HUMAN RESOURCE

MANAGEMENT

INDUSTRIAL RELATIONS
Definition:-
1. Industrial Relation is that part of management which is
concerned with the manpower of the enterprise – whether
machine operator, skilled worker or manager.

2. Industrial Relation is a relation between employer and

employees, employees and employees and employees and
trade unions. - Industrial dispute Act 1947

3. While moving from jungle of the definitions, here, Industrial

Relation is viewed as the “process by which people and their
organizations interact at the place of work to establish the
terms and conditions of employment.”

4. The Industrial Relation relations also called as labor -

management, employee-employers relations
Features pertaining to
Industrial Relations:

1. Industrial Relation do not emerge in vacuum they are

born of employment relationship in an industrial
setting.

2. Industrial Relation are characterized by both conflict

and co-operations.

3. As the labor and management do not operate in

isolations but are parts of large system.
Contd:
4. Industrial Relation also involve the study of conditions
conductive to the labor, managements co-operations
as well as the practices and procedures required to
elicit the desired co-operation from both the parties.

5. Industrial Relations also study the laws, rules

regulations agreements, awards of courts, customs
and traditions, as well as policy framework laid down
by the governments for eliciting co-operations
between labor and management.
 Factors Influencing IR

1. Institution: It includes government, employers, trade

unions, unions federations or associations, government
bodies, labor courts, tribunals and other organizations
which have direct or indirect impact on the industrial
relations systems.

2. Characters: It aims to study the role of workers unions

and employers’ federations officials, shop stewards,
industrial relations officers/ manager,
mediator/conciliators / arbitrator, judges of labor
court, tribunal etc.
 Contd:
3. Methods: Focus on collective bargaining, workers’ participation in
the Industrial Relation schemes, discipline procedure, grievance re-
dressal machinery, dispute settlements machinery working of closed
shops, union reorganization, organizations of protests through
methods like revisions of existing rules, regulations, policies,
procedures, hearing of labor courts, tribunals etc.

4. Contents: Includes matter pertaining to employment conditions like

pay, hours of works, leave with wages, health, and safety
disciplinary actions, lay-off, dismissals retirements etc., laws relating
to such activities, regulations governing labor welfare, social
security, industrial relations, issues concerning with workers’
participation in management, collective bargaining, etc.
Objectives of Industrial
Relation
1. 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.

2. 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.

3. To raise productivity to a higher level in an era of full

employment by lessening the tendency to high
turnover and frequency absenteeism.
Contd:
4. To establish and nurse 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.To eliminate, as far as is possible and
practicable, strikes, lockouts and gheraos by providing
reasonable wages, improved living and working conditions,
said fringe benefits.

5. 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.

6. Improvements in the economic conditions of workers in the

existing state of industrial managements and political
government
Contd:
7. Control exercised by the state over industrial
undertaking with a view to regulating production and
promoting harmonious industrial relations.

8. Socializations or rationalization of industries by

making he state itself a major employer

9. Vesting of a proprietary interest of the workers in the

industries in which they are employed.
The main aspects of Industrial Relations are:

1. Labor Relations, i.e. relations between union and

management.

2. Employer-employees relations, i.e. relations between

management and employees.

3. Group relations, i.e. relations between various groups of

workmen.

4. Community or Public relations, i.e. relations between

industry and society.
Contd:
5. Promotions and development of healthy labor-
managements relations.

6. Maintenance of industrial peace and avoidance of

industrial strife

7. Development of true industrial Democracy

 Effects of poor Industrial Relations
1. Multiplier effects: Modern industry and for that matter
modern economy are interdependent. Hence although the
direct loss caused due to industrial conflict in any one
plant may not be very great, the total loss caused due to
its multipliers effect on the total economy is always very
great.

