CONCEPT OF I.R.

The processes by which human

beings and organizations
interact at the workplace and
more broadly in society as a
whole to establish terms and
conditions of employment. --
D.Q. Mills
 Industrial relations;
background.
 In India it has passed through several
stages.
 PRE-INDEPENDENCE ERA;
 Principle of demand supply governed IR
 Concept of hire and fire.
 Conditions of labour and wages were
very poor.
 This paved the way for revolutionary
movements.
 Trade union movement emerged only
after First World War.(1914-1918)
 IR concept assumed a new dimension
after 1918.
 No labour laws except Employers and
Workmen (disputes) Act, 1860, used to
settle wage disputes.
 Numerous strikes and disturbances
during 1928-29
 Trade dispute Act, 1929 based on
British Industrial Courts Act 1919,
enacted
 No standing machinery for settlement of
Industrial Disputes was created under
this Act.
 1938, Bombay Industrial Relations(BIR)
Act was created
 After 2nd World War(1939-41) India
faced many Industrial Relations
problems.
IR IN POST- INDEPENDENCE
PERIOD
 Industrial Disputes Act 1947, which provides
for permanent machinery for settlement of
Industrial Disputes.
 Industrial Truce Resolution made in Dec.1947
to maintain Industrial harmony.
 Setting up of Indian labour conference (ILC) a
tripartite body (Mangt,employre&Govt) to look
into IR problems in India. Meet every year.
 1947-56, many labour laws were enacted.
 IR, HR, LR, and LIR …
What’s in a Name?
Industrial Relations
(as a field of study)

Labor Relations All aspects of Human Resources

Union people at work Nonunion
Bilateral Rule-Making Employment Unilateral Rule-Making
relationships

- CB/Negotiation - Compensation
- Labor Law - Staffing
- Contract Admn. - T&D
- Labor History - Benefits
Industrial Relations As A Field
of Study -- Definitions
 Employment relationships -- relations among
workers, employers, their organizations, and
government regulators (generic?)
 All aspects of people at work (Kochan)
 The processes by which human beings and
organizations interact at the workplace and
more broadly in society to establish terms and
conditions of employment (Mills)
•Industrial relations is an outcome of
employer-employee relationship.
 I.R. facilitates harmonious relationships
in an organization by setting a
framework for the management and
employees.
 I.R. is based on mutual compromise
and adjustment, for the benefit of both
the parties concerned.
 The relationship between Employer and
employee or trade unions is called
Industrial Relation.
 Harmonious relationship is necessary
for both employers and employees to
safeguard the interests of the both the
parties of the production.
 IR Systems Concept (Dunlop 1958)
Major Elements
 Actors (workers, unions, mgmt, government)
 Contexts (labor and product markets,
technology, community)
 Processes (unilateralism, individual
bargaining, legislation, adjudication, “CB”)
 Ideology (minimal shared beliefs; the “glue”
that gives systems stability)
 Rules (broadly defined) or Outcomes (pay,
benefits, work rules, working conditions, job
satisfaction, industrial democracy, peace and
conflict, productive efficiency)
ROLES PLAYED BY ACTORS.
 EMPLOYEES: The employees are the
pillars on which the organization is built.
 Employees play a very major roll in
determining the industrial relations
atmosphere in an organization.
 Employees have to be satisfied with the
organization its policies and procedures.
TRADE UNIONS:
 Constitute the employee representative
bodies in an organization.
 One recognized union and rest are
mere registered unions.
 Trade unions negotiate with the
management in the interest of the
employees.
 CENTRAL T.U.
ORGANIZATIONS IN INDIA.
 Indian National Trade Union Congress
(INTUC)
 All India Trade Union Congress (AITUC)
 National Labour Organization (NLO)
 Center of Indian Trade Union (CITU)
 Bhartiya Mazdoor Sangh (BMS)
 Trade unions work in co-
ordination with management.
MANAGEMENT:

 Plays a crucial roll in the I.R. of an

organization.
 Role of management has slowly

undergone changes from an

exploitative authoritarian style to a
more participative style.
 CHANGES IN MANAGEMENT
STYLE IN DUE COURSE OF
TIME
 Exploitative authoritative style.

 Benevolent authoritative style.

 Consultative management style.

 Participative style.

