The Concept of Industrial Relations

Semantics Human Relations: Relations between or among human beings Employee Relations: Relations between employer and

employees as individuals Employment Relations: Relations between parties in an

employment context, either as individuals or as collective(s). Employment relations cover relations between management and employees, both in unionized and non-unionized situations

Union Management Relations: Collective Relations between unions and management. Often the terms industrial relations and union-management relations are used synonymously.

Industrial Relations: Industrial Relations focus on Human Relations between employers/managers and workers and their unions in the production/service process.

The term Industrial Relations in its widest sense includes relations in all aspects of work and employment between and among the parties to an employment relationship.

The term “industry” includes all forms of economic activity: agriculture, manufacturing, services etc.

Definitions•Originally the term industrial relations stood for employer-employee relations in an industry….•Later on, when the workers organized themselves into trade unions and the latter started dealing with the employers, trade union activities also came to be included under this term…•Still later when the relations between employers and employees came to be vested with public importance and ceased to be private , the state had to be involved in such relations …and the activities of the state designed to modify, regulate and control relations between employers and employees also became a part of industrial relations.

According to ILO, “Industrial Relations deal with either the relationship between the state and employer’s and worker’s organizations or the relation between the occupational organizations themselves”.

The Concept of IR have been extended to denote the relations of the state with employers, workers, and their organizations.

The subject therefore includes individual relations and joint consultations between employers and work people at their workplace, collective relations between employers and their organizations and trade unions and part played by the state in regulating these relations.

• Considering all these elements the term industrial Relations can be taken to stand for :

Employee(s)-Unions-Employer(s)-Government Relationship in

employment

Expert Opinions: Saloman defined IR as “basic perceptions of

what is right in respect of ‘fairness’ and the exercise of ‘power’ and ‘authority’

Richardson opined that , “Industrial Relations is an art, the art of living together for purposes of production (and/or services).

According to Dale Yoder, Industrial Relations are a set of functional interdependence involving historical, economic, social, psychological, demographic, technological, occupational, political and legal variables……It is the whole field of relationship that exists because of the necessary collaboration of men and women in the employment process of an industry”

In a wider context, Ramaswamy defines it as,

“ A relationship between collectives such as workers, managers and government agencies interacting in the context of technology, markets and a power structure in order to frame rules and procedures to reconcile their conflicting interests and govern their conduct towards each other”.

Nature of Industrial RelationsA Mixture of Cooperation and conflict…Some

Conflict always remain because: Both the groups develop different orientations

and perceptions of their interests. They also develop generally negative images about each other

There are no mutually accepted yardsticks or norms to tell to the two groups how far they should go in the pursuit of their objectives. In the absence of norms, both groups claim complete rationality for their demands

There is no neutral field for the groups to meet on…..mostly it is win-lose situation

Notable Features/Characteristics of Industrial Relations Industrial Relations do not emerge in vacuum Industrial Relations are characterized by both Conflict

and Cooperation Industrial Relations includes vital environmental

issues Industrial Relations involve the study of conditions

conducive to the labour and management cooperation and it also involves the practices and procedures required to elicit the desired cooperation.

Industrial Relations also study the laws, rules, regulations, agreements, customs and traditions as well as policy framework laid down by government as well as judiciary.

The concept of industrial relations is broad-based and multidisciplinary in nature

Components of Industrial Relations System Workers and their organizations:1. Changing role and demography of workers2. Changing expectations of workers3. Changing attitudes and expectations of employers4. Role of Trade unions different for different parties 5. Working style and philosophy of trade unions strongly

influenced by the ideology of political parties The Management:1. Today’s management is discouraging Trade Unions

especially private sector2. Different management styles for different situations3. IR to be integrated with the HRM Policies4. Humane approach with participative management is

required5. Collective bargaining to be stressed

Contd…The Government: Four doctrines of Government’s Labour

Policy are:1. To encourage the trade unions2. To maintain industrial peace3. To involve trade unions in formulation

and implementation of Five Year Plans4. To exercise political control over the

trade union movement without jeopardizing the legal rights of unions itself

Aspects/Rationale of Industrial Relations Promotion and Development of healthy labour-management

relations: This pre-supposes:1. The existence of strong, well organized, democratic and responsible

TUs2. Ability of TUs to enhance job security of employees and increase

worker’s participation in management3. The spirit of Collective bargaining, negotiation and health

conciliation4. Engagement of TUs in welfare work Maintenance of industrial peace and avoidance of industrial

strife: This requires:1.Proper machinery should be set up for the prevention and settlement

of industrial disputes2. Government to maintain the status quo3. Government to be referred in case of major disputes4. There should be provision of the bipartite and tripartite forums at

industry level Development of industrial democracy: This includes:1. Establishment of Shop Councils and Joint management councils at

floor and plant level2. Workers’ participation3. Recognition of Human Rights in the industry

Factors affecting Industrial Relations Institutional Factors: state policies, labour laws, collective agreements,

labour unions, employer’s organizations Economic Factors: labour supply and demand, wage disparity between

groups, level of unemployment, economic conditions and cycle etc Social Factors: dominating social groups, values, norms, status Technological Factors: work methods, rate of technological changes, R&D

activities etc Psychological Factors: owner’s attitude, workforce perceptions, worker’s

attitude towards work, , their motivation, satisfaction, morale, interests, alienation etc

Political factors: political institutions, government ideology, ruling elite and opposition towards labour problems etc.

