Unit 1

Introduction and Importance of Employee Relations Management

The term ‘Industrial Relations’ comprises of two 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.”

Concept of Industrial Relations

The term industrial relations explain the relationship between employees and management which
stem directly or indirectly from union-employer relationship. Industrial relations are the
relationships between employees and employers within the organizational settings.

The field of industrial relations looks at the relationship between management and workers,
particularly groups of workers represented by a union. Industrial relations are basically the
interactions between employers, employees and the government, and the institutions and
associations through which such interactions are mediated.
The term industrial relations have a broad as well as a narrow outlook. Originally, industrial
relations were broadly defined to include the relationships and interactions between employers
and employees. From this perspective, industrial relations cover all aspects of the employment
relationship, including human resource management, employee relations, and union-management
(or labor) relations.

Now its meaning has become more specific and restricted. Accordingly, industrial relations
pertains to the study and practice of collective bargaining, trade unionism, and labor-
management relations, while human resource management is a separate, largely distinct field that
deals with nonunion employment relationships and the personnel practices and policies of
employers.

The term industrial relations have a broad as well as a narrow outlook. Originally, industrial
relations were broadly defined to include the relationships and interactions between employers
and employees. From this perspective, industrial relations cover all aspects of the employment
relationship, including human resource management, employee relations, and union-management
(or labor) relations.

Now its meaning has become more specific and restricted. Accordingly, industrial relations
pertains to the study and practice of collective bargaining, trade unionism, and labor-
management relations, while human resource management is a separate, largely distinct field that
deals with nonunion employment relationships and the personnel practices and policies of
employers.

Industrial relations is used to denote the collective relationships between management and the
workers. Traditionally, the term industrial relations is used to cover such aspects of industrial life
as trade unionism, collective bargaining, workers’ participation in management, discipline and
grievance handling, industrial disputes and interpretation of labor laws and rules and code of
conduct

According to National Commission on Labor (NCL), industrial relations affect not merely the
interests of the two participants- labor and management, but also the economic and social goals
to which the State addresses itself. To regulate these relations in socially desirable channels is a
function, which the State is in the best position to perform.

History
Industrial relations got its roots in the industrial revolution and the spread of capitalism which
created the modern employment relationship by spawning free labour markets and large-scale
industrial organizations with thousands of wage workers. Kaufman, the Global Evolution of
Industrial Relations.
As both societies wrestled with these massive economic and social changes, labour problems
arose. Low wages, long working hours, monotonous and dangerous work, and abusive
supervisory practices led to high employee turnover, violent strikes, and the threat of social
instability and due to confluence of these event and ideas associated with rise of democratic
governments in the western world of the late nineteenth and twentieth centuries. It emerged from
both negative and positive impulses
 The negative aspect, industrial relations was a reaction against deplorable working condition and
with unrepressed profit making and employee clout in the nine teeth century and twentieth
century capitalism and this led to the deplorable situations a conflict between capital and labour
and hardship for employee of that time
So we come to the conclusion that industrial relation was part of the reform wing. Industrial
relations arose from the conviction that cordial relationship between workers and employer could
be improvised through a combination of scientific discovery, education, legal reform.
Current situation
Therefore, the maintenance of a good human relationship is a must in today business
environment, because in case of its absence the organizational structure may crumble.
Employees constitute the most valuable assets of any organization.
Any neglect of the important factor is likely to result in increased cost of production in term of
wage and salaries, benefits and services; working conditions, increased labour turn-over,
absenteeism, indiscipline and cleavages, strikes and transfer on the ground of discontent and the
like, besides deterioration in the quality of the goods produced and strained relations between
labour and management.

