Nexus between HRM & IR

"The trouble started in HMSI

not because of low wages
but maltreatment," says
AITUC.

1
Concept of Industrial Relations
Concept of Industrial Relations:
‘Industrial Relations’ comprises of two terms:
‘Industry’ and ‘Relations’.
1. “Industry” refers to “any productive activity in which an
individual (or a group of individuals) is (are) engaged”.
2. By “relations” we mean “the relationships that exist within
the industry between the employer and his workmen.”

2
 What is Industrial
Relations?
A particular set of phenomena associated with
regulating the human activity of employment
 The making and administering of the institutions and rules
of work regulation
 Socio-industrial conflict (in all its forms) and its resolution

 Explicit and implicit bargaining between employees and

employers

Industrial relation is the study of employment

and labor market. It assesses factors that
shapes employer, government and workers
relationship in enterprises, industries and
across labor markets
MH 3
 Goals
There are different types of organizations:
1.Big organization, small organization, local or international.
2. They constitute of 3 main actors:
Shareholder- represented by management, association of
employers. Always to gain as much profit and
productivity.
Employees- being represented by trade unions. To get
good salary and good working conditions
Government; being represented by specialized
government agencies concern with workers, enterprise
and their relationship. Try create industrial harmony
Each of the actors above always conflicting between one
another in order to achieve their objectives.
3. Besides the above 3 main actors, in the present context
academicians have also considered another actor which
can also influence the nature of IR i.e Stakeholders.

MH 4
 Conflict
Conflict result from industrial and organizational
factors.
1. Different roles of management and employees
Mgrs responsible for efficiency, productivity and
profitability
Employees: more of personal terms (better pay, good
working conditions and good job security).

MH 5
 What is HRM?

HRM – functional definition

“Is a set of interrelated functions and
processes whose goal is to attract, socialize,
motivate, maintain, and retain employees”
HRM – goal-based definition
“aims to improve the productive contribution
of individuals while simultaneously attempting
to attain other societal and individual
employee objectives”

MH 6
 Important terms
Human resource: Knowledge, skill sets, expertise of employees, the adaptability,
commitment and loyalty of employees.
Skills: The individual abilities of human beings to perform a piece of work.
Resource: The stock of assets and skills that belong to a firm at a point of time
Capability: The ability of a bundle of resources to perform an activity; a way of
combining assets, people and processes to transform inputs into outputs.

Core competencies: Activities that the firm performs especially well when
compared to its competitors and through which the firm adds value to its goods and
services over a long period of time. A unique capability in the organization that
creates high value and that differentiates the organization from its competition.
Competitive advantage: It comes from a firm's ability to perform activities more
distinctively and more effectively than rivals. To attain competitive advantage, firms
need to add value to customers and offer a product or service that cannot be easily
imitated or copied by rivals (Uniqueness).
Value: Sum total of benefits received and costs paid by the customer in a given
situation.

MH 7
 Evolution of HRM

Each slice relates to workforce

responsible for business
productivity not attainable in a
state of chaos. Hence the
importance of IR

MH 8
 Human Resource Management

McClea
n

MH 9
 What Does HRM Do?

HRM serves 3 primary entities:

• The organization
• Society
• Individual employees and

MH 10
 Human
Asset Profiles

Career
Development Plans Performance
Management

Coaching & Human Selection

Mentoring
Capital
Strategy
Core
Values
Revenue
Per
Recruitment
Employe
Core e Cost Per
Competencies Employee

Profit Per
Performance Employee
Improvement

MH 11
 Shaping a Robust Nexus: HR-IR
 Aligning employees to a common sets of objectives
derived from the mission and value statements,
 Mitigation of risk by devising appropriate Succession
Planning Strategies,
 Identification of top-performers and non-performers,
 Continuous measurement of the effectiveness of
leadership and employee satisfaction,
Increasing employee engagement through appropriate
measures,
 Aligning compensation to performance,
 Adjustment of recruitment and training to competency
gaps,
 and specifying well-defined Job Descriptions which map to
the organization structure . These become the basis of
Recruitment, Goal Setting, Training, Performance Evaluation
MH and Career Development. 12
 Aligning Organizational Goals
Focusing mission and value

Mission Missio
n

Vision

Vision
Excellence Alignme
Assessment
nt
CHAOS Substandard Productivity
Performance

ASK: Whether bond between HR and IR becoming

MH healthy? 13
HR Management Main Components

Staffing

Employee and Training &

Labor Relations Development

HRM

Safety and Compensation

Health and Benefits

Take our 20 best people away, and I will tell you that
Microsoft would become an unimportant company
Bill Gates
MH 14
 Purpose of HR Function?
To enable management to enhance the individual
and collective contribution (possible only if bond
between HRM & IR is robust) of people to the
enterprise in:

 The short term

 The Long term

The only vital value an enterprise has is the experience,

skills, innovativeness and insights of its people
Leif Edvinsson, Swedish Intellectual Capital guru

MH 15
 Core HRM Activities
 Human Resource Planning
 Recruitment
 Selection
 Performance Management &
Appraisal
 Training
 Rewards
 Employee Relations
 Employee Communication and
Participation
 Hazard free work environment
 Personnel Records

MH 16
 Job Satisfaction..
Workplace support
 (flexible schedules, etc)
 autonomy
 meaningfulness
 opportunities for learning & advancement
 job security are highly related to job
satisfaction
 pay and benefits have little effect on job
satisfaction.

