1-2.

Nature of
Industrial Relations:
Traditional & Changing
Perspectives
Debi S. Saini
Professor & ChairpersonHRM Area
Management Development Institute, Gurgaon

The issues discussed in this presentation are:

1. Conflict dynamics & different approaches of IR Mgt.
2. Working of an IR system: Dunlops

System Model

3. IR & related terms: IRLRER

4. Has Globalizations changed IR scene? How?
5. IR: ActorsIssuesInstitutionsProcedures
6. Traditional issues in IR
7. Frames of reference of IR: UnitaristPluralistMarxist
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Two Main Components of this Course:

Management of Personnel/People
(Systems, effectiveness, engagement, productivity)

Management of Industrial Relations

(Conflict, interests, rights, peace)

Lately, the two perspectives are getting

merged into an integrated HRM framework
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The Roots of
Industrial Conflict

Peace Requires: Balancing of Business Needs & People Needs

Business Needs

People Needs

High Earnings

Reward & gain sharing

Speed to Marketplace

Reasonable job security

Market Share
Product Quality
Customer Service
Customer Responsiveness
Low Costs
Efficiency/Productivity
Flexibility
Benchmarking
Responsive/Innovative
Future Oriented
Customer Satisfaction

People Needs
are Managed
differently in
Different Orgs.
IBM
Tata Steel
Ballarpur Industries
Hero MotoCorp
NDPL

Work-life balance
Flexibility
Empowerment
Welfare facilities
Social security
Learning Atmosphere
Respect for their Diversity
Growth opportunities
Recognition/ belonging
Participation/ Involvement
Management style

First know: Why Labour-Mgt. Conflict Occurs

Conflict is at the centre in organizational working

Why: Difference in interests, values, goals, attitudes

Industrial Conflict: a Complex & difficult issue

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Mgts. differently handle conflict:

Positive or Negative
Meaning of Work

What does work mean to People: Two extremes

Positive (win-win)

Negative (loselose)

Work is interesting

Sheer Drudgery/unpleasant

Reflects good quality of life

A way to

Gives us meaning of life

Just a means

kill time
to living

(WM feels: meditating/ bldg. a temple)

Can we think of
some basic approaches to
managing
employer-employee relations?
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Graziano: CEO killed

Maruti-Suzuki HR Chief burnt
HMSI Violence 2005
Tata Steel (35 K workers; no strike since 1958)
Classic Stripes: 3-6 best employer co.

How do we go about
understanding these issues?
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Classic Stripes (Mfg.): Come Out of Control Mindset

http://classicstripes.com/manufacturing_plants.html

500 WM including contract WMMost are blue-collared

4 WM 25 yrs. ago (in 10 x 10): Built 44 acre campus in Vasai
3 plants now: Mumbai; Vasai; Hardwar No Union

Kishore Musale Charitable Trust:

Main

motto: dignity at work.

Believes

in: valuing every individual, giving people their due,

freedom, respect, opportunity backed by lots of training.

Classic Stripes: Some HR Initiatives contd

Won Safety & Environt. 2003 award (SIGA given to 5 cos. worldwide)
Kaizen Training: 2 hrs per month

A relationship committee: Meets twice in a month

Has a library with trade journals, magazines & books

DM: 1/3 Women workers; also physically-challenged

Shares with employees a %age of its annual profits

Tata Steel Ltd.: HRM Model

Sr. Mgt. work at less than 60% of market worth; dont leave
Meets need for dignity,

stability, security: No strike since 1958

Participation, paternalism

(kin employment),

family focus

Ethical working
CSR creates a sense of pride

in employees

Comparing two US Cos.: South West & American Airlines

On same day (May 2010): AG meeting of airlines: SWA & AA

--AA meeting was picketed by AA Pilots Assn.

--Southwest celebrated 37 yrs. of service by founder, Herb Kellehar

Paper carried picketing

news; same paper carried an ad:

Kellehar knew, knows & will always know that

the secret to bus. success, small or large, is to put people first.

Kellehar sees employees as my principal customer.

Understanding
Employee Relations
& related Terms?

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2 Sets of Concerns for Employer & Employee

Employees as Individual
(Market operates here)

Employees as collective
(Class solidarity operates here i.e. Unions)

Org. needs: Employee retention & engagement, indl. peace

in both situations

Employee Relations, IR & LR

ER & IR both deal with all

aspects of employment relations

i.e. unionized & non-unionized [Today, Global focus: cooperationdecent

work]

But IRs key focus is unionized workers, &

ERs key focus is

ER: is ongoing

individualized workers

relations-building process with employees

through HR

practices & orgl. culture-bldg. efforts

for securing employee commitment/engagement

LR (labour Relations)

focuses exclusively on

employment relations in a unionized environment

(i.e. Unions & mgt.)

What does good ER Involve: Research?

1.

Dialogue & communication for trust & culture

2.

Partnership through involvement & feeling valued

3.

Proactive, not reactive efforts (Hero MotoCorp)

4.

Employee rights, fairness, just grievance mgt.

5. Employee discipline (Tata Steel; Classic Stripes)

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Employee Relations

Employee

Partnership

Communication

& Employee
Involvement

for Trust bldg.

Proactive
Efforts

Employee
Rights/fairness/
Grievance mgt.

Employee

Discipline

Fig.: Key Dimensions of Employee Relations

Manifestations of Poor Employee Relations

Unionization
Poor Performance
Employee Absenteeism
Employee dissatisfaction & Turnover
Litigation

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What do you
think is meant by
Industrial Relations?