Aspects of Industrial Relations

IR is dynamic in nature. The nature of IR can be seen as an outcome of complex set of
transactions among the major players such as the employers, the employees, the trade union, and
the state in a given socio-economic context. In a sense, change in the nature of IR has become
sine quo non with change in the socio-economic context of a country.
Keeping this fact in view, IR in India is presented under the following two sections:
1. IR during Pre- Independence
2. IR during Post-Independence

IR During Pre-Independence
The structure of the colonial economy, the labour policies of colonial government, the
ideological composition of the political leadership, the dynamics of political struggle for
independence, all these shaped the colonial model of industrial relations in pre-independent
India”. Then even union movement was an important part of the independence movement.
However, the colonial dynamics of the union movement along with the aggressiveness of alien
capital, the ambivalence of the native capital and the experience of the outside political
leadership frustrated the process of building up of industrial relations institutions.
Till the Second World War, the attitude of the colonial government toward industrial relations
was a passive regulator only Because, it could provide, that too only after due pressure, the sum
of protective and regulative legal framework for industrial relations Trade Union Act 1926 (TL
A) Trade Disputes Act 1929 (TDA). It was the economic emergence of the Second World War
that altered the colonial government’s attitude on industrial relations.
The state intervention began in the form of introduction of several war time measures, viz. the
Defense of India Rules (Rule 81- A), National Service (Technical Personnel) Ordinance, and the
Essential Service (Maintenance) Ordinance As such in a marked contrast to its earlier stance, the
colonial government imposed extensive and pervasive controls on industrial relations by the
closing years of its era-. Statutory regulation of industrial relations was on plank of its labour
policy. The joint consultative institutions were established primarily to arrive at uniform and
agreeable labour policy.
The salient features of the colonial model of IR can be summarized as close association between
political and trade union movement, dominance of ‘outsiders’ in the union movement, state
intervention and federal and tripartite consultations.
The eve of Independence witnessed several instances that served as threshold plank for IR during
post Independence era. The prominent instances to mention are passing of Indian Trade Unions
(Amendment) Act, 1947, Industrial Employment (Standing Orders) Act 1946, Bombay Industrial
Relations Act, 1946, and Industrial Disputes Act, 1947 and split in AITUC and formation of
INTUC.

IR During Post-Independence:
Though Independent India got an opportunity to restructure the industrial relations system the
colonial model of IR remained in practice for sometimes due to various reasons like the social,
political and economic implications of partition, social tension, continuing industrial unrest,
communist insurgency, conflict, and competition in the trade union movement. In the process of
consultation and confrontation, gradually the structure of the industrial relations system (IRS)
evolved.
Several considerations like unequal distribution of power in the labour market, neutrality of the
state, incompatibility of free collective bargaining institution with economic planning etc.
provided moral justification for retaining state intervention in the IRS. State intervention in the
IRS is logical also when the state holds large stakes in the industrial sector of the economy.
However state intervention does not mean suppression of trade unions and collective bargaining
institution. In fact, state intervention and collective bargaining were considered as
complementary to each other.
Gradually, various tripartite and bipartite institutions were introduced to supplement the state
intervention in the IRS.
The tripartite process was considered as an important instrument of involving participation of
pressure groups in the state managed system. Non formal ways were evolved to do what the
formal system did not legistate, for one reason or other.
The political and economic forces in the mid 1960s aggravated industrial conflict and rendered
non-formal system ineffective. In the process of reviewing the system, National Commission on
Labour (NCL) was appointed in 1966.
Now the focus of restructuring shifted from political to intellectual. However, yet another
opportunity was lost when there was an impasse on the NCL recommendations in 1972. The
Janta Government in 1978 made, of course, a half-hearted attempt to reform industrial relations.
Unfortunately, the attempt met with strong opposition from all unions. The BMS, for example,
termed it as “a piece of anti-labour, authoritarian and dangerous legislation””.
Several committees were appointed to suggest measures for reforming die IRS. In the process,
tripartism was revived in 1980s. Government passed the Trade unions and the Industrial Disputes
(Amendment) Bill, 1988.

Linking Industrial Relations with economic growth of a country

Globalization and the National Economy

Globalization can usefully be conceived as a process or set of processes which embodies a
transformation in the spatial organization of social relations and transactions, generating
transcontinental or interregional flows and networks of activity, interaction and power.
Globalization has four types of change. Firstly, globalization includes growing social, political
and economical actions across political limits of countries and continents. Secondly, it
recommends the growth of inter bondness and flows of trade, investment, finance, and society.
Third, it is developing extensity and intensity of global inter bondness can be depended to a
speeding up of global connections and developments as the progress of world wide actions of
transport and communication speed up the flow of ideas, goods, information, investment and
communities. Fourthly, the growing extensity, intensity and speed of global communications can
be attached with their developing impression such that the results of indistinct actions can be
very important elsewhere and yet all the local growth may come to have massive global
consequences. It makes the sense, that the boundaries between local affairs and global matters
can become increasingly blurred.

