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Presentation on theme: "INDUSTRIAL RELATIONS - CONCEPTS, APPROACHES AND ORGANISATIONS"— Presentation transcript:


2 INDUSTRIAL RELATIONS Industrial Relations is a multidisciplinary field that studies the employment relationships. It can be defined as the relations between management and union, or between representatives of employees and representatives of employers i.e. it represents all aspects of employment relations within the organizational settings. Industrial Relations also includes the processes through which these relationships are expressed According to ILO, industrial relations denotes such matters as freedom of association and the right to organise, right of collective bargaining of collective agreements, or conciliation and arbitration proceedings, and the machinery for cooperation between the authorities and occupational organisations at various levels of the economy. The term Industrial Relations comprises of 2 terms ‘Industry’ and ‘Relations’. ‘Industry’ refers to any “productive activity in which an individual (or a group of individuals) is (are) engaged. By ‘relations’ we mean “ the relationships that exist within the industry between the employer and his workmen.

3 Two Dominant Aspects of Industrial Relations
Two important aspects of the industrial relations scene in a modern industrial society : Cooperation - Modern industrial production is based upon cooperation between labour and capital. Here labour stands for the workers who man the factories, mines and other industrial establishments or services. Capital stands for the owners of business enterprises who supply the capital and own the final products. Conflict - The second aspect of the system of industrial relations today is, the existence of conflict. Conflict, like cooperation, is inherent in the industrial relations set up of today. It becomes apparent when industrial disputes resulting in strikes and lockouts become frequent.

4 Objectives of Industrial Relations
To protect the socio economic interest of workers and the management through establishing and maintaining industrial democracy at work place To avoid industrial conflicts so as to develop a healthy work environment To encourage collective bargaining inter alia to increase performance, safety, mortality and other incidental mutual benefits Helping government make laws to improve the quality of life of working class

5 Aspects of industrial relations
Development of healthy labour-management relations – Presence of a strong, well organized, democratic and responsible trade unions help in enhancing job security of employees, increase in workers’ participation in management etc which lead to better labour management relations. Collective Bargaining, plant discipline, satisfactory trade union relations, welfare work undertaken by government, unions and employers lead to better relations Maintenance of industrial peace – This can be nurtured by setting up machineries for prevention and settlement of industrial disputes, develop labour laws like Trade Union Act, Industrial Disputes Act etc and administrative enactments to negotiate disputes and reduce tension, government should have the power to refer disputes to adjudication when there is a major crises, government should enjoy power to maintain status quo, to be exercised if after referring to arbitration, either party refuses to comply, and the provision of bipartite and tripartite forums for settlement of disputes. Development of Industrial Democracy – where the labour has the right to be associated with the management of an industry. Techniques to achieve this objective – establishment of shop councils and joint management councils at the floor and plant level, recognition of Human Rights in Industry, increase in labour productivity and availability of proper work environment.

6 The Three Actors of IR and their roles
Good industrial relations are difficult to define since a good system of industrial relations involves complex relationships between: (a) Workers (and their informal and formal groups, i. e. trade union, ) (b) Employers (managers & formal orgns like trade and professional associations) (c) The government and legislation, government agencies and 'independent' agencies like the Advisory Conciliation and Arbitration Service. Roles of the actors- Management – Their roles maybe (i)The Exploitative Authoritarian system, (ii)Benevolent Authoritarianism, (iii)Consultative Style (iv) Participative Style Workers’ Unions - Roles (i) Bargainers (ii) Partners (iii) Enemy of the System The Government - The third actor is the Government. The Government may assume any of the following roles (i) Laissez-faire Philosophy (ii)Paternalism (iii) Voluntarism (iv) Interventionism The three actors in the system interact with each other to yield the basic output – i.e. set of rules that govern working conditions and terms of employment.

7 Factors that affect Industrial Relations
1.Institutional Factors – like state policy, labour laws, collective bargaining agreements, labour unions, employers’ federations etc 2. Economic Factors – like economic organizations( socialist, communist, capitalist), type of ownership (individual, company – domestic, MNC, government, cooperative ownership), source of labour supply, disparity of wages between groups, level of unemployment etc 3. Social Factors – These factors like caste, creed, status are loosing importance with the acceleration of industrialization but cannot be ignored. 4. Technological Factors – like work methods, type of technology used, etc as these factors influence employment status, wage level, etc 5. Psychological Factors – like owners’ attitude, perception of workforce, workers’ attitude, their motivation, morale, interest, dissatisfaction etc has an important impact in the industrial relations 6. Political Factors – like system of government, political philosophy, attitude of government towards labour problems etc. IR are largely shaped by the amount of involvement of political parties in trade union activities. 7. Enterprise related Factors – like style of management, its values, organizational climate, competition, adaptability to changes, HR policies etc 8. Global Factors – like international relations, global conflicts, economic and trading policies of power blocks, international trade agreements, International labour agreements.

