‘Industrial relations’ refers to the complex set of human relationships which emerge in work situations.
In other words, the relationships between employers and employees or trade unions are called Industrial Relation. Thus, industrial relations deals with the workers and employers relation in any industry.
Industrial Relations: History , Meaning , Features ,Objectives , Theories and Causes
Contents:
- History of Industrial Relations
- Meaning and Definitions of Industrial Relations
- Parties Involved in Industrial Relations
- Features of Industrial Relations
- Objectives of Industrial Relations
- Aspects of Industrial Relations
- Conditions for Congenial Industrial Relations
- Theories of Industrial Relations
- Causes of Industrial Relations
- Impact of Industrial Relations
- Current Issues and Future Challenges of Industrial Relations
- Measures for Improving Industrial Relations
Industrial Relations – History
During one century relations between workers and management have considerably changed. The relations between the master craftsman and his co-workers were perfectly cordial. The relations were personal, contacts were close, disputes settled amicably at the place of work.
ADVERTISEMENTS:
By the passage of time, relations between workers and management became complex. The introduction of limited liability system of investment separated the owner of a company’s capital, its management and its workers. In such circumstances, work-people began to regard themselves as a separate class from employers and shareholders.
The personal relations came to a virtual end in modern industry as a result of dynamism in economic relationship. As a result the old master- servant relationship gave place to employer-employee relations. Throughout the entire period of history, the employment relations have undergone changes- slavery to serfdom- serfdom to master-servant relationship- master-servant relations to employer- employee relations, which came to be known as, industrial relations.
The term ‘industrial relations’ refers to the complex set of human relationships which emerge in work situations. In other words, the relationships between employers and employees or trade unions are called Industrial Relation. Thus, industrial relations deals with the workers and employers relation in any industry.
Industrial relations are also known as labour-management relations or employee-employers relations. Industrial relations involve attempts to arrive at workable solutions between the conflicting objectives of profit motive and social gains, of discipline and freedom, of authority and industrial democracy and of bargaining and cooperation.
ADVERTISEMENTS:
Industrial Disputes Act, 1947 defines industrial relation as “a relation between employer and employees, employees and employees and employees and trade unions”.
The term industrial relations “include recruitment, selection, and training of workers, personnel management as well as collective bargaining policies and practices”. -DALE YODER
“It is the complex of inter-relations among workers, managers and government.” -PROF. DUNLOP
On the basis of analytical study of above definitions, it may be concluded that industrial relations are the results of those mutual feelings and views of employers and employees which they adopted to get better results of planning, organising, supervision, direction, co-ordination and control of their industrial enterprise.
ADVERTISEMENTS:
It includes their efforts to minimise mutual frictions and to develop mutual co-operation and co-ordination. It also includes the laws passed by the Government for the settlement of industrial disputes and for the establishment of harmonious industrial relations. Thus, Industrial Relations are the inter-relations between employees, employers and Government.
In other words, there are three parties to industrial relations:
1. Trade Unions – Trade Unions try to protect the interests of workers. These unions stress upon the development of cultural and educational qualities of their members.
2. Employers and their Organisations – Employers and their organisations try to protect the interests of employers to create a healthy industrial atmosphere so that the organisational objectives may be achieved. They try to get full cooperation of workers in achieving this objective.
ADVERTISEMENTS:
3. Role of Government – Government also plays an important role in establishing better industrial relations. Government tries to protect the interests of both the employees and employers. For this purpose, the Government enforces various acts and laws.
Therefore, it can be said that industrial relations are the joint liability of labour unions, employers and the Government.
Industrial Relations – Meaning and Definitions Propounded by Dale Yoder, Tead and Metcalfe, Allan Flanders, Clegg and Legal Definition
In its stricter sense, the term “industrial relations” means relationship between management and workmen in a unit or an industry. In its wider connotation, it means the organisation and practice of multi-pronged relationships between workers and management, unions and workers, and the unions and managements in an industry.
Dale Yoder defines it as a, “whole field of relationship that exists because of the necessary collaboration of men and women in the employment process of an industry.”
ADVERTISEMENTS:
Tead and Metcalfe observed that, “industrial relations are the composite result of the attitudes and approaches of employers and employees towards each other with regard to planning, supervision, direction and coordination of the activities of an organization with a minimum of human efforts and frictions with an animating spirit of cooperation and with proper regard for the genuine well-being of all members of the organization.”
According to Allan Flanders, “the subject of industrial relations deals with certain regulated or institutionalised relationships in industry. Personal or in the language of sociology, “unstructured” relationships have their importance for management and workers, but they lie outside the scope of a system of industrial relations.”
