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Industrial Relation
After Industrial revolution, there arise the importance of industry for the development of each nation. Industry is essence for the development of the country. To become self reliant and self sufficient, Industrial development is necessary so that maximum production be achieved to fulfill the requirements of people. There are two counterparts:
Management: owners, capitalists –provide inputs, objective is to earn max. Profits
Labour- workers, contract workers, employees, objective is to earn livelihood.
Traditional Approach:
It is a relation between employer and employee.
Modern Approach:
The term industrial relations explain the relationship between employees/workers/labourers/contract labourers and management /owner /employer/contractors which stem directly or indirectly from union-employer relationship.
It also involved in organizing the workers, its participation in decision making, dispute settlement, collective bargaining etc.
It also focuses on the improvement of the economic conditions of the workers.
Industrial relations are relations and interactions in an industry, particularly between labour and management, as a result of their composite attitudes and approaches to the management of affairs of the industry for the betterment of not only the management and workers but also of industry and national economy as a whole.
“Industrial relation is that part of management which is concerned with the manpower of the enterprise whether machine operator, skilled worker or manager.”
The industrial relation is managed by some Rules and Regulations called Labour or Employment or Industrial Laws.
Aim of Industrial relations:
Protect workers against their exploitation
Social justice to employees.
The term Industrial Relations comprises Industry and Relations.
Industry means any productive activity in which an individual is engaged.
It includes –
(a) Primary activities like agriculture, fisheries, plantation, forestry, horticulture, mining, etc. and
(b)Secondary activities like manufacturing, construction, trade, transport, commerce, banking, communication, etc.
Industry means the secondary sector where factors of production (land, labour, capital and enterprise or four M’s – men, materials, money, machines) are gainfully employed for the purpose of production, and where a business organization exists.
Relations means the relations that exist in the industry between the employer and his workforce.
Important point regarding IR
1. Industrial relations are the relations which are the outcome of the ‘employment relationship’ in an industrial enterprise.
It is, thus, employer-employee relationship in an industry. Two parties—employer and workmen are necessary without which such relationship cannot exist and it is the industry which provides the setting for industrial relations.
2. Industrial relation is the relation in the industry created by the diverse and complex attitudes and approaches of both management and workers in connection with the management of the industry. Attitude refers to the mental state of a person, approach can be the external expression of such an attitude.
(3) This relationship emphasises on the process of accommodation whereby both the parties develop skills and methods of adjusting to and cooperating with each other.
(4) Every industrial relation creates a complex of rules and regulations to govern the work-place, the work- community with the main purpose of maintaining harmonious relations between the management and the workmen by solving their problems through the process of collective bargaining.
(5) The Government/State also regulates the industrial relations in the country. It evolves influences and shape industrial relations through laws, rules, agreements, awards of the courts, and emphasizes on the usages, customs, traditions, implementation of its policies and interference through executive and judicial machinery.
The scope of industrial relations-
(a) Relationship among employees, between employees and their superiors or managers.
(b) Collective relations between trade unions and management. It is called union-management relations.
(c) Collective relations among trade unions, employers’ associations and Government.
Types of relations: (i) Labour relations i.e., relations between union- management (also known as labour management relations);
(ii) Group relations i.e., relations between various groups of workmen i.e., workmen, supervisors, technical persons, etc.
(iii) Employer-employee relations i.e., relations between the management and employees. It denotes all management employer relations except the union- management relations;
(iv) Community or Public relations i.e., relations between the industry and the society.
Characteristics of industrial relations
1. Parties in the Industrial Relations Activities:
Basically, two parties-workers and management are involved in the process of establishing relations. However, the government agencies regulate /maintain industrial relations.
2. Interactive Process:
Industrial relations arise out interactions between different persons/parties. They are supervisors, workers trade unions, employers’ associations.
So, interactive process takes place between –
i. Supervisors and industrial workers
ii. Supervisors and group/team members
iii. Management and trade union leaders
iv. Employers’ federations and workers’ unions.
3. Two-Way Communication:
It is a two-way communication process. One party gives stimuli, other party responds to the stimuli. So, the transaction occurring through such mechanism is either complementary or cross. More the complementary transactions, better will be the industrial relations situations.
4. HRM Practices:
Effective human resource planning system, identification and stimulating prospective employees, designing the most suitable selection technique to choose the right kind of people help to organization to get a committed and willing workforce that want to grow, develop and achieve. Such employees in the process like to develop better relations with their bosses. So, HRM practices influence IRs pattern in the industry.
5. Approaches to IRs:
Various approaches contribute to shape IRs pattern in industrial organizations. These approaches include sociological, psychological, socio-ethical, human relations, Gandhian, system approaches etc.
6. State Intervention:
State plays a vital role to influence industrial relations situations through its activities as facilitator, guide, counsellor for both the parties in the industry.
7. Role of Trade Union:
Behavioural manifestations of workers are mostly governed by the trade unions to which they belong. Hence, trade union’s perception, attitudes towards management influence workers to form their mind set that regulates/promotes interaction with the management.
8. Organizational Climate:
If, congenial and conducive organizational climate prevails, workers feel homely, interact spontaneously, communicate boss about their problems, difficulties directly and come close to him to exchange/share the views each other in respect of work, change of job design, introduction of any operative system, process etc. Under such situation, possibility of establishing healthy human relations develops and these relations influence industrial relations pattern of organization.
9. Dispute Settlement Process:
If, the management personnel believe on the philosophy of settling workers’ grievances/ disputes through bi-lateral negotiation process, they give much more emphasis on mutual talk, sharing responsibility, collaboration, partnership dealing and mutual trust. In the process changes in workers’ attitudes, behaviour and thought pattern are likely to occur which effect industrial relations.
10. Outcomes of IRs:
Outcomes of IRs are reflected in production both in quantity and quality, services, man days lost, wastes, accident rate, productivity, labour turnover rate, absenteeism rate, number of bipartite negotiations, company’s image, growth, development etc.
11. Competency Development:
Healthy industrial relations help to develop workers’ skill, knowledge, ability, aptitude and change their attitudes, perception to enable them to participate in collaborative activities / collective bargaining process effectively.
12. Issues in IRs:
Industrial relations climate / situation is greatly influenced by the issues-economic, non-economic governed by service contract / terms and conditions of employment. Besides, the issues not covered under service rules viz., behavioural, and attitudinal issues influence IRs pattern
Main Objectives of IR
1. Cordial Relation and cooperative work atmosphere in industry:
2. Enhance economic status of the workers.
3. Development and Progress of Industry:
4. Maintaining Industrial Peace
5. Regulate production by maintaining industrial conflicts,
6. Socialize industries.
7. provides opportunities for the workers
8. Improve workers strength
9. Avoid industrial conflicts
10. Maintain industrial democracy
Factors affecting industrial relations:
1. Institutional Factors: Includes state policy, labour laws, labour codes, labour