industrial relations background

MODULE – 1INDUSTRIAL RELATIONS

IR can be defined as the relationship between management & union or b/w representatives of employees & representatives of employees. It includes all the aspects of employment relations.

2Dynamics of IR- Mamoria &

Gankar

Promotion & Development of healthy labour management relations

Maintenance of industrial peace & avoidance of industrial strife

Development of Industrial democracy


Gankar

Promotion & Development of healthy labour management relations

The existence of strong, well-organised, democratic & responsible TUs & associations of employers.

The spirit of collective bargaining & willingness to take recourse to voluntary arbitration.

Welfare work provided by the state, TUs & employees create, maintain & improve labour-management relations & thereby contribute to industrial peace.


Gankar

Maintenance of Industrial Peace

Machinery should be set up for the prevention & settlement of industrial disputes

Developing various legislative & administrative enactments like Trade Unions Act, Industrial Disputes Act, Industrial Employment Act, Works Committees & Joint Management Councils, Industrial Tribunals, National tribunals etc.


Gankar

The Govts has powers to refer disputes to adjudication when the situation tends to get out of hand & industry is faced with economic collapse due to continued stoppage of production on account of long strikes/lockouts.

The Govt enjoys the power to maintain status quo

.The provision of bipartite & tripartite forums for the settlement of disputes


Gankar

Establishment of Shop Councils & Joint Management Councils at the floor & plant level to improve the working & living conditions of employee, to improve productivity, encourage suggestions from employees, to assist in the administration of law & agreements & create a sense of participation in DM among the employees.

Recognition of Human rights in the Industry.

Increase in the labour productivity

Availability of proper work environment


Gankar

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 frequent absenteeism


Gankar

Contd………To establish and promote the growth of an industrial democracy based on labor partnership in the sharing of profits and of managerial decisions

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


Gankar

Institutional factors- State policy, labour laws, collective bargaining agreements

Economic factors-type of ownership, nature & composition of workforce, the source of labour supply, labour market relative status, disparity of wages between groups etc.

Social Factors- Social groups, social values, social status etc.


Gankar

Technological Factors- Work methods, type of technology used, rate of technology change, R&D activities

Psychological Factors- Owners’ attitude, perception of workforce, workers’ attitude towards work, their motivation, interest, dissatisfaction & boredom resulting from man – machine interface

Political factors- System of government, attitude of government, political philosophy etc.


Gankar

Enterprise related factors- Style of management prevailing in the enterprise, organizational climate, extent of competition, adaptability to change & various HRM policies.

Global factors- Global conflicts, economic & trading policies of power blocks. International trade agreements & relations, ILO etc.


Gankar

1) Psychological Approach to Industrial Relations

2) Sociological Approach to IR

3) Human relations Approach to IR

4) Socio-Ethical Approach to IR

5) Gandhian Approach to IR

6) System Approach to IR 7)


Gankar


Gankar

Psychological Approach to Industrial Relations

Mason Harie – a psychologist studied the behavior of two different groups namely “Union Leaders’ & the “Executives”

For the test a photograph of an ordinary middle-aged person was served as input, which both the groups were expected to rate.

Union Leaders referred the person in the photograph as ”Manager”

But the group of executives saw “ Union Leader” in the photograph


Gankar

Conclusion of the Study

The general impression about a person is radically different when he is seen as a representative of management from that of the person as a representative of labour

The management & labour see each other as less dependable

The mgt & labour see each other as deficient in thinking regarding emotional characteristics & inter-personal relations.


Gankar


Gankar

Sociological Approach to Industrial relations

The industry is made up of various individuals & groups with different personalities, educational background, family, emotions, likes & dislikes, interests& many other personal factors.

The differences in individual attitudes & behavioural creates problems of conflicts & competition among the members of the industrial society.

In the process of change, IRs are becoming more complex that would further complicate with the passage of time.


Gankar


Gankar

Human relations Approach to IRThe problems of IRs can be only managed by deciphering & managing the dynamics of human behaviour both at individual & group levels.