Professor Clegg defines, “industrial relations in the broadest terms as encompassing the rules governing employment together with the ways in which the rules are made and changed and their interpretation and administration.”
Legal Definition – “Industrial Relations” means relation between employers and employers, or between employers and workmen, or between workmen and workmen in a company.
Industrial Relations – 3 Main Parties Directly Involved: Employers, Employees and Government
In the opinion of Dale Yoder, industrial relations refers to the whole field of relationship among people, human relationships that exist because of the necessary collaboration of men and women in the employment process of modern industry.
ADVERTISEMENTS:
According to the view of ILO, industrial relations comprise relationship between the state on the one hand and the employers and employees organisations on the other hand.
In the industrial relations, the three main parties, employers, employees and government are directly involved.
1. Employers:
In the industrial relation employers have the right to hire and time workers and there by central the economic destiny of employers. Management can also affect workers’ interests by exercising their right to relocate, close or merge a factory and to introduce technological changes.
ADVERTISEMENTS:
Many employers negotiate individually as well as through their associations with employees’, representatives to settle terms and conditions of employment. Some employers share decision-making power with workers. Employers try to gain loyalty of workers in various ways. They are concerned mainly with imposing motivation, commitment and efficiency of labour.
2. Employees:
Employees in the industry seek to improve the terms and conditions of their employment. They always try to take in the decision-making process of the management.
By participating in this process, they can easily fulfil their demand and grievances. Rather they have right to struggle. In their struggle, workers get support from trade unions and labour legislation. Trade union expert power both at plant level and industry level.
3. Government:
Government plays an important role in the industrial relations. It protect the interest of both employers and employees. Government have made various labour policies for labour-management co-operation. It also provided labour laws for save and security of employee in the industry.
In the industrial relations, personnel manager also play a significant role by providing the following functions:
i. The personnel manager keeps industrial law and also advise the managers regarding responsibilities, entailing, discipline, welfare measures, managing diversity etc.
ADVERTISEMENTS:
ii. The personnel manager conduct or act as the employer’s representative in negotiations.
iii. He also managing crisis in changed situation, correcting warning of mistakes on the part of line managers.
iv. He also interpreted the agreement made between formal and informal groups.
v. He also provide for the introduction of worker’s participation in decision-making in the organisation.
vi. He provides statistics and information regarding workforce.
vii. He also deals with recruitment, maintenance of personnel records of training, experience, achievements, qualifications, awards, pension and other records.
viii. His main function is to produce data in respect of personnel matters of worker like absentee figures and costs, statistics of sickness, absence, costs of welfare and other employee services, statements, about development in policies by other organisations, ideas for innovations.
Industrial Relations – Features
(1) Industrial relations are the outcome of the employment relationship in industry. These relations exist with the help of two parties-employer and employees. It is the industry which provides the setting for industrial relations.
(2) Industrial relation is a dynamic and developing concept. It bring change with changing structure and environment of industry. It is not a static concept.
(3) Industrial relations include both individual relations as well as collective relations. Individual relations imply relations between employer and employees. And collective relations means, relations between employer’s association and trade unions as well as the role of the state in regulating these relations.
(4) It is a complex and multi-dimensional. The concept is not limited to relations between trade unions and employer but also extends to the general web of relationship between employers, employees and the government. It covers regulated as well as unregulated, institutionalised as well as individual relations. These multi-pronged relationships may be in organised or unorganised sector.
(5) Purpose of industrial relation is to maintain harmonious relationships between management and labour. The parties involved in this system, develop skills and methods of adjusting with each other. They solve their problems through collective bargaining, or by adopting the methods of conciliation, arbitrations or at last the adjudication. Every industrial relation system creates a complex set of rules, regulations and procedures to govern the work place.
(6) In the industrial relations, distinction made between human resource management and industrial relation. Human resource management deals with executive policies and activities regarding the human resource aspects of the enterprise, while industrial relations mainly concerned with employer-employee relationship.
(7) The main parties involved in the industrial relation systems are employers and their associations, employees and their unions and the government. These three groups interact within the economic and social environment to shape the industrial relation system.
(8) An important feature of industrial relation is that it was regulated and influenced by the central and state government through laws, rules, agreements, awards of courts, executive and financial machinery. The Government of India enacted procedural as well as substantive laws to regulate industrial relations in the country.
In addition, the government has set up wage boards, labour courts, tribunals, and other bipartite and tripartite bodies to maintain healthy relations between employer and employees.
(9) In the industrial relation employer, employee and government play a significant role. In the industry, employee rise their voice against the management and fulfilment of their demand, on the other hand employer always try to suppress his voice by fulfilling some of its demands. Here government protect the interest of both employee and employers.