In total globalization can be consideration of as expanding, increasing speed up, and developing
influence of worldwide inter connections. In sum globalization in this way, it makes possible to
draw observe patterns of worldwide contacts and business across all type of fields of human
activity, from the military to the cultural.

Effects of globalization on national economies

Globalization creates major change on the economic environment of any nation; it changes any
nation in terms of economic development policies under national government. The globalization
provides the free movement of trade and investment, labour and assets. Through globalization
nation’s economy growth globally so it opening up the barriers of international trade which
increase the stability and creates positive impact on quality of life with in a nation’s individuals.
Economic growth through Globalization has both positive and negative impacts on the society.
One of the main benefits of economic growth is the higher incomes per capita and higher living
standards due to an increase in output. It increase in output has also created employment
opportunities which takes the nation towards prosperity.
The native impact of Globalization is that the revenue earned in the nation is not spend in that
particular country for growth of this country’s economic conditions of its people, this revenue is
spend in other countries along the globe and the ultimate benefit goes to the company’s home
country
Other main weakness of Globalization is that it increases possibilities of unintentional motion of
diseases between the countries. Globalization gives attraction towards the money oriented
lifestyles and selfish attitudes, which suppose to consumption to be a mean to manage overall
economic affluence.

Emerging challenges of IR in India

Companies clash to get competitive advantages not only in the product sphere, but also in the
customer sphere. New rivals come to the market right with the customers, right with the
suppliers. Through their know-how, especially in technologies, better technical facilities, new
knowledge from research and staff professionalism, they are able to roll out a competitive clash.
It has to be said today even small companies are able to knock out bigger firms which frequently
boast of their renown, yet they are often striken by the syndrome of routinism, outdated opinions
on product research and development, limited perception only focused on themselves and their
own satisfaction. Potential new competitors take advantage of this situation.
Another serious force active in competitive clashes is called the genesis of substitutes which add
utility value to integrated products that we would formerly purchase as separate products. Let us
give an example: ten years ago, in the former eastern bloc countries, we were surprised at the
arrival of mobile phone. This particular utility has been vigorously outdone by the emergence of
substitutes.

Changing employment patterns and practices

Corporate organizations are changing rapidly and in apparently contradictory ways. It is
recognized that the most important asset of any organization is its people. This is because value
is added to goods and services by the quality of the individuals producing or supplying them.
Excellent employees are aware of the need to respond to customer needs. Well developed human
capital is recognized to be as important as up-to-date capital plant.
However, increasingly firms are looking at ways to reduce their human resource cost base to
remain competitive, especially with the rise of lower cost firms in the developing world
particularly from Asia. Since the 1990s, some of the following trends have taken place in an
attempt to reduce and rationalise human resources in an organization:
 Downsizing
 Disposal of peripheral activities, perhaps through management buyouts (MBOs)
 Outsourcing of support activities to allow concentration on primary (core) activities
concerned with the creation or delivery of a product or service.
 Project based management and team working
 The creation of a more flexible workforce

Flexible workforces
In recent years there has been a changing pattern to employment and this has helped employers
to develop a more flexible working pattern among their employees. These trends are:
 Increasing self-employment – this area is increasing in many countries
 Reduction in full-time employment – firms now use fewer full time employees and tend
to offer more short-term contracts
 Part-time working – there has been a growth in the level of part-time employment. This
may be a lifestyle choice on the part of many, but firms have encouraged this trend as
part-time employment offers more flexibility
 Contractors – many firms now use contractors and consultants for a wide range of task.
This has led to many previous employees setting up as self-employed contractors.
 Temporary employment – increasing numbers of employees have been on temporary
working contracts. Again these are used by firms to ensure flexibility – we look at this in
more detail below.
Firms like flexible workforces as it enables them to adapt their employee levels to meet
fluctuations in demand and to try to maintain their competitive advantage in the face of external
changes.