Equity & Fairness – Equity/ fairness refer to equal treatment to one and all under comparable circumstance in industrial relations. Power & Authority – Power is the ability to influence, impose or control. It implies use of force. Its various aspects are – power to reward/ punish/ coerce others, position power, expert power due to knowledge/experience/skills, associational power through membership in unions/coalitions/networking etc. Authority is the right to expect and command obedience. Individualism & Collectivism – The fundamental basis of a democratic society is the freedom of the individual. In an employment relationship, collectivist basis may negate or limit an individual’s freedom. Integrity, Trust & Transparency – Integrity is adhering to what is professional, Trust is established between and among people. Transparency is promoted through sharing of information, openness in communication, willingness to explain and reason out the motives behind decisions and actions.

9 3 Theoretical perspectives
Each view offers a particular perception of workplace relations and interprets workplace conflict, the role of unions and job regulation differently. 1. Unitarist perspective - In unitarism, there is only one source of authority; management. They own and therefore control. It has a paternalistic approach where it demands loyalty of all employees. Consequently, trade unions are deemed as unnecessary and avoidable since the loyalty between employees and organizations are considered mutually exclusive, where there can't be two sides of industry. Conflict is perceived as irrational, disruptive and the pathological result of agitators, interpersonal friction and communication breakdown. Employers and management find the unitary perspective attractive as it legitimizes their authority to govern. This perspective is outmoded. 2. Pluralist perspective- This is based on the assumption that the organization is composed of individuals who make up distinct sectional groups, each with its own interests, objectives and leadership, the two predominant sub-groups -management and trade unions. Consequently, the role of management would lean less towards enforcing and controlling and more toward persuasion and co-ordination. This perspective sees conflicts between management and employees as rational and inevitable. Trade unions are deemed as legitimate representatives of employees to collectively safe guard their interests. Conflict is dealt by collective bargaining, Hence pluralist is about mutuality and the reciprocal influence of management over trade unions and workers. 3. Radical perspective- This is based on the notion that the production system is privately owned and is motivated by profit. Radical theories are strongly identified with Marxist theories . This perspective sees inequalities of power and economic wealth as having their roots in the nature of the capitalist economic system. Conflict is therefore seen as inevitable and trade unions are a natural response of workers to their exploitation by capital. They favour transformation of trade unions into revolutionary organizations.

Industrial relations can be viewed as a eclectic system composed of group of people and organizations working with varying viewpoints. It can be viewed from various angles ranging from economic, social, political, psychological, and managerial

11 THE MARXIST APPROACH The Marxist approach is primarily oriented towards the historical development of the power relationship between capital and labour. It is also characterised by the struggle of these classes to consolidate and strengthen their respective positions with a view to exerting greater influence on each other. In this approach, industrial relations is equated with a power-struggle. The price payable for labour is determined by a confrontation between conflicting interests. The capitalist ownership of the enterprise endeavours to purchase labour at the lowest possible price in order to maximise their profits. The lower the price paid by the owner of the means of production for the labour he employs, the greater is his profit. The Marxist analysis of industrial relations, however, is not a comprehensive approach as it only takes into account the relations between capital and labour. It is rather, a general theory of society and of social change, which has implications for the analysis of industrial relations within what Marxists would describe as capitalist societies.

An industrial relations system at any one time in its development is regarded as comprised of three sets of independent variables: the ‘actors’, the ‘contents’ and the ‘ideology’ of the system which binds the industrial relations system together, and a body of rules created to govern the actors at the workplace and work community. This approach is helpful in studying the industrial relations as it focuses on participants in the process, environmental forces and the other inter relations within the IR system. The actors: They are (i) managers and their representatives, (ii) workers and their organizations and (iii) specialized government agencies concerned with workers, enterprises and their relationships. The environmental contents: (i) technological characteristics of the workplace (ii) the product and factors market or budgetary constraints that impinge on the actors (iii) the locus and distribution of power in the larger society The ideology: These are a set of ideas and beliefs commonly held by the actors that helps to bind or integrate the system as an entity. The network of rules: The result of all the interaction within the system, leads to establishing rules like country’s labour policy, labour agreement etc and deciding their application so that the workers gat a fair deal.

