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1-1 Excel BooksINDUSTRIAL RELATIONS Emerging Paradigms (2nd Edition) B D Singh

Copyright © 2008, B D Singh

Background to Industrial Relations

1Chapter

Background to

Industrial Relations




Cont….

Understanding/Appreciating Industrial Relations/Employee

Relations

Introduction

"Work dominates the lives of most men and women and management of employees,

both individually and collectively, and remains a central feature of organisational life"-

observed Blyton and Turnkoll (1994). The truth behind these words is fast becoming

reality because of the rapid-changing business skylines and industrial landscapes

which force adjustment and readjustment of parameters of Employees Relations,

more frequently.

The concept of Employee-Relations requires proper appreciation. Generally, the

term used is "Industrial Relations" and means relationship between management

and workers in the Industry.




Cont….

Industrial Relations: Definitions, Concepts and Theories

The term ‘industrial relations’ refers to the complex of human relationships which

emerges in work situations.

One of the most comprehensive definitions which puts industrial relations in a

proper perspective of human relationships is by J. Henry Richardson. He says:

"Industrial relations are the art of living together for purposes of production."

The definition by Allan Flanders focuses attention on the institutionalisation of the

relationship in which forums are created to regulate the relations. 'The subject of

industrial relations deals with certain regulated and institutionalised relationships in

the industry.' Similar emphasis on regulation and institution is noticed in the

definition by H.A. Clegg. He observes: "The field of industrial relations includes the

study of workers and their trade unions, management, employers' associations and

the state institutions concerned with the regulation of employment."




Cont….

The present is only a part of a continuum linking the past with the future.

Consequently, current industrial relations owe much to their past and the

participant's goal and expectations for the future. At the micro level, the time-context

may be evident in two ways:-

a) Today's problem stems from yesterday's decision and its solution will, as the

environments change, become a problem in the future, and

b) The attitudes, expectations and relationships manifest, led by the participants,

are at least in part, the product of their past individual and collective

experiences.

"A distinctive approach of employment management is the need of the hour which

seeks to achieve competitive advantage through strategic development of a highly

committed and capable workforce, using an integrated array of cultural, structural

and personnel techniques." - John Storey, (1995).




Difference Between Traditional Industrial Relations and Emerging Employee Relations (HRM)

S.NO. DIMENSION TIR EER/HRM

1. Nature of Relations Pluralist Unitarist

2. Contract Emphasis on terms of contract defined rules, contract

Beyond contract, innovative ways

3. Conflict Institutionalised De-emphasised, is pathological

4. Union legitimacy Unions are acceptable Not considered desirable Nurturing

5. Managerial task in relation to labour

Monitoring Nurturing

6. Key relation Labour-management Customer

7. Pay Standardised, based on job evaluation

Performance related

8. Basis of labour -management relations

Collective bargaining contract Individual contract

9. Job design Division of labour Team work

10. Conflict handling Reach temporary truce, reactive Managing climate and culture-proactive

11. Key people PM/IR Specialists Line People

12. Focus of attention Personnel procedures Various culture and structure -related personnel strategies.




Union-free Employees Relation

Some of the factors which have a bearing on this issue in the Indian context

are:

a) The aggressive approaches of Indian employers in the service sector to trade

unionism;

b) The growth of BPO organizations, a majority of which are of American origin

and which are manifestly anti-union;

c) The declining membership of trade unions, as, for instance, from 92 lakh

members in 1989 to some 30 lakh members in 1997;

d) The decline in the number of 'skill' workers and their replacement by

'knowledge‘ workers; and

e) A perceptible change in the attitude of the Central and State Governments

towards trade unions and trade unionism.




Cont….

HRM Dimensions to Employee Relations

The key contrasting dimensions of traditional industrial relations and HRM have

been presented by Guest (1995) as follows:

Dimension Industrial Relations HRM

Psychological contract Compliance Commitment

Behavioural references Norms, custom and practice Values and mission

Relations Low trust, pluralist, collective High trust, unitarist, individual

Organisation design Formal roles, hierarchy, division of labour, managerial control

Flexible roles, flat structure, teamwork, autonomy, self-control




Cont….

HRM – IR - INTERFACE

The relationship between an

employee and employer is primary.

It may be referred to as employer-

employee relationship or as

employee relations. The

relationship between employees

and union(s) is secondary, for

except where closed-shop situation

exists, a person joins an

organisation as an employee first

and later s/he may become a

member of a union, if one exists

(Figure). This relationship may be

referred to as union-management

relations or industrial relations.

MANAGEMENT

WORKERS/EMPLOYEES

TRADE UNIONS




Cont….