2. Fall in normal tempo: poor Industrial Relations adversely

affect the normal tempo of work so that work far below
the optimum level. Costs build up. Absenteeism and labor
turnover increase. Plants discipline breaks down and both
the quality and quality of production suffer.
 IMPORTANCE OF INDUSTRIAL RELATIONS

1. Uninterrupted production – The most important

benefit of industrial relations is that this ensures
continuity of production. This means, continuous
employment for all from manager to workers. The
resources are fully utilized, resulting in the maximum
possible production. There is uninterrupted flow of
income for all. Smooth running of an industry is of
vital importance for several other industries; to other
industries if the products are intermediaries or inputs;
to exporters if these are export goods; to consumers
and workers, if these are goods of mass consumption.
 IMPORTANCE OF INDUSTRIAL RELATIONS

2. Reduction in Industrial Disputes – Good industrial

relation reduce the industrial disputes. Disputes are
reflections of the failure of basic human urges or
motivations to secure adequate satisfaction or
expression which are fully cured by good industrial
relations. Strikes, lockouts, go-slow tactics, gherao
and grievances are some of the reflections of
industrial unrest which do not spring up in an
atmosphere of industrial peace. It helps promoting
co-operation and increasing production.
 IMPORTANCE OF INDUSTRIAL RELATIONS

3. High morale – Good industrial relations improve the morale

of the employees. Employees work with great zeal with the
feeling in mind that the interest of employer and employees
is one and the same, i.e. to increase production. Every
worker feels that he is a co-owner of the gains of industry.
The employer in his turn must realize that the gains of
industry are not for him along but they should be shared
equally and generously with his workers. In other words,
complete unity of thought and action is the main
achievement of industrial peace. It increases the place of
workers in the society and their ego is satisfied. It naturally
affects production because mighty co-operative efforts alone
can produce great results.
IMPORTANCE OF INDUSTRIAL RELATIONS

4. Mental Revolution – The main object of industrial

relation is a complete mental revolution of workers
and employees. The industrial peace lies ultimately
in a transformed outlook on the part of both. It is the
business of leadership in the ranks of workers,
employees and Government to work out a new
relationship in consonance with a spirit of true
democracy. Both should think themselves as
partners of the industry and the role of workers in
such a partnership should be recognized. On the
other hand, workers must recognize employer’s
authority. It will naturally have impact on production
because they recognize the interest of each other.
IMPORTANCE OF INDUSTRIAL
RELATIONS
5. New Programmes – New programmes for workers
development are introduced in an atmosphere of
peace such as training facilities, labor welfare facilities
etc. It increases the efficiency of workers resulting in
higher and better production at lower costs.

6. Reduced Wastage – Good industrial relations are

maintained on the basis of cooperation and
recognition of each other. It will help increase
production. Wastages of man, material and machines
are reduced to the minimum and thus national interest
is protected.
DIFFERENCE BETWEEN INDUSTRIAL
RELATIONS AND HUMAN RELATIONS:

1. Relationship:

1) Industrial relations refer to the relations between the

employees and the employer in an industry.
2) Human relations refer to a personnel-management
policy to be adopted in industrial organizations to
develop a sense of belongingness in the workers
improves their efficiency and treat them as human
beings and make a partner in industry.
Contd:
2. Nature of Problems:

1) Industrial relations cover the problems regulated by

law or by collective agreement between employees
and employers.

2) On the other hand, problems of human relations are

personal in character and are related to the behavior
of worker where morale and social elements
predominated.
Contd:
3. Problem Solving bodies:

1) Human relations approach is personnel philosophy

which can be applied by the management of an
undertaking.

2) The problem of industrial relations is usually dealt with

a three levels – the level of undertaking, the industry
and at the national level. To sum up the term
“Industrial Relations” is more wide and comprehensive
and the term “Human Relations” is a part of it.
Determining factors of Good
Industrial Relations

