UNIT IV

INDUSTRIAL RELATIONS
BBM503

INDUSTRIAL RELATIONS Definition and Approaches of Industrial Relations, Industrial Conflicts, Industrial Relation Policy.

Industrial Relations comprises of : Industry and Relations Industry relates to productive activity in which individual (or a group of individuals) is (are) engaged. relations focuses on the relationships which exist within the industry between the employer and his workmen.

Three phases of Industrial relations : Science building, Problem solving, Ethical

In the science building phase, industrial relations is part of the social sciences and it seeks to understand the employment relationship and its institutions through highquality, rigorous research.

 In the problem solving phase, industrial relations exist between two camps within industrial relations when labour markets are seen as imperfect, and when the employment relationship includes conflicts of interest, then one cannot rely on markets or managers to serve workers interests, ...

.... and in extreme cases to prevent worker exploitation. Industrial relations practitioners therefore support institutional interventions to improve the workings of the employment relationship and to protect workers rights.

 In the ethical phase, industrial relations see the employment relationship as a mixture of shared interests and conflicts of interests that are limited to the employment relationship in the workplace. Therefore focuses on grievance procedures, employee voice mechanisms like works councils and labour unions, collective bargaining, and labourmanagement partnerships.

about industrial relations outlook

i) broad ii) narrow. broad outlook include the relationships and interactions between employers and employees and covers: employment relationship narrow outlook is more specific and relates to the study and practice of collective bargaining, and labor-management relations.

Basic facts about industrial relations a) Institutional factors b) Economic factors c) Technological factors

Institutional factors includes state policy, labor laws, laborers unions and social institution like community, caste, joint family, attitude of work, motivation and influence.

 Economic factors includes organization like (socialist, capitalist, communist, individual ownership, company ownership, government ownership), power of labor and employers, Technological factors covers the techniques of production, modernization and capital structure

Meaning of IR
Industrial Relation deals with the manpower of the enterprise and the management which is concerned with whether machine operator, skilled worker or manager.

Industrial Relation is a process by which people and their organizations interact at the place of work to establish the terms and conditions of employment.

 The relationship of employers and workers have formed to promote their respective interests, and the relations between those organizations, at all levels.

methods of industrial relations: collective bargaining between employer and employee. participation of workers in the Industrial Relation schemes. other disciplinary procedure, grievance readdress machinery , dispute settlements, union reorganization, revisions of existing rules, policies, procedures, hearing of labor courts, tribunals etc.

contents : covers two parts one part includes employment conditions other parts relates to the laws activities

Institution / Establishment: direct or indirect impact on the industrial relation system includes government, employers, trade unions, unions federations or associations, government bodies, labor courts, tribunals and other organizations.

Objectives of Industrial Relations Primary objective is to bring about good and healthy relations between two partners in industry According to Kirkaldy IR objectives improving the economic condition of workers control by the state over industries to regulate production and industrial relations socialisation or nationalisation of industries vesting the proprietorship of the industries in the workers

1. to safeguard the interest of labor and management 2. to avoid industrial conflict or strife 3. to raise productivity to a higher level 4. to establish and maintain the growth of an industrial democracy 5. to bring down strike, lockout 6. to establish government control

current industrial relation issues minimum wages flexible/performance pay cross-cultural management dispute prevention industrial relations/ HRM Training migration

Suggestions to Improve IR both should develop constructive attitudes towards each other. policies, procedures and practices relating to the employments should be clear to everybody in the organization. management should encourage right kind of union leadership.

about Industrial Relation (IR) System....

o sound IR system shows the relationships between management and employees o other, between them and the state which are more harmonious and cooperative than conflictual

actors in the IR system employers employees government

industrial relations among three actors

Scope
narrow sense wider sense in narrow sense, relationship emerges out of the day to day association of the management and the labour.

in wider sense, the relationship emerges

between an employee and employer in the course of the running of an industry

about main issues of industrial relations.... Collective bargaining Machinery for settlement of industrial disputes Standing orders Workers participation in management Unfair labour practices

Approaches to Industrial relation

IR is related to class conflict, others perceive it in terms of mutual co-operation and still others understand it in terms of competing interests of various groups. HR managers arc expected to understand these varying approaches because they provide the theoretical underpinnings for much of the role of HRM.'

Perspective theories contrast in their approach to the nature of workplace relations: Unitary Perspective Pluralistic-Perspective Marxist Perspective

In unitary, the organization is perceived as an integrated and harmonious system. A core assumption of unitary approach is that management and staff, and all members of the organization share the same objectives, interests and purposes.

unitary view
organization is: a group that united having same objectives single authority common value, interest and objectives managers have the right to manage.

unitary approach from employee point of view

working practices should be flexible. if a union is recognized, there should be means of communication between staff and the company. emphasis is on good relationships and sound terms and conditions of employment. employee participation in workplace decisions. skills and expertise of managers should supports their endeavours.

unitary approach From employer point of view staffing policies should inspire and motivate employees. organization's objectives should be communicated and discussed with staff. reward systems should foster to secure loyalty and commitment. line managers should take ownership of their team

unitary perspective
assumptions capitalist society integrated group of people within the work organization common values, interests and objectives nature of conflict and its resolution irrational and aberrant ( straying from the path) if there is/are conflict, they are Frictional and personal coercion (force) or paternalism (limiting freedom through regulation) Role of Trade Unions intrusion from outside historical anachronism (relating to a wrong period) management only forced to accept trade unions in economic relations

 Pluralistic approach to industrial relations organization is perceived as being made up of powerful and divergent sub-groups, with their own set of objectives and leaders.

