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8/13/2019 Sameer Amale, Mohsin Dalvi - Industrial Relations and Collective Bargaining, Ethics and Justice in HRM
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Concept of Labour Relations
“ Labour relations can refer broadly to any dealings between
management and workers about employment conditions.”
‘Labour Relations’ comprises of two terms:
• Labour
• Relations
“Labour ” refers to any individual (or a group of individuals) is
(are) engaged by “relations” that exist within the industry
between the employer and his workmen.”
The term ‘labour relations’ explains the relationship between
employees and management .
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Three partners in Industrial Relations
Trade Unions: -
Protect the interests of workers
Insist upon the development of cultural and educational
qualities of their members
Employers & their organizations:
Protect the interest of employers and create healthy industrial
atmosphere, so as to attain the objectives of the organization
Obtain full co-operation of workers for achieving this objective
Government:
Pass laws to protect the interest of both employers and
employees and establish better industrial relations
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Objectives of Labour Relations
Safeguard interests of labour and management by highest
level of mutual understanding for better production
Avoid industrial conflict and develop harmonious relations
Raise productivity to a higher level in an era of full
employment
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Establish and promote the growth of an industrial democracy
based on labour partnership in sharing profits and in
managerial decisions
Eliminate strikes, lockouts by providing reasonable wages,
improved living and working conditions
Improve economic conditions of workers in existing state of
industrial managements and political government
Objectives of Labour Relations (cont’d)
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Causes of Poor Labour Relations
Attitude of management and labour towards each other
Inadequate fixation of wages or improper wage structure
Indiscipline
Unhealthy working conditions at the workplace
Desire of workers for higher bonus, wages or daily allowances
Desire of employers to pay as little as possible to its workers
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Inadequate welfare facilities
Dispute on sharing the gains of productivity
Retrenchment, dismissal and lockouts by the management.
General economic and political environment such as rising
prices, strikes by others and general indiscipline having their
effect on the employees attitudes
Causes of Poor Labour Relations (cont’d)
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Effects of Bad Labour Relations
Effect on Workers:
Loss of wages
Physical injury or death on account of violence during labour
unrest
Economic losses
Bitterness in relations
Adverse affect on career
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Effects of Bad Labour Relations (cont’d)
Effect on Employers / Industrialists:
Less production
Less Profit
Bad effect on human relations
Damage to machines and equipments
Adverse effect on development of companies
Effect on Consumers:
Rise in prices
Bad effect on quality of goods
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Effect on Government:
Loss of revenue (less recovery of income tax. sales tax, etc.)
Lack of order in society, (iii) Blame by different parties
Other Effects:
Adverse affect on International Trade (Fall in exports and
rise in imports) Economic Development of the country
Uncertainty in economy
Effects of Bad Labour Relations (cont’d)
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Requisites for Successful Labour Relations
Top Management Support
Sound Personnel Policies
Adequate Practices should be developed by professionals
Detailed Supervisory Training
Follow-up of Results
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What is a Dispute?
Every human being has certain requirement like economic
needs, social needs, security requirements.
When these requirements do not get satisfied, then result isDISPUTE between worker & capitalist/employer.
“ Dispute is a type of human behavior which occurs when twoor more parties are in opposition or in battle. ”
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Disputes in Industries
Industrial dispute refers to any dispute or differences
between employers and employees or workmen, or between
workmen and workmen, and is connected with fulfillment or
non-fulfillment of the terms of employment or the condition
of work of any person.
Industrial disputes are of two types:
Individual disputes - related to reinstatement,compensation etc.
Collective disputes - related to wages, bonus, profit sharing,
hours of work etc.
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Causes of Industrial Disputes
Psychological causes:
Authoritarian leadership
Clash of personalities
Difficulty in adjusting in given conditions or with one another Demand for self respect & recognition by workers
Institutional causes:
Non recognition of trade/ labour union by the management
Unfair conditions and practices
Matter of collective bargaining
Pressure on workers to avoid participation in trade unions
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Economic causes:
Terms & condition of employment:
• Dispute on promotion, lay off, retrenchment
• More work hours• Working in night shift
Working conditions:
• Working condition such as too hot, too cold, dusty, noisy etc.
• Improper plant and work place layout
• Frequent product design changes etc.
Causes of Industrial Disputes (cont’d)
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Wages & other benefits:
• Inadequate wages
• Poor fringe benefits• No bonus or other incentive etc.
