IRLL Unit -1 (MBA -Final)

8/11/2019 IRLL Unit -1 (MBA -Final)

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IRLL (MBA) Unit -1 Ms. Bhawna

Introduction

Industrial relations constitute one of the most delicate and complex problems of the modern industrial

society. This phenomenon of a new complex industrial set-up is directly attributable to the emergence

of Industrial Revolution. The pre-industrial revolution period was characterized by a simple process of

manufacture, small scale investment, local markets and small number of persons employed. All this led

to close proximity between the manager and the managed. Due to personal and direct relationship

between the employer and the employee it was easier to secure cooperation of the latter. Any

grievance or misunderstanding on the part of either party could be promptly removed. Also, there was

no interference by the State in the economic activities of the people. Under such a set-up industrial

relations were simple, direct and personal. This situation underwent a marked change with the advent

of industrial revolution size of the business increased needing investment of enormous financial and

human resources, there emerged a new class of professional managers causing divorce between

ownership and management, and relations between the employer and the employer became entranged

and gradually antagonistic. This new set-up rendered the old philosophy of industrial relation irrelevant

and gave rise to complex, indirect, and impersonal industrial relations.

Industry today is neither viewed as a venture of employers alone nor profit if considered as its sole

objective. It is considered to be a venture based on purposeful cooperation between management and

labour in the process of production and maximum social good is regarded as its ultimate end and both

management and employees contribute in their own way towards its success. Similarly, labour today is

no more an unorganized mass of ignorant works ready to obey without resentment or protest the

arbitrary and discretionary dictates of management. The management has to deal with employees today

to as individuals but also as members of organized social groups who are very much conscious about

their rights and have substantial bargaining strength. Hence, the objective of evolving and maintaining

sound industrial relations is not only to find our ways and means to solve conflicts to resolve differences

but also to secure the cooperation among the employees in the conduct of industry.

But maintaining smooth industrial relation is not an easy task. Almost all the industrialized countries of

the world face the problem of establishing and maintaining good management worker relationships in

their industries. Each country has sought to find our solution, depending upon its economic, social and

political environment. However, industrial conflict still arises and therefore establishment and

maintenance of satisfactory industrial relations forms an important plank in the personnel policies of

modern organization.


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In the broad sense, industrial relations cover all such relationships that a business enterprise

maintains with various sections of the society such as workers, state, customers and public who come

into its contact.

In the narrow sense, it refers to all types of relationships between employer and employees, trade

union and management, works and union and between workers and workers. It also includes all sorts

of relationships at both formal and informal levels in the organization.

The relationship between the employer and employees or trade union is known as Industrial relations.

A good industrial relation is necessary for better environment in the organization and for better

production and performance.

The term Industrial Relations comprises of two terms: Industry and Relations. Industry refers to

any productive activity in which an individual (or a group of individuals) is (are) engaged. By

relations we mean the relationships that exist within the industry between the employer and his

employees.

There are six main parties who are actively associated with any industrial relation system. They are the

employees, employers, employers association, government, the trade union, and courts and

tribunals.

Industrial relation is used to refer all the relationship between the parties in an organization or in an

industry i.e. relationship between employers and employees, management and employees, trade

union and management, employees and unions, employees and employees. Industrial relation is also

known as labour relation or employee relations.

The concept of labour management relation is different from the concept of industrial relations. While

the former refers to absence of government as a party in negotiation, the later pre supposes the

existence of government representation in any negotiation.

The following Tead and Metcalfe observed that Industrial relations are the composite result of the

attitudes and approaches of employers and employees towards each other with regard to planning,

supervision, direction and coordination of the activities of an organization with a minimum of human


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efforts and frictions with an animating spirit of cooperation and with proper regard for the genuine well-

being of all members of the organization

J.T. Dunlop defines industrial relations as the complex interrelations among managers, workers and

agencies of the governments. According to Dale Yoder industrial relations is the process of

management dealing with one or more unions with a view to negotiate and subsequently administer

collective bargaining agreement or labour contract.

Features of Industrial Relations:

1.

Industrial relations are outcomes of employment relationships in an industrial enterprise. These

relations cannot exist without the two parties namely employers and employees.

2.