To achieve greater flexibility, firms are using more part-time, temporary and external
contractors, which allow them to increase or decrease their work teams as required. It may also
provide more flexibility to the employees themselves who may work from home, select their
own working hours and days.
Part-time employment
Part-time employment provides flexibility benefits for both firms and for employees. For firms
part-time employees are cheaper to hire and often do not have additional responsibility
allowances and benefits that are awarded to full-time staff. They may not have the same level of
job security (although the law has been updated in many countries to improve the situation) and
tend to be easier to replace when they leave.
However, part-time employees may be less motivated and loyal to the business and are probably
less willing to volunteer to work additional time when required to cope with unexpected demand
patterns. Part-time staff do not tend to stay with employees for as long as full-time staff.

Temporary employment
A job may be considered temporary if employer and employee agree that its end is determined
by objective conditions such as a specific date, the completion of a task or the return of another
employee who has been temporarily replaced (usually stated in a work contract of limited
duration).
Typical cases are people:
 with seasonal employment.
 engaged by an agency or employment exchange and hired to a third party to perform a
specific task (unless there is a written work contract of unlimited duration).
 with specific training contracts.

Flexi time arrangements

Flexi time covers any variations in working hours from the standard 9.00 a.m. to 5.00 p.m.
working day, in the form of:
a) Flexible working hours
b) Term-time working
c) Job sharing
d) Employments breaks and sabbaticals
e) Annualized hours
Staff will have some say in the selection of their hours which allows them more freedom to
concentrate on their out of work commitments, such as child care.
Advantages:
a) Recruitment and retention of qualified staff who may not be able to work traditional
hours
b) Equality of opportunity for people who would otherwise be prevented from entering the
workforce
c) Work patterns which can accommodate variations in customer demand patterns
d) Success in tackling skills shortages
e) Reduces absenteeism and lateness
f) Creates a better sense of personal responsibility
g) Improves efficiency in core time and reduces overtime levels
Disadvantages:
a) Scheduling work rotas is more time consuming for managers
b) Can encourage time watching
c) Full time employees may be resentful
d) Possible communications difficulties when staff are not there or sharing roles

Portfolio working
Portfolio working will contribute more to a better work/life balance. It is to a method of
employment that is not dependant on any one client or company where individuals are paid for a
number of different skills, products or services that they offer, often from their own home office
using the internet.
So a freelance or self-employed person could be called a portfolio worker if they have a variety
of clients to whom they offer different services, or a person who works part time at two, three or
more different organizations. The term portfolio working also includes people who work for an
organisation part-time, but have their own business as well.
Portfolio working increases the flexibility and mobility of a firm’s human resources, but may
cause problems for the worker who may not be able to rely on a constant source of income
resulting in cash flow crises. Indeed, portfolio worker may find it difficult to access dome
financial services, such as applying for mortgages, because they cannot guarantee that they can
make regular payments.

THE ACTORS IN EMPLOYEE RELATIONS

Management, Unions and The Government
Industry management is one of two key players in the realm of industrial relations. Industrial
relations describes the relationship between management (often top-level management) and
employee organizations (like unions).

Top-level management
Top-level management must communicate and negotiate with employee organizations to avoid
strikes, law-suits and protests. This level of management interacts with employee organizations
on a large-scale, as opposed to lower tiers of management which mostly rely on human resources
to conduct employee interactions.

Low-level management
Low-level (or local) management interacts with employees on an individual basis (often through
a human resources department). All levels of management are involved in industrial relations,
but low-level management has little or no say in big-picture decisions (employee compensation
and benefit alterations).