Denial of Legal & Other Right of Workers:
• Proceedings against labour law and regulation
• Violation of already made agreement
Causes of Industrial Disputes (cont’d)
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Strike
Boycott
Picketing
Gheraos
Lockout
Termination of service of striking employees
Results of Industrial Disputes
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Collective Bargaining
Conciliation
Mediation
Negotiation
Arbitration
Adjudication
Procedures for Settling Labour Disputes
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Collective bargaining is a technique used for compromising
the conflicting interests of employees and employer.
It is called collective because the employees as a group select
representatives to meet and consult with management.
What is Collective Bargaining?
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Characteristics of Collective Bargaining
Group action
Flexible and mobile
Two party process
Continuous process
Dynamic
Industrial democracy at work
Not a competitive process
An art
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Increase the economic strength of unions and management
Maintaining stable peace in the industry
Avoid interruptions in work like strikes, go-slow tactics etc.
Lay down fair rates of wages and norms of working conditions
Importance of Collective Bargaining
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Forms of Collective Bargaining
Single plant bargaining
Multiple plant bargaining
Multiple employee bargaining
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Forms of Collective Bargaining in India
Negotiated by officers
Negotiated by parties
Negotiated on voluntary basis
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Equal bargaining power of trade union and management
Free consultation and free enterprise
Representative union
Mutual confidence and good faith in each other
Proactive approach by management
Conditions for Success of Collective
Bargaining
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Increase economic strength of employees and management
Establish uniform conditions of employment
Secure prompt and fair redressal of grievances
Lay down fair rates of wages and norms for working conditions
Promote stability and prosperity of the company
Ensure old age pension benefits
Extend the democratic principles from political to the
industrial field
Functions of Collective Bargaining
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Collective Bargaining process
Collective bargaining process has the following stages:
1) Identification of problem
2) Preparing for negotiations
3) Negotiations of agreement
4) Contract administration
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Concept of Ethics
Ethics refers to the standards or principles of moral conduct
governing an individual or a group of individuals within the
framework of an organisational entity. Ethical behavior depends on the person’s frame of reference
It is not always clear when one’s decisions are ethical.
Usually unethical decisions are followed by shame and/or guilt
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“Ethics means taking decisions that represent what you stand
for, not just what is legal.”
An behavior has legal and ethical aspects
Lack of ethics erodes trust
Infosys and Tata Group vs Satyam and General Motors India
Globalisation dictates more open discussion on ethics
Ethical business practices influence brand value
Ethics And The Law
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Components in Ethical Decisions
Normative judgments
• Judging something as good or bad, right or wrong, better or
worse.
Moral standards (Morality)
• Society’s accepted standards for behaviors that have serious
consequences to its well-being.
• Behaviors that cannot be established or changed bydecisions of authoritative bodies.
• Behaviors that override self-interest.
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Factors Affecting Ethical Behaviour at Work
The person:
Conscience of the employee
Awareness of existence of moral issues in the situation
Influence of managers
Managers’ interpersonal dealings with employees
Urgency in meeting unfulfilled goals Walking the talk
Reprimanding wrongdoings
No taking credit or shifting blame
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Factors Affecting Ethical Behaviour at Work
The organisation:
Realignment of moral compass on joining new organisation
Moral engagement within the organisation
Openly talking about ethical conduct - “ethically toxic
organisations suffer from moral muteness”
Punishing unethical behaviour
Training on ethics codes
Whisleblower policies
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What Is Organizational Culture?
The characteristic values, traditions, and behaviors a
company’s employees share.
How is culture is revealed?
Ceremonial events
Written rules and spoken commands
Office layout
Organizational structure
Dress codes
Cultural symbols and behaviours
Figureheads
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Employees and Ethical Dilemmas
Questions employees must ask when faced with ethical dilemmas:
Is the action legal?
Is it right?
Who will be affected?
Does it fit the company’s values?
How will it feel afterwards?
How will it look in the newspaper? Will it reflect poorly on the company?
