Introduction to Industrial Relations
Industrial Relations Notes B.Com 5th Sem CBCS Pattern
Meaning of Industrial Relations
The
term “Industrial Relation” refers to all types of relationship between all the
parties concerned with industry. According to Encyclopaedia
Britannica, it denotes relations of all those associated in productive work,
including industry, agriculture, mining, commerce, finance, transport and other
services.
According
to Dale in his book Personnel Management and Industrial Relation, defines
Industrial relations are relationship between management and
employees or among employee and their organization that arise out
of employment.
According
to R.A.Lester Industrial relations involves attempts to have workable solutions
between conflicting
objectives and values, between incentive and economic security, between
discipline and the industrial democracy, between authority and
freedom and between bargaining and cooperation”.
In
modern usage, the phrase “Industrial Relation” includes the whole gamut of
matters that arise due to the continuing relationship between the employers
and the workers.
Features of Industrial Relations
1.
Industrial Relation do not emerge in vacuum they are born of employment
relationship in an industrial setting. Without the existence of the two
parties, i.e. labour and management, this relationship cannot exist. It is the
industry, which provides the environment for industrial relations.
2.
Industrial Relation are characterised by both conflict and co-operations. This
is the basis of adverse relationship. So the focus of Industrial Relation is on
the study of the attitudes, relationships, practices and procedure developed by
the contending parties to resolve or at least minimize conflicts.
3.
As the labour and management do not operate in isolations but are parts of
large system, so the study of Industrial Relation also includes vital
environment issues like technology of the workplace, country’s socio-economic
and political environment, nation’s labour policy, attitude of trade unions
workers and employers.
4.
Industrial Relation also involve the study of conditions conductive to the
labour, managements co-operations as well as the practices and procedures
required to elicit the desired co-operation from both the parties.
5.
Industrial Relations also study the laws, rules regulations agreements, awards
of courts, customs and traditions, as well as policy framework laid down by the
governments for eliciting co-operations between labour and management. Besides
this, it makes an indepth analysis of the interference patterns of the
executive and judiciary in the regulations of labour–managements relations. In
fact the concepts of Industrial Relations are very broad-based, drawing heavily
from a variety of discipline like social sciences, humanities, behavioural
sciences, laws etc.
👉👉Industrial Relations Notes
Objectives of Industrial Relation
Following
are the important objectives of industrial relation:
1)
To safeguard the interest of labour 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.
2)
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.
3)
To enhance productivity to a higher level in an era of full employment by
lessening the tendency to high turnover and frequency absenteeism.
4)
To establish and nurse the growth of an Industrial Democracy based on labour
partnership in the sharing of profits and of managerial decisions, so that ban
individuals personality may grow its full stature for the benefit of the
industry and of the country as well.
5)
To eliminate, as far as is possible and practicable, strikes, lockouts and
gheraos by providing reasonable wages, improved living and working conditions,
said fringe benefits.
6)
To establish government control of such plants and units as are running at a
loss or in which productions has to be regulated in the public interest.
7)
Improvements in the economic conditions of workers in the existing state of
industrial managements and political government.
8)
Control exercised by the state over industrial undertaking with a view to
regulating production and promoting harmonious industrial relations.
9)
Socialisations or rationalization of industries by making the state itself a
major employer.
10)
Vesting of a proprietary interest of the workers in the industries in which
they are employed.
Significance of Good Industrial Relations
If
the objective of the nation is rapid national development and increased social
justice are to be achieved, there must be harmonious relationship between
management and union. Such relations will lead to the following benefits:
1.
Industrial Peace: Good industrial relations bring harmony and
remove causes of disputes. This leads to industrial peace, which is an ideal
situation for an industrial unit to concentrate on productivity and growth.
2.
High Morale: Cordial industrial relations improve the morale of the employee.
It implies the existence of an atmosphere of cooperation, confidence, and
respect within the enterprise. In such an atmosphere, there are common goals,
which motivate all members of the organization to contribute their best.
Consequently, there is higher productivity, higher income, and increased job
satisfaction – all resulting in higher morale of the workforce.
3.
Mental Revolution: Sound industrial relation completely
transforms the outlook of employers and employee. It is based on consultation
between the workers and the management. This motivates the workers to give
their best to the organization and share the fruits of progress jointly with
the management.
4.
Reduced Wastage and Increased Productivity: It helps in increasing production.
Wastage of man, material and machines are reduced to the minimum and thus
national interest is protected. Thus, they will contribute to the economic growth
of the countries.
5.
Programmes for Workers Development: New programmes for workers development
are introduced in an atmosphere of peace such as training facilities, labor
welfare facilities etc. Hence, full advantage of latest inventions, innovations
and other technological advancement can be obtained.