Industrial Relations – 8 Important Objectives: Create Mutual Faith and Trust, Settle Industrial Disputes, Full Employment, Develop Industrial Democracy and a Few Others
Important objectives of industrial relations are as under:
Objective # 1. To Create Mutual Faith and Trust between Workers and Management:
Most important objective of industrial relations is to create an atmosphere in the enterprise in which both the workers and management may have faith and trust upon each other. To achieve this object, it is necessary that both the parties should get proper opportunities to express their feelings and emotions.
Objective # 2. To Settle Industrial Disputes:
Another important objective of industrial relations is to settle industrial disputes peacefully and, at the earliest, so that the harmonious atmosphere may be created and the production and productivity of the enterprise may be increased.
Objective # 3. To Create Full Employment:
Industrial relations have to be maintained to enhance productivity of the workers and to ensure full employment by reducing the rate of labour turnover and absenteeism.
Objective # 4. To Develop Industrial Democracy:
Industrial relations aims to establish good and harmonious labour-management relations which promote mutual understanding, mutual confidence and resolve the mutual differences. Workers get an opportunity of participation in management. It develops the feelings of responsibility among them and they direct their efforts for the achievement of organisational objectives.
Objective # 5. To Solve Labour Problems:
Good industrial relations aim at minimising labour problems, such as strikes, lock-outs, gheraos etc. They strive to eliminate labour problems by providing reasonable wages, fringe benefits, improved living and working conditions, etc. Industrial relations also strive to change the traditional and contrary views of labour and management towards each other so that they may develop mutual understanding and co-operation and both may work in the best interests of the concern.
Objective # 6. To Provide Social Justice:
Industrial relations help in providing social justice to the workers by ensuring fair and equitable wages and thus improving their standard of living.
Objective # 7. To Enhance Morale and Motivation:
Good industrial relations increase the morale of the workers and motivate the workers to put in more efforts. Every problem is solved by mutual consent which increases worker’s participation in management and profits of the firm and also provides job satisfaction to the workers.
Objective # 8. To Increase Production:
Good industrial relations boost the production and improve both the quality and the quantity of the goods produced. It also increases labour efficiency. An increase in the morale of workers reduces per unit cost of production. Thus, industrial relations have far reaching impact on the production.
Industrial Relations – 3 Important Aspects: To Establish Healthy Labour – Management Relations, To Establish Industrial Peace and To Establish Industrial Democracy
“Industrial relations” as a formal discipline of academic study originated mainly on the endeavour of John R. Commons who set up the first academic “industrial relations” programme at the University of Wisconsin in 1920. In the UK, Montague Burton, an industrialist, endowed chairs for the study of the subject in a few universities in 1930, but the subject came to be formally established in the country on the initiative of Allan Flanders and Hugh Clegg.
Since then, there has been a substantial growth of literature, study and research on the subject. However, many specific areas coming under the purview of industrial relations, such as trade unionism, collective bargaining, industrial disputes and strikes and related issues, had been dealt with both extensively and intensively by scholars even much earlier. A particular mention may be made of the pioneer work of Sidney Webb and Beatrice Webb, G. D. H Cole, Karl Marx, Selig Perlman, Robert F. Hoxie and John Conmons.
The contributions of all the above-mentioned scholars had, however, been based on the experiences of the conditions prevalent in particular economic, industrial, political and social environments obtained at different intervals of time. Even in a particular environment, the employers or their managers had to manage their workforce in one way or another.
The task was not difficult in small and non-unionised establishments. When the size of the establishments expanded resulted in congregation of a large number of workers at the same place of work, ownership of enterprises and capital came to be vested in companies and big corporations; management of enterprises came to be handed over to paid professionals; unionisation spread and governmental intervention in the field of labour matters increased; the employers had to arrange for effective systems of managing their workforce.
This eventually resulted in the adoption of “personnel administration”, “labour relations” and later “industrial relations” as appropriate devices.
To facilitate the study of aspects of industrial relations the same is divided into three parts:
(1) To establish healthy Labour – Management Relations
(2) To establish Industrial Peace
(3) To establish Industrial Democracy
Their detailed description is as under:
(1) To Establish Healthy Labour – Management Relations:
Healthy labour – management relations is a pre-condition of good Industrial Relations.
In order to establish healthy labour – management relations following conditions must be fulfilled:
(i) Existence of strong, responsible and democratic trade unions. Trade Unions protect economic and social interests of their members. They put pressure on the management to achieve their objectives. Besides, responsible and strong Trade Unions by co-operating with organisation play an important role in developing healthy labour- management relations.
(ii) Healthy labour – management relations require that all industrial disputes be settled on the basis of collective bargaining. Responsible Trade Unions understand the significance of collective bargaining.