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Unethical Behaviours
Abusive or intimidating behaviour towards other employees
Lying to employees, customers or public
Placing personal agendas before company interests
Violating safety regulations
Misrepresenting working times Discrimination on basis of gender, caste, age
Sexual harassment
Stealing
Bribing, accepting kickbacks
Internet abuse Intentionally providing non-conforming goods or services
Alteration of documents
Falsification or manipulation in reports and records
Improper use of competitor’s inside information
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Ethics in HRM Activities (cont’d)
Ethics in Selection:
Prospective employees must perceive screening process as
being fair so that they may see the importance of ethical
behaviour in the organisation Using screening tests to select applicants having strong ethics
Applicants’ expectations from screening process:
• Formal procedures will give chance to show competence
• Respectful interpersonal treatment• Receiving useful feedback about own performance
Matching between job and employee
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Ethics in HRM Activities (cont’d)
Ethics in Training and Development:
Employees must be trained to
• Recognize ethical dilemmas
• Use ethical frameworks to resolve problems• Use HR functions (eg. Interviews) in ethical ways
Use various tools (videos, bulletins) to train employees on ethics
Successful training requires
• Comprehensively identifying employees’ training needs
• Qualified trainers
• Commitment on the part of employees and trainers
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Ethics in HRM Activities (cont’d)
Ethics in Performance Appraisal:
Clear standards to emphasise fairness
Employees must understand the basis of appraisal
Using appraisal for political gains is damaging to company
Ethics in Rewards and Disciplinary systems
Ethical behaviour must be rewarded and unethical behaviour
punished
Employees expect swift and harsh disciplinary actions for
misdemeanours
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Ethical Issues - Employee Privacy
Employee privacy violations upheld by courts:
Intrusion (locker room and bathroom surveillance)
Publication of private matters
Disclosure of medical records Appropriation of an employee’s name or likeness
Actions triggering privacy violations:
Background checks
Monitoring off-duty conduct and lifestyle
Drug testing
Workplace searches and Monitoring
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Ethical Issues - Employee Privacy (cont’d)
What do employers monitor about employees:
E-mail and activity
Telephone calls
Employers monitor employees to: Improve productivity
Keep tabs on attendance
Protect from computer viruses
Detect leaks of confidential information
Guard against liability for illegal acts and harassment suits
caused by employee misuse
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Dismissal
Involuntary termination of an employee’s employment with
the firm
Avoidance best way to handle dismissals Effective hiring can reduce many dismissals
Terminate-at-will rule
In absence of a contract, the employee can resign for anyreason, at will, and the employer can similarly dismiss the
employee for any reason (or no reason), at will
Ethical Issues - Employee Dismissal
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Wrongful discharge
Employee dismissal not complying with the law or with the
contractual arrangements stated or implied in the employment
application forms, employee manuals or other promises Limitations imposed by wrongful discharge on terminate-at-will:
• Statutory exceptions to certain types of dismissals
• Common law exception - implied contract
• Violation of public policy• Good faith exception
Ethical Issues - Employee Dismissal (cont’d)
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Misconduct in the workplace
• Deliberate and willful violation of the employer’s rules:
stealing, rowdy behavior, and insubordination.
InsubordinationWillful disregard of the boss’s authority or legitimate orders
Criticising the boss in public
Disregard for the chain of command
Deliberate defiance of clearly stated company policies, rules,regulations, and procedures
Participating in an effort to undermine and remove the boss
from power
Grounds For Dismissal (cont’d)
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Bases for wrongful discharge suits:
Discharge not complying with the law
Discharge not complying with contractual arrangement stated
or implied by firm via its employment application forms,employee manuals, or other promises
Avoiding wrongful discharge suits
Set up employment policies and dispute resolution proceduresthat make employees feel treated fairly
Do the preparatory work that helps to avoid such suits
Avoiding Wrongful Discharge Suits
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Employment application must contain a clear statement that
employment and can be terminated anytime.
Have clear written rules listing infractions that require
discipline and discharge and religiously follow them.
If a rule is broken, get the worker’s side of the story in front of
witnesses, and get it signed. Then get both sides of the issue.
If an employee shows evidence of incompetence, give a
warning and provide opportunity to improve. All evaluationsshould be in writing and signed by the employee.
Keep careful confidential records of all actions such as
employee appraisals, warnings or notices, memos.
Avoiding Wrongful Discharge Suits (cont’d)
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Plan the interview carefully
• Make sure the employee keeps the appointment time
• Never inform an employee over the phone
• Allow 10 minutes as sufficient time for the interview• Use a neutral site, never your own office
• Have employee agreements, the human resource file, and a
release announcement prepared in advance
• Be available at a time after the interview in case questionsor problems arise
• Have phone numbers ready for medical or security
emergencies
The Termination Interview
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Get to the point
• Avoid small talk
• As soon as the employee enters, give the person time to get
comfortable and then inform him or her of your decision Describe the situation
• Briefly explain why the person is being let go
• Remember to describe the situation rather than attack the
employee personally• Emphasize that the decision is final and irrevocable
The Termination Interview (cont’d)
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Listen
• Continue the interview until the person talks freely and calmly
about the reasons for termination and support package
Review all elements of the severance package• Describe severance payments, benefits, access to office
support people, and the way references will be handled.