 Partnership style.
ROLE OF GOVERNMENT:

 It provides a basic framework

within which the Management,
Trade unions and the
employees are expected to
work for the common good of
the organization. (Labour Laws)
 Objectives of Industrial Relation
 A. To safeguard the interest of labor and
management by securing the highest level
of mutual understanding and good-will.
 B. To avoid industrial conflict or strife and
develop harmonious relations.
 C. To raise productivity to a higher level
 D. To establish and nurse the growth of an
Industrial Democracy based on labor
partnership in the sharing of profits and of
managerial decisions,
 E. To eliminate, as far as is possible ,
strikes, lockouts and Gheraos by
providing reasonable wages, improved
living and working conditions, said fringe
benefits.
 F. To establish government control of
such plants and units as are running at a
loss or in which productions has to be
regulated in the public interest.
 G. Improvements in the economic
conditions of workers in the existing state
of industrial managements and political
government.
 H. Control exercised by the state over
industrial undertaking with a view to
regulating production and promoting
harmonious industrial relations.
 I. Socializations or rationalization of
industries by making the state itself a
major employer
 J. Vesting of a proprietary interest of the
workers in the industries in which they
are employed.
 
Aspect of Industrial Relations
  i. Labor Relations, i.e. relations between
union and management.
 ii. Employer-employees relations, i.e.
relations between management and
employees.
 iii. Group relations, i.e. relations
between various groups of workmen.
 iv. Community or Public relations, i.e.
relations between industry and society.
 v. Promotions and development of
healthy labor-managements relations.
 vi. Maintenance of industrial peace and
avoidance of industrial strife
 vii. Development of true industrial
Democracy.
 Suggestions to Improve I. R .
  a. Both management and unions should
develop constructive attitudes.
 b. All basic policies and procedures
relating to Industrial Relation should be
clear to everybody.
 c. The personnel manager should
remove any distrust by convincing the
union of the company’s integrity and his
own sincerity and honesty. Suspicious,
rumors and doubts should be cleared.
 D. Management should encourage right
kind of union leadership
 IMPORTANCE OF INDUSTRIAL
RELATIONS:
1. Uninterrupted production – The most
important benefit of industrial relations is
that this ensures continuity of
production.
 2. Reduction in Industrial Disputes –

 3. High morale – Good IR improve the

morale of the employees. Employees

work with great zeal.

  
 4. Mental Revolution – The industrial
peace lies ultimately in a transformed
outlook on the part of both. Both should
think themselves as partners of the
industry.
 5. New Programmes – New
programmes for workers development
such as training facilities, labor welfare
facilities etc
 6. Reduced Wastage .
 Difference between I R & H R:
  The term “Industrial Relations” is different
from “Human Relations”.
 Industrial relations refer to the relations
between the employees and the employer
in an industry.
 Human relations refer to a personnel-
management policy to develop a sense
of belongingness in the workers to
improves their efficiency and treat them
as human beings and make a partner in
industry.
 Determining factors of industrial
relations –
 1. History of industrial relations –
 2. Economic satisfaction of workers –
 3. Social and Psychological satisfaction –
 4. Off-the-Job Conditions –Family life.
 5. Enlightened Trade Unions –
 7. Public policy & legislation compliance.
 8.Educated and enlightened workforce.
 Scope of IR Work:
 1. Administration, including overall
organization, supervision and co-
ordination of industrial relations policies
and programmes.
 2. Liaison with outside groups and
personnel departments as well as with
various cadres of the management staff.
 3. The drafting of regulations, rules, laws
or orders and their construction and
interpretation.
 4. Position classification, including
overall direction of job analysis, salary
and wage administration, wage survey
and pay schedules.
 5. Recruitment and employment of
workers and other staff.
 6. Employment testing, including
intelligence tests, mechanical aptitude
tests and achievement tests.
 7. Placement, including induction and
assignment.
 8. Training of apprentices, production
workers, foremen and executives.
 9. Employee counseling on all types of
personnel problems-educational,
vocational, health or behavior problems.
 10. Medical and health services.
 11. Safety services & first- aid training.
 12. Group activities, including group health
insurance, housing, cafeteria
programmes and social clubs.
 13. Suggestion system.
 14. Employee relations, specially collective
bargaining with representatives and settling
grievances.
 15. Public relations.
 16. Research in occupational trends and
employee attitudes, and analysis of labor
turnover.
 17.Genuine employee records keeping
 18. Operation research and analysis.
 19. Benefit, retirement and pension
programmes.
  