UNIONS
A new report from the Economic Policy Institute takes a deep look at the role and importance of
unions as the key avenue for working people to come together and negotiate for an expansion of
their rights and freedoms. Here are nine things you need to know about the state of the labor
movement in 2017.
 Unions amplify the voices of working people on the job: Joining a union means that you
and your co-workers have a say in the workplace. When working people come together to
negotiate, it means they are more likely to have their voice heard, which means they are
more likely to win wage increases, better access to health care and workplace safety,
 more reasonable and predictable work schedules, and more satisfactory avenues for
settling workplace disputes.
 Union members are much more diverse than are depicted. Almost half of union members
are women. More than one-third of union members are people of color.
 Working people in unions come from a variety of sectors: Nearly 40% of working people
in unions are in education and health services. Nearly 14% are in public administration.
More than 12% are in transportation and utilities. Just over 9% of union members are in
manufacturing.
 Unions are thriving in diverse industries: More and more working people are joining
unions in fields that are experiencing a lot of change. Some key groups of working people
that are growing in their union membership rates include: television writers, graduate
student workers, professional and technical employees, UPS employees, Maine lobster
fishers, cafeteria and contract workers, and working people at digital companies.
 Democracy is strengthened when more working people are union members: Business
owners and CEOs organize to represent their interests before government and in society.
Unions enable working people to do the same thing with fewer resources. Unions fight
not only for their own members, but for laws that benefit all working people, from things
as diverse as Social Security and child labor laws to voting rights and the minimum wage.
 More specifically, unions help reduce wage gaps and increase wages for women and
people of color: Through a variety of methods, unions make it easier for women and
people of color to obtain equal pay for equal work. Things like establishing pay
transparency, correcting salary discrepancies, making raise and promotion processes
clearer, and helping pursue justice for workers who have been discriminated against are
major tools in the pursuit of worker equality.
 Union workplaces are safer and all workplaces are safer because of unions: One of the
key reasons that working people organize into unions is to improve workplace safety. In a
country where annually nearly 60,000 people die on the job or because of workplace-
related diseases, and 7 million others are injured or get sick on the job, worker safety is a
major concern. Unions have a long history of fighting for safer workplaces. When a
workplace is unionized, working people are better able to negotiate for even safer
workplaces.
STATE AND THE INDUSTRIAL RELATION
State intervention from the early period in 19th Century to the present. The colonial state was
intervention and the state interventionists model of industrial relations system was later
strengthened. State interests of both labour and capital also.
The state has intervened in the system principally because the class forces were weak and it
served its political interests. It of course sought to promote labour welfare and also to protect the
interests of capital. It used the class forces and the state machinery to advance its interests and
favoured either class mainly to achievce its ends.
This has remained the dominant theme in the IRS for long time and remains unchanged at least
in formal terms even after the economic system underwent radical changes since 1991.

Role of Trade union in Industrial Relations

Trade unions, are organizations of workers in a common trade who have organized into groups
dedicated to improving the workers’ work life. A trade union generally negotiates with
employers on behalf of its members, advocating for improvements such as better working
conditions, compensation and job security. These unions play an important role in industrial
relations — the relationship between employees and employers.
History
The origins of trade unions can be found in guilds and fraternal organizations composed of
people practicing a common trade, which date back hundreds of years. However, the modern
conception of trade unions, in which unions represent a specific set of workers in negotiations
with employers, dates back only to the 18th century. Membership in unions only became
widespread in the United States and Europe in the 19th century.
Trade unions are associations of workers formed to represent their interests and improve their
pay and working conditions.

Types
There are four main types of trade unions.
1. Craft unions: These represent workers with particular skills e.g. plumbers and
weavers. These workers may be employed in a number of industries.
 2. General unions: These unions include workers with a range of skills and from a
range of industries.
3. Industrial unions: These seek to represent all the workers in a particular industry,
for instance, those in the rail industry.
4. White collar unions: These unions represent particular professions, including
pilots and teachers. Unions in a country, often belong to a national union
organization. For example, in India, a number of unions belong to the All India
Trade Union Congress (AITUC).

Role of Trade Unions

Unions carry out a number of functions. They negotiate on behalf of their members on pay
scales, working hours and working conditions. These areas can include basic pay, overtime
payments, holidays, health safety, promotion prospects, maternity and paternity rights and job
security.
Depending on the circumstances, unions may try to protect or improve workers’ rights. They also
provide information on a range of issues for their members, for instance on pensions. They help
with education and training schemes and may also participate in measures designed to increase
demand for the product produced and hence for labour.
Some also provide a range of benefits to their members including strike pay, sickness pay and
unemployment pay. In addition many get involved in pressurizing their governments to adopt a
legislation, which will benefit their members or workers in general, such as fixing a national
minimum wage.

