Industrial Relations &

Human Resource
Management

Introduction to
Industrial Relations
Definitions
Relevance
Key Players
Frames of reference
Historical Milestones
Key Processes
Change

INDUSTRIAL RELATION
EVOULTION
Paternalism
Personnel department
Record keepers
Scientific management
Growth of trade unionism
Govts intervention & legislative
measures
Industrial relations department

Industrial Relations is
The art of living together for purposes
of production(J.Henry Richardson)
Includes the study of workers and their
trade unions, management, employers
associations and the state institutions
concerned with the regulation of
employment. (H.A.Clegg)

Industrial Relations
Problems of human relationship
arising from the sale of services for
a wage and working on the
premises of employers and under
their control from the subject
matter of industrial relations
(Dale Yoder)

Industrial Relations:
has acquired a deserved reputation
for being dull
because it has too often failed to
relate in any meaningful way to the
reality of peoples working lives,
how these were formed, how they
are constrained and how they might
be changed.
(Blyton & Turnbull, 1998)

Industrial Relations
Affects:

Economic Performance

Business Success

Employees Experience of Work

Every employment
relationship:

Economic exchange
Power relationship
Continuous & open-ended
Interdependent
Asymmetrical
Employers cannot rely on coercion or even
compliance to secure high performance.
Need active consent & co-operation.

Key Players
GOVERNMENT

INDEPENDENT 3RD PARTIES

EMPLOYEES EMPLOYERS

Traditional I.R. System

- Power
- Rights
- Interests
- Negative behaviours
- Information hoarding

Labour-Management
Relationship
Armed
Open
Collaborative Truce
Warfare
-----------------------------------------------1.
Most labour-management relationships
fall to the right of the continuum
2.
Partnership rarely attempted as matter
of course
3.
Organisational change forces adaptation
(Adams, 2000)

Characteristics of IR
1.
2.

3.

4.

An outcome of relationship in industry.

It create rules and regulations to
maintain peace and harmony.
Important parts of IR are employees
and their organization, employer and
their association and government.
It has a role of management, union and
government.

Forms of Industrial
Relations

Managing by Contending:
The stakeholders engage in a contest of
will with the dominant stakeholder
holding the reins and steering the
choice-making processes as well as
choices.

Contd
Managing by Conceding:
The dominant stakeholder manages
interactions with other less dominant
and dominated stakeholders by making
concessions to buy peace on an ad hoc,
situational basis. Ploy employed is
divide and rule.

Contd
Managing by colliding:
The dominant stakeholder strikes up
equations with individual stakeholder
representatives or with coalitions of
stakeholders, through which mechanism
of choice-making as well as choices are
influenced to favor the dominant
stakeholder.

Contd
Managing by Collaborative
Problem:
The dominant stakeholder in todays
deregulated environment is likely to be
the Corporation and the onus is on
corporations to create a new ethos,
revolving around collaboration and
mutuality though what can be termed
as the Transformational Process Model.

Objective of IR
1.

2.

3.

4.

To promote and develop labor

management relation.
To regulate the production by minimizing
industrial conflicts
To provide opportunity to workers to
involve in decision making process with
management.
To encourage and develop trade unions in
order to improve the workers' strength.

SIGNIFICANCE OF INDUSTRIAL
RELATIONS
To help in economic progress of a country.
To help in establishing & maintaining true
industrial democracy.
To help management both in the formulation
of informed labor relations & policies
To encourage collective bargaining and boost
morale of workers.
To help Govt in making laws forbidding unfair
practices.

FUNCTIONS OF IR
EMPLOYEE-EMPLOYER RELATIONS
wages & salary admn
career prospects
retirement benefits
grievance handling
training & development
counseling
compensation on accidents

Contd
LABOUR-MANAGEMNT RELATIONS
recognition of union
collective bargaining
industrial disputes
tripartite dispute settling
welfare measures
health & safety

Contd
INDUSTRIAL
DEMOCRACY
Humanism in industry
Focus on employees
Social orientation
Public relations
Participative management
Formation of works committee

Contd
INDUSTRIAL PEACE & PRODUCTIVITY
Improve union mgmt relation
Avoid strikes & go-slow tactics
Prevent lock-outs & lay offs
Upgrade technology
Secure employee co-op
Minimize loss of man days/year

Contd
LIAISON FUNCTIONS
Formulation of IR policy.
Employee-attitude survey.
Liaison with local Govt authorities like labor
officers.
Liaison with state & central Govt industrial
department.
Participation in labour conferences.
Formulation of labour & industrial policies.

Institutional factors : Include factors like

state policy, labor laws, collective bargaining
Factors
affecting
Industrial
Relations
agreements,
employers
organizations
/
federations, etc.
Economic factors : Include factors like type
of ownership, individual, company whether
domestic or MNC, government, etc., source of
labor supply, level of unemployment, etc.

Contd

Social Factors : Include factors like social

values, norms, social status (high or low)
Technological factors : Include factors
like work methods, type of technology
used, rate of technological change, R&D
activities, etc. These factors directly
influence employment status, wage level,
collective bargaining process in an
organization.