APPROACHES TO INDUSTRIAL
RELATIONS
 THERE ARE SIX APPROACHES;
 Psychological Approach
 Sociological Approach
 Human Relations Approach
 Socio- Ethical Approach
 Gandhian Approach
 Systems Approach
Psychological Approach;

 According to this approach, most of

the problems in I.R. arises because
of differing perceptions and
attitudes of the Managements
and workers
SOCIOLOGICAL APPROACH
 Industry is considered as a social
system.
 Various groups in the system are
considered as communities made up
of individuals with different attitudes,
customs, perceptions, social status etc.
 These differences in the system give
rise to a number of conflicts.
 HUMAN RELATIONS
APPROACH
 Handling of human resources is
different from handling material,
physical or financial resources.
 It lays emphasis on human aspect and
the way human feelings influence the
work relations and behavior of
employees in an organization.
ETHICAL APPROACH
 Every day, managers and employees
need to make decisions that have moral
implications. And those decisions
impact their companies, company
shareholders, and all the other
stakeholders in interest
 . Conducting business in an ethical
manner is incumbent upon everyone in
an organization for legal and business
reasons.
 And as a manager, it's important to
understand your ethical obligations so
that you can meet your company's
expectations as well as model
appropriate behavior for others
 Ethics is a set of standards for judging
right from wrong.
 At its most basic level, it means acting
fairly and honestly in individual as well
as group decision making.
 On a business level, it can refer, for
example, to fair and honest competition,
acting without deception or
misrepresentation, and working within
the boundaries of the law.
 In the wake of corporate scandals over
the past several years, most
organizations have written or updated
their Codes of Conduct and Ethics Rules.
 The first thing a manager should do is to
read and understand those documents.
 The second thing to do is to be sure that
your staff also reads and understands the
documents and can come to you with any
questions.
 If you act consistently with Codes of
Conduct and Ethics Rules, you provide a
foundation of trust in your relationships
with others.
 Part of your goal is to show others what it
means to make ethical decisions.
 The other part of your goal is to
encourage others to come forward if they
suspect that someone is not acting
ethically.
 Everyday decisions involve ethical issues.
 Did you consider only legitimate business
reasons for promoting some employees
and not others?
 Was your decision to discipline a
particular employee fair and consistent
with how you've treated others?
 Are you tolerating behavior from some
that you do not tolerate in others?
 These are just some examples of
questions you can ask yourself to be sure
you are acting responsibly and ethically.
 As part of a company's attempt to
create an ethical work environment, it's
important to offer an effective ethics
training program.
 Such training should include more than
just a review of your company's ethics
rules.
 The broader topic of ethics in a global
economy is very important in today's
world of international business
SOCIO-ETHICAL APPROACH
 I.R. apart from having a sociological
approach, also has an ethical base.
 Worker and management should work
with mutual cooperation and realize
their moral responsibility towards the
organizational objectives.
GANDHIAN APPROACH
 Industrial problems should be solved
peacefully by using non-violence method.
 According to Mahatma Gandhi peaceful way
of resolving conflicts is through non-
violence.
 Problems in the industry should be solved
through Satyagraha (adherence to truth).
SYSTEMS APPROACH
 Developed by John Donlop.
 Basic elements of systems approach are the
participants, environmental forces and the
output.
 There are three major participants namely,
the workers, the management and Govt.
representatives
 The interaction bet. three results in a
significant state that is known as a sub
system of an I.R. system.
 CONCEPT OF WORKERS
PARTICIPATION IN
MANAGEMENT
 According to Keith Davis, “the concept
of worker’s participation in management
crystallizes the concept of industrial
democracy, and indicates an attempt on
the part of an employer to build his
employees into a team which works
towards the realization of common
objectives”.
In the words of Tannenbaum R and
Massarik,
 The term workers’ participation implies
“a formal method of providing an
opportunity for every member of the
organization to contribute his brain and
ingenuity (power of creative
imagination) as well as his physical
efforts to the improvement of
organizational effectiveness.”
 Concept of workers participation aims at