Through
these employee development programme, workforce easily adjust itself to
required changes for betterment.
Effects of poor Industrial Relations
Poor
Industrial Relation produces highly disquieting effects on the economic life of
the country. Following are an attempt
to enumerate the ill-effects of poor Industrial Relations:
1.
Multiplier effects: Modern industry and for that matter modern economy
are interdependent. Hence although
the direct loss caused due to industrial conflict in any one plant may not be very great, the total
loss caused due to its multipliers effect on the
total economy is always very great.
2.
Fall in normal tempo: poor Industrial Relations adversely affect the
normal tempo of work so that work far
below the optimum level. Costs build up. Absenteeism and labour turnover increase. Plants discipline breaks
down and both the quality and quality of production
suffer.
3.
Resistance of change: Dynamic industrial situation calls for change more
or less continuously. Methods have to
be improved. Economics have to be introduced. New
products have to be designed, produced and put in the market. Each
of these tasks involves a whole chain
of changes and this is resisted bitterly if these are industrial conflict.
4.
Frustration and social cost: every man comes to the work place not only
to earn a living. He wants to satisfy
his social and egoistic needs also. When he finds difficulty in satisfying these needs he feels frustrated.
Poor Industrial Relations take a heavy toll in terms
of human frustration. They reduce cordiality and aggravate social tension.
Suggestions and Measures to Improve Industrial Relations
Good
industrial relation refer to harmonious relations between the trade union and
the management in an organization, but it is not easy to promote and maintain
sound and harmonious industrial relations in an organization but there are some
suggestions which are help to maintain sound and cordial relation between the
labor and the management.
1.
Support of Top Management: Top management action always be proactive and
geared to problem solving and its action and decision must be in favour of an
organization and employees.
2.
Sound Personnel Policies: personnel policies constitute the business
philosophy of an organization and guide it in arriving at human relations
decisions. Sound policies and rules are of little help unless they are executed
objectively and equitably at all the levels of an organization.
3.
Collective Bargaining: Collective bargaining is an instrument which
helps to maintain industrial peace in an organization .such collective
bargaining agreements and association of employees in decision making process
will bring about cooperation between labour and management.
4.
Strong Trade Union and Sound Employers’ Union: Industrial
relations can be sound only when the bargaining power of the employees’ union
is strong and equal to that of management. And employers’ union should also be
sound and well organized. Sound management are helpful for the maintenance and
promotion of uniform personnel policies among various organizations and to
protect the interest of weak employers.
5. Positive Attitudes: Both top
management and trade union should adopt positive attitudes towards each other,
they help them to understand problem of each and which can be solved by
collective bargaining.
6.
There are also some others suggestions but they are some expensive because
they want some research work on them:
a)
There should be well established and properly
administered grievance redress machinery, sometimes which provides an outlet
for tensions and frustrations of workers. Similarly, a suggestions scheme will
help to satisfy the creative urge of workers.
b)
Job supervisors should be trained thoroughly
to ensure that organizational policies and practices as well as leadership and
communication skill, which help them too properly, implemented and carried into
effect.
c)
A regular follow up of IR programmed is
essential so that existing practice may be properly evaluated and a check may
be exercised on certain undesirable tendencies, should they manifest
themselves.
Various Approaches or theories of Industrial Relations
Industrial Relation is perceived by differently by different
people. Some of the approaches to industrial relations are as follows. There
are three popular approaches to IR: Unitary, Pluralistic and Marxist.
Some others are psychological approach, sociological, V.V.Giri, Gandhian , HRD
and System Approach. Here we are discussing on mainly popular approaches.
1.
Unitary Perspective: In unitary, the organization is perceived as
an integrated and harmonious system, viewed as one happy family. A core
assumption of unitary approach is that management and staff, and all members of
the organization share the same objectives, interests and purposes; thus
working together, hand-in-hand, towards the shared mutual goals. Furthermore,
unitary has a paternalistic approach where it demands loyalty of all employees.
Trade unions are deemed as unnecessary and conflict is perceived as disruptive.
From
employee point of view, unitary approach means that:
a)
Working practices should be flexible.
Individuals should be business process improvement oriented, multi-skilled and
ready to tackle with efficiency whatever tasks are required.
b)
If a union is recognized, its role is that of
a further means of communication between groups of staff and the company.
c)
The emphasis is on good relationships and
sound terms and conditions of employment.
d)
Employee participation in workplace decisions
is enabled. This helps in empowering individuals in their roles and emphasizes
team work, innovation, creativity, discretion in problem-solving, quality and
improvement groups etc.
e)
Employees should feel that the skills and
expertise of managers supports their endeavors.