There is a predominant view that modern human resource management policies focus on the employee as an individual, reduce the emphasis on collectivism, and seek to marginalize the role of trade union. This view gains strength when managements:

communicate directly with employees even though in the past they used to communicate with their employees through the workers' representatives or the trade union,

substitute and supplant rather than supplement representative forms of employee participation/involvement through direct forms of employee participation/involvement such as suggestion schemes, quality control circles, Kaizen, 5S, etc.,

make the maintenance of union-free environment a key result area for the Director Human Resources,

actively pursue anti-union or discriminatory policies against trade union members, and

refuse to deal with trade union.




Handling the link between HR & IR Develop sensitivity to human needs and human problems at work and beyond

work. Evolve a value system based on trust, transparency, fairness, and equity. Pay

attention and practice the core values professed by the organisation: walk the talk and talk the walk.

Institutionalize openness in subordinate- superior relationships. Allow the subordinates to speak hard facts and ventilate their grievances even though they appear to be, initially, unpalatable and fictitious assumptions respectively. Deal with employee grievances promptly and explain the logic and rationale of

decisions to convince the aggrieved. People cooperate when they understand. Tell the human resource management department and professionals to operate

through the line of departments/professionals. Consciously provide exposure and understanding to line managers on human

resource management aspects. Review HR/IR policies and practices from time to time. Rules and procedures

should unleash and facilitate, not block and hinder human potential in the organisation.




Cont….

Theories in Industrial Relations

Theories are body of propositions from which uniformities can be derived. A theory

should attempt to explain why certain events happen and how an why the rules of

the system change. Significant points for theory are: (a) it should deal with a set of

variables to identify input-output relationships; (b) it should establish inter-

relationships between individualism and collectivism; (c) it should testify hypothesis;

and (d) it should predict quality. The first initiative refers to theorization of Dunlop's

concept of industrial relations.




Cont….

Approaches to Industrial Relations

Input Conversion Output

CONFLICT INSTITUTIONS /PROCESSESREGULATION

(RULES)

SYSTEMS

Approaches to Industrial Relations




Cont….

Unitary Perspective

The unitary perspective is based on the assumptions that the organisation is, or if it is not, then it should be, an integrated group of people with a single authority/loyalty structure and a set of common values, interests and objectives shared by all members of the organisation.

The unitary perspective is found predominantly amongst managers – particularly line-management-and, therefore, is often regarded as a management ideology. Fox has argued that management clings to this view because:

i. It legitimises its authority-role by projecting the interests of management and employees as being the same and by emphasising management's role of 'governing' in the best interests of the organisation, as a whole;

ii. It reassures managers by confirming that conflict (dissatisfaction), where it exists, is largely the fault of the government rather than the management;

iii. It may be projected to the outside world as a means of persuading them that the management's decisions and actions are right and the best in the circumstances




Cont….

Pluralistic Perspective

Fox believes that this view of the organisation "probably represents the received

orthodoxy in many Western societies" and is often associated with a view of society

as being 'post-capitalist', i.e., there is a relatively widespread distribution of authority

and power within the society, a separation of ownership from management, a

separation of political and industrial conflict, and an acceptance and

institutionalisation of conflict in both spheres. This perspective is based on the

assumption that the organisation is composed of individuals who coalesce into a

variety of distinct sectional groups, each with its own interest, objectives and

leadership (either formal or informal). The organisation is perceived as being multi-

structured and competitive in terms of groupings, leadership, authority and loyalty

and this, Fox argues, gives rise to 'complex of tensions and competing claims which

have to be 'managed' in the interests of maintaining a viable collaborative structure'.




Radical Perspective

The radical perspective, which is also often referred to as the Marxist perspective,

concentrates on the nature of the society surrounding the organisation. The Marxist

general theory of society argues that:

1. Class (group) conflict is the source of societal change-without such conflict the

society would stagnate;

2. Class conflict arises primarily from the disparity in the distribution of, and

access to, economic power within the society -the principal disparity being

between those who own capital and those who supply their labour;

3. The nature of the society's social and political institutions is derived from this

economic disparity and reinforces the position of the dominant establishment

group, for example, through differential access to education, the media,

employment in government and other establishment bodies, etc.;

4. Social and political conflict in whatever form is merely an expression of the

underlying economic conflict within the society.




Cont….

Objectives of Industrial Relations

The Nair & Nair attribute to IR:

The development of healthy employer- employee relations

The maintenance of industrial peace and high productivity

The development and growth of industrial democracy

Nair & Nair cite Kirkaldy (1947), according to whom there are four objectives

for IR:

Improvement of economic conditions of workers.

