This presentation focuses on the following issues:

3. Nature of
Industrial Relations: Traditional & Changing Perspectives
Debi S. Saini Professor of HRM Management Development Institute, Gurgaon

Changing world of work and emergence of new thinking

New developments in industrial relations

Emergence of neo-unitarisn through union-substitution strategies

Companies practicing developmental agenda for pursuing new goals

Re-orienting top mgt., middle mgt., unions, & workers

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The Evolution of Employment Systems Since 1980s

The old system based on implicit job security is dead (Cappelli, 2000) It is argued that the old system should be replaced by a new equilibrium in which job security is replaced by something else

Changes in World of Work and new pointers in IR

New Developments in Employee Relations

New Developments in Industrial Relations Shifts from IR to Employee Relations

1. Changing role of state

2. Unions in crisis (bldg. cooperation)

3. New actors in IR: e.g. Consumers/society 4. Emergence of Cooperative bargaining 5. Emphasis on performance-related pay 6. Pressures on labour law rigidity 7. Changing role of ILO: Decent work 8. Employers Primacy on flexibility 9. IR impacted by HR philosophy
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1. Changing Role of State

Welfare state: inefficient Government as facilitator

2. Union-dilution is Major Agenda: Causes

Shift: adversarial to cooperative IR:
Also called Individualized IR

States primacy to productivity Service orgs.: white/gold-collar WM Declining core; rising periphery WM Influence of HRM Philosophy Employment of labour law consultants
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Social justice to market & trickle down

Changed labour policies of states:

Globalization and Crisis in Unionism

Tab. 1: Percentage of Trade Union members among Total Workforce in Selected Industrialized Countries
Country Austria Denmark France Germany Italy 1970 63.6 62.6 21.0 37.7 38.5 39.8 57.9 66.6 48.5 1980 59.6 87.8 17.1 40.6 49.0 39.4 64.4 13.8 78.2 54.5 1990 56.2 88.9 9.2 38.5 39.2 29.5 70.3 16.8 82.4 38.1 1997 46.6 89.9 8.6 33.4 38.0 28.9 71.3 15.1 86.4 30.2 2003 35.2 75.5 5.8 22.2 47.1 23.9 63.0 11.5 78.0 25.9

Decline in Union Presence (density)

Netherlands Norway Spain Sweden UK

Decline in Union Influence (reach)

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Source: Accessed on 12 January, 2006 from Cornell Institute of Industrial Relations (IR) Statistical Record on Trade union Membership at http://www.ilr.cornell.edu/library/downloads/FAQ/UNIONSTATS2002.pdf 10

3. New Actors in IR
1. Multilateral IR: consumer/society

4. Emergence of Cooperative Bargaining

1. Shift: industry level to unit level CB

2. New issues:
Customer Creation and sustenance Protecting environment Gender issues Safety promotion Child labour abolition

2. Squeezing of bargaining zone 3. Pressure:

fear of corp. incompetence

Earlier: fear of corporate power

4. New clauses: Productivity linkage 3. Medias role in new issues

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Wage/benefits cut
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5. Emphasis on Performance-related Pay (PRP)

6. Pressure on Labour Law Framework Pressure on Legislature

Do not allow union militancy; co. have to compete globally

Flexible pay

Cost saving: a big concern

Flexible workforce: withdraw Ch-VB of IDA

Competencies & results are imp.

Keep away law of Employee Participation

Knowledge pay in high-tech. industries

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Respect sanctity of managers rights

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7. Change in ILOs Agenda

ILOs desire foradaptation, renewal, change From adversarial C.B. to sophisticated compromise
Securing decent work for women and men everywhere

8. Flexibility: Key in New Era

What is labour flexibility? The ability to adjust the size and mix of labour inputs in response to changes in product demand so that organization doesnt have excess labour

Common purpose
For all three social partners

Hard and Soft issues in Flexibility

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9. HRM Philosophy & Psychological contract

It is a philosophy of people-mgt:
Identify & enforce behaviour Aims: Competitive advantage Focus on new interventions PM & IR merged to produce positive energy HRM strategy is the Single most imp. Consultancy Area
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Practicing of a Developmental Agenda for promoting New IR

Neo-Unitarism through Union Substitution

What Should HR Do to Promote Cooperative IR
Attractive Reward strategy Design satisfying jobs

Know:
Maximize opportunities

--Context & challenges of new IR --Key new principles affecting employee relations --New Practices needed to implement these principles

Emp Involvement, empowerment

Union Substitution attempts Through Progressive HR

Strategic Selection

Behave
--Do the things that lead to sustainable cooperation

Culture Building, flexibility Individual diversity

Investment in HRD for WM & managers

Make workplace funful & implement Fair standards

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Integrated agenda
--Integrate the agenda of SHRM & IR mgt together
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Towards Developing Strategic IR

Two main dimensions
I. Competency-building amongst mgt. & union Management (at different hierarchical levels) Unions

Re-orienting the Top Management

CEOs personal predisposition is critical His beliefs about unionPeople policiesIR policiesMgt.

De-humanization often seen especially in larger bureaucracies

II. New Approach to Developing Processes (fostering OCTAPACE) Openness Confrontation Trust Autonomy Proactivity Authenticity Collaboration Experimentation Top mgt. shapes org. culture: Through: beliefs, actions, styles

Development of top management should aim at: Becoming aware of biases & prejudices Learning to treat IR as important managerial business
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Developing Middle Management

I. Its competency-building will include:
1. Knowledge about new issues in IR 2. Understanding customs/practices in dealing with WM/union 3. Knowledge about the legal framework of IR 4. Knowledge of history of union & its leadership 5. Knowledge about new economic environment/practices

Development of Union Leadership

This requires sensitizing them to various issues:
General economic and industrial environment New technology Competitors and their HR practices New compulsions of mgt. & need for flexibility Need for democratization within trade unions
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II. Skills
1. Skills in diagnosing the problem 2. Skills in grievance resolution 3. Skills in negotiation 4. Skills in communication and inter-personal relations

III. Attitudes
1. Orientation to positive problem-solving 2. Positive belief-system about existence of union (if one exists) 3. Faith in participative decision-making

Implementing HR Agenda for Workers

Creating developmental climate in general Communication & internationalization HR values/goals

What can one learn from this presentation?

New order is emerging in IR: called employee relations IR shifting from adversarialism to neo-pluralism or neo-unitarism Shift from shenanigans to trust & cooperation Along with traditional issues, new issues have emerged in IR Flexibility is one of the most salient concerns of cos. Governments new eco. agenda is moving from social justice to growth New world of work has led to union-substitution strategies HRM strategy: for top mgt.middle mgt.unionworkers
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Involve unions in cooperation with workers Continuously communicating the HR action areas: EI Create HR architecture to implement intentions
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