CH-01: An Overview of Industrial Relations

Table of Content S.L 1 2 3 4 5 6 7 8 9 10 Topics Definition of Industry. Definition of Industrial Work. Definition of Industrial Relations. Nature of Industrial Relations. Factors Influencing Industrial Relations. Objectives of Industrial Relations. Approaches of Industrial Relations. Importance for Sound Industrial Relations. Causes of Poor Industrial Relations. Difference Model of Industrial Relations. Page No. 2 2 3 4 5 7 8 10 13 14

1. What is Industry?
Industry is a basic category of business activity. The term industry is sometimes used to describe a very precise business activity or a more generic business activity. If a company participates in multiple business activities, it is usually considered to be in the industry in which most of its revenues are derived. According to Bangladesh Labor Law-2006,Industry means any business, trade, service, employment or occupation .In a broader sense, industry is characterized by the existence of the following: a. b. c. d. e. Employer and employee Works on the basis of wages Products or services to be produced Buying and selling of labor power Creation of utility.

2. What is Industrial work?

Industrial work refers to those activities in which land, labor, and capital are used to produce goods or services that are able to create utility to customers. In Industrial work, workers sell their labor power which the employers buy against wages. So any work which is related to produce goods or service is included within industrial work. Thus manufacturing, farming, teaching, banking all are industrial work.

3. Definition of Industrial Relations

There is a correlation among parties related to industries. Industrial progress is impossible without cooperation of labors and harmonious relationship. Industrial Relation deals with individual relation and joint consultation between employers and employees.

The term industrial relation consists of two words-Industry and Relation. Industry means a group of firms producing same and substitute products. On the other hand Relation means the relationship among workers, management and government. As a whole industrial relation refers to the relationship between labor and management that grow out of employment.

Views of Specialists: Professor Dunlop Says,'' Industrial Relation defined as the complex interrelations among workers, managers and government.'' Bishwonath Bosh Says, ''Industrial Relation is an art, the art of living together.'' VB Shingh Says, ''Industrial Relations is a set of functional interdependence including historical, economical and legal variables.''

At the end we can conclude that industrial relation includes: 1. Relation between management and workers. 2. Relation between employers and trade unions. 3. Relation among state, government and union 4. Coordination among parties to achieve desired goals. 5. Harmonious adjustment among departments, parties and their interests.

4. Nature of Industrial Relations

Concept of Industrial Relations is evolved from various disciplines like social sciences, humanities, behavioral sciences and law etc. nature of Industrial Relations involve: 1. Industrial Relations cannot emerge in vacuum. Industrial relations is an outcome of employment relationships in industrial establishments, it requires existence of labor and management as well as government for relationships to exist. 2. Industrial Relations are characterized by both conflict and co-operation. Study of IR targets on attitudes, relationships, practices and procedures developed in order to resolve or minimize conflict. 3. Industrial Relations create various rules and regulations to maintain peace and harmony in the industry. 4. There are four main aspects of Industrial Relations. a. Labor relations b. Employer and employee relations c. Union and management relations d. Organization and community relations 5. Industrial Relations include the field of studies like technological, Economical, Social and Political aspects of Industries. 6. Labor and management cannot operate in isolation as they are part of larger system. 7. Industrial relations occur within a dynamic conflict situation . Nature and characteristics are: a) Existence of a conflicting relationship b) Relationship between the employer and employees c) Buying and selling of labor power is the main issue d) Buyers are less but sellers of labor power are many. e) State favors the buyers of labor power.

5. Factors Influencing Industrial Relations

It's important to think of a small business as a producer in a market economy. As a producer, you have a need for labor, or employees who make something or provide a service to consumers. The relationships you maintain with your employees will impact your ability to maintain a steady labor force, an essential ingredient for economic stability. It's important to create management and human resources practices that will keep employees happy and feeling like they benefit from working for your business. External Factors The history of industrial relations goes back to when workers felt that employer actions or market conditions caused them to have an unequal share of power in their relationship with their employer. Workers turned to collective bargaining in the public and private sectors to get better wages and working conditions from their employer's representatives. Today, there are many laws ensuring that U.S. workers receive a minimum wage and safe working environments. More labor regulation later decreased the need for collective bargaining. Internal Factors Another way to look at industrial relations is the impact of the company's human resources practices. These might include low productivity, absenteeism, high employee turnover, low job security, unsatisfactory or unsafe working environments, failure to recognize performance in pay plans, and lack of motivation, according to the International Labor Organization. Smallbusiness owners can address these problems by updating their HR practices and firing managers who create these problems. They can also address employee motivation; including rolling out more opportunities for training and advancement, pay for performance, performance incentives and worker recognition programs. Work Climate You can set up the most research-based HR policies in your firm, but employees will still judge the company by how it feels to work there. Look at how your leadership style affects employees and how your managers manage employees. If there are problems with worker performance

