Sunday, April 30, 2017

Industrial Relations Notes - Introduction to Industrial Relations

Unit – 1: Introduction to Industrial Relations
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.
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.

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