Enterprise-related factors: management style, organizational climate, extent of competition, organizational health, HRM policies etc.

Global factors: International Relations, global conflicts, global cultural milieu etc.

All these factors are inter-related and interdependent that determine the texture of industrial relations in any setting.

Multidisciplinary Approach to Industrial Relations Theory:

The field of IR theory has a multi-disciplinary base

Psychological Approach Sociological Approach Human Relations Approach Socio-Ethical Approach Gandhian Approach Unitary Approach Pluralistic approaches Pluralistic Model of Reconciling interests by Gennard and

Judge Marxist approach Dunlop’s Systems Approach Craig’s System Model

Psychological Approach to Industrial Relations The problems of IR have their origin in the perceptions

of the management, unions and the workers The conflicts between labour and management occurs

because every group negatively perceives the behaviour of the other i.e. even the honest intention of the other party is looked at with suspicion.

The problem is further aggravated by various factors like the income, level of education, communication, values, beliefs, customs, goals of persons and groups, prestige, power, status, recognition, security etc are host factors both economic and non-economic which influence perceptions unions and management towards each other

Industrial peace is a result mainly of proper attitudes and perception of the two parties.

Sociological Approach to Industrial Relations

The industry is a social world in miniature having a community made up of various individuals and groups with differing personalities, families, education, emotions likes and dislikes etc

Though the workers carry out their jobs in given industrial environment, their work behaviour is largely monitored by various social factors…further the social consequences of industrialization like urbanization, social mobility, disintegration of family structure etc influence the adjustment and development of IR and require a structural change in the basis IR systems as well

Certain social evils like delinquency, gambling, drinking, drug-addiction, stress and strain etc do influence worker’s efficiency and productivity that in turn influence IR system as a whole.

The process of change and modernization of IR are complex in character from a sociological perspective…..such a perspective may be useful in understanding and appreciation of diverse roles and predictable attitudes of interests of groups in Industrial Relations

Human Relations Approach to Industrial RelationsVarious HRM policies like leadership, motivation

etc have profound influence on their work behaviour

Common denominator in all conflicts is the dissatisfied needs of the individual…thus for maintaining good human relations in general and industrial relations in particular , the study of human needs is important

Understanding and applying Human relations into industrial relations might result in greater job satisfaction, greater involvement and greater identification of personal objectives with the objectives of the organization on the part of both the managers as well as workers .

Socio-Ethical Approach to Industrial Relations This approach holds that industrial relations

besides having a sociological base does have some ethical ramifications…that it is the moral responsibility of managers and workers to cooperate mutually and understand each other’s problems

Thus the goal of labour-management relations may be stated as maximum productivity, leading to rapid economic development, adequate understanding among employers, workers and the government, of each other’s role in industry and willingness among parties to cooperate as partners in the industrial system

Gandhian Approach to Industrial Relations ( Trusteeship)

Gandhiji’s views on industrial relations are based on his fundamental principles of truth and non-violence

Out of these principles evolved the concepts of non-cooperation on which his philosophy of IR rests

The philosophy presumes the peaceful co-existence of capital and labour, which calls for the resolution of conflict by non violent, non-cooperation which actually amounts to peaceful strikes.

Conflicts may arise due to:1. Work-wage bargain2. Managerial system of work governance3. Fundamental divisions and differing values in society Gandhiji therefore accepted worker’s right to strike but

remarked that this right is to be exercised in a just cause and in a peaceful manner

Two things are expected from workers: 1. Awakening 2. Unity The interests of groups can be negotiated through collective

bargaining.

Unitary Approach to Industrial Relations

The unitary perspective is based on the assumption that an organization is composed of a group of people under a single/unified loyalty structure. It is the prerogative, right and responsibility of the management to make decisions regarding how an enterprise is to be run and how employees are to be dealt with.

This approach to IR is based on the assumption that everyone-be it employee, employer or government-benefits when emphasis is on common interest. The underlying assumption is that everyone benefits when the focus is on common interest and promotion of harmony as against conflicting interests.

Conflict is considered irrational and Trade Unions are avoidable Advocates of the unitary approach seek direct negotiations with

employees. Participation of Government, tribunals and unions is not sought.

Under this approach IR is founded on mutual co-operation, team work, shared goals and conflict at work place is seen as a temporary aberration resulting from poor management of employees.

Usually employees accept and cooperate with management and conflict is regarded as destructive

Pluralistic Approach to Industrial Relations Pluralistic approach is a departure from unitary

approach of IR and was evolved and practised in early 1970s by A.Fox.