Consequently, the role of management would less towards enforcing and controlling but more toward persuasion and co-ordination. Trade unions are deemed as legitimate representatives of employees, conflict is dealt by collective bargaining.

Pluralist: Input-output mode

Input Conversion Output

Pluralist perspective
Assumptions Post-Capitalist society, where a relatively widespread distribution of power and authority within the society Differing values, interests and objectives Competitive authority/loyalty structures (formal & informal) Nature of conflict and its resolution Rational and inevitable Structural and institutionalized Compromise, negotiate and agreement Role of Trade Unions Legitimate and accepted in both economic and managerial relations Internal and integral to organization

conflict result from industrial and organizational factors. 1. Different roles of mgt. and employees Mgrs : responsible for efficiency, productivity and profitability

Employees: more of personal term (better pay, good working conditions and good job security.

2. Conflictual behavior result form: Specific situation (e.g the closure of some part of organization and change to new technology) general management principal (to cut cost, increase profit and productivity)

implications of Pluralistic approach The firm should have industrial relations and personnel specialists Independent external arbitrators should be used to assist in the resolution of disputes. union representatives have an opportunity to carry out their representative duties Comprehensive collective agreements should be negotiated with unions

Marxist Approach to Industrial Relations this looks at the nature of the capitalist society, where there is a fundamental division of interest between capital and labour. This perspective sees inequalities of power and economic wealth as having in their root.

about Marx argue...

Weakness and contradiction inherent in the capitalist system. Capitalism would foster monopolies. Wages would be minimized to a subsistence level. Capitalists and workers would be in contention to win ground and establish their constant win-lose struggles

Marxist: Control of the labour process

A. Focus
The way capital controls labour Mechanisms of management control Scientific management Segmentation of labour (core & periphery) Bureaucratic control (policies, procedures & rules) Responsible autonomy (self-control or adoption of management values )

Employee response Resistance (restrictive practices) Collectivism (joint regulation)

Dunlop's Contribution To Industrial Relations Industrial Relations as 3 group of actors:-

1.workers and their organization, 2.managers and their organization, 3.government and its agencies concerned with work communities.

These groups interact with the technology, the market or budgetary constraint .

key factors of Dunlop's model

economic, technological, political, legal and social forces which impact employment relationships. interaction of the key actors in the employment relationship: labour, management, and government. Rules are derived from these interactions that govern the employment relationship.

significance of Dunlops model to environmental forces management, labour, and the government possess a shared ideology provides stability to the system.

model sees IR as a subsystem of society distinct from but overlapping, the economic and political subsystem

Dunlops approach to industrial relation or system approach to industrial relation

about System.. A system is a community situated within an environment. A system is a dynamic and complex, interacting as a structured functional unit. A system is a combination of parts and subsystems. Each part may have different subparts. Parts and sub parts of the system are mutually related to each other.

Basic components of system Internal inputs (goals, values, power of the participants (actors) in the system are conditioned by the flow of effects from environmental subsystems (external inputs)

The processes or complex of private and public activities for converting inputs into outputs The outputs, comprising the material, social and psychological rewards employees receive in rendering their services; and

 feedback loop through which the outputs flow directly into the industrial relations system itself and also into the environmental subsystem.

System Approach of industrial labor relations was put by john Dunlop in 1950s. this approach focuses on

Participants in the process Environment forces Output

(none
of these institutions can act in an autonomous or independent, unless they are shaped at least to some extent by their market , technological and political contexts)

Dunlops approach to industrial relations

basic elements of system approach a) Participants in the system Workers and the organization Management and their representatives Government agencies

b) Environmental forces (relevant to industrial relations) Technological characteristics Market or economic constraints The locus and balance of power existing in a society

Technological characteristics Industrial relations is different in a labor intensive industry from those of capital intensive. Market or economic constraints These influence industrial relations, because the need for labor is closely associated with the demand for the products. Existence of competition in market.

The locus and balance of power

This factor in a society in the form of power centers
Workers organizations The employers The government Also influences the relationships between the labor and management role of government is important part in shaping the pattern of industrial relations

they lead to the formulation of rules of behavior. (like labor laws, collective agreements, codes etc. govern the behavior of each of the three parties participating in industrial relations system.)

Output the result of interaction of parties of the system which is manifested in the network of rules, country labor policy and labor agreements.

management, labor, and the government possess shared ideology, provides stability to the system.