(iii) Labour – management relations are also influenced by the political pattern of the government of a country. By introducing various labour – legislations government provides the labour class proper facilities and justice and thus makes its contribution in promoting healthy labour-management relations.
(iv) Not only government but employers’ associations and trade unions also take keen interest in the welfare activities of the labourers with a view to establishing healthy labour-management relations.
(2) To Establish Industrial Peace:
Industrial Peace is the basis of industrial development. To maintain industrial peace, effective provisions must be made to prevent and settle industrial disputes. In case measures to prevent industrial disputes do not succeed then machinery to settle such disputes must be put to operation. Provisions for prevention of industrial disputes are quite effective to maintain industrial peace.
Following measures are adopted for prevention and settlement of industrial disputes:
(i) Works Committees
(ii) Conciliation Officer
(iii) Board of Conciliation
(iv) Court of Enquiry
(v) Labour Court
(vi) Industrial Tribunal
(vii) National Tribunal
(viii) Arbitration
(ix) Mediation
In addition to the above measures, if the government deems it fit, it can impose legal restrictions on strikes and lock-outs. The government may constitute Evaluation and Implementation Committee to penalise those industries which fail to implement labour laws, awards, etc. All these measures help in preventing and settling industrial disputes and thus in establishing industrial peace.
(3) To Establish Industrial Democracy:
In the present day industrial society, the concepts of “industrial democracy” and “social justice” are being held in high esteem. Establishment of Joint Management Councils is a significant step in this direction. Advice must be taken from these councils with regard to rules of work in the factory, retrenchment, rationalisation, lock-outs and penal provisions.
Labourers get an opportunity to influence managerial decision through the medium of these committees. Besides, in establishing industrial democracy, profit sharing, workers’ participation in management and the concept of human relations, etc. have also an important role to play. All these measures are likely to instill a sense of satisfaction among the workers.
Such workers would lend maximum co-operation to the management. In short, joint management councils, profit sharing, and workers’ participation in management, human relations etc. are activities of great significance in the direction of setting up of “industrial democracy.”
Industrial Relations – Conditions for Congenial Industrial Relations
The establishment of good industrial relations depends on the constructive attitude on the part of both management and the union. The constructive attitude in its turn depends on all the basic policies and procedures laid down in any organisation for the promotion of healthy industrial relations. It depends on the ability of the employers and trade union to deal with their mutual problems freely, independently with responsibility.
They should have their faith in collective bargaining rather than in collective action. For better industrial relations it is also necessary that fair labour standards are laid down, there is a feeling of equality with which the management should enter into collective bargaining with the labour and there should be realisation on the part of management to promote workers’ welfare.
The existence of strong, independent, responsible, democratic trade unions, the promotion of collective bargaining — a fair and independent machinery for the peaceful settlement of industrial disputes — the existence of good human relations, lack of any kind of discrimination are certainly essential for a healthy industrial relations situation.
It is very difficult to promote and maintain sound industrial relations. Certain conditions should exist for the maintenance of harmonious industrial relations.
They are:
(i) Existence of strong, well organised and democratic employees’ unions – Industrial relations will be sound only when the bargaining power of the employees’ unions is equal to that of management. A strong trade union can protect the employees’ interest relating to wages, benefits, job security etc.
(ii) Existence of sound and organised employers unions – These associations are helpful for the promotion and maintenance of uniform personnel policies among various organisations and to protect the interest of weak employers.
(iii) Spirit of collective bargaining and willingness to resort to voluntary organisation – The relationship between employee and employer will be congenial only when the differences between them are settled through mutual negotiation and consultation rather than through the intervention of the third party.
Collective bargaining is a process through which employee issues are settled through mutual discussions and negotiations through give and take approach. If the issues are not settled through collective bargaining they should be referred to voluntary arbitration but not to adjudication in order to maintain congenial relations.
(iv) Maintenance of industrial peace:
Permanent industrial peace in an organisation is most essential which can be ensured through the following measures:
(a) Machinery for prevention and settlement of industrial disputes. It included legislative and non-legislative measures. Preventive measures include works committees, standing orders, welfare officers, shop councils, joint councils and joint management councils. Settlement methods include voluntary arbitration, conciliation and adjudication.
(b) Government should be provided with the authority of settling the industrial disputes when they are settled between the two parties and also by voluntary arbitration.
(c) Provision for the bipartite and tripartite committees in order to evolve personnel policies, code of conduct, code of discipline etc.
(d) Provision for the various committees to implement and evaluate the collective bargaining agreements, court orders and judgments, awards of the voluntary arbitration etc.
