaches to study IR

    No single strong explanatory theory

    Dunlop (1958) Systems Theory of IR

    Kochan et al, (1984) - Strategic Choice Theory

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    Employment Relations

    Dunlops model

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    Dunlops Model of IR

    Industrial relations is the system which produces the rules of theworkplace.

    Actors: Management

    Employees and their representatives (Trade Unions)

    Govt. agencies (Arbitrators)

    Environment/ Context: in which actors operate Technological

    Market (economy) and budget constraints

    Locus and distribution of power (political)

    Ideology: Set ideas held by actors

    Rules: (product of interaction between the actors) Through this process the rules are framed which govern the relations

    between the employer and employees

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    Dunlops Model of IR

    Dunlop's model identifies three key factors to beconsidered in conducting an analysis of themanagement-labor relationship: Environmental or external economic, technological,

    political, legal and social forces that impactemployment relationships

    Characteristics and interaction of the key actors in

    the employment relationship: labor, management,and government

    Rules that are derived from these interactions thatgovern the employment relationship

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    Kochan et al, (1984) - Strategic Choice


    Integrates strategy, structure, and decision making

    IR activities among actors happen at 3 levels:

    Top tier: Strategic decision making

    Middle tier: Collective Bargaining and/or Personnelpolicy-making

    Bottom tier: Workplace, individual andorganizational relationships

    IR strategies are made in response to the firms overallcompetitive strategies

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    Perspectives on Industrial Relations


    Organization is perceived as an integrated andharmonious system, viewed as one happy family

    Only one source of authority: Management They own so they control

    All share same objectives, interests and purposes;thus working together, hand-in-hand, towards the

    shared mutual goals. Conflict is unnecessary &Trade unions are avoidable

    Still prevails in unorganized sectors and tiny, small-scale industries

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    Perspectives on Industrial Relations



    Organization comprises of distinct groups (Management and

    Trade Unions) with different objectives and leadership

    Role of management is towards enforcing and controlling andmore toward persuasion and co-ordination

    Conflict between management and employees is rational and


    Conflict is necessary, but can be and needs to be managed and

    resolved Mutuality and reciprocal influence of trade unions and


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    Perspectives on Industrial Relations


    Radical/ Marxian

    Production system is privately owned and profitoriented

    Class conflict is necessary for social change to endthe disparity between class & mass

    Two classes of society - workers and capitalists

    Sees industrial conflict synonymous with political

    and social conflict Conflict in employment relationship is reflective of

    the structure of the society

    Role of trade union is to protest exploitation

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    Perspectives on Industrial Relations


    Trusteeship (Gandhian Philosophy)

    When company accepts its total responsibility

    Seeking justice is the aim of business

    The principle of trusteeship expresses the inherent responsibilityof a company to its consumers, workers and shareholders

    Conflict is inherent

    Interests of groups can be negotiated through collective bargaining

    Main concern is motivation of workers

    Seeks to motivate through positive incentives, not fear

    Interested in employee involvement

    Work cooperatively with them

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    Labor Market Situation in India

    How many are covered under Industrial

    Relations System?

    Only about 7% of the workforce is employed inorganized and formal sector (1999-2000 survey)

    Although the growth of employment is

    increasing in this sector largest chunk is inAgricultural sector

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    Role of Govt.

    Constitutional and legislative framework Management and TU should abide by constitution, legislations and

    gazette notifications

    Evolve norms through tripartite forums to act as guidelines

    for shaping industrial relation Responsibility to ensure conformity to these norms through

    its judici