among many workers or other indicators such as high turnover or absenteeism, you need to study what's causing those conditions. Start by introducing a new HR goal, such as introducing flexibility and participation into your management model; give managers and workers more authority to decide how to accomplish their goals. Employee Attitudes You can use an employee survey to study the sources of conflict or dissatisfaction in employees. They will have a wide range of attitudes about working for you. It's important to determine if they respect you as a leader and care about the company. These are signs of good employee relations and will usually produce better performance. Employees who love the company can often perform well even when faced with tough economic conditions, which may give them a bigger workload and fewer pay increases.

6. OBJECTIVES OF INDUSTRIAL RELATIONS

The primary objective of industrial relations is to maintain congenial relations between employees and employer. The other objectives are:

1. Protect management and labor interests by securing mutual relations between the two groups. 2. Avoid disputes between management and labor, and create a harmonizing relationship between the groups so productivity can be increased. 3. Ensure full employment and reduce absenteeism, hence, increasing productivity and profits. 4. Emphasize labor employer partnership to establish and maintain industrial democracy. This is done to ensure the sharing of profit gains, and personal developmental of all all employees. 5. Provide better wages and living conditions to labor, so misunderstandings between management and labor are reduced to a minimum. 6. To bring about government control over plants where losses are running high, or where products are produced in the public interest. 7. To bridge a gap between various public factions and reshape the complex social relationships emerging out of technological advances by controlling and disciplining members, and adjusting their conflicts of interests. 8. Improved Industrial Relation will protect the interest of labor and well as management. 9. Encouraging the sense of ownership among workers for Industries. 10. To enhance government control over units and plants that are running under losses or where production has to be regulated in public interest.

7. Approaches to Industrial Relations

Industrial conflicts are the results of several socio-economic, psychological and political factors. Various lines of thoughts have been expressed and approaches used to explain his complex phenomenon. One observer has stated, An economist tries to interpret industrial conflict in terms of impersonal markets forces and laws of supply demand. To a politician, industrial conflict is a war of different ideologies perhaps a class-war. To a psychologist, industrial conflict means the conflicting interests, aspirations, goals, motives and perceptions of different groups of individuals, operating within and reacting to a given socio-economic and political environment. Psychological approach The problems of IR have their origin in the perceptions of the management, unions and the workers. The conflicts between labor and management occur because every group negatively perceives the behavior of the other i.e. even the honest intention of the other party so looked at with suspicion. The problem is further aggravated by various factors like the income, level of education, communication, values, beliefs, customs, goals of persons and groups, prestige, power, status, recognition, security etc are host factors both economic and non-economic which influence perceptions unions and management towards each other. Industrial peace is a result mainly of proper attitudes and perception of the two parties. Human relations approach Human resources are made up of living human beings. They want freedom of speech, of thought of expression, of movement, etc. When employers treat them as inanimate objects, encroach on their expectations, throat-cuts, conflicts and tensions arise. In fact major problems in industrial relations arise out of a tension which is created because of the employers pressures and workers reactions, protests and resistance to these pressures through protective mechanisms in the form of workers organization, associations and trade unions. Theoretical perspectives Industrial relations scholars have described three major theoretical perspectives or frameworks that contrast in their understanding and analysis of workplace relations. The three views are generally known as unitarism, pluralist and radical. Each offers a particular perception of workplace relations and will therefore interpret such events as workplace conflict, the role of unions and job regulation differently. The radical perspective is sometimes referred to as the "conflict model", although this is somewhat ambiguous, as pluralism also tends to see conflict as inherent in workplaces. Radical theories are strongly identified with Marxist theories, although they are not limited to kosala.