Industrial Relations – 3 Notable Perspectives: Unitarist Perspective, Pluralist Perspective and Radical Perspective
Relationships between the employer and the employee have often been viewed from some distinct perspectives. Most of these relate to the conditions prevalent much before the evolution of formalised concept of “industrial relations.”
The more notable of these are:
(1) Unitarist,
(2) Pluralist and
(3) Radical perspectives.
(1) Unitarist Perspective:
Under the unitarist perspective, the organisation is perceived as an integrated and harmonious whole being symbolic of “one happy family” This perspective asserts that management and employees have a common purpose to achieve in a co-operative manner.
This perspective has an element of paternalism on the part of management, which voluntarily takes care of employees’ problems without facing any pressure from them. This perspective considers trade unions as anachronism and unnecessary because the purpose for which they are formed is taken care of by the management on its own. The perspective holds, “Conflict is perceived as disruptive and the pathological result of agitators, interpersonal friction and communication breakdown.”
(2) Pluralist Perspective:
Under this perspective, an industrial organisation is perceived as being composed of divergent subgroups, each of which has its own interests, objectives, loyalties and leadership. These sub-groups in industrial setting are management and trade unions. The perspective recognises trade unions as legitimate representatives of employees and asserts that conflict situations can be solved through the process of collective bargaining and negotiations.
The management can fruitfully adopt the policy of persuasion and negotiation for solving conflicting issues. Conflict between the two sub-groups is accepted as being inevitable, but it can be resolved through suitable devices such as consultation and persuasion. Besides, the scope of conflict can be minimised by the adoption of jointly agreed norms which can be smoothly adhered to. The views of Sydney Webb and Beatrice Webb, G. D. H Cole and John R. Commons partially support this perception, but their writings also contain elements of the radical perspective.
(3) Radical Perspective:
This perspective assumes the existence of inherent conflict between the interests of owners of enterprises and the working hands in a capitalist economic order. Karl Marx uses the terms bourgeoisie (representing the capitalists) and proletariat (representing the working class). In such a society, class conflict is inevitable in view of conflicting interests of the two groups.
In a capitalist economic order, the workers are the worst sufferers. Under this order, trade unions emerge as natural organisation through which the workers can counteract their exploitation by the capitalists. The perspective further asserts that the conditions of workers cannot permanently improve unless the capitalist economic order is overthrown. This is possible only when trade unions adopt a revolutionary approach.
Many scholars have tried to explain the nature of “industrial relations” based on certain other approaches, such as sociological, psychological and political approaches.
The sociological approach views industrial relations as a product of the industrial society, which is itself a part of the broad social milieu. The psychological approach devolves mainly round the perception of the parties to the-same problems, which may relate to particular situations, persons or issues.
The political approach may be viewed in two ways. One view lays emphasis on governmental regulation of industrial relations through the enactment of labour laws or other political devices. The focus of the other view is on the formation of a government jointly by the employer and the union for dealing with issues related to the terms and conditions of employment.
Industrial Relations – Causes of Poor Industrial Relations: Economic, Political, Psychological, Organisational and Social Causes
Industrial relation scene is not satisfactory and it is visible from frequent strikes, gherao, lockout and other forms of industrial disputes. Several economic, social, psychological, technological and political facts are responsible for poor industrial relation.
Cause # 1. Economic:
Poor wages and poor working conditions are the main causes of poor industrial relations. Lack of fringe benefits, absence of promotional opportunities, faulty incentive schemes, dissatisfaction with job evaluation and performance appraisal methods are other economic causes of poor industrial relations. When the employers deny equitable and fair remuneration and good working and living conditions to the employees, industrial conflict arises.
Cause # 2. Political:
In the absence of strong and responsible trade unions, collective bargaining becomes ineffective. The Unions status is reduced to a mere strike committee. The outsiders, who become union leader by making wild promises to workers make excessive demands on employees when employers do not accept their demands conflict arise in the industrial relation.
Cause # 3. Psychological:
Lack of job security, poor organisational culture, non-recognition of merit and performance, authoritative administration and poor inter-personal relations are the psychological reasons for unsatisfactory employer-employee relations.
Cause # 4. Organisational:
Faulty communication system, dilution of supervision and command, non- recognition of trade union, unfair practice, violation of collective agreement and standing orders and labours laws are the organisational causes of poor relation in industry.
Cause # 5. Social:
Uninteresting nature of work is the main social cause. Factory system and specialisation have made worker a subordinate to the machine. Workers has lost sense of pride and satisfaction in the job. Dissatisfaction with job creates industrial conflicts.