The healthy industrial relations are key to the progress. Their significance may be discussed as
under –
a) Uninterrupted production – The most important benefit of industrial relations is that this
ensures continuity of production. This means, continuous employment for all from
manager to workers. The resources are fully utilized, resulting in the maximum possible
production. There is uninterrupted flow of income for all. Smooth running of an industry
is of vital importance for several other industries; to other industries if the products are
 intermediaries or inputs; to exporters if these are export goods; to consumers and
workers, if these are goods of mass consumption.
b) Reduction in Industrial Disputes – Good industrial relations reduce the 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 industrial
relations. Strikes, lockouts, go-slow tactics, gherao and grievances are some of the
reflections of industrial unrest which do not spring up in an atmosphere of industrial
peace. It helps promoting co-operation and increasing production.
c) High morale – Good industrial relations improve the morale of the employees.
Employees work with great zeal with the feeling in mind that the interest of employer and
employees is one and the same, i.e. to increase production. Every worker feels that he is a
co-owner of the gains of industry. The employer in his turn must realize that the gains of
industry are not for him along but they should be shared equally and generously with his
workers. In other words, complete unity of thought and action is the main achievement of
industrial peace. It increases the place of workers in the society and their ego is satisfied.
It naturally affects production because mighty co-operative efforts alone can produce
great results.
d) Mental Revolution – The main object of industrial relation is a complete mental
revolution of workers and employees. The industrial peace lies ultimately in a
transformed outlook on the part of both. It is the business of leadership in the ranks of
workers, employees and Government to work out a new relationship in consonance with
a spirit of true democracy. Both should think themselves as partners of the industry and
the role of workers in such a partnership should be recognized. On the other hand,
workers must recognize employer’s authority. It will naturally have impact on production
because they recognize the interest of each other.
e) New Programmes – New programmes for workers development are introduced in an
atmosphere of peace such as training facilities, labor welfare facilities etc. It increases the
efficiency of workers resulting in higher and better production at lower costs.
f) Reduced Wastage – Good industrial relations are maintained on the basis of cooperation
and recognition of each other. It will help increase production. Wastages of man, material
and machines are reduced to the minimum and thus national interest is protected.
The Trade Union Act 1926
The Trade Unions Act, 1926 provides for registration of trade unions with a view to render
lawful organisation of labour to enable collective bargaining. It also confers on a registered trade
union certain protection and privileges.

The Act extends to the whole of India and applies to all kinds of unions of workers and
associations of employers, which aim at regularising labour management relations. A Trade
Union is a combination whether temporary or permanent, formed for regulating the relations not
only between workmen and employers but also between workmen and workmen or between
employers and employers.

Registration

Registration of a trade union is not compulsory but is desirable since a registered trade union
enjoys certain rights and privileges under the Act. Minimum seven workers of an establishment
(or seven employers) can form a trade union and apply to the Registrar for it registration.

a) The application for registration should be in the prescribed form and accompanied by the
prescribed fee, a copy of the rules of the union signed by at least 7 members, and a
statement containing

b) the names, addresses and occupations of the members making the application, the name
of the trade union and the addresses of its head office, and the titles, names, ages,
addresses and occupations of its office bearers.

c) If the union has been in existence for more than a year, then a statement of its assets and
liabilities in the prescribed form should be submitted along with the application. The
registrar may call for further information for satisfying himself that the application is
complete and is in accordance with the provisions, and that the proposed name does not
resemble

d) On being satisfied with all the requirements, the registrar shall register the trade union
and issue a certificate of registration, which shall be conclusive evidence of its
registration.

Objectives of Trade Union:

The following are the objectives of trade union:

(1) To improve the economic lot of workers by securing them better wages.

(2) To secure for workers better working conditions.

(3) To secure bonus for the workers from the profits of the enterprise/organization.
(4) To ensure stable employment for workers and resist the schemes of management which
reduce employment opportunities.

(5) To provide legal assistance to workers in connection with disputes regarding work and
payment of wages.

(6) To protect the jobs of labour against retrenchment and layoff etc.