providing an opportunity to workers’ to
take part in management decision
making.
 According to Arun Monappa and Mirza
Saiyadain, the degree of influence that
the workers are allowed to exercise can
be classified into five levels:
Five levels of participation
 INFORMATIVE PARTICIPATION;
Information regarding balance-sheet,
production target, new technology are
shared with the workers.
CONSULTATIVE PARTICIPATION; Worker
representatives in different forums like
works committee and joint management
councils are consulted on matters like-
employee benefits, welfare and working
conditions.
ASSOCIATIVE PARTICIPATION; T he
workers at this level of participation have
a major roll to play in comparison to
earlier stages.
 ADMINISTRATIVE PARTICIPATION; In this
case , the workers’ council is given certain
alternatives, from which it can select the one
it wants to implement. At this level the
workers enjoy a greater degree of influence.
 DECISIVE PARTICIPATION; Decisions are
taken jointly on the matters relating to
production and welfare. As the decisions are
taken with mutual consent, both the parties
are obliged to abide by them and the
decisions are successfully implemented.
PURPOSE OF WORKERS
PARTICIPATION:
 W.P. IN MANAGEMENT ensures that the
capabilities of workers are properly
utilized and they are able to make a
significant contribution. The reasons for
w.p. are as follows;
 It bridges the Gap between the management
and workers.
 Workers feel valued and therefore more
committed to work.
 They feel, they have the ability to influence
organizational decision and this makes them
more responsible in performing their duties.
 Since they are involved in the process of
decision –making, any change in the
organization can be implemented without
any resistance from them.
 Participation also ensures that each
party(workers and management)
understands the problems and constraints
of the other. This helps in reducing the
industrial conflict.
 Participation ensures equal distribution of
power in industry so that it tends to be
shared among all those engaged in
organizational work.
 Participation facilitates effective
communication.
 The increased use of technology in industry
has necessitated the growing co-operation of
workers becase of the complex operation of
production.
 Thus, participation improves the progress and
prosperity of the enterprise.
WORKERS PARTICIPATION IN
INDIA:
 Industrial Policy Resolution, 1956
and 2nd five year plat(1957-61)
emphasized for increased use of W.P.
in management in Industry for the
following reasons;
 Increasing productivity for for general
benefit of the enterprise,employee and
the community.
 Giving employees a better
understanding of their roll in the
working of the industry and the process
of production.
 Satisfying the workers urge for self-
expression, thus leading to industrial
peace, better relations and increased
cooperation
Forms of workers participation in
Management in India.
 NON-STATUTORY:
 Workers participation in management
through :
 Joint management council;
 Equal representation.
 To promote cordial relations between
employer and employees and increase
productivity.
JOINT MANAGEMENT COUNCIL
 Recommended by 1957-61-five year
plan and ILC IN 1957-15th session.
 Duration; 2years.
 Equal representation.
 Improving working conditions and
developing knowledge and skill of
workers.
 Resolving issues that are not resolved
at the unit level.
UNIT COUNCIL:
For 100 or more workers.
 Equal representation.
 Tenure 3 years.
 Chairman from-management and Vice-
chairman from workers side.
 To improve health safety & welfare
measures.
 Absenteeism and management of
wastage.
 Ensure communication.
PLANT COUNCILS:For PSUs
 Equal participation.
 One woman representative; if 15% wo-
men are employed in the establishment.
 Tenure-3years.
 Chairman- C.E., Vice-chairman-workers
 Improving productivity and quality,
 Review of personnel and financial
matters,
 Welfare and environmental protection.
 SHOP-COUNCIL(500 or more)
 Equal no. of representatives.
 Tenure-3years.
 Chairman- Mangt. Rep, and Vice-ch.
elected by council members.
 To maintain discipline, implementing
cost reduction programmed, and
suggesting technological innovations.
WORKS COMMITTEE
 U/S-3 OF ID ACT-1947
 Equal no of representatives from
employers and employees.
 From technical, managerial and
supervisory cadre.
 Tenure ; 2 years
 President and secretary Employers rep.
 VICE-PRESIDENT AND JOINT
SECRETARY , FROM EMPLOYEE
REPRESENTATIVES.
 MATTERS OF COMMON INTEREST LIKE
WORKING CONDITION AND BASIC
FACILITIES FOR WORKERS ARE
DISCUSSED AND RESOLVED
AMICABLY.
 WORKS COMMITTEE WILL NOT DEAL
WITH, WAGES AND ALLOWANCES
,BONUS,WORKLOAD,PLANNING&DEVEL
OPMENT,LAY-OFF AND
RETRENCHMENT ETC.