Industrial relations system creates rules and regulations to maintain harmonious relations.

3.

The government intervenes to shape the industrial relations through laws, rules, agreements,

terms, charters etc.

4.

Several parties are involved in the Industrial relations system. The main parties are employers

and their associations, employees and their unions and the government. These three parties

interact within economic and social environment to shape the Industrial relations structure.

5.

Industrial relations are a dynamic and developing concept, not a static one. They undergo

changes with changing structure and scenario of the industry as and when change occurs.

6.

Industrial relations include both individual relations and collective relationships.

Distinction between human relations and industrial relations

The term human relations lays stress upon the processes of inter-personal relationships among

individuals as well as the behavior of individuals as members of groups.

The term industrial relations is widely used in organizations and it refers to the relations between the

employers and workers in an organization, at any specified time.

Thus, while problem of human relations are personal in character and are related to the behavior of

individuals where moral and social element predominate, the term industrial relations is

comprehensive covering human relations and the relations between the employers and workers in an


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Parties to IR

The major parties to IR are the employees, employees representatives, employer, associations of

employers, government, and courts and tribunals.

Role of state in industrial relations

In recent years the State has played an important role in regulating industrial relations but the extent of

its involvement in the process is determined by the level of social and economic development while the

mode of intervention gets patterned in conformity with the political system obtaining in the country and

the social and cultural traditions of its people. The degree of State intervention is also determined by

the stage of economic develop. For example, in a developing economy like ours, work-stoppages to

settle claims have more serious consequences than in a developed economy and similarly, a free market

economy may leave the parties free to settle their relations through strikes and lockouts but in other

systems varying degrees of State participation is required for building up sound industrial relations.

In India, the role played by the State is an important feature in the field of industrial relations and State

intervention in this area has assumed a more direct form. The State has enacted procedural as well as

substantive laws to regulate industrial relations in the country.

Role of management in industrial relations

The management has a significant role to play in maintaining smooth industrial relations. For a positive

improvement in their relations with employees and maintaining sound human relations in the

organization, the management must treat employees with dignity and respect. Employees should be

given say in the affairs of the organization generally and wherever possible, in the decision-making

process as well. A participative and permissive altitude on the part of management tends to give an

employee a feeling that he is an important member of the organizationa feeling that encourages a

spirit of cooperativeness and dedication to work.

Management must make a genuine efforts to provide congenial work environment.

They must make the employees feel that they are genuinely interested in their personal

development. To this end, adequate opportunities for appropriate programmes of 18training

and development should be provided.


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Managements must delegate authority to their employees commensurate with responsibility.

They must evolve well conceived and scientific wage and salary plan so that the employees may

receive just compensation for their efforts. They must devise, develop and implement a proper

incentive plan for personnel at all levels in the organization.

There must be a well-planned communication system in the organization to pass on information

and to get feed back from the employees.

Managements must pay personal attention to the problems of their employees irrespective of

the fact whether they arise out of job environment or they are of personal nature.

They must evolve, establish and utilize appropriate machineries for speedy redressal of

employees grievances.

Manageemnts must provide an enlightened leadership to the people in the organization.

An environment of mutual respect, confidence, goodwill and understanding on the part of both

management and employees in the exercise of their rights and performance of their duties should

prevail for maintaining good industrial relations

Role of trade unions in maintaining industrial relations

The trade unions have a crucial role to play in maintaining smooth industrial relations. It is true that the

unions have to protect and safeguard the interests of the workers through collective bargaining. But at

the same time they have equal responsibility to see that the organization do not suffer on account of

their direct actions such as strikes, even for trivial reasons. They must be able to understand and

appreciate the problems of managements and must adopt a policy of give and take while bargaining

with the managements. Trade unions must understand that both management and workers depend on

each other and any sort of problem on either side will do harm to both sides. Besides public are also

affected, particularly when the institutions involved are public utility organizations.


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The pluralistic approach totally departs from the unitary approach. The pluralistic approach perceives:

1. Organisations as coalition of competing interest, where the management role is to mediate amongst

the different interest groups.