Poor industrial relations are harmful for all. Industrial conflicts reduce productivity of labour. Quantity and quality of work also suffer due to industrial conflicts. Workers have not interested in higher productivity, thus cost also rise. Industrial discipline breaks down and labour turnover and absenteeism increase.
Working class suffers due to industrial decline. They find it very difficult to get improved wages and working conditions. Matty of them loose jobs and promotion. They get frustrated and demoralised. Social tension such as drinking, gambling and other social evils increases due to poor industrial relations.
Industrial Relations – Impact on Trade Unions, Collective Bargaining, Participative Management and Quality Circles & Managing Diversified Cultures
1. Impact on Trade Unions:
Trade unions in India played a phenomenal role in protecting the interests of the workers even by controlling and regulating the management at the cost of the organisation. But trade unions now play an important role by co-operating with the management, as the survival of the organisation under competitive environment would be at stake.
Trade unions’ role of fighting with the management in order to protect the interests of workers would be at stake as most of – the employment conditions would be determined by the market forces rather than by the political and/or membership strength of the trade unions. Further, the government would support managements rather than trade unions unlike in the past, as presently the government’s objective is to attain rapid economic development. Hence, the liberalisation would not guarantee the same role and importance for, the trade unions in India.
Trade unions in India resisted the implementation of economic liberalisation as they do not generally favour multinationals getting free access into the Indian industrial field. The trade unions do favour the growth of small-scale sector; they oppose privatisation of public enterprises and do not want to close the sick industrial units. Though the trade unions voice their argument against new economic policy on various platforms and through different means, they have, in fact, not responded adequately to the possible fall out in employment and salaries.
2. Impact on Collective Bargaining:
The socialistic pattern of society and dominance of trade unionism have attributed importance to collective bargaining in deciding various issues relating to labour problems and personnel policies. But under market economy most of the problems would be decided on the basis of individual issue rather than collectively. As Alan Fox observed, management may seek in some cases unilateral action and search for managing new sources of pluralism and individualism at the work place, bypassing collective bargaining.
The other way to respond is to promote labour- management cooperation to introduce technological and other changes for modernising and/or restructuring enterprises to overcome crisis and/or withstand competitive pressures. Most of the private sector organisations have been seeking to promote labour-management cooperation through consultations rather than collective bargaining. Hence, the collective bargaining machineries would not enjoy the same privilege under liberalised economy.
3. Impact on Participative Management and Quality Circles:
The purpose of participative management is to satisfy the social and psychological needs of employees for association, sense of belongingness and satisfaction of involvement in decision-making. Among other things, the outcome of participative management is making use of human resources to the maximum extent through satisfying their social and psychological needs.
Further, the innovative and creative abilities of employees will find utility value in the organisation under participative management. Participative management provides added competitive advantage to the industries. Hence, the significance of participative ‘management would be ‘magnified under liberalised economy.
Quality improvement, upgradation and maintenance are the central plan of the new economic policy. Quality controls to match international standards would be a tough task of Indian enterprises. Quality circles would play a dominant role in quality improvement. But these programmes are not well received at present. However, these schemes would receive the attention in Indian industry for the enhancement of skills, upgradation of knowledge etc., to match the human resources to the requirements of new technology.
4. Managing Diversified Cultures:
In the recent past, managing diversity has emerged as a strategic challenge in the area of the human resource management due to globalisation. Managing diversity can be classified into two broad categories, viz., and cross national and international. Managing cross national diversity refers to managing the interface between people of two countries such as that between expatriates and host country nationals.
Managing international diversity on the other hand, refers to, coping with the realities of an increasingly diverse, both ethnic, and gender-wise, workforce in a given country. The diversified agenda also includes differences in age, sexual orientation, religion, physical and/or mental capabilities.
The increasing globalisation of workforce has contributed to the need for managing different cultures and subcultures effectively. The ethnic mix of workforce due to entrance of multinationals and foreign companies with their people into India posed a challenge to manage the diversified international cultures.
The effective management of multifarious Indian cultures and international cultures, though it is a great challenge, would help the industry in achieving its goals efficiently.
Economic liberalisation and globalisation have their impact on all segments of economic activities including personnel management and industrial relations. They demand highly skilled and committed personnel and provide the scope for high quality of work-life.
Though, they result in unemployment to less skilled personnel in short run, continuous development of human resources along with setting up of a number of new industries would provide better employment opportunities. The salary and benefits administration would tend towards the market factors.
The industrial relations system may not take much deviation but the actors of industrial relations may be required to play a more co-ordinated role in order to strengthen the competitive abilities of the organisation. Government would play the role of a facilitator, trade union plays a balanced role of satisfying the demands of managements too, management fulfils its role tending towards individual needs rather than generalising them. Thus, the emphasis may shift from industrial relations to human relations.
