Unit 1: Introduction

T.H.6

Concept and purposes of industrial relations; Process of industrial relations; Actors (workers, employers, government) of industrial relations system, pluralist and Marxist

Introduction to Industrial Relations Industrial relation has become one of the most delicate and complex problems of modern industrial society. Industrial progress is impossible without cooperation of labours and harmonious relationships. Therefore, it is in the interest of all to create and maintain good relations between employees (Labours) and employers (Management) Concept of Industrial Relations The term 'Industrial Relation' comprises of two terms; "Industry" and "Relations". Industry refers to any productive activities in which an individual (or a group of individuals) is engaged. By "relation" we mean "the relationship that exist within the industry between the employer and his employees (work person) Industrial relations have three faces: science building, problem solving, and ethical. In the science building face, industrial relations are part of the social sciences, and it seeks to understand the employment relationship and its institutions through high-quality, rigorous or exact research. In this vein, industrial relations scholarship cross with scholarship in labor economics, industrial sociology, labor and social history, human resource management, political science, law, and other areas. In the problem solving face, industrial relations seek to design policies and institutions to help the employment relationship work better. In the ethical face, industrial relations contain strong normative principles about workers and the employment relationship, especially the rejection of treating labor as a commodity in favour of seeing workers as human beings in democratic communities entitled to human rights. The term industrial relations explains the relationship between employees and 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 labour) relations. Now its meaning has become more specific and restricted. Collective bargaining, trade unionism, worker participation in decision making, grievance and dispute settlement and labour-management relations are the fundamental element of industrial relation. Beside that human resource management is a separate, largely distinct field that deals with non union employment relationships and the personnel practices and policies of employers. Origins The term "industrial relations" came into common usage in the 1910s, particularly in 1912 upon the appointment by President William Taft of an investigative committee titled the Commission on Industrial Relations. The commission's charge was to investigate the causes of widespread, often violent

labour conflict and make recommendations regarding methods to promote greater cooperation and harmony among employers and employees. Shortly thereafter, the term gained even greater saliency in the public mind due to the wave of strikes, labour unrest, and agitation for "industrial democracy" that accompanied the economic and political disturbances associated with World War I. As a result, by the beginning of the 1920s universities began to establish industrial relations centres and programs to conduct research and train students in employeremployee relations, while progressive business firms established the first "industrial relations" or "personnel" departments to formalize and professionalize the management of labour Conclusion The field and practice of industrial relations began in the early years of the twentieth century and evolved in numerous ways in reaction to a host of far-reaching changes in the economic, political, and social realm/empire. It began with a broad emphasis on the employment relationship and the labor problems that grow out of this relationship. As a result of the rise of mass unionism between 1935 and 1955, the field became identified in the academic and practitioner worlds with, first and leading, the study and practice of collective bargaining and labor-management relations. Since then the unionized sector of the economy has shrink considerably, while a competitor field of human resource management has grown and spreada product of both new ideas and practices and the opening up of a much-expanded unorganized sector in the labor market. Thus the term "industrial relations" is increasingly associated with the unionized sector of the labor market. But a minority of participants continue to view industrial relations as pertaining to the entire world of work and, in particular, the three solutions to labor problems: personnel/human resource management, trade unionism and collective bargaining, and government legislation. Importance of Industrial Relations The healthy industrial relations are key to the progress and success. Their significance may be discussed as under 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. 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 treat by good industrial relations. Strikes, lockouts, stoppage 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. High moral: 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.