1. History of industrial relations – No enterprise can

escape its good and bad history of industrial relations.
A good history is marked by harmonious relationship
between management and workers. A bad history by
contrast is characterized by militant strikes and
lockouts. Both types of history have a tendency to
perpetuate themselves. Once militancy is established
as a mode of operations there is a tendency for
militancy to continue. Or once harmonious relationship
is established there is a tendency for harmony to
continue.
Determining factors of Good
Industrial Relations
2. Economic satisfaction of workers – Psychologists
recognize that human needs have a certain priority.
Need number one is the basic survival need. Much of
men conducted are dominated by this need. Man
works because he wants to survive. This is all the more
for underdeveloped countries where workers are still
living under subsistence conditions. Hence economic
satisfaction of workers is another important
prerequisite for good industrial relations.
Determining factors of Good
Industrial Relations
3. Social and Psychological satisfaction –
Identifying the social and psychological urges of
workers is a very important steps in the direction of
building good industrial relations. A man does not
live by bread alone. He has several other needs
besides his physical needs which should also be
given due attention by the employer. An organization
is a joint venture involving a climate of human and
social relationships wherein each participant feels
that he is fulfilling his needs and contributing to the
needs of others. This supportive climate requires
economic rewards as well as social and psychological
rewards such as workers’ participation in
management, job enrichment, suggestion schemes,
re-dressal of grievances etc.
Determining factors of Good
Industrial Relations
4. Off-the-Job Conditions – An employer employs a
whole person rather than certain separate
characteristics. A person’s traits are all part of one
system making up a whole man. His home life is not
separable from his work life and his emotional
condition is not separate from his physical condition.
Hence for good industrial relations it is not enough
that the worker’s factory life alone should be taken
care of his off-the-job conditions should also be
improved to make the industrial relations better.
Determining factors of Good
Industrial Relations
5. Enlightened Trade Unions – The most important
condition necessary for good industrial relations is a
strong and enlightened labor movement which may
help to promote the status of labor without harming
the interests of management, Unions should talk of
employee contribution and responsibility. Unions
should exhort workers to produce more, persuade
management to pay more, mobilize public opinion on
vital labor issues and help Government to enact
progressive labor laws.
 Determining factors of Good
Industrial Relations
6. Negotiating skills and attitudes of management and
workers – Both management and workers’ representation
in the area of industrial relations come from a great
variety of backgrounds in terms of training, education,
experience and attitudes. These varying backgrounds play
a major role in shaping the character of industrial
relations. Generally speaking, well-trained and
experienced negotiators who are motivated by a desire
for industrial peace create a bargaining atmosphere
conducive to the writing of a just and equitable collective
agreement. On the other hand, ignorant, inexperienced
and ill-trained persons fail because they do not recognize
that collective bargaining is a difficult human activity.
Determining factors of Good
Industrial Relations
7. Public policy and legislation: - When Government regulates
employee relations, it becomes a third major force determining
industrial relations the first two being the employer and the
union. Human behavior is then further complicated as all three
forces interact in a single employee relation situation.
Government intervention helps in three different ways 1) It helps
in catching and solving problems before they become serious.
Almost every one agrees that it is better to prevent fires then to
try stopping them after they start; 2) It provides a formalized
means to the workers and employers to give emotional release to
their dissatisfaction; and 3) It acts as a check and balance upon
arbitrary and capricious management action.
Determining factors of Good
Industrial Relations
8. Better education: - With rising skills and education
workers’ expectations in respect of rewards increase. It
is a common knowledge that the industrial worker in
India is generally illiterate and is misled by outside
trade union leaders who have their own axe to grind.
Better workers’ education can be a solution to this
problem. This alone can provide worker with a proper
sense of responsibility, which they owe to the
organization in particular, and to the community in
general.
Determining factors of Good
Industrial Relations
9. Nature of industry: - In those industries where the
costs constitute a major proportion of the total cast,
lowering down the labor costs become important
when the product is not a necessity and therefore,
there is a little possibility to pass additional costs on to
consumer. Such periods, level of employment and
wages rise in decline in employment and wages. This
makes workers unhappy and destroys good industrial
relations.
Functional requirements for a
successful IR Programme

1. 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.

2. 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.
 Contd:
3. 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.

4. 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.
Contd:
5. 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
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.
The Human Relations Approach

1. What Conrad & Poole (1998) refer to as a "relational

strategy of organizing" is more commonly called the
"human relations approach" or "human relations
school" of management by organizational theorists.
This human relations approach can be seen as being
almost entirely antithetical to the principles of classical
management theory. Where classical management
focused on the rationalization of work routines, human
relations approaches stressed the accommodation of
work routines and individual emotional and relational
needs as a means of increasing productivity.
The Human Relations Approach

2. The human relations approach can also be seen as a response to a

highly charged and polarized social climate in which labor and
management were viewed as fundamentally opposed to one
another, and communism was seen as a very real and immediate
danger to the social order -- the notion of class
struggle propounded by Marxist theorists was taken very
seriously. By focusing on the extent to which workers and
managers shared economic interests in the success of the
organization, the human relations approach can be seen as an
attempt to move beyond the class struggle idea. Of course, the
human relations approach (which really emerged in the late
1930s) was made possible by the fairly coercive suppression of
the most radical organized labor movements.
The Human Relations Approach:
Principles