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Industrial Relations: Simply Speaking:

Industrial relations (IR)

is the process of

rule making

that mediates between divergent interests

of capital and labour

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How can we view Industrial Relations

J. H. Richardson (Leeds University)

Industrial relations is
the art of living together
for purposes of production

Important
Some
regulation
is needed
in
all relations;
State
determines
the regulatory
framework
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How can we view Industrial Relations contd

Hugh Clegg (Clegg & Flanders pioneers of Classical Oxford School of IR)
Industrial relations is a study of
workers and their unions,
employers and their associations,
and State & its institutions/agencies

concerned with regulation of employment.

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Imp.: Different powers, roles, interests, duties of Actors

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Is Globalization Syndrome
linked to
Industrial Relations: How?

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What Does Globalization mean?

Global movement of capital
Global movement of businesses
Driven by principles of free market economy
& less obstructed people

movement

Across borders within companies

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Globalization & Other Causes of Changes in Business

1. GLOBALIZATION Syndrome
2. Information Revolution/Internet
3. New Technology
4. Emergence of Service Industry
5. HR Philosophy:

Psychological Contract &

Focus on: Employee Relations
M. Thatcher has been named UKs most
effective prime minister of the 20th century
by BBC History Magazine 30 Aug, 2006, TOI

Globalization has led to:

Internl integration of economies

PSU reforms & privatization
Collaborations & jt. ventures
Dominance of market
rationality
Decline of welfare state
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What is meant by:

IR Actors
IR Institutions
IR Procedures
IR Issues
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Focus of the Discipline of IR

A. Characters (or actors) in IR
Union leaders
HR Managers
Conciliation Officers/ Mediators
Arbitrators/judges
Labour Courts/
Labour Lawyers/Management Consultants
Others
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Focus of the Discipline of IR

B. IR Institutions
(permanent form of custom or law)

Unions
Employer associations
State/Labour Bureaucracy
ILCILO
Tribunal/Labour Court
Labour law
Higher judiciary
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Focus of the Discipline of IR cond

C. IR procedures (aim at: Procedural justice)
Bargaining/Negotiation
Conciliation
Arbitration
Adjudication
Reference
Procedure for going on strikes/ lockouts
Inquiries/Disciplinary procedure
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IR is studied by many academic disciplines

Economics
History
Law
Sociology

Political Science

Management
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What do you think

are some of the key issues
in IR?

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Traditional Problems/Issues in IR
1. Job satisfaction:

Job designWorking conditionssupervision

2. Negotiating Wage/salary/VRS/bonus/benefits
3. Alienation & discontent
4. Grievance management
5. Trade union, strikes, lockouts
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Traditional Problems in IR
6. Industrial dispute settlement
7. Indiscipline, absenteeism & mobility
8. Labour Laws
9. Labour welfare/QWL
10. Communication
11. Joint consultation, participation, involvement
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Three Basic Approaches

to looking at IR:
Pluralism, Unitarism, Radicalism

What are these?

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Frames of Reference
in Industrial Relations
& New Issues in IR

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Frames of Reference: Unitarism & Pluralism

Unitarism
1. Assumptions about Interests
Common interest/objectives

2. Assumptions about conflict

Inevitable, destructive: Be avoided
Caused by: Poor mgt/communication

3. Assumptions about trade unions

Unwanted intrusion

Pluralism
1. Assumptions about Interests
Mgrs. & employees have: different objectives

2. Assumptions about conflict

InevitableBe negotiated
Caused by difference of opinions/values

3. Assumptions about trade unions

Not the cause of conflict: Conflict inherent
Legitimate part of workplace relations

4. Assumptions about collective bargaining 4. Assumptions about Collective bargaining

CB generates workplace conflict

rather than resolve it

CB ensures fairer outcomes

Balances employee & mgt. power
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III. Marxist (Radical/ Critical) Perspective

Market economies are social arrangements created by historical forces

Private property is a social construct, not created by nature

Owners of capital accumulate capital; take all or most of it
Power of ownership &

control cause WMs impoverishment

Classes struggle: for control of industry, economy & state

Differential access to education, media, government jobs

III. Marxist (Radical) Perspective contd

View of society based on post-capitalism is wrong
Capitalist profit is key influence on co. policy

Control enforced downwards by capitals agents

Surplus

value generation by capitalist

Employees socialized into accepting status quo

Class conflict is the source of societal change

Without conflict society will stagnate

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Capitalism will collapse due to its inherent contradictions

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III. Marxist Perspective

contd

CB: limited accommodation of fundamental divisions

Unions/IR instts. deal with marginal issues

Law

not independent referee

Industrial Justice: only if revolution

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How do we Conceptualize
the Different Workings of
IR System?

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Eight Broad Typologies of IR Models

I. Traditional II. Paternalistic
Pluralism
Pluralism
(German Pharma)

III. Ambivalent
Pluralism
(Most unionized cos.
Maruti-Suzuki Ltd.)

(Tata Steel/NDPL)

IV. Repressive
Pluralism
(Simran Foods Ltd.)

V. Coercive
Unitarism

VI. Ambivalent VII. Paternalistic VIII.

Unitarism
IBM type Unitarism
Unitarism

(Glaziano before the

violence; SMEs)

(Or manoeuvred
unitarism through law,
shenanigans,
paternalism, collusion
with bureaucracy)

(New Unitarism)
(Most Indian SMEs,
Flaxo Exports)

(Hero-Honda, Air Tel)

Debi Saini 2010

What can be Learnt from these two Sessions:

Conflict in industry is inevitable, given different interests
Variegated models of IR are practiced by different organizations

IR is a system

of rule-making

about gains of & power in industry

IR concept is changing into employee relations in new era

IR focuses on actors,

institutions, procedures

Unitarism & Pluralism are 2 broad approaches to IR

IR can be divided into 8 broad typologies
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