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 employers authority. It will naturally have impact on production because they recognize the interest of each other. 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. Thus, it is evident that good industrial relations are the basis of higher production with minimum cost and higher profits. It also results in increased efficiency of workers. New and new projects may be introduced for the welfare of the workers and to promote the morale of the people at work. An economy organized for planned production and distribution, aiming at the realization of social justice and welfare of the massage can function effectively only in an atmosphere of industrial peace. If the twin objectives of rapid national development and increased social justice are to be achieved, there must be harmonious relationship between management and labor. Objectives of the Industrial Relation The main objectives of industrial relations system are; To safeguard the interest of labor and management by securing the highest level of mutual understanding and good will among all those sections in the industry, which participate in the process of production. To avoid industrial conflict or strife and develop harmonious relations, which are an essential factor in the productivity of workers and the industrial progress of a country. To raise productivity to a higher level in an era of full employment by lessening the tendency to high turnover and frequency absenteeism. To establish and promote the growth of an industrial democracy based on labor partnership in the sharing of profits and of managerial decisions, so that prohibit individuals personality may grow its full stature or tallness for the benefit of the industry and of the country as well. To eliminate or minimize the number of strikes, lockouts and gheraos by providing reasonable wages, improved living and working conditions, said fringe benefits. To improve the economic conditions of workers in the existing state of industrial managements and political government. Socialization of industries by making the state itself a major employer Vesting of a proprietary interest of the workers in the industries in which they are employed.

Industrial relations System An industrial relations system consists of the whole range of relationships between employees and employers which are managed by the means of conflict and cooperation.

A sound industrial relations system is one in which relationships between management and employees (and their representatives) on the one hand, and between them and the State on the other, are more harmonious and cooperative than conflictual and creates an environment conducive to economic efficiency and the motivation, productivity and development of the employee and generates employee loyalty and mutual trust. 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 right to hire and fire them. Management can also affect workers interests by exercising their right to relocate, close or merge the factory or to introduce technological changes. Employees: Workers seek to improve the terms and conditions of their employment. They exchange views with management and voice their grievance. They also want to share decision making powers of management. Workers generally unite to form unions against the management and get support from these unions. Government: The central and state government influences and regulates industrial relations through laws, rules, agreements, awards of court ad the like. It also includes third parties and labor and tribunal courts.

Scope: The concept of industrial relations has a very wide meaning and connotation. In the narrow sense, it means that the employer, employee relationship confines itself to the relationship that emerges out of the day to day association of the management and the labor. In its wider sense, industrial relations include the relationship between an employee and an employer in the course of the running of an industry and may project it to spheres, which may transgress to the areas of quality control, marketing, price fixation and disposition of profits among others. The scope of industrial relations is quite vast. The main issues involved here include the following: 1. 2. 3. 4. 5. Collective bargaining Machinery for settlement of industrial disputes Standing orders Workers participation in management Unfair labor practices

Theoretical perspectives Industrial relations scholars have described three major theoretical perspectives or frameworks that contrast in their understanding and analysis of workplace relations. The three views are generally known as unitarism, pluralist and radical/Marxist. Each offers a particular perception of workplace relations and will therefore interpret such events as workplace conflict, the role of unions and job regulation varies differently. The radical perspective is sometimes referred to as the "conflict model", although this is somewhat ambiguous, as pluralism also tends to see conflict as inherent in workplaces. Radical theories are strongly identified with Marxist theories, although they are not limited to these. Unitary Perspective In unitarism, the organization is perceived as an integrated and harmonious whole with the ideal of "one happy family", where management and other members of the staff all share common purpose, emphasizing mutual cooperation. Furthermore, unitarism has a paternalistic approach where it demands loyalty of all employees, being predominantly managerial role in its emphasis and application. Consequently, trade unions are deemed as unnecessary since the loyalty between employees and organizations are considered mutually exclusive, where there can't be two sides of industry. Conflict is perceived as disruptive and the pathological result of agitators, interpersonal friction and communication breakdown. Pluralistic Perspective In pluralism the organization is perceived as being made up of powerful and divergent sub group's management and trade unions. This approach sees conflicts of interest and disagreements between managers and workers over the distribution of profits as normal and inescapable. Consequently, the role of management would lean or twist less towards enforcing and controlling and more toward persuasion and coordination. Trade unions are believed as legitimate representatives of employees. Conflict is dealt by collective bargaining and is viewed not necessarily as a bad thing and if managed could in fact be channelled towards evolution and positive change. Realistic managers should accept conflict to occur. There is a greater propensity or tendency for conflict rather than harmony. The implications of this approach include:

The firm should have industrial relations and personnel specialists who advise managers and provide specialist services in respect of staffing and matters relating to union consultation and negotiation. Independent external arbitrators should be used to assist in the resolution of disputes. Union recognition should be encouraged and union representatives given scope to carry out their representative duties They should anticipate and resolve this by securing agreed procedures for settling disputes.