From
employer point of view, unitary approach means that:
a)
Staffing policies should try to unify effort,
inspire and motivate employees.
b)
The organization’s wider objectives should be
properly communicated and discussed with staff.
c)
Reward systems should be so designed as to
foster to secure loyalty and commitment.
d)
Line managers should take ownership of their
team/staffing responsibilities.
e)
Staff-management conflicts - from the
perspective of the unitary framework - are seen as arising from lack of
information, inadequate presentation of management’s policies.
f)
The personal objectives of every individual
employed in the business should be discussed with them and integrated with the
organization’s needs
2.
Pluralistic-Perspective: In pluralism the organization is perceived as
being made up of powerful and divergent sub-groups - 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 less towards enforcing and controlling and
more toward persuasion and co-ordination. Trade unions are deemed 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 for conflict rather than harmony. They should
anticipate and resolve this by securing agreed procedures for settling
disputes. The implications of this approach include:
a)
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.
b)
Independent external arbitrators should be
used to assist in the resolution of disputes.
c)
Union recognition should be encouraged and
union representatives given scope to carry out their representative duties·
d)
Comprehensive collective agreements should be
negotiated with unions
3.
Marxist Perspective: This view of industrial relations is a
by product of a theory of capitalist society and social change. Marx argued
that:
a)
Weakness and contradiction inherent in the
capitalist system would result in revolution and the ascendancy of socialism
over capitalism.
b)
Capitalism would foster monopolies.
c)
Wages (costs to the capitalist) would be
minimized to a subsistence level.
d)
Capitalists and workers would compete/be in
contention to win ground and establish their constant win-lose struggles would
be evident.
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.
Industrial Relations since post-independence era
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.
State
intervention in the IRS was a part of the interventionist approach to the
management of industrial economy. 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””.
Industrial Relations in Emerging Socio - Economic Scenario
(After 1991)
In
1991 with declaration of new economic policy, a series of Industrial, fiscal and trade reforms were announced by the
Government. It was presumed that these structural
changes would arrest growing inertia that has set in the economy due
to its mismanagement and continuance
of unrealistic economic policies for more than four
decades. It is heartening to note that the new economic policy has
altogether generated a new business
environment, where in the private sector was liberated from the clutches of excessive Government controls, the P.S.U's
lost their monopolistic position, and industries
were freed from tariffs and custom duties, the threshold limit of
MRTP remarked FERA was considerably
relaxed, accessibility of foreign capital has become easy etc. At the same time this N.E.P. has given a serious jolt to
the interest of working class. In fact, the workers
are securing the brunt of liberalization – a situation hard to be
adjusted. Which is obvious from the
fact that even presently the employment opportunities of working class has considerably shrunk and would further squeeze
in the years to come, as with the ever changing
methods of work by which employers would be forced to lay off obsolete employees. So not only employability of
additional workforce but present one would be minimized
considerably.
In
fact, ever since the declaration of new economic policy, a heated debate is
going on between the various
industrial relations participants regarding the desirability of continuance of such a policy. In this
context, every party has its own perception and apprehensions,
but all of them agree on one basic fact that sustained economic growth cannot take place in a disturbed industrial
relations environment.
The
inculcation of harmonious industrial relations requires that all the
participants be motivated to work
whole heartedly for making the system to work. There are various factors pointing towards the emerging
socioeconomic scenario. One of the major factors is
the changing image of workers. The modern worker have come a long
way in 54 years from the exploited,
illiterate poverty stricken, rural linked group that once were. The industrial labour of today is no longer the
migrant rural worker of yesterday, shuttling between
his village and the city. It is totally urban in its economic outlook.
Socially, too, workers have changed.
They have absorbed the urban industrial culture. They are capable of handling semi-skilled and highly skilled
industrial operations. Above all, they are usually
not the sole supporters of large joint families. Changes in the worker's life
have given rise to a new attitudinal
and behavioural pattern.
There
has also been a transformation of Indian society - from a "society of
subjects to that of citizens."
The modernisation of economy has brought in advances in technology, organisational complexities and increasing
economic interdependence. Consequently, the worker
is increasingly called upon to rely on discretion, initiative and self
management, instead of waiting for
commands from old style bosses. The traditional culture of being 'looked after' as subjects has yielded place
to one in which industrial labour wants to 'look
after' itself. Yet another change, whose challenges is being evaded
instead of being faced, is the need
felt making quicker decisions because of the high stakes involved in a technologically sophisticated industry. Our
industries, particularly those in the public sector,
suffer from the widespread empire of the owners.