1. Decentralization -- The strict notion of hierarchy

employed by classical management theorists is
replaced with the idea that individual workers and
functional areas (i.e., departments) should be given
greater autonomy and decision-making power. This
requires greater emphasis on lateral communication so
that coordination of efforts and resources can occur.
This communication occurs via informal
communication channels rather than the formal,
hierarchical ones.
The Human Relations
Approach: Principles
2. Participatory Decision-Making -- Decision-making
is participatory in the sense that those making
decisions on a day-to-day basis include line workers
not normally considered to be "management." The
greater autonomy afforded individual employees -- and
the subsequent reduction in "height" and increase in
span of control of the organizational structure --
requires that they have the knowledge and ability to
make their own decisions and the communication skill
to coordinate their efforts with others without a
nearby supervisor.
The Human Relations Approach:
Principles

3. Concern for Developing Self-Motivated Employees --

The emphasis on a system of decentralized and
autonomous decision-making by members of the
organization requires that those members be highly
"self-motivated" (that is, able to set their own task-
related goals and monitor their own performance in
achieving them). So one goal of managers in such an
organization is to design and implement organizational
structures that reward such self-motivation and
autonomy. Another is to negotiate working relationships
with subordinates that foster effective communication in
both directions.
The Marxist Approach

1. Introduction:
• The class conflict analysis of industrial relations derives its impetus
from Marxist social thinking and interpretation. Marxism is
essentially a method of social enquiry into the power relationships
of society and a way of interpreting social reality. The application
of Marxian theory as it relates to industrial relations derives
indirectly from later Marxist scholars rather than directly from the
works of Marx himself. Industrial relations, according to Marxists,
are in the first instance, market-relations. For Marxists industrial
and employee relations can only be understood as part of a
broader analysis of capitalist society in particular the social
relations of production and the dynamics of capital accumulation
The Marxist Approach
2. Orientation:
• Marxist approach is primarily oriented towards the historical
development of the power relationship between capital and labor.
It is also characterized by the struggle of these classes to
consolidate and strengthen their respective positions with a view
to exerting greater influence on each other. In this approach,
industrial relations is equated with a power-struggle. The price
payable for labor is determined by a confrontation between
conflicting interests. The capitalist ownership of the enterprise
endeavors to purchase labor at the lowest possible price in order
to maximize their profits. The lower the price paid by the owner of
the means of production for the labor he employs, the greater is
his profit. The Marxist analysis of industrial relations, however, is
not a comprehensive approach as it only takes into account the
relations between capital and labor
The Pluralist Approach
1. Introduction:
• Pluralism is a major theory in labor-management relations, which
has many powerful advocates. The focus is on the resolution of
conflict rather than its generation, or, in the words of the pluralist,
on ‘the institutions of job regulation.’ Kerr is one of the important
exponents of pluralism. According to him, the social environment is
an important factor in industrial conflicts. The isolated masses of
workers are more strike-prone as compared to dispersed groups.
When industrial jobs become more pleasant and employees’ get
more integrated into the wider society, strikes will become less
frequent. Ross and Hartman’s cross national comparison of strikes
postulates the declining incidents of strikes as societies
industrialize and develop appropriate institutional framework.
The Pluralist Approach
2. Evolution:
The theories on pluralism were evolved in the mid-
sixties and early seventies when England witnessed a
dramatic resurgence of industrial conflicts. However,
the recent theories of pluralism emanate from British
scholars, and in particular from Flanders and Fox.
According to Flanders, conflict is inherent in the
industrial system.
 The Pluralist Approach

3. Relationship between Workers and Management:

Fox distinguishes between two distinct aspects of
relationship between workers and management. The
first is the market relationship, which concerns with the
terms and conditions on which labor is hired. This
relationship is essentially economic in character and
based on contracts executed between the parties. The
second aspect relates to the management’s dealing with
labor, the nature of their interaction, negotiations
between the union and management, distribution of
power in the organisation, and participation of the union
in joint decision-making.
The Pluralist Approach
4. Critics:
The major critics of the pluralist approach are the
Marxists according to whom exploitation and slavery
will continue unabated in the institutional structure of
pluralism. The only difference is that in such a social
structure, the worker will be deemed to be a better-
paid wage slave.