Unitary Perspective In unitarism, the organization is perceived as an integrated and harmonious system, viewed as one happy family. A core assumption of unitary approach is that management and staff, and all members of the organization share the same objectives, interests and purposes; thus working together, hand-in-hand, towards the shared mutual goals. Furthermore, unitarism has a paternalistic approach where it demands loyalty of all employees. Trade unions are deemed as unnecessary and conflict is perceived as disruptive. From employee point of view, unitary approach means that: Working practices should be flexible. Individuals should be business process improvement oriented, multi-skilled and ready to tackle with efficiency whatever tasks are required. If a union is recognized, its role is that of a further means of communication between groups of staff and the company. The emphasis is on good relationships and sound terms and conditions of employment. From employer point of view, unitary approach means that: Staffing policies should try to unify effort, inspire and motivate employees. The organization's wider objectives should be properly communicated and discussed with staff. Reward systems should be so designed as to foster to secure loyalty and commitment. Line managers should take ownership of their team/staffing responsibilities. Pluralistic-Perspective In pluralism the organization is perceived as being made up of powerful and divergent subgroups - management and trade unions. This approach sees conflicts of interest and disagreements between managers and workers over the distribution of profits as normal and inescapable. Consequently, the role of management would lean less towards enforcing and controlling and more toward persuasion and co-ordination. Trade unions are deemed as legitimate representatives of employees. Conflict is dealt by collective bargaining and is viewed not necessarily as a bad thing and if managed could in fact be channeled towards evolution and positive change. Realistic managers should accept conflict to occur. There is a greater propensity for conflict rather than harmony. Marxist Perspective The Marxist approach looks at industrial relations from a societal perspective. It views industrial relations as a microcosm of the wider capitalist society. The basic assumption of this approach is that industrial relations under capitalism are an everlasting and unavoidable source of

conflict According to this approach, industrial conflicts are the central reality of industrial relations, but open conflicts are uncommon.15 The Marxist approach views industrial disputes as a class struggle and industrial relations as a politicized concept and an element of the class struggle. As per the Marxist approach, the understanding of industrial relations requires an understanding of the capitalized society, the social relations of production and the mechanism of capital accumulation. The System Approach The system approach was developed by J. P. Dunlop of Harvard University in 1958. According to this approach, individuals are part of an ongoing but independent social system. The behavior, actions and role of the individuals are shaped by the cultures of the society. The three elements of the system approach are input, process and output. Society provides the cue (signal) to the individuals about how one should act in a situation. The institutions, the value system and other characteristics of the society influence the process and determine the outcome or response of the individuals. The basis of this theory is that group cohesiveness is provided by the common ideology shaped by the societal factors.

8. Importance for Sound Industrial Relations

A sound industrial relations system is not capable of precise definition. Every industrial relations system has to take into account, and reflect, cultural factors. Systems cannot change culture, but only behavior within a cultural environment. As such, one can only describe some of the elements which have generally come to be recognized as contributing to a sound industrial relations system. These elements would constitute a sort of 'check-list'. A relatively sound industrial relations system will exhibit some of these elements. A sound industrial relations system is one in which relationships between management and employees (and their representatives) on the one hand, and between them and the State on the other, are more harmonious and cooperative than conflictual and creates an environment conducive to economic efficiency and the motivation, productivity and development of the employee and generates employee loyalty and mutual trust. Industrial relations itself may again be described as being concerned with the rules, processes and mechanisms (and the results emanating there from) through which the relationship between employers and employees and their respective representatives, as well as between them on the one hand and the State and its agencies on the other, is regulated. Industrial relations seek to balance the economic efficiency of organizations with equity, justice and the development of the individual, to find ways of avoiding, minimizing and resolving disputes and conflict and to promote harmonious

relations between and among the actors directly involved, and society as a whole. The rules, processes and mechanisms of an industrial relations system are found in sources such as laws (legislative, judicial, quasi-judicial), practices, customs, agreements and arrangements arrived at through a bipartite or tripartite process or through prescription by the State. 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. Reduction in Industrial Disputes Good industrial relations 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, 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. 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. 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 employers authority. It will naturally have impact on production because they recognize the interest of each other.

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. A sound industrial relations system requires a labour management relations policy (LMRP). There are many specific objectives of such a policy, all of which go to make up the policy at the national level. The following are some of the objectives, the emphasis varying from country to country depending on the priorities and stage of development of each of them at any given point of time:

i. Employment and job security and increased employment opportunities. ii. Raising living standards through improved terms and conditions of employment. iii. Productivity improvement which enables employers to be more competitive and to increase their financial capacity to raise the living standards of the employees. iv. Minimizing conflict, achieving harmonious relations, resolving conflicts through peaceful means and establishing stable social relationships. In Western industrialized societies "harmony" and "harmonious relations" are not explicitly referred to either as an objective or as a means, though basically it represents an important objective in such societies. However, this concept is explicitly referred to in many Asian societies. Development has an economic and social dimension on the one hand and a cultural dimension on the other. The economic and social aspects involve guiding or influencing economic and social change in a desirable direction. This means not only economic development measured in terms of growth rates and per capita incomes, but also equity in terms of income distribution and employment opportunities, life expectancy, population growth rates, literacy, poverty alleviation, etc. As aptly stated by John Kenneth Galbraith: "It is one of the least advertised and for the very affluent the least attractive, of economic truths that a reasonably equitable distribution of income throughout the society is highly functional." In a broad sense, therefore, labour management relations policy formulation (LMRP) should aim at achieving social justice through a process of consensus by negotiation so as to avert adverse political, social and economic consequences. Labour relations reflect the power structure in society, and it emphasizes negotiation and reconciliation by peaceful means of the interests of government, workers and employers who are the main participants in the system. Consensus enables the policy formulated to be implemented with the minimum of conflict as it has the support of all three parties. This is in fact reflected in the ILO's principle of tripartism. In the final analysis, labour management relations policy seeks to achieve development through

establishing conditions which are fairer, more stable and more peaceful than they are at any given moment of time. Labour management relations policy also seeks to achieve an acceptable balance between labour and management, necessary for a negotiated development strategy and the establishment or preservation of a society which is essentially pluralist. Thus, it is evident that good industrial relations are the basis of higher production with minimum cost and higher profits. It also results in increased efficiency of workers. New and new projects may be introduced for the welfare of the workers and to promote the morale of the people at work. An economy organized for planned production and distribution, aiming at the realization of social justice and welfare of the massage can function effectively only in an atmosphere of industrial peace. If the twin objectives of rapid national development and increased social justice are to be achieved, there must be harmonious relationship between management and labor.

9. Causes of poor industrial relation:

Workers are the main elements of industry. If workers become dissatisfied with employers then there create industrial disputes. Industrial relation suffers because of following reasons 1. Irresponsible trade union: Lack of proper trade union creates bad relation between employers and workers. 2. Inefficient management: If the management of industry is inefficient then there creates industrial disputes. 3. Lack of welfare activities and incentives measures: Lack of welfare activities and incentives measures tends to create industrial dispute. 4. Inter union rivalry: Multiplicity of trade union causes rivalry and disputes within industries. 5. Lack of proper work environment: Improper work environment demotivates workers and creates industrial disputes. 6. Exploited workers by employer: Most of the time employers try to exploit workers by paying them less than what they deserve. 7. Excessive work load: Excessive work load creates dissatisfaction among the workers. 8. Violation of labor law: If employers disregard towards labor laws cause severe problems in industrial relations 9. Unfavorable political and economic environment: Political and economic environment also play a negative impact on the industrial relation. These are the causes of poor industrial relations.

10.

Industrial Relation Model

There are mainly two types of Industrial Model. These are:-

1. Dunlops Model: In 1950, John Dunlop expressed a model called Dunlops model. Dunlops model identifies three key factors to be considered in conducting an analysis of the management-labor relationship: Environmental or external economic, technological, political, legal & social forces Characteristics and interaction of the key actors in the employment relationship Rules that are derived from these interactions that govern the employment relationship a) Dunlop identifies three actors: Workers: Sectional Bargaining Class Bargaining Agent of the State Partners in Social Control Enemy of the System Management: The exploitative authoritarian system Benevolent authoritarian system Consultative style Participative style Government: Laissez-fair philosophy Paternalism Tribalism Voluntarism Interventionism b) Ideology: Democratic Capitalism Democratic socialism State capitalism Social capitalism Mixed Economy c) Body of Rules: Trade Union Policy

Rules, Regulation, Legislation of government Economical condition of country

Criticism of Dunlopian Model: 1) 2) 3) 4) 5) 6) Behavioral Aspect Alienation Roles to Play Systematic problem Inapplicable Reciprocity

2. Kal Marxist Model: Main concept is industrial relations is a by product of a theory of capitalist society and social change. 1. Weakness and contradiction inherent in the capitalist system would result in revolution and ascendancy of socialism over capitalist. 2. Wages would be minimized to a subsistence level. 3. Capitalist and workers would compete. Feature of this model Imbalance of power within both the society and at the place of work. The concentration of this model is on the fundamental issue of why disputes are generates. The dehumanization nature of work due to the division of work.

Criticisms of the model In every country government plays the role as guardian for both stronger and weaker. Max Weber says that alienation is the result of industrialization and bureaucracy rather than the division. It is not true that all problems of alienation will be solved with the overthrow of capitalism system. High rate of wages increase the workers intention of work which is escaped in this model.

Reference
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