Style of Leadership followed by the manager will have an impact on IR

Another important factor in all conflicts is dissatisfied human wants.

Basic Needs Safety needs Social needs Egoistic/ Esteem needs


Gankar

The manager on his part has to develop a greater insight & effectiveness in his work.

It has been rightly said that ”The industrial progress of the future will depend upon how far industry is willing to go in for establishing a community of mutual responsibility between the highest paid executive & lowest paid production worker”.


Gankar


Gankar

Socio-Ethical Approach to IR/Giri ApproachIn India, The National Commission on Labour studied the sociological aspect of labour-management relations.

This group observed that the labour-management relations exists within social, cultural & political structure of the society.

They therefore need to be examined in relation to the overall goals namely democratic, socialism & economic growth.

The study group observed that “ The goal of labour-management relations may be stated as maximum productivity, leading to rapid economic development, adequate understanding among employers, workers & govt of each other's role in industry & willingness among parties to co-operate as partners in the industrial system”


Gankar

Important Observations of the Study An important aspect of labour relations in industry is the extent to

which labour & management accept the way of life & value system of modern technology. The Director of IRs should develop a code of ethics for his company & a “management philosophy” for IRs in general & for labour relations in particular which “will meet the test of being firm but fair, tough but tender, & hard but human”

A better appreciation of management problems by labour can lead to acceptance of management’s proposed solutions.

Mutual understanding between workers when they belong to same culture, area, state or region & differences in opinion & misunderstanding when they are recruited from different cultural areas.


Gankar

The Group suggested that the govt should limit in its intervention the labour-management negotiations in public sector enterprises by laying down the broad principles within which the management can negotiate with the labour force on its own.

For this purpose, the following guidelines have been suggested in respect with:The extent to which the capacity to pay should be subordinated to the payment of wagesThe extent to which the retained earnings for ploughing back in to business can be sacrificedThe extent to which the dividends can be lowered to meet the wage demands of labourThe extent to which such extra costs can be passed on to the consumer by way of increased prices of products.


Gankar

The Study Group added that

“The incentive earnings should result only from increased productivity”

“There is a need for framing uniform Statutory Standing Orders for all Central Government Undertakings”

It also suggested that the standard rules governing the conduct & discipline of employees in public sector undertakings be framed.


Gankar

V.V Giri laid stress on collective bargaining & mutual negotiations between employers & employees for the settlement of disputes.

His emphasis was on “Voluntary efforts of the management & the TUs to wind up their differences through voluntary arbitration rather than through compulsory arbitration”

He observed that “ There should be a bipartite machinery in every industry & every unit of the industry to settle differences from time to time with the active encouragement of government. Outside interference should not encroach upon industrial peace”

This approach to labour problems encourage s mutual settlement of disputes, collective bargaining & voluntary arbitration & not compulsory adjudication.

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Dynamics of IR- Mamoria & Gankar


Gankar

Gandhian Approach to IR Ganhiji’s views based on

Truth, Non violence & Non possession

Out of these principles evolved the concepts of non co-operation & trusteeship on which his philosophy of industrial relations rests.

This philosophy presumes that the peaceful co-existence of capital & labour, which calls for the resolution of conflict by non-violent, non-cooperation(i.e, Satyagraha) which actually amounts to peaceful strikes


Gankar

The Principle of trusteeship held that the present capitalist order must be transferred to egalitarian one.

It does not recognize the right to property except permitted by society for its own welfare.

The trusteeship theory implies that there is no room for conflict of interests between the capitalist & the labourers.

Though wealth belong to its owners, morally it belongs to society.

If capitalists fail to pay minimum living wages to workers, workers should appeal to the employer’s conscience.