Industrial Relations – Current Issues and Future Challenges
1. Job Security – A Thing of the Past:
The era of protective labour laws seems to have ended immediately after the commencement of the LPG (liberalisation, privatisation and globalisation) era in India. Workers have come to realise that the protective cover extended by trade unions does not exist anymore.
The concept of ‘job security’ is being put to rest by most employers — with a little bit of support and encouragement from the market forces, the government and of late, the judiciary.
2. Economic Agenda Uppermost in the Minds of Management:
The interests of the workmen are conveniently ignored taking shelter behind convincing and forceful economic arguments such as cost pressures, global competition, and the need to remain lean and fit.
3. Judiciary — Playing an Active Role:
The right to strike work is being increasingly questioned everywhere, thanks to the active judicial intervention in the recent past.
4. VRS Schemes could be Double-Edged Weapons:
VRS schemes are being enforced with lot of enthusiasm in the name of ensuring organisational survival and continuance. These dangerous moves from employers are being watched, debated and protested by employees — sometimes, leading to violent demonstrations in different parts of India. VRS schemes are loaded with emotional baggage — affecting the sentiments of workers in a bad way.
Unknowingly almost surreptitiously, all the remaining people become extremely suspicious about management intention, the entire top management in their eyes losses the credibility. Good performers may begin to look for greener pastures outside and many more talented newcomers may be prevented at the gate by the bruised souls still operating in the company. VRS schemes could conveniently become double-edged weapons, causing serious morale-motivation-performance-related problems.
5. Violent Demonstrations, Protests and Brutal Murders at the Work Spot:
In a country of large numbers, any talk about lay-offs, retrenchment and voluntary retirement — not surprisingly — leads to instantaneous violent reactions from the workmen. The murder of Roy George, the Vice President of Human Resources of Pricol Limited in Coimbatore and the beating to death of the CEO of another car parts company in the Noida Industrial Zone near Delhi in 2009 are clear indicators of this dangerous trend.
In both cases, the dispute between the management and the labour was going on for a long time of two years or more; in both cases, the murders were a sequel to the sacking of a number of workers; and in both cases, the executives were done to death in their offices by enraged workers with sticks and iron rods.
6. Provide a Democratic Forum for Workers to Ventilate their Grievances:
Unless workers get a chance to ventilate their grievances in a fearless and bold manner — catching the attention of the top management in time — such violent incidents could spoil the show not only in the affected company / region but also the whole industrial relations scenario in the country.
7. Management Should Not Behave Like a Burra Sahib:
The top management should encourage workers to bring up any issue — sometimes without a fixed agenda — before a joint management council and all members should be allowed to speak without regard to their rank and designation. Many companies have found this immensely useful as a safety valve, sounding board, storm signal and fire extinguisher — leading to a tension-free atmosphere.
The aim of the management should be to conduct itself in as compassionate, enlightened and understanding a manner as possible, and deal with all employees as human beings, and not as designations. The CEO should set a personal example and follow an open door policy, and not behave like a burra sahib turning up his nose at the sight of workers.
8. Keep the Dialogue Open:
Before showing the door to surplus staff, management must keep the dialogue with representatives of unions open and conduct the show with care, caution and restraint. In a country of over 100 crore population, even gradual reduction of industrial employment is going to be resisted vehemently, vociferously and violently by trade unions, opposition parties and affected workmen.
The media glare and attention could turn the issue into a big headache as it happened to Tata Motors when it wanted to set up the plant in Singur, West Bengal. Every attempt must be made to bridge the communication gap between labour and management; otherwise, even trivial issues could flare up sentiments and burn up the candle of managerial energies too soon. Harmonious industrial relations are built around sound HR policies and practices which are transparent, fair and flexible.
9. Employee Synergy:
The present dimensions of different cadres of employees as workers and managers will gradually diminish. The growing awareness of roles and responsibilities and the increasing levels of education will convert the less informed workers into knowledge workers who in turn will comfortably compete with their more privileged superiors — the Managers.
The distinction thus will disappear, so traditional approach of maintaining IR will not work. HR Manager has to be fully prepared, competent, transparent and logical while dealing with workforce.
10. Consolidation of Bargaining Strengths:
The bargaining strengths of Trade Unions have brought remarkable dividends to the working class all over the world. The managements have not recognised this fact that the less united group of employees, namely, the officers and staff have not been treated fairly and equitable. This denial of justice has been playing heavily on the white-collared personnel and the formation of the federations in Banks and Public Sector Undertakings has been a pointer in this direction.