13 Dunlop’s framework of Industrial Relations System.
Inputs Processes Outputs Actors Environmental Contents Rules Ideology All these factors are critical in an industrial relations system and may be expressed in a variety of forms: regulations & policies of management , decrees, decisions, awards, or orders of government agencies, collective bargaining agreements, customs and traditions of workplace & work community etc. These rules may be incorporated in a number of these forms, they may be written, in oral form or customary practice. Some limitations of the systems framework: With liberalization and growing environmental concerns, apart from managers, workers and governments, consumers and community also plays a critical role in IR processes and outcomes. Also behavioral aspects like human motivations, preferences etc have been ignored. Bargaining Conciliation Arbitration Lawmaking etc

Psychologists associated the problems of industrial relations with the perceptions and attitudes of the focal participant: labour & management. Mason Harie conducted a test on both the groups and concluded that a. The general impression about a person is radically different when he is seen as a representative of management from that of the person seen as a representative of labour. b. The management and labour see each other as less dependable c. Both parties see each other as deficient in terms of emotional characteristics and inter personal relations. These variance is due to their individual perception. The conflicts between management and labour occur mainly because each group negatively views/ perceives the behavior of the other. This leads to strained inter-personal and inter-group relations breeding disharmony and during conflicts not only their interest but also personalities are at stake.

The industry is a social world comprising of a community made up of individuals with differing personalities, varying educational background, family breeding, emotions etc. Various sociological factors like value system, customs, norms of both labour and management affect the industrial relations and their work behavior is largely influenced by these factors. Moreover social consequences of industrialization like social mobility, migration generates many social evils like family disintegration, stress & strain, delinquency, personal & social disorganization leading to vices like drinking, gambling, drug abuse etc. These affect the efficiency and productivity of the workers and influences Industrial Relations. Whenever industrialization gains momentum, consequently new social patterns emerge along with new relationships, institutions, behavioral patterns and techniques to handle human resources develop. All these shape the industrial system. With the passage of time the profile of the industrial worker has changed and he has become more urban in outlook, no longer unskilled or neglected by society and is more secure in his employment. Management also gives importance on the use of behavior techniques while dealing with the human side of the enterprise and the flow of authority, power or control has become more democratized. Sociologically, in the process of change, industrial relations are becoming more complex.

The human relations approach highlights certain policies and techniques to improve employee morale, efficiency and job satisfaction. It encourages the small work group to exercise considerable control over its environment and in the process helps to remove a major irritant in labour-management relations. This approach deals with the most delicate area i.e. humans who have their own emotions, perceptions, attitudes, personality etc. These factors makes them complex individuals and when they interact with each other their complexity multiplies. The problems of industrial relations rises when they are not properly managed both at individual and group level. The human resource management policies relating to leadership and motivation has a profound influence on work behavior. E.g. autocratic style may lead to dissatisfaction and demotivate people to work. Another important factor to maintain good human relations and industrial relations is the study of human need and the satisfaction of these needs. The 4 basic needs are physiological, safety & security, social and egoistic needs. Each higher order need arises once the lower order needs are satisfied. Though no specific diagnosis can be made, but the management should try to design a suitable motivational strategy to provide their optimum need satisfaction required to maintain good human relations. Application of techniques oh human relations will lead to good industrial relations. The workers will have greater job satisfaction, develop greater involvement in their work, and can identify their objectives with that of the organization. The manager will develop a greater insight and effectiveness in his work.

This approach to industrial relation is based upon fundamental principal of truth, non-violence and non-possession. This approach presumes the peaceful co-existence of capital and labour. Gandhiji emphasized that if the employers follow the principal of trusteeship than there is no scope of conflict of interest between labour and management, Gandhiji accepted the workers right to strike, but should exercise this right for a just cause and in a peaceful and non-violence manner and this method should only be resorted when all methods failed in getting employers response. In case of conflict Gandhiji advocated- The workers should seek redressal of reasonable demands only through collective action If they have to organize strikes, it should be peaceful and non violent. Strikes should be avoided in industries of essential services India’s industrial relations system has been largely influenced by Gandhian thought. There is an emphasis on peaceful settlement of industrial disputes and the government expects the parties to resolve their disputes peacefully and stresses on mutual negotiations. In case the parties desire to refer their disputes to arbitration, it is imperative that the trade unions serve a 14 day notice of strike to the employers


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