Marxist Perspective This perspective focuses on the fundamental division of interest between capital and labor, and sees workplace relations against this background. It is concerned with the structure and nature of society and assumes that the conflict in employment relationship is reflective of the structure of the society. Conflict is therefore seen as inevitable and trade unions are a natural response of

workers to their exploitation by capital. This view of industrial relations is a by product of a theory of capitalist society and social change. Marx argued that; Weakness and contradiction inherent in the capitalist system would result in revolution and the ascendancy or superiority of socialism over capitalism. Capitalism would foster monopolies. Wages (cost to the capitalist) would be minimized to a subsistence level. Capitalists and workers would compete in controversy to win ground and establish their constant win lose struggles would be evident. Measures for Improving Industrial Relations The following measures should be taken to achieve good industrial relations: Strong and Stable Union: A strong and stable union in each industrial enterprise is essential for good industrial relations. The employers can easily ignore a weak union on the plea that it hardly represents the workers. The agreement with such a union will hardly be honoured by a large section of workforce. Therefore, there must be strong and stable unions in every enterprise to represent the majority of workers and negotiate with the management about the terms and conditions of service. Mutual Trust: Both management and labor should help in the development of an atmosphere of mutual cooperation, confidence and respect. Management should adopt a progressive outlook and should recognize the rights of workers. Similarly, labor unions should persuade their members to work for the common objectives of the organization. Both the management and the unions should have faith in collective bargaining and other peaceful methods of settling disputes. Workers Participation in Management: The participation of workers in the management of the industrial unit should be encouraged by making effective use of works committees, joint consultation and other methods. This will improve communication between managers and workers, increase productivity and lead to greater effectiveness. Mutual Accommodation: The employers must recognize the right of collective bargaining of the trade unions. In any organization, there must be a great emphasis on mutual accommodation rather than conflict or uncompromising attitude. One must clearly understand that conflicting attitude does not lead to amicable labor relations; it may foster union militancy as the union reacts by engaging in pressure tactics. The approach must be of mutual give and take rather than take or leave. The management should be willing to co-operate rather than blackmail the workers. Sincere Implementation of Agreements: The management should sincerely implement the settlements reached with the trade unions. The agreements between the management and the unions should be enforced both in letter and spirit. If the agreements are not implemented then both the union and management stop trusting each other. An environment of uncertainty is created. To avoid this, efforts should be made at both ends to ensure the follow up of the agreements. Sound Personnel Policies: The following points should be noted regarding the personnel policies. The policies should be: Formulated in consultation with the workers and their representatives if they are to be implemented effectively.
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Clearly stated so that there is no confusion in the mind of anybody.

Implementation of the policies should be uniform throughout the organization to ensure fair treatment to each worker.
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Governments Role: The Government should play an active role for promoting industrial peace. It should make law for the compulsory recognition of a representative union in each industrial unit. It should intervene to settle disputes if the management and the workers are unable to settle their disputes. This will restore industrial harmony. Progressive Outlook: There should be progressive outlook of the management of each industrial enterprise. It should be conscious of its obligations and responsibilities to the owners of the business, the employees, the consumers and the nation. The management must recognize the rights of workers to organize unions to protect their economic and social interests. Industrial Relations Today By many accounts, industrial relations today are in crisis. In academic circles, its traditional positions are threatened on one side by the dominance of mainstream economics and organizational behaviour, and on the other by postmodernism. In policy-making circles, the industrial relations emphasis on institutional intervention is trumped by a neoliberal emphasis on the fair promotion of free markets. In practice, labor unions are declining and fewer or less companies have industrial relations functions. The number of academic programs in industrial relations is therefore withdrawal, and scholars are leaving the field for other areas, especially human resource management and organizational behavior. The importance of work, however, is stronger than ever, and the lessons of industrial relations remain vital. The challenge for industrial relations is to re-establish these connections with the broader academic, policy, and business worlds.