State control on industries for regulating production and promoting harmonious

industrial relations.

Socialisation or rationalisation of industries by making State itself a major

employer.

Vesting of the proprietory interest of the workers in the industries in which they

are employed.




Industrial relations activities contribute significantly is that of overall industrial goals

such as productivity, labour peace and industrial democracy. Now, let us draw our

attention to some of these:

1. Employer to Individual Employee Relationships

2. Labour Management Relations

3. Industrial Peace and Productivity

4. Industrial Democracy

5. Liaison Functions




Forms of Industrial Relations

The interaction among the stakeholders in Industrial Relations is characterised by a

certain "balance of power". In highly regulated industrial relations environment, the

State is likely to be the dominant player. Similarly, in a market-driven economy,

employers tend to dominate as a result of the right to "hire and fire" in response to

market exigencies. In a socialist economy, trade unions tend to have a dominant

role. In that process, industrial relations degenerate into a dominance-submission

syndrome in which the dominant stakeholder tends to control. The management of

industrial relations within the framework of culture of dominance can take three

forms:

Managing by Contending

Managing by Conceding

Managing by Colluding




Cont….

Theories of Industrial Relations

Several systematic attempts have been made by Industrialists, Sociologists and

Industrial Relations theorists to develop the theoretical perspectives to analyse

industrial relations and trade unionism. It might be useful to examine some

significant approaches to the analysis of industrial relations in order to be able to

develop an appreciation of alternative industrial relations perspectives. Some of the

theories are below:-

Dunlop's System Theory (1958)

The Pluralist Theory of Flanders (1970)

The Structural Contradictions Theory of Hyman, 1971

Human Relations Theory

The Trusteeship Theory of Mahatma Gandhi




Cont….

Basic Postulates of IR

EQUITY and FAIRNESS

Equity refers to equal treatment to one and all under comparable circumstances.

Equity and fairness are used synonymously in industrial relations. The concept of

fairness is an objective when one applies a technical yardstick like market forces




Cont….

POWER AND AUTHORITY

Power has the ability to influence, impose, or control. It implies the use of force.

Power emanates from six major interrelated aspects:

the power to reward and/or punish

power to coerce others

position power

expert power due to one's access to information, knowledge, or experience

associational power through membership in trade unions, employers

organizations, chambers of commerce, networking/coalitions, etc.




Cont….

INDIVIDUALISM AND COLLECTIVISM

The fundamental basis of a democratic society is the freedom of the individual. In an

employment relationship, collectivist basis may negate or limit an individual's

freedom. The closed-shop system is a case in point. An individual should have the

right to join a trade union. Likewise, he or she should have the right not to join a

union. Compelling an employee to join a union due to the union shop clause or

closed-shop system in a collective agreement negates the right of freedom of the

individual employee.




Cont….

COLLABORATIVE MODEL FOR SOUND INDUSTRIAL RELATIONS

sharing information

consulting with each other on a regular basis

brainstorming together

organizing morale-boosting safaris to units where labour and management

have benefited through cooperation

creating opportunities for both management and labour to review, learn and put

positive learning into practice

bridging the gap between precept and practice

ensuring the support and sustenance of top management




Cont….

Obligations of the Management

For management, the following obligations are critical:

Clarify and reason with the other party;

Provide for say and share for all employees;

Focus on fairness;

Empower people;

Be transparent




Cont….

Obligations of the Union

Unions need to:

Accept the nexus between the financial success of an enterprise and the livelihood and well-being of the people in that organisation; improvement in wages and welfare can come only from improved business results;

Develop a long-term perspective;

Understand the link between macro and micro relationships in assessing the behaviour and performance of a firm;

Realize the importance of knowledge, skills, attitudes, and habits; lifelong employability can come through proactively addressing, jointly with the management, the issues relating to human obsolescence;

Cope with the imperatives of simultaneously pursuing two apparently conflicting goals: 'pattern maintenance' and 'adaptation to change';

Understand and assess the consequence of working together versus working at cross-purpose.




The Choices

Labour and management have six options;

Coerce: Only one side gets what it wants.

Conflict: While both sides spend more energy while only one side usually has

marginal gains.

Compete: One party wins and the other loses.

Compromise: No one gets what they want.

Co-opt/cooperate: It is usually possible for the initiator to walk away with a

larger slice of the cake.

Collaborate: Both parties evolve an option that provides for mutual gain.

Obviously, collaboration is the most preferred mode. Collaborative collective

bargaining can lead to win-win situations and mutual gains for both, the worker

and the management.

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