Contd

Psychological factors : These factors

affect workers job and personal life that
directly
or
indirectly
influences
industrial relations systems.
Political factors : Most of the trade
unions are controlled by political
parties, so the trade relations are
shaped by the gravity of involvement of
political parties in trade union activities.

Contd

Enterprise-related factors : Include

factors like style of management, its
philosophy
and
value
system,
organizational
climate,
extent
of
competition etc.
Global factors : Issues included are
international relations, global conflicts,
international
trade
agreements
and
relations, international labour agreements
(role of ILO) etc.

Industrial relations
operates at
at the national level:
At this level the industrial relations
operates so as to formulate labour
relations policy. In market economies
this is usually done through a tripartite
process
involving
government,
employers and workers and their
representative organizations.

Contd

at the industry level

At this level industrial relations often takes the

form of collective bargaining between
employers' organizations and unions. This
process may result in determining wages
and other terms and conditions of
employment for an industry or sector. It may
also result in arrangements on issues which
are of mutual concern such as training, ways
of avoiding or settling disputes, etc.

Contd

at the enterprise level.

the relationship between employers and

workers is more direct, but the interests of
workers may be represented by unions.
Employers' organizations, however, are not
usually involved at the enterprise level in
representing the employers' interests with
workers or their union, but this does not
mean that they do not have an important
promotional role at this level.

Industrial Relations machinery in

India

Preventive Machinery
a)
b)

Trade Union
Joint Consultation
1.
2.

c)
d)
e)

Work Committee
Joint Management

Standing Orders
Grievance Procedure
Code of Discipline

Council

Contd
Settlement Machinery
a)

b)
c)

Conciliation
1.
Conciliation Officer
2.
Board of Conciliation
3.
Court of Inquiry
Voluntary arbitration
Compulsory Arbitration
1.
Labor Court
2.
Industrial Tribunal
3.
National Tribunal

TYPE OF LEGISLATIONS:
LAWS ON WORKING CONDITIONS

Factories Act
Shop and Establishments Act
Mines Act
Plantation Labour Act
Indian Merchants Shipping Act

Contd
LAWS ON WAGES

Payment Of Wages Act

Payment of Bonus Act
Equal Remuneration Act
Minimum Wages Act

Contd
Laws on Industrial Relations

Industrial Dispute Act

Indian Trade Union Act
Industrial Employment Act

Contd

Contd
Laws On Social Security

Workers Compensation Act

Maternity Benefit Act
Employee Provident Fund
Payment Of Gratuity Act
Employees State Insurance Act

Functional Requirements of a
successful Industrial Relations
Programme

Top management support

Sound personnel policies
Adequate practices should be
developed by professionals
Detailed supervisory training
Follow up of results

Approaches to industrial
relations
Approaches to organisations

Unitary

Pluralistic

Co-operation

Authoritarian
Paternalism

Marxist

Conflict
Approaches to industrial relations

Input
Conflict
(differences)

Human
resource
management

Conversion
Institutions
and
processes

Systems

Revolution

Output
Regulation
(rules)

Social action

Wider approaches to industrial relations

Labour market

Evolution

Comparative

Control of
the labour
process

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

Unitary view
Organization is:
A group that united
Having same objectives
authority,common value, interest
and objectives
Managers have the right to manage,
managers have prerogative to make
decisions.

Pluralist perspective
Assumptions
Post-Capitalist society, where a relatively widespread distribution of
power and authority within the society, a separation of ownership
from mgt. a separation ,acceptance and institutionalization of
political and industrial conflict
Coalescence of sectional groups within work organisation
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

Pluralistic Perspective
Relatively widespread distribution
of authority and power within the
society
Separation of ownership from
management
Separation of political and
industrial conflict
Acceptance and institutionalization
of conflict in both spheres.

Pluralistic Approach
Organizations
is in a permanent
state of dynamic tension resulting
from the inherent conflict of interest
between the various sectional groups.
Trade
Unions
as
legitimate
representatives of employee interest
Stability in IR as the product of
concessions
and
compromises
between management and unions

Radical Marxist
Perspective

Assumptions

Capitalist society

Division between labor and capital.

Imbalance and inequities in society.

Nature of conflict and its resolution

Inherent in economic and social

Change society
Role of Trade Unions

Employee response to capitalism

Expression and mobilization of class consciousness

Develop political awareness and activity.

Radical Marxist
Perspective

Class conflict is the source of

societal
change-without
such
conflict society would stagnate
Class conflict arises primarily from
the disparity in the distribution of
and access to economic power
within the society

Contd

The nature of the societys social and

political institutions is derived from this
economic disparity and reinforces the
position of the dominant establishment
group.
Social and political conflict in whatever
form is merely an expression of the
underlying economic conflict within the
society.