• Don’t promise benefits beyond those in the support package
Identify the next step.• The terminated employee may be disoriented and unsure
what to do next. Explain where the employee should go next,
upon leaving the interview.
The Termination Interview (cont’d)
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Exit interviews are conducted with employees who are
leaving the firm for any reason
Its aim is to elicit information about the job or related
matters that might give the employer a better insight intowhat is right or wrong about the company
The assumption is that because the employee is leaving,
he or she will be candid
The quality of information gained from exit interviews isquestionable
Interviewing Departing Employees
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Layoff are not terminations.
Temporary layoffs occur when:
• There is no work available for employees.
• Management expects the no-work situation to be temporaryand probably short term.
• Management intends to recall the employees when work is
again available.
Layoffs
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Voluntarily reducing employees’ pay to keep everyone
working
Concentrating employees’ vacations during slow periods
Taking voluntary time off to reduce the employer’s payroll Taking a ―rings of defense approach‖ by hiring
temporary workers that can be let go early
Offering buyout packages to find enough volunteers to
avoid dismissing people
Alternatives to Layoffs
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Implemention of reduction in force:
Identify objectives and constraints
Form a downsizing team
Address legal issues
Plan post-reduction actions
Treatment of departing employees during a merger:
Avoid the appearance of power and domination
Remain businesslike and professional
Maintain a positive feeling about the acquired company
How the organization treats the acquired group will affect
those who remain
Adjusting to Downsizings and Mergers
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Apart from compensation, employees expect fair treatment
Fairness is inseparable from justice
Components of organisational justice:
• Distributive justice - fairness and justice of the result of adecision
• Procedural justice - the fairness of the process by which the
decision was reached
A just company is equitable, fair, impartial and unbiased
Fair Treatment And Justice
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Need for Fair Treatment
Courts consider fairness of employer’s disciplinary procedures
while reviewing disciplinary decisions
Positive employees outcomes related to fairness:
• Enhanced commitment• Enhanced satisfaction
• Take more steps to support employer’s interests
Job applicants who felt unfairly treated expressed desire to
appeal to the outcome, while those who felt fairly treatedreacted favourably
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HR’s Role in Fostering Ethics and Fair
TreatmentWhy treat employees fairly?
“They’re not employees, they’re people” - Peter Drucker
Avoidance of employee litigation
Enhanced employee commitment
Enhanced satisfaction with the organization, with jobs, and with
leaders
Increased organizational citizenship behaviors
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Fair Interpersonal Treatment Perceptions
Ethical behaviours:
Employees are praised for their work
Employees are trusted
Employees complaints are treated with effectively
Employees are treated with respect
Employees questions and problems are responded to quickly
Employees are treated fairly
Coworkers help each other out
Coworkers treat each other with respect
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Fair Interpersonal Treatment Perceptions
Unethical behaviours:
Supervisors yell and swear at the employees
Supervisors play favourites
Employees are treated like children
Employees are lied to
Employees’ suggestions are ignored
Employees are threatened to be fired or laid off Coworkers argue with each other
Coworkers put each other down
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Fairness Guidelines for Supervisors
Perceptions of fair treatment depend on:
Engagement - Involve individuals in decisions affecting them by
asking for inputs and allowing them to refute the merits of
others’ ideas and assumptions
Explanation - Ensure everyone involved and affected
understands why final decisions are made and the thinking that
underlies the decisions
Expectation clarity - Make everyone know upfront by what
standards they will be judged on and the penalties for failure
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Basis For Fair And Just Discipline Process
Clear rules and regulations
• Define and address workplace issues
• Inform employees what behaviours are unacceptable
System of progressive penalties
• Range and severity of penalty depends on type of offense
and number of occurrences
An appeals process
• Right of employee to grieve the decision ensures that
supervisors mete out discipline fairly and equitably
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Template Slide
Ethics in Performance Appraisal:
Clear standards to emphasise fairness
Employees must understand the basis of appraisal
Using appraisal for political gains is damaging to company
• recognize ethical dilemmas
Successful training requires
• Comprehensively identifying employees’ training needs
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