Industrial Conflict the total range of behaviours and attitudes that express from one end opposition and divergent orientations between industrial owners and managers,, and on the other working people and their organisations

forms of conflict
Organised conflict: - collective in nature, involves groups of employees or trade unions - open(or overt),obvious to all that it is occurring - takes the form of: - strikes - lockouts - overtime bans, working to rule, restrictions on output - political action

Unorganised conflict:
- individual in nature, only involves single employees - hidden (or covert), not obvious it is occurring - takes the form of: - absenteeism - labour turnover - low productivity - acts of indiscipline and sabotage

Theories of industrial conflict

Strikes as a product of industrialisation (1) propounded by Ross and Hartman in 1960 theory Identifies that
(i) as industrialisation advances, labour movements mature from industrial to political action, and governments increasingly intervene in economy and industrial relations

(ii) consequent withering away of strikes as unions

increasingly accommodated in industrial and

political systems

(iii) consequent convergence in national industrial

relations systems as a result of industrialisation.

 Strikes as a product of industrialisation (2)

propounded by Marx in 1857, Hyman 1975 theory identifies that (i) industrialisation divides society into classes with directly conflicting economic interests

(ii) exploitation of workers occurs as wealth is

concentrated in fewer and fewer owners of

means of production

(iii) workers become conscious of their

exploitation, realise common interests and

organise to resist

 Strikes as a product of institutionalisation(3)

propounded by Dubin (1954) The theory identifies that (i) where regulation is unilateral or statutory, there are more strikes (ii) where formalised, collective bargaining occurs (allowing dispassionate airing and orderly settlement of grievances), there are fewer strikes.

also propounded by Clegg in 1976 theory identifies that(i) the more comprehensive, the dispute settlement procedures under collective bargaining, the fewer strikes occur (ii) plant-level bargaining involves fewer workers, but more strikes

(iii) industry and national-level bargaining involves larger numbers of workers in shorter strikes

Strikes as a product of political factors (4)

propounded by Shorter and Tilly in 1974 The theory identifies highly organized trade unions, plus low access to the political system results in high incidence of strikes

also propounded by Korpi and Shalev in 1979 The theory identifies highly organized trade unions, plus a high ability to access government leads to a low incidence of strikes

 Strikes as a product of the business cycle (5)

propounded by Hansen in 1921 theory identifies that : (i) in recession, trade unions defend wages and conditions against employer cost-cutting, so strikes increase (ii) in economic booms, trade unions become offensive to protect real wages against rising prices, so strikes increase (iii) when prices neither rise nor fall, the incidence of strikes is lowest

also propounded by Creigh and Makeham in 1982 The theory identifies that : strikes about employer willingness to concede to union demands (i) in times of low economic growth and high unemployment, employers less willing to concede, leading to more strikes (ii) in times of high economic growth and low unemployment, employers avoid disruption by meeting union demands, leading to fewer strikes

 Strikes as a product of economic factors (1) propounded by Davis in 1979 The theory identifies - strikes are result of union and employer expectations of inflation. (i) when each sides expectations of inflation are similar it is easier to reach agreement on wages (ii) when each sides expectations are different because of changing inflation, agreement on wages is harder and strikes increase

 Strikes as a product of economic factors (2)

propounded by : Hibbs in 1976 The theory emphasises that: (i) in times of high unemployment, workers are less willing to go on strike for fear of losing their jobs (ii) in times of low unemployment, workers are more willing to go on strike as a means of making up lost ground

Strikes as a product of social factors

propounded by : Kerr and Siegal in 1954 theory focuses on : industries in isolated communities, lacking alternative employment are more strike-prone than those in urban communities.

also propounded by Mayo in 1933 The theory identifies that : industries where social needs of workers are not satisfied are more strike-prone than industries where the social needs of workers are met. Needs seen as open communication and inclusive management practices. Poor communication and alienating management practices are basic cause of strikes.

McGregor in 1966, Maslow in 1954 and Herzberg in 1966 emphasises that : strikes are high when managers fail to provide workplace structures that allow employees to make full use of their abilities.

about Industrial Relation Policy Prior to 1991, the industrial relations system in India sought to control conflicts and disputes through excessive labor legislations. With the advent of liberalization in 1992. the policy is tilted towards employers.

 Living Wage and Job Security minimum wage for all workers, including youth and employed trainees. Support workers for fair wages. protection for casual, seasonal, fixed term and temporary workers.

 Industrial Democracy Improve workplace democracy improve workers' union representation and participation in the future of their work. Implement international standards on the right to strike, worker accident compensation, pay equity and breastfeeding breaks.

 Collective Organising and Bargaining Support initiatives for multi-party bargaining. Support the right of unionised workers to prevent freeloading by non-union workers.

Pay and Employment Equity Support equal pay for men and women workers for work of equal value. Increase workplace access to subsidised early childhood and after school care.

Healthy and Safe Workplaces Stronger laws for key health and safety areas Where employers are prosecuted and fined for breaches of workplace safety, a portion of the fine to workers injured as a result of the breach.

State Sector Promote a strong public sector, operating as a single entity Promote better employment practices. Promote multi departmental collective bargaining of consistent wages & conditions for state sector workers.