This approach perceives that organization is a coalition of competing interest groups mediated by the management

At times when while mediating management pays insufficient attention to the needs and claims of employees…employees may unite in the form of trade unions to protect their needs and claims.

The system of IR gets grounded on the product of concessions and compromises between management and trade unions

Conflict is considered inevitable and in some respects necessary as well. The belief among pluralists is that conflict is necessary, but it can be and needs to be managed and resolved.

The Pluralistic Model of Reconciling interests by Gennard and Judge(1997)

Employees

Highest wages and conditions

Survival of the enterprise

Employers

Profit/surplusHigh quality

service

Survival of the enterprise

Reconciliation of different interests

processes

agreements

Different interests

Common interests

REFLECT RELATIVE

BARGAINING POWERS

Marxist Approach to Industrial Relations (Radical Approach) Like pluralists Marxists also view conflict between labour and

management as inevitable but unlike pluralists they regard conflict as a product of the capitalistic society based on classes.

Marxian philosophers believe that capitalism can continue to maintain itself only by lowering the standard of living of the working class. According to this approach conflict arises because of division within society in terms of haves i.e. capitalists and have nots i.e. labour

Marxists do not welcome state intervention as in their view it usually supports management’s interests

Acc to this approach , Labour-capital conflict cannot be solved by bargaining, participation and cooperation…trade unions activities are reactive to the exploitation by capitalists and also a weapon to bring a revolutionary social change.

The radical approach facours transformation of Trade unions into revolutionary organizations rather than their becoming lieutenants of capital in intensifying exploitation of workers(Trotsky,1977)

Capitalist society integrated group common values,

interests, objectives

one authority /loyalty irrational + fractional

coercion

intrusive anachronistic only accepted if

forced

Unitary Pluralistic MarxistAssume

Nature of conflict

Conflict resolution

TU Role

• Post-capitalist society• Sectional groups -

coalesce• different values,

interests, objectives

• competitive authority /loyalty (formal/informal)

• inevitable, rational, structural

• compromise + agreement

• legitimate• internal, integral to

workplace• accepted role in econ &

managerial relations

• Capitalist• Division of labour/capital• social imbalance +

inequalities - power, wealth etc

• inherent in econ. & social systems

• disorder - precursor to change

• change society

• employee response to capitalism

• mobilise, express class consciousness

• develop political awareness & activity

System Approach to Industrial Relations (Dunlop and Craig’s Model) Dunlop’s Model:

1. Dunlop propounded an IR system which according to him is to be viewed as an analytical subsystem of an industrial society

2. He suggested that the industrial Relations system could be divided into four interrelated elements comprising ‘certain actors , certain contexts ,an ideology which binds the IR system together and a body of rules created to govern the actors at the workplace”

3. An IR system involves three groups of actors viz Workers and their organizations, Managers and their organizations and Governmental Agencies

4. These actors confront an environmental context: the technology, market, power relations etc

5. The system is bound together by an ideology or understandings shared by all the actors…

6. Thus Dunlop sees the creation of rules as the central aim of the IR system

Dunlop’s Model

Inputs Processes Outputs

Environmental Context

Actors

Ideology

1.Market or Budgetary restraints2. Technology3. Distribution of power in society

UnionManagement Government

Rules of the workplaceBargaining

Conciliation

ArbitrationLawmakin

g etc

Craig’s Model

Environment

Technological subsystem

Economic subsystem

Political subsystem

Industrial Relations system

InputsValuesPower

OutputsRules

Workers

Managers

Govtagencie

s

Craig’s System ModelIn Craig’s Model the actors and context

are similar to those in Dunlop’s ModelThe inputs are the goals, values and

power of the actorsThe mechanism is the conversion of

inputs into outputsThe output is the financial,

psychological and social rewards for the workers and is in the form of rules which govern pay, working conditions, hours of work etc.

Rule making Approach to IR Dunlop referred to the network of rules as one of the

outputs of IR Flanders considered formulation of rules and their

implementation as the bread and butter of IR Gouldner pointed out the importance of developing

rules by consensus Rules originated from different sources and are shaped

by their legal, political, economic, social and historical context

Constitutional and Legislative framework Single party(Unilateral) Two parties (Collective Bargaining) Three Parties(Tripartite accords) Third Party( Arbitration/Adjudication) Multiple parties (Social Codes)

Pluralistic

Co-operation

Conflict

Authoritarian

Paternalism

Unitary

Humanresource

management

Systems

Evolution

Revolution

Marxist

Control ofthe labour

process

Input Conversion Output

Conflict(differences)

Institutionsand

processes

Regulation(rules)

Approaches to organisations

Approaches to industrial relations

Social action

Wider approaches to industrial relations

Approaches to industrial relations

Labour market Comparative

Next Session

1. Evolution of Indian IR2. Emerging trends in Indian IR

Winter Break Assignment (to be Graded)1. A knowledge sharing exercise/discussion• Scan any new trends/ story/ news/ article/ research with regard to Industrial relations in any country including India with a brief linkage with the prevailing approaches of IR!!

•2. A two-page assignment on Evolution of IR system in India and in any other country