Realising that the only way to receive justice from the hands of the management is to force them to understand that they should not be treated in a casual manner. This objective will be sought to be satisfied through consolidation of their strength in the form of associations. To meet out this situation, the HR manager has to equip not only himself but complete team of management through interpersonal skill development and enhancement of competence level.
This situation may be diffused by taking care of middle managers in terms of improving their quality of life and paying compensation well so that they may not divert to formation of formal associations.
11. Integration Skills – The Need of the Hour:
Information technology is bound to create an impact on industrial relations as both the parties — management as well as workers will use this tool to strengthen their bargaining power. It will be difficult rather impossible for HR managers to hide any business information from workers and union to take undue advantage while bargaining.
Workers will also be ready with full facts and figures in their favour to justify their demands as management use to have. So, HR managers have to be more careful and develop new negotiation skills in this regard.
To perform the role of a “corporate hero “, the HR manager has to equip himself with interpersonal skills of the highest order. Otherwise even minor flare-ups between labour and management could derail an organisation and put it under the ‘watch list’. What may look like very simple prescriptions — having listening skills, interacting abilities, persuasive and convincing power, friendly attitude, ability to look at a problem from all angles, empathy and so on and so forth — are in fact the most indispensable requirements of a HR manager.
In most cases, healthy and competitive compensation packages and fair and equitable HR policies and practices would suffice to put out fires without prolonged heated discussions and spur of the moment reactions. But, unless there is true empowerment where workers are able to air their concerns in a fearless manner, the status walls between the two cannot be demolished. People are the most precious, valuable and prized possessions of an organisation.
Even when the large majority seem to be looking at an issue through coloured glasses — influenced by unions, political parties, caste groups and regional considerations — HR managers require monumental patience to put out fires first and create a healthy atmosphere of interaction based on mutual trust, confidence and cooperation.
Companies where these elements are available in abundance — for example in Tata Steel where for over 8 decades now there is not a single instance of strike — are free from industrial conflict. And there are important lessons for others to learn from the experience of Tata Steel and emulate their practices and implement their strategies with sincerity and dedication.
Industrial Relation – Measures for Improvement: Participative Management, Collective Bargaining, Responsible Unions, Sound Human Resource Policies and a Few Others
Generally, industrial relations means the relationship between employers and employees in industrial organisation. But in broad sense, it includes the relations between the various unions, between the employers and the government.
On the whole, the maintenance of good human relationships is the main aim of industrial relations. The goal of labour management relations maybe stated as maximum productivity leading to rapid economic development, adequate, understanding among employers, workers and government
Industrial Relations is the study of human behaviour at the workplace. It concerns the formal relations between employers and their employees. Technology has playing a significant role in industrial relations. It change the process and structure of the organisation’s management and improved the quality of work life in organisation’s.
Organisation as a socio- technical system which bring out the relationship between human resources and technology. Technology is one of the major instrument which change the organisational work. Due to the growth of technology, specialization system has been increase.
Industrial peace is the basic aim of the industrial relations. So that, government has a vital role to play in structuring industrial relations. The government seeks to maintain balance by establishing legal, social, and economic forms of work life. The government adopt the legislative and administrative organs to changes in social ideals and norms.
(1) Participative Management:
For improving industrial relations, participative management is required. Management should not interfere in the internal affairs of the unions. Rather encourage them to participate in the formulation and implementation of human resources policies and practices. It also encourage for right type of strong union leadership.
(2) Collective Bargaining:
Collective bargaining as the corner stone of good industrial relations. Through bargaining union can fulfil the demand of the workers and also the management solve its problem through collective bargaining. For improving industrial relations, a strong collective bargaining is required.
(3) Responsible Unions:
Unions should be responsible as it recognize, the workers in the industry. A responsible union can only recognize that the welfare of workers depends upon the successful operation of industry.
(4) Sound Human Resource Policies:
Policies and procedures relating to the compensation, transfer, promotion etc. of employees should be fair and transparent for good industrial relations. Rather it create conflict in the industry. All policies and rules relating to industrial relations should be clear to everybody in the enterprise and to the union leaders.
(5) Grievance Procedure:
A well-established and properly administered system for the timely and satisfactory redressal of employees’ grievances can be very helpful in improving industrial relations. It provides an outlet for tensions and frustrations of workers. Similarly, a suggestions scheme will help to satisfy the demand of workers.
(6) Constructive Attitude:
Both management and Trade Union should adopt positive attitudes towards each other. Management must recognize union as the spokesman of worker grievances. On the other hand, workers also recognize the right of employers.
(7) Employee Welfare:
Employers should recognize the need for the welfare of workers. They must ensure reasonable wages, satisfactory working conditions, opportunities for training and development and other necessary facilities for labour.