Theories of Industrial
Relations

Dunlops System Theory(1958)

An Industrial relations system at any

one time in its development is regarded
as comprised of certain actors, certain
contexts, an ideology which binds the
industrial relations system together and
a body of rules created to govern the
actors at the workplace and work
community.

Contd

IR = f(a, t, m, p, i)
Where a = Actors, employers, workers
and government
T= Technological context
M= Market context
P= Power context
I= Ideological context that helps to
bind them together

Contd

The
significant
aspects
of
the
environment in which the actors
interact are:
1. The technological characteristics of
the organization, the workplace and
work community.
2. The market or budgetary constraints
which impinge on the actors.

Contd

3. The locus and distribution of power in

the larger society.

Acc to Dunlop theory ,

the actors,
working within contexts (environment),
developing a body of rules, held
together by an ideology

System producing rules (IRS) and

system governed by rules (production)

Naturally stable and orderly

Emphasis on roles rather than people

Importance of environmental influences

Criticisms

1. that it is essentially a non-dynamic model

of industrial relations form which it is difficult
to explain industrial relations change.
2. that it concentrates on the structure of the
system, ignoring the processes within it.
3. that it tends to ignore the essential
element of all industrial relations that of the
nature and development of conflict itself.

Contd

That it focuses on formal rules to the neglect of

important informal rules and informal processes.
That it may not be integrated and it is
problematic whether or not the actors share a
common ideology.
That it fails to give an account of how inputs into
the system are converted into outputs.
That it is environmentally biased and provides
no articulation between the internal plant level
systems and the wider systems.

Contd

That it favors an analytical approach

based on comparison rather than a
problem solving approach built on
description and
That it makes no special provision for
the role of individual personalities in
industrial relations as the actors are
being viewed in a structural rather than
in a dynamic.

Contd

Pluralist Theory of Flanders (1971)

Conflict is inherent in an industrial system.

Collective bargaining is central to industrial
relations system.
Rules of the system are determined through
the rule-making process of collective
bargaining, regarded as a political institution
involving power relationships between
employers and employees.

Contd

r= f(b) or r= f (c)
r= rules governing industrial
relations
b= collective bargaining
c= conflict resolved through
collective bargaining

Criticism

Too narrow
Overemphasizes the significance of the
political process of collective bargaining and
gives insufficient weight to the role of the
deeper influences in the determination of
rules.
Institutional and power factors are viewed as
of paramount importance, while variables such
as technology, market, status of the parties
and ideology are not given any prominence.

Contd

Structural Contradictions Theory

of Hyman 1971

Marxian analysis of IR + Trade union =

Pessimistic & Optimistic approach
Both represent structural contradictions
Pessimistic approach Lenin, Michels,
Trotsky limitations of trade union
consciousness Working class +
intellectuals = New social order

Contd

Optimistic approach Marx & Engels

role of working class not only maintenance
& enhancement of wage level but also
carry class struggle against capital class
thrust creating classless society
Trade unions represent workers
response to the deprivations inherent in
their role as employees within a capitalist
economy opposition & conflict cant be
divorced from their existence & activity

Contd

Inherent deprivation cause conflict

of trade unions with employers in
politico-economic structure
Analysis focus on not only
structure but also deprivations &
socio-economic inequalities
(inherent components of capitalist
mode of production)

Contd

Human Relations Theory

Human are not inanimate or passive.
Human are very complex to understand
i.e. to manage.
Integration of people into work-situation
that motivates them to work together
productively, cooperatively, &with
economic, psychological & social
satisfactions

Contd

Goals

to get people to produce

To cooperate through mutuality of interest
To gain satisfaction from their relationships

Highlights policies & techniques improve

employee morale, efficiency & job satisfaction
Encourages small work group to exercise
considerable control over its environment &
in the process helps to remove a major
irritant in labour-management relation

What Influences Human

To Work

Style of leadership

Autocratic style

Democratic style
Motivation (satisfy the dissatisfied needs)

Physiological needs (food, water, clothing,

shelter)

Safety needs (physical, finance and job security)

Social needs (belonging, affection)

Egoistic needs (self-esteem and esteem from

others)

Contd

Trusteeship Theory of Mahatma

Gandhi

Gandhi ji had immense faith in goodness of

man.
He believed that many of evils of the
modern world have been brought about by
wrong systems, not by wrong individuals.
He laid down certain conditions for
successful strikes,

Contd

Truth, Non-violence, Nonpossession, Non co-operation

(Satyagarah), trusteeship...

Workers right to strike.

Concept of equality

Contd

There is no room for conflict of interests

between the capitalist and the
labourers.

But what IF conflicts occur...?

o Should they go for strikes/lockouts...!

Contd

Two things that Gandhiji expect from

workers
i.

ii.

Awakening
o
Nurturing faith in their moral
strength
o
Awareness of its existence
Unity

Contd
Gandhi ji advocates

Demands should be reasonable and

through collective action.
Avoid strikes as far as possible.
Avoid formation of unions in
philanthropic organizations.
Strikes should be the last resort only.
In case of organizing a strike, workers
should remain peaceful and non-violent.