MH 17
 Top Themes that Concern
Employees Satisfaction Most
An analysis of employee responses to opinion surveys in
Asia

A job security 1
B enough help and resources 2
C friendly, helpful co-workers 3
D interesting work 4
E good working conditions 5
F enough authority 6
G good wages 7
H opportunities to development 8
I enough information 9
J full appreciation of work done 10
K competent supervision 11
L clearly defined responsibilities 12

MH 18
Approaches to Employee
Engagement
Employee engagement, or worker engagement, is a business
management concept. An "engaged employee" is one who is fully
involved in, and enthusiastic about, his or her work, and thus will
act in a way that furthers their organization's interests.
Research-10 effective approaches for improving
employee engagement:
1. Rewards and Recognition
2. Human Capital Infrastructure
3. Learning Management
4. Knowledge Management
5. Performance Appraisal
6. Workplace Design
7. Employee Relations
8. Career Development
9. Human capital strategy
10.Recruiting
MH 19
Employee Engagement
(Reseach)
At least four studies agreed on these eight key drivers.
 Trust and integrity – how well managers communicate and 'walk the
talk'.
 Nature of the job –Is it mentally stimulating day-to-day?
 Line of sight between employee performance and
company performance – Does the employee understand
how their work contributes to the company's performance?
 Career Growth opportunities –Are there future opportunities for
growth?
 Pride about the company – How much self-esteem does the employee
feel by being associated with their company?
 Coworkers/team members – significantly influence one's level of
engagement
 Employee development – Is the company making an effort to develop
the employee's skills?
 Relationship with one's manager – Does the employee value his or
her relationship with his or her manager?

MH 20
 Factors Influencing Employee
Satisfaction and Engagement
1)  An expressed intention to remain with an
organization
2)  The variety of skills and competencies their job
requires
3)  The organization's commitment to satisfying
customers
4)  The amount of cooperation within and across
functions
5)  Consistent communication regarding roles and
expectations
6)  Training to improve their contributions to the
organization
7)  Freedom and discretion in their jobs and access to
resources and information
8)  Competent, expert managers who are open to ideas
of their employees

MH 21
 Workforce Engagement
Metrics
Research
• Workforce engagement
characteristics:
• Satisfaction
• Understanding
• Contribution
• Alignment
• Retention

MH 22
MH 23
 Top Themes that Concern Employees
Most
An analysis of employee responses to opinion
surveys.

• Higher salaries. Pay is the number one topic

for employee dissatisfaction.

• Internal pay equity. Employees are

particularly concerned about 'pay compression'
(defined as the differential in pay between new
and more experienced employees).

• Benefits programs. Particularly health/dental,

retirement,

MH 24
 Safety and Health
Employees who work in
a safe environment and
enjoy good health are
more likely to be
productive and yield
long-term benefits to
the organization.

Isn't it a bit unnerving that doctors call what they do

practice?
George Carlin
MH 25
 Safety and Health
Safety - Involves protecting employees from
injuries caused by work-related accidents

Health - Refers to the employees' freedom

from illness and their general physical and
mental well being

MH 26
 Competition
Competent Employees

Growth Prosperity

Success

MH 27
 Economic Challenges
 Two related challenges:
 Global trade – international trade and
competition with other markets
 Need for productivity Improvement
 More output with equal (or less) input
 HR Implications
 Need to contribute to international competence
of workers (via training, etc.)
 Potential workforce reductions – can result in
job insecurity and negative effects on workers

MH 28
 Complex Work Environment
Industrial society is a complex and dynamic society
(consist of group, societies and institution) they are
interrelated, however have different attitudes and
perceptions. They are also being influenced by
external environment.
We cannot ignore the working aspect of human
being, as working hour dominate most of our time.

MH 29
 HR Management Industrial Relations
 Only 2 imp. Parties employee  Relationship between
and employer workforce & management
 Objectives, policies,  The implementation of HRM
procedure and programs of policies results in IR.
human resources and  There are four important
implement them parties namely employees,
 Individual employee contacts employer, trade unions and
with the immediate superior. government
Grievance and disciplinary  The sound IR contributes to
procedures are resorted to, to the organizational goals. The
solve the employee-employer unsound IR result in industrial
conflicts. conflicts demanding for change
 Reformulates the objectives, and reformulation of HRM
policies etc ,based on industrialobjectives and goals
conflicts which are the  Employees contact even the
outcome of unsound industrial top management as a group.
relations.  Collective bargaining and
 HRM is the overall forms of industrial conflicts are
management of all resources resorted to solve the problems
including workers, staff,
executives, Top management
MH and even suppliers and 30
 Industrial Relations

 Industrial relations are governed by the system of

rules and regulations concerning work, workplace and
working community
 The main purpose is to maintain harmonious relations
between employees and employer by solving their
problems through grievance procedure and collective
bargaining.
 Trade Unions is another important institution in the
Industrial relations. Trade unions influence and shape
the industrial relations through collective bargaining.
 Industrial relations are the relations mainly between
employees and employers
 These relations emphasis on accommodating other
parties interest, values and needs. Parties develop skills
of adjusting to and cooperating with each other.

MH 31
 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 labor and harmonious relationships.
Therefore, it is in the interest of all to create and
maintain good relations between employees (labor) and
employers (management).
 The main purpose is to maintain harmonious relations
between employees and employer by solving their
problems through grievance procedure and collective
bargaining.
 Trade Unions is another important institution in the
Industrial relations. Trade unions influence and shape
the industrial relations through collective bargaining.
 Industrial relations are the relations mainly between
employees and employers
 These relations emphasis on accommodating other
MH parties interest, values and needs. Parties develop skills32
Competitive edge will largely depend on
‘knowledge workers’ ability to perform

“Learning is not compulsory –

neither is survival!”
W Edward Deming

MH 33