Gankar

Gandhiji advocated that for resolving disputes following rules to be observed

The workers should seek redressal of reasonable demands only through collective actionIf a strike has to be organised, the TUs should seek by ballot authority from all workers to do so, remain peaceful & use non violent methodsThe workers should avoid strikes as far as possible in industries of essential servicesThe workers should avoid formation of unions in philanthropic organizationsThe strikes should be resorted to only as a last resortAs far as possible, workers should take recourse to voluntary arbitration


Gankar

32IR- C.S VENKATARATNAM

Bargaining

Conciliation

Arbitration

Lawmaking

ProcessesInputs Outputs

Ideology

Actors

Environmental Contents

Feedback

Rules

Dunlop’s framework of Industrial relations System

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Actors are Managers & their representativesWorkers & their representatives Specialized govt agencies(Specialised agencies created by the first

two actors)Contexts/Contents areThe technological characteristics of the workplace & the work

communityThe product mkt or budgetary constraints that impinge on the actorsThe locus & distribution of power in the large society

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IR- C.S VENKATARATNAM

Ideology- It is a set of ideas & beliefs commonly held by the

actors in that helps to bind or to integrate the system together as an entity.

The ideology of an IR system is a body of common ideas that defines the role & place of each actor & the ideas that each actor holds towards the place & the functions of the others in the system. The ideology of a stable system involves a compatibility among these views.

35I.R – C.S VENKATARATNAM

The Network or Web of RulesThese consists procedures for establishing rules, & procedures deciding their application etc.

These may be expressed in a variety of forms-

The regulation & policies of the mgt hierarchy The laws of any worker hierarchy The regulations, decrees, decisions, awards, or orders

of govt agencies The rules & decisions of specialised agencies created

by the mgt & worker hierarchies, collective bargaining agreements & the customs & traditions of the workplace & work community.


Unable to test theory

Minimizes other environmental impacts

The actors in the IR is not only mgt, workers & govts. Environmental concerns, consumers & the community have a critical role in IR.

Views managers as giving orders and workers following those orders


‘My Boat’ Attitude- Get off if you do not like it

‘Shared Boat’ Attitude- We sail together, Do not rock the boat

‘Our Boat’ Attitude- It is our common enterprise. Let us combine our efforts to better it

‘Your Boat’ Attitude- With a sense of ownership & pride, the purpose is to let employees wholeheartedly to contribute to the improvement of the enterprise.


Unitary

Pluralist

Radical /Marxist Perspective

Trusteeship


Assumptions There is only one source of authority- management. They own

& therefore they control

The employment relationship is grounded in mutual cooperation and a harmony of interest between employers and employees


For Unitarists, employers are law unto themselves. Employers perceive themselves as providers of job, income & social mobility. They believe that conflict in unnecessary.

It assumes that organisation is composed of a group of people under a single/unified loyalty structure. It is the prerogative, right & responsibility of the mgt to make decisions regarding how an enterprise is to be run & how employees are to be dealt with.


Fails to recognise the divergent interests that exist between management and labour

Narrow view of the nature of the employment relationship and of industrial conflict

Issues of conflict, such as income distribution, the status of labour, and power and control in decision-making, are neglected


AssumptionsThe organisation is composed of individuals who make up distinct groups, each with its own interests, objectives & leadership. This gives rise to a complex of tensions & competing claims which have to be “managed” in the interest of maintaining viable collaborative structure.

It sees conflicts between mgt & employees as rational & inevitable.

Common interests & mutual dependence are perceived as necessary for the survival of the whole of which they are parts.


Normative differences do not come in the way of negotiations concerning rules governing various aspects of employment relationship.

The purpose of such interactions is to secure a balance of power between mgt & employees.

Employees can organise themselves into unions to collectively safeguard their interests.

The belief among pluralists is that the conflicts is necessary, but it can be & needs to be managed & resolved.


Radical/Marxist perspective is based on the notion that the production system is privately owned & is motivated by profits.

Control over production is exercised by managers who are agents of owners

I.R – C.S VENKATARATNAM45

The viewpoint that regards industrial conflict as an aspect of class conflict in wider society

Unions are an outcome of the power imbalance inherent in the employment relationship

The State actively seeks to protect the interests of capital

Social change is required to end the disparity between those who own capital & those who supply labour.

IR – C.S VENKATARATNAM 46

The Radical perspective seeks to alter the existing system of economic organisation which causes social, economical & political conflicts.

