Industrial Relations

Gautam Bandyopadhyay
HR Consultant & Visiting Professor
 Industrial Relations
• It consists of two terms : ‘Industry’ & ‘Relations’.
• ‘Industry’ refers to any productive activity in which an
individual or a group of individuals is/are engaged.
• By ‘Relations’ we mean the relationships that exist within
the industry between the employer and his workmen.
• ‘Industrial Relations’ refer to sum total of relationships
among various parties concerned with the industrial
venture, namely management or employers, unions and
the government or its agencies.
• Thus the group or collective relationships between
management and employees represented by unions are
popularly known as ‘Industrial Relations’.
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 Definition
• Industrial Relations (IR) is defined as the relationship between
employer and employees.

• According to Clegg (1979) it is the “study of governing

employment” means it covers all aspects of employment i.e.
➢ Employer and employee relationship
➢ Trade union and employee relationship
➢ Government and employer/employee relations

• Edwards (2003) prefers the term ‘Employment Relationship’ :

“The employment relationship is by definition a relationship
between employer and employee and this direct relationship
may be mediated by two other key institutions to IR, the trade
union and the state”.
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 3 Major Components of IR
• Employees : First party who are mostly affected in
the relationship who voice against any grievances.
Normally they participate through their unions.

• Employers : Second party in the relationship who are

interested to make more profit from the
organization.

• Government : In India, Govt. tries to regulate the

relationship of employees and employers.

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 Evolution of IR : Different Eras
1. Era of Industrial Revolution
2. Era of Trade Unionism
3. Era of Social Responsibility Feeling
4. Era of ‘Scientific Management’
5. Industrial Psychological Era
6. The Behavioural Era
7. The Welfare Era

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 Evolution…1
1. Era of Industrial Revolution :
• Place of work changed from home to a central work area
• Method of production changed from manual to machine
• Migration from rural to urban areas
• Separation of owners and workers – abolition of closeness
• Heavy physical labour eliminated
• Women and children deployed in simplified mechanized job

As a result -
• Concentrations of people around many machines
• Working and living conditions were unhygienic/unsatisfactory
• Workers were treated harshly (stretched working hours, wage
disparity)
• Monotony and boredom in work for which there was no love
• Unskilled workers found it difficult to cope up
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 Evolution…2
2. Era of Trade Unionism :
• Group of workers began to get together to discuss their common
problem such as
➢ child labour
➢ long working hours and
➢ poor working conditions

• Later on
➢ economic problems
➢ employee benefits
➢ service conditions
➢ social security

Philosophy was “through strength and collective support, the mgmt

will be forced to listen to workers and reduce their grievances”.

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 Evolution…3
3. Era of Social Responsibility Feeling :
• Robert Owen (1913) used to believe that “the principal social
and economic environments influence the physical, mental
and psychological development of workers”.

• He introduced –
➢ model villages next to his cotton mills in Scotland
➢ shower baths and toilets inside the factories
➢ these places used to be cleaned and painted regularly
➢ windows fitted for appropriate light and ventilation
➢ day schools for the children and night schools for workers
➢ abolition of child labour

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 Evolution…4
4. Era of ‘Scientific Management’ :
• This era starts around 1900 by F W Taylor
• He started his experiments in the steel industry

• He developed four great principles of management –

➢ Clear cut job description in scientific manner
➢ Selection of a right person for the job to be performed
➢ Training of the person to perform his job scientifically
➢ Friendly cooperation between the management and the men.

• He first talked about financial incentives to the workers

• Taylor’s approach was accepted largely by both labour and
management for greater productivity as well as mutual benefits.

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 Evolution…5
5. Industrial Psychological Era :
• Hugo Munsterberg’s book ‘Psychology and Industrial
Efficiency’ published in 1913
• His analysis of jobs in terms of their mental and emotional
requirements
• He introduced the concept of matching needs of employees
for different skills and abilities for different jobs
• Hawthrone Experiment(1920 – 30) by Elton Mayo et al of HBS.
Starting of a new area : Organizational Behaviour.
• They concluded that “human and social factors, not physical
variables, are accounted for productivity”
• It leads to the concept of ‘Human Relations’ from the era of
‘Scientific Management’
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 Evolution…6
6. The Behavioural Era :
• It began in 1954 and it includes studies of Physiology, Psychology
and Sociology
• Abraham Maslow (1954) propounded a theory regarding a
theory of “hierarchy of needs” of an individual
• Herzberg came forward with his ‘two factor theory of motivation’
which are ‘hygiene factors’ and ‘motivators’
• Douglas McGregor formulated Theory X (or Hard Approach) and
Theory Y (or Soft/Permissive Approach). Considering neither is
absolutely fruitful, suggested a “Carrot and Stick approach”
• Basically it tries to understand human behaviour at the work
place and how to utilise/modify that behaviour for gain of the
employer as well as to fulfill aspirations of the employees
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 Evolution…7
7. The Welfare Era :
• When thousands of persons are being employed under one roof,
in the factory system, organizations started to have a common
man/unit to control the entire group to achieve their own goals
• It started with selection, recruitment & placement of personnel
• Thereafter need felt for developing systematic approach or
methods, fixation of different wage rates, developing job
description etc.
• It follows to consider benefits and services to be provided to the
employees.
• Beginning with welfare work responsibilities of this specialised
group have grown wider and deeper in manifolds in the area of
employee relations.
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 Different Approaches

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 Relations & Policies
• It comprises a set of policies intended to maximise
organisational integration, flexibility and commitment of the
employee and quality of work (Guest, 1987).

• Industrial Relations essentially comprises of market relations

and managerial relations.
• The idea of market relations is that of labour which like any
other commodity has their own demand and supply criterion.
• The managerial relations component of IR consists of the
managerial tactics to persuade labour to give its consent to
work.

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 IR Objectives

• To safeguard the interests of labour as well as of management

• To avoid conflict or strife & develop harmonious relations
• To raise productivity to a higher level & reduce absenteeism
• To establish and nurture the growth of Industrial Democracy
• To eliminate, as far as practicable, strikes, lockouts, gheraos
• To establish government control, if needed, in which
production needs to be regulated in the public interest

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 Dunlop’s Model of ER
John Dunlop (1958) : “A set of ideas and beliefs commonly
held by the actors that helps to build or integrate the system
together as an entity.”

Environment : Actors:
•Market Constraints Outcome:
•Union
•Technology Rules of the
•Management
•Socio-Political Power Workplace
•Government
in the Society

It encompasses with Value System as well as National and

International Environment (ILO, Globalization, Political as well
as Economic Ideology of the Nation).

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 Factors influencing industrial relations
• Actors in IR :
1. Employees
2. Employers
3. Government

• Influencing Factors are :

1. Trade Unions
2. Labour Legislation
3. Industrial Democracy

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 Causes of industrial disputes

Broad categories are as follows :

✓ Economic : wage, bonus, overtime payment etc.
✓ Political : affiliation of diff political parties with unions
✓ Social : detoriation of social values and norms, low morale
✓ Technology : resistance to change, fear of unemployment
✓ Psychological : personality, attitude, conflict of objectives
✓ Market : rising prices or inflation, shortage of daily needs
✓ Legal : injustice felt, inadequacy of legal support

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 Problems Associated with IR

• Labour Market
• Wages
• Working Conditions
• Unionism
• Job Security
• Social Security

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 Current Issues

• Impact of Artificial Intelligence (AI)

• Expectation of the Changing Workforce
• Work-life Balance & Compensation Benefits
• Changes in Labour Laws (Ref : labour.gov.in/labour codes)
• Handling Diversity & Gender Issues

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 Thank You

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