2. Trade unions as legitimate representatives of employee interests.

3. Stability in IR as the product of concessions and compromises between management and unions.

Legitimacy of the management authority is not automatically accepted. Conflict between the

management and workers is understood as inevitable and in fact, is viewed as conductive for innovation

and growth. Employees join unions to protect their interest and influence decision making by the

management. Unions thus balance the power between the management and employees. In the

pluralistic approach, therefore, a strong union is not only desirable but necessary. Similarly, society's

interests are protected by state intervention through legislation and industrial tribunals which provide

orderly process for regulation and resolutions of conflict.

The theories on pluralism were evolved in the mid-sixties and early seventies when England witnessed a

resurgence of industrial conflicts. However, the recent theories of pluralism emanate from British

scholars, and in particular from Flanders and Fox. According to pluralists, industrial conflict is inevitable

and it needs to contain within the social mechanism of collective bargaining, conciliation and arbitration.

c. Marxist Approach:According to Marxist approach, the conflict in an organisation arises not because

of the employees and the employer. The conflict takes place due to the division in the society between

the capital (i.e. with those who own resources) and labor (i.e. who has only labour to offer). Conflict is

therefore seen as inevitable and trade unions are a natural response of workers to their exploitation by

capital.

Adversarial relations in the workplace are simply one aspect of class conflict. The Marxist approach

focuses on the type of society in which an organisation functions. Conflict arises not just because of

competing interest within the organisation, but because of the division within society between those

who own or manage the means of production and those who have only their labour to offer. Industrial

conflict is thus seen as being synonymous with political and social unrest.

Trade unions are seen both as labour reaction to exploitation by capital, as well as a weapon to bring

about a revolutionary social change. Concern with wage related disputes are secondary. Trade unions

focus on improving the position of workers within the capitalist system and not to overthrow. For the


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10.

Inadequate welfare facilities;

11.

Dispute on sharing the gains of productivity;

12.

Unfair labour practices, like victimization and undue dismissal;

13.

Retrenchment, dismissals and lock-outs on the part of management and strikes on the part of

the workers;

14.

Inter-union rivalries; and

15.

General economic and political environment, such as rising prices, strikes by others, and general

indiscipline having their effect on the employees attitudes.

The foregoing discussion of the causes of industrial disputes in India makes it clear that the problem of

labour unrest is quite complex. The worker is a human being and as a being he feels discontented and

frustrated if his day to day needs are not met properly. If the workers are given adequate wages, there is

improvement of working conditions. If brokers and political agents are eliminated the chances of conflict

and tensions among workers and employers will be greatly minimised.

Industrial relations and productivity

Industrial relations and productivity, Industrial relations are that part of management which is

concerned with the man power of the enterprise whether ordinary, skilled workers or managerBetrel

smith. Good industrial relations provides congenial atmosphere where workers can think of their

job management thinks of their welfare and goal of the company the workers also are concentrating to

achieve the goal of company.

Welfare of the company where both manager and worker works becomes foremost there by all derive

theirbenefit.Motivated workers moral become high the team spirit participative management profitshar

ing scheme etc. leaves the worker satisfied. A Satisfied worker is a most productive worker. Thus good

1.R achieves better productivity increasing production is one thing, but increasing productivity is

another thing. The achievement of greater productivity can be had by good industrial relations only.

1. Productivity can be of manpower, finance, marketing and workers productivity manpower

productivity can be had by efficient development of work force, right man, the right place at the right

time, for right type of job.


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2. A deployment which equates full load to a perfect worker his optimum capacity is brought out. He

can bring out his optimum only when he is fully satisfied his psychology is in good condition.

Improvement of industrial psychology is done by good relations only.

3. Finance productivity is deployment of finance for just and best output. The receipt of finance at low

interest and payout should fetch high interest payment to workers also.

If payment to workers are just and incentive oriented, stimulating, competitive, workers interest is

aroused results in higher production and more return on the money invested as finance, Hence this

besides creating mutual confidence develops a team spirit and better relations.

4. Marketing productivity, for the efforts taken expenditure incurred by marketing department if sales

are high it may be called a productive marketing philosophy more marketing can be achieved if cost of

production is less. Cost of production will be low if workers are a satisfied lot, if wastage is avoided, ifbest quality is produced, if disciplined production takes place with in stipulated time at the stipulated

cost and quality. This is easily achieved if morale of work force if high is they are motivated.