In the radical approach, conflict is inevitable in a capitalist system.

Conflict cannot be controlled as long as capitalism prevails.

Marxists sees a role of TUs in protesting against exploitation.

The radical approach favours transformation of TUs in to revolutionary organisations rather than their becoming lieutenants of capital in the intensifying exploitation of workers.

IR- C.S VENKATARATNAM 47

Criticised for being overly focused on conflict between capital and labour

Neglects any dynamics of trust, accommodation and cooperation in the employment relationship

Underestimates the independence of the State from capital

IR- C.S VENKATARATNAM48

Mahatma Gandhi proposed the trusteeship approach.

The Principle of trusteeship expresses the inherent responsibility of a business enterprise to its customers, workers, shareholders & the community & the mutual responsibilities of those to one another.

The concept of trusteeship implies stewardship without ownership.

Gandhi believed that the people should keep the minimum of wealth for themselves to be able to lead a life that millions lead & give up the rest to be held for the greatest good of all.


Conflicts may arise due to- Wage-work bargain Managerial system of work governance Fundamental divisions & differing values in the society

The interests of group can be negotiated through collective bargaining


Equity & Fairness

Power & Authority

Individualism & Collectivism

Integrity, trust & Transparency


Equity & fairness

Power & Authority Power to reward/punish Power to coerce others Position power Reference power due to personal attributes Expert power Association power


Individualism & Collectivism

Integrity, Trust & Transparency


The structure of the economy & labour marketConstitutional provisions, labour framework & labour standards(International, National, Statutory)The structure of TUs & employers organizations & their linkages, attitudes & approachesThe nature & extent of government intervention Policies on IRs at International, national, industry, firm & workplace levelsLabour mkt policies & labour mkt institutions, labour law administration & dispute relation mechanisms etcCollective bargaining & workers’ participation


Harmonizes the interests of ecologically sustainable economic growth with social progress & justice

Generates productive employment

Contributes to improvement in the productivity & quality of goods/services at economical prices

Improves the quality of life of workers & their families.


Top management Support

Developing Sound HRM & IR policies

Development of Effective HRM & IR Practices

Provision of adequate supervisory training

Follow-up of results

Dynamics of IR- Mamoria & Gankar 56

Sharing Information

Consulting with each other on a regular basis

Brainstorming together

Organising morale boosting safaris to units where labour & mgt have benefited through cooperation

Creating opportunities for both management & labour to review, learn, & put positive learning in to practice.

Bridging the gap between precept & practice


All the above features can become a part of the IR environment of a Co if

The mgt shifts the direction & control towards consensus & commitment

The mgt strives to develop a shared vision & common ownership of ideas in a spirit of ‘something for everyone’

The mgt aims for a consensus on corporate HR/IR strategy

The mgt promotes organisational learning across the co’s operating units on how to address the agenda.


Clarify & reason with other party

Provide for say & share for all employees

Focus on fairness

Empower people

Be transparent because trust begets trust

Give credit

Learn to manage the egoIR- C.S VENKATARATNAM

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Accept the nexus between the financial success of the enterprise & livelihood & well-being of the people in the orgn; improvement in wages & welfare can come only from improved business results

Develop long term perspective

Understand the link b/w relationships in assessing the behaviour & performance of a firm

Realise the importance of knowledge, skills, attitudes, lifelong employability can come through proactively addressing, jointly with mgt, the issues relating to human obsolescence

Understand & assess the consequences of working together verses working at cross purposes.


Coerce – Only one side will get what it wants

Conflict- Both side spends more energy & one side will have marginal gains

Compete-One party wins & other loses

Compromise- No one gets what they want

Cooperate- Initiator may gain

Collaborate- Both parties evolve an option for mutual gains


Industrial Relations has a very important role in the modern competitive industrial society.

It is a big challenge to HR/IR manger to formulate sound IR policies & maintain a harmonious relation with the employees to retain a competitive position in the modern complex industrial society

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THANK YOU

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industrial relations background

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