(7) To ensure that workers get as per rules provident fund, pension and other benefits.

(8) To secure for the workers better safety and health welfare schemes.

(9) To secure workers participation in management.

10) To inculcate discipline, self-respect and dignity among workers.

(11) To ensure opportunities for promotion and training.

(12) To secure organizational efficiency and high productivity.

(13) To generate a committed industrial work force for improving productivity of the system.

Functions of Trade Unions:

(1) Collective bargaining with the management for securing better work environment for the
workers/ employees.

(2) Providing security to the workers and keeping check over the hiring and firing of workers.

(3) Helping the management in redressal of grievances of workers at appropriate level.

(4) If any dispute/matter remains unsettled referring the matter for arbitration.

(5) To negotiate with management certain matters like hours of work, fringe benefits, wages and
medical facilities and other welfare schemes.

(6) To develop cooperation with employers.

(7) To arouse public opinion in favour of labour/workers.

Benefits of Trade Union:

Workers join trade union because of a number of reasons as given below:

  A worker feels very weak when he is alone. Union provides him an opportunity to
achieve his objectives with the support of his fellow colleagues.

 Union protects the economic interest of the workers and ensures a reasonable wage rates
and wage plans for them.

 Union helps the workers in getting certain amenities for them in addition to higher wages.

 Union also provides in certain cases cash assistance at the time of sickness or some other
emergencies.

 Union organize negotiation between workers and management and are instruments for
settlement of disputes.

 Trade union is also beneficial to employer as it organizes the workers under one banner
and encourages them follow to peaceful means for getting their demands accepted.

 Trade union imparts self-confidence to the workers and they feel that they are an
important part of the organization.

 It provides for promotion and training and also helps the workers to go to higher
positions.

 It ensures stable employment for the workers and opposes the motive of management to
replace the workers by automatic machines.

 Workers get an opportunity to take part in the management and oppose any decision
which adversely effects them.

Industrial Democracy & Participative Management

Meaning of Industrial Democracy:

Industrial democracy means that the management in industrial units is by the people, of the
people and for the people. Here people include all those who are concerned with the industrial
unit. Industrial democracy connotes an equilibrium between the rights of the dominant industrial
hierarchy and the rights of employees with a broad social objective.
The concept of industrial democracy is a complete departure from the traditional concept of
autocratic management or one man rule. Industrial democracy means the application of
democratic principles in managing industrial units.
In such type of system, workers are treated as responsible partners of an enterprise and are
allowed to participate in the decision making process through different methods. Workers are
given the right of self-expression and an opportunity to communicate their views on policy
formulation.

Objectives of Industrial Democracy:

The objectives of industrial democracy are:
(i) To create a sense of belongingness of workers to the organisation.
(ii) To improve a sense of commitment to the organisational objectives, plans and activities
among employers.
(iii) To satisfy the psychological needs of the employees.
(iv) To respect the human dignity of the employees.

Significance of Industrial Democracy:

The advantages of industrial democracy are as follows:
(i) There would be full cooperation of employees for the implementation of decisions as they
participate in decision making.
(ii) Industrial harmony can be maintained as the employees feel the sense of belongingness.
(iii) Productivity can be increased.

Participative Management
Participative management offers all employees opportunities to contribute to workplace policies
and decisions that achieve business goals while promoting career satisfaction. As opposed to an
autocratic management style, where the manager assumes operational control and makes all the
decisions unilaterally, a participative manager asks for input from team members and considers
all opinions to find workable solutions to business problems and implement them to meet
deadlines. As a result, employees feel more valued and often work harder on behalf of their
employers under this style of management.
Characteristics of a Participative Manager
The participative manager will reflect qualities like having open, transparent communication
between employers and employees, which fosters mutual respect and cooperation. In order to
achieve this type of working relationship, participative managers adopt several principles for
involving employees more actively in business operations.
a) they share information about business growth and progress allowing employees to feel
vested in the company’s goals.
b) they provide training to enhance employee skills and knowledge to increase positive job
performance and improve operational outcomes.
c) managers solicit employee participation by seeking input for making business decisions
and rewarding successful suggestions or ideas.