5. Workers productivity with increased sense of responsibility which comes of best team and

cooperative spirit, we will produce, shows togetherness, best relation between employer and employee.

Besides satisfied employment results in less absenteeism and reduced turnover absence of

both automatically increase production and productivity.

Productivity implies development of an attitude of mind and a constant urge to find better, cheaper,

quicker easier and safe ways of doing a job manufacturing an article and providing a service V.K.R.

Menon. Normally productivity is ratio of output / Input as per international labor organization. The

ratio between output and factors of input (men, material, money, talent etc.) is generally known as

productivity of the factor concerned so far we explained this greatest output with smallest input

productivity is to be calculated from the quantity of produce vis-q-vis the resources utilized

(make best out of the things available) for that production. Productivity is necessary for all type of

enterprises government quasi government or private sector etc. Not mere production will elevate us we

are to compete with the world, hence effective production improvement and productivity alone can

raise us national productivity level should be hoisted up, economic growth will be stable only with rising


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productivity and industrial goal is centred around good industrial relations when productivity goes up

economic growth shoots up, the industrial climate remains cordial and congenial to production

development activities economic use of raw materials avoiding wastages giving optimum thrust by

industrial workers reduces the cost of production the benefit of which goes to customers and society at

large with more sales and profit automatically the workers wages

and benefits becomes better developing countries like us should give more thrust on productivity and

attempts are made to link bonus with productivity a golden rule if itcomes to adoption legally. In a way

increase in productivity expenditure on sees that Industrial Relations is stable input is reduced capital

investment also may be reduced hence general economy improves with heightened productivity we see.

1. Industrial workers touch their peak of efficiency

2. Wasteful expenditure, wastages are systematically reduced.

3. Total cost is reduced

4. Automatically the quality improves by fine tuning by dedicated, motivated workers

.5. Workers emoluments are increasing and get share in the increasing profits.

6. Industrial environment becomes healthy for expansion diversification and more

employment industrial relations are influenced by

The competitive market and dynamics of change necessities

required. globally has pushed us to resort to automation

introduction of new and modern technology, mechanisation, computarisation etc. all those are

aimed to improve not only production, but productivity also which can be achieved only by

improved relation with worker

Up gradation of employees by

proper training developmentprogrammes etc. only will bring them at par to match with

technology change etc as envisaged earlier simultaneously, they are to be motivated there

should be morale boosting which will improve the relations and go to improve productivity.

A capable H.R.M management should be there to cope up with the aspirations of new set of

workers under new technology the managers should be talented to deal and convert the

workers in to a useful team to achieve common goal.


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I)

From its side, the government rules, regulations

sops, etc shouldbe compatible with the industrial needs. They should aid theimprovement in

productivity, such as pressure for a bonus which is productivity linked etc putting more

responsibility on workers in industrial production. This will improve employers relations

which is also a part of industrial relations. Following actions of management may

affect labour relations.

1)

un balanced management of men material by supervising managers hereworkers may be displeased

and lower their efficiency

2)

Untrained low caliber management, cannot

cope with modernizationresulting in fall out and cannot contribute to improve productivity orindustr

ial relations.

3)

Failure to make scientific management to evolve systems and boost productivity.4)

In competency at all three levels of management to bolster production or productivity. The

productivity can be increased along with better industrial relations and allied activities like

a)

Adoption of supply chain management to get best raw materials where maximum

utilization becomes possible

b)

Giving better environment to workers and improved working conditions environment

should remove boredom or monotony and create zeal and dynamism.

c)

updated machines with full scale mechanization will reduce cost of production

d)

The work force should be correctly selected properly trained and fully loaded. This

should be followed by training for updating.

e)

Proper rewards, either monetary or non-monetary should be

arranged, incentive plans mutually agreeable should be framed and adhered to for

moral boosting.

f)

Grievance Procedures should be implemented to nip the grievance in the loud stage

to avoid conflict, dispute etc.

g)

Quality circles should be formed along with workers to take care of quality products

wastage avoidance etc, which will improve productivity, but above two quality

control and wastage control, can be there if relations are good thus interlinking has

become a perpetual need

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IRLL Unit -1 (MBA -Final)