Management of Industrial Relations

Industrial relations has become one of the most

delicate and complex problems of modern industrial
society.
Industrial progress is impossible without cooperation of
labors and harmonious relationships. Therefore, it is in
the interest of all to create and maintain good relations
between employees (labor) and employers
(management).
 Concept of Industrial Relations:

The term ‘Industrial Relations’ comprises of two

terms: ‘Industry’ and ‘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.”.
The term industrial relations explains the relationship
between employees and management which stem
directly or indirectly from union-employer
relationship.
 Definitions:

The term ‘industrial relations’ has been variously

defined. J.T. Dunlop defines industrial relations as
“the complex interrelations among managers, workers
and agencies of the governments”.
According to Dale Yoder “industrial relations is the
process of management dealing with one or more
unions with a view to negotiate and subsequently
administer collective bargaining agreement or labour
contract”.
 Definitions:

The HR Employee Relations Manager directs the

organization's employee relations function. They
develop employee relations policies and ensure
consistent application of company policies and
procedures. In addition, they are responsible for
employee dispute resolution procedures, performing
internal audits, and taking appropriate action to
correct any employee relations issues.
 Objectives
• Objectives of Industrial Relations: 

• The main objectives of industrial relations system are:-

• To safeguard the interest of labor and management by securing
the highest level of mutual understanding and good-will
among all those sections in the industry which participate in
the process of production.
• To avoid industrial conflict or strife and develop harmonious
relations, which are an essential factor in the productivity of
workers and the industrial progress of a country.
• To raise productivity to a higher level in an era of full
employment by lessening the tendency to high turnover
and frequency absenteeism.
• To eliminate or minTo establish and promote the
growth of an industrial democracy based on labor
partnership in the sharing of profits and of managerial
decisions, so that ban individuals personality may grow
its full stature for the benefit of the industry and of the
country as well. 
• imize the number of strikes, lockouts and gheraos by
providing reasonable wages, improved living and
working conditions, said fringe benefits.
• To eliminate or minimize the number of strikes,
lockouts and gheraos by providing reasonable wages,
improved living and working conditions, said fringe
benefits. 
• To improve the economic conditions of workers in the
existing state of industrial managements and political
government.
• Socialization of industries by making the state itself a
major employer
• Vesting of a proprietary interest of the workers in the
industries in which they are employed.
 
 Participants of IR
• Some of the major parties to industrial relation are as
follows: 1. Employees 2. Employer 3. Government.
1. Employees:
• Among the participants to IR, employees are considered
as the most affected one by the IR system prevalent in
an organisation. Employees with their various
characteristics such as their commitment to the work
and the organisation, their educational and social
background, their attitudes towards the management
and so on affect and are affected by the system of IR.
• Generally, employees perceive IR as a means to
improve their conditions of employment, voice against
any grievances, exchange views and ideas with
management and participate in organisational decision
making processes.
2. Employer:
• Employer is the second party to IR. In the corporate
organisation, employer is represented by the
management. Hence, management becomes responsible
to various stakeholders in an organisation including
employees.
• Like employees’ associations, employers also form their
associations at the local, industry and national levels.
Examples of employers’ associations at all India level are
Associated Chambers of Commerce’s and Industry
(ASSOCHAM), Confederation of Indian Industry (CII),
Federation of Indian Chambers of Commerce and Industry
(FICCI), etc.
• The major objectives of the employers’ associations in
relation to IR are to:
• ADVERTISEMENTS:
• 1. Represent employers in collective bargaining at the
national or industry level.
• 2. Develop machinery for avoiding disputes.
• 3. Provide feedback on employee relations.
• 4. Advise member organisations on the issues relating to IR.
3. Government:
• The role of government in the matter of industrial relations has
been changing along with changes in industrial environment and
management perspective. For example, till century, the
governments everywhere in the world adopted a policy of laissez
faire.
• The IR matters were left to be settled by the employees and
employers. But, towards the end of the 19 century, the attitude of
the government in the changed conditions of conflicts between
employees and employers, changed to some kind of intervention in
the matter of IR.
• In due course of realization, government intervention became a
reality. As of day, government intervention has become
widespread in HR matters. In India, government tries to regulate
the relationship of employees and employers, and also keeps an
eye on both groups to keep each in line. This relationship is
enforced and maintained through labour courts, industrial
tribunals, wage boards, investigating and enquiry committees, etc.
 Functional Requirement of Successful IR
Programme
• Top Management Support: – Since industrial relations is a functional staff service, it must necessarily derive its
authority from the line organization. This is ensured by providing that the industrial relations director should report to a
top line authority to the president, chairman or vice president of an organization.
• Sound Personnel Policies: – These constitute the business philosophy of an organization and guide it in arriving at its
human relations decisions. The purpose of such policies is to decide, before any emergency arises, what shall be done
about the large number of problems which crop up every day during the working of an organization. Policies can be
successful only when they are followed at all the level of an enterprise, from top to bottom.
• Adequate Practices should be developed by professionals: – In the field to assist in the implementation of the policies
of an organization. A system of procedures is essential if intention is to be properly translated into action. The
procedures and practices of an industrial relations department are the “tool of management” which enables a supervisor
to keep ahead of his job that of the time-keeper, rate adjuster, grievance reporter and merit rater.
• Detailed Supervisory Training : – To ensure the organizational policies and practices are properly implemented and
carried into effect by the industrial relations staff, job supervisors should be trained thoroughly, so that they may convey
to the employees the significance of those policies and practices. They should, moreover, be trained in leadership and in
communications.
• Follow-up of Results: – A constant review of an industrial relations programme is essential, so that existing practices
may be properly evaluated and a check may be exercised on certain undesirable tendencies, should they manifest
themselves. A follow up of labor turnover, absenteeism, departmental morale, employee grievances and suggestion; 
wage administration, etc. should be supplemented by continuous research to ensure that the policies that have been
pursued are best fitted to company needs and employee satisfaction. Hints of problem areas may be found in exit
interviews, in trade union demands and in management meetings, as well as in formal social sciences research.
 Industrial Relations Perspectives
• What is Industrial Relations?
• Industrial Relations (IR) is the study of the laws, conventions and institutions that regulate 'the workplace'. It is a fundamentally important aspect of our
way of life, our culture and our society.
• Industrial relations means different things to different people. The following illustration depicts how IR shapes our working life, our society and the
national economy.
• What is industrial relations from a Worker's Perspective?
• As workers, we associate Industrial Relations with Unions, Industrial Awards, and labour laws that set the conditions under which we work. This includes
our pay, safety, employment security and opportunities for training. 150 years ago people worked 6 days a week, 12 hours a day or more, and there were no
provisions for sick pay or holiday pay. There was no protection for children who were often a form of cheap labour, or worse, were sold into slavery. As a
society we have come a long way since, and this is largely due to the formation and actions of labour unions.
• What is industrial relations from an Employer's Perspective?
• The modern day employer attaches great importance to maintaining good industrial relations as a cornerstone of business growth and success. Industrial
relations, for the employer, is about negotiations between workers and business owners/managers that lead to increased productivity and improved product
quality in exchange for better pay and conditions of employment for workers. These negotiations between business owners/managers and their workers is
often referred to as enterprise bargaining. The reduction of conflict between workers and business management is also a highly desirable objective in
Industrial Relations.
• What is industrial relations from a Society Perspective?
• Whether we have good jobs and how we work has a fundamental effect on the quality of our lives. Unemployment causes social isolation and economic
deprivation. When there is high levels of unemployment, there is social tension and upheaval. Too much employment has its own set of woes. People who
work long hours often suffer from health issues and family problems. There is a need to strike a work-life balance to ensure a healthy, happy and productive
populations.
• What is industrial relations from a Government Perspective?
• Industrial relations is a major factor in managing the economy. As a nation we compete in the global marketplace for goods and services. If the workforce is
inefficient and wage demands are too high, then the cost of our goods and services is greater and consequently we are less competitive in the global
marketplace (see more about Globalisation). Governments create laws and policies that affect Industrial Relations and thereby influence the pay and
conditions of work for workers.
 The system Model
• The Dunlop theory of industrial relations states that the industrial system is comprised of
three distinct parts: management organizations, workers and government agencies. These
three entities cannot act completely independent of each other, but instead are intertwined, and
the power each one holds is relative to its position within the market and political environment.
The theory was created by sociologist John Dunlop in 1958.
• Dunlop's theory basically states that the industrial relations system is really a social subsystem,
and its actions are dependent on three factors: technology, the economy and the distribution of
political power. All three of these environmental factors and the rules that are derived from them
are what determines the relationship between employers and workers in the industrial context.
• This theory differs from the prevailing ideologies of the time, which mostly considered
employers, workers and the government as separate, autonomous agencies with separate and
independent powers and processes. By contrast, Dunlop's theory paints the entire industrial
relationship as a complex system with interconnected parts that cannot operate independent of
each other. Dunlop placed a lot of emphasis on external or environmental forces shaping the
roles of each of the three principal parts. Management, the labor force and technology all coexist
within the broader context of society, and are governed by legal, political, social and economical
forces.
 Social Action Theory
• The social action theory was founded by Max Weber. There are two main types of
sociological theories; the first is the structural or macro theory while the other is
social action, interpretive or micro perspectives. At the two ends of the argument as
to which is a better theory are Durkheim, the founding father of functionalism, and
Weber, the mastermind behind social action theory.
 
• As the ‘micro’ name suggests, social action perspectives examine smaller groups
within society. Unlike structuralism, they are also concerned with the subjective
states of individuals. Very much unlike a structuralism perspective, social action
theorists see society as a product of human activity.
Evalution and Growth of IR In India
 Government Policies And IR
• Industrial Relations System and Government Policy Industrial relations in India are
essentially triadic in character. The state enters the everyday relationship in industry in
the capacity of a mediator and adjudicator. In the Indian system, labor and management
are theoretically free to regulate their own relations, but in practice because of the ready
availability of state machinery - conciliation and compulsory adjudication, a meaningful
bargained relationship, in general, could not develop even after fifty years of
Independence. The inevitability of government intervention and the reasons for it are
rightly narrated by Myers by observing, “The pattern of labor management relations in
India has increasingly been structured by government. The difficulties in developing a
committed industrial labor force, the rivalries and weaknesses of the Indian trade union
movement, the failure of many Indian and foreign employers to deal fairly with the
workers or constructively with trade unions, and the resultant labor discontent and strife
have encouraged government intervention in order to contain, channel and redirect
incipient and actual labor protest. Increasingly, planning objectives for rapid economic
development have been given priority and the pattern of labor management relations has
been expected to conform to these objectives.
 UNIT II
Union Management Relations
Trade Union

Definition: Labour unions or trade unions are organizations formed by workers from related
fields that work for the common interest of its members. They help workers in issues like
fairness of pay, good working environment, hours of work and benefits. They represent a cluster
of workers and provide a link between the management and workers.

Description: The purpose of these unions is to look into the grievances of wagers and present a
collective voice in front of the management. Hence, it acts as the medium of communication
between the workers and management.

Regulation of relations, settlement of grievances, raising new demands on behalf of workers,

collective bargaining and negotiations are the other key principle functions that these trade
unions perform.

The Indian Trade Union Act, 1926, is the principle act which controls and regulates the
mechanism of trade unions. In India, political lines and ideologies influence trade union
movements. This is the reason why today political parties are forming and running trade unions.
 Types
• They may be classified into the following types:
• 1. Craft Unions:
•The membership of such unions is drawn from among workers employed in a particular craft or trade or allied crafts or trades or occupations irrespective of the organisa­tion or the industry
they belong to. Such employees are craft conscious and usually profession­als or non-manual employees. The Ahmedabad Weavers’ Union is an example that can be cited in this regard.
• 2. Industrial Unions:
• In industrial unions, membership is open to all types of workers engaged in any one industry or a group of industries or service, that is, on industry-wise basis, for example, Rashtriya Mill
Mazdoor Sangh, Mumbai.
• 3. Labour Unions:
•In these unions, membership is open to all workers irrespective of their occu­pation, skill or industry, the philosophy being that all workers have common status and a common need for
mutual help. Labour unions refer to both craft and industrial unions.
• 4. General Unions:
• General unions believe in the solidarity of the working class. Hence, their membership is open to workers of different skills and trades engaged in different industries.
• 5. Blue-Collar Workers’ Unions:
•Blue-collar workers’ unions constitute of employees usually performing operative jobs. They usually operate machines in the production and allied departments. Blue-collar workers
constitute the bulk of membership of trade unions in the organised sector.
• 6. White-Collar Workers’ Unions:
• Such unions usually comprise office staff or who work off the shop floor and perform desk jobs or provide service over the counter or any such other job. White-collar category includes
executives, managers, professionals, administrators, supervi­sors, clerks and the like.
• We come across such unions in banks, service sector, insurance companies, BPOs, software organisations, Central and state government offices, and so on. Their members being educated
and matured are aware of the capacity to pay off their organisa­tions and, therefore, are more reasonable while they prepare their charter of demands.
•7. Reformist Unions:
• These unions may be either business unions or revolutionary unions.
• i. Business Unions:
•They are also known as ‘bread and butter unions’ and aim at securing economic interests of their members and follow the method of collective bargaining to accomplish their objectives.
•ii. Revolutionary Unions:
• Revolutionary unions are opposed to the capitalistic industry and replace it by the socialistic systems through radical means such as strikes, boycott.
• 8. Friendly or Uplift Unions:
• These unions mainly aim at improving the intellectual, moral and social life of their members. These unions are not craft conscious. They rather focus on the interest of workers. They are
idealistic in nature. Since they are law-abiding, they believe in the institution of collective bargaining and also setting up of cooperative enterprises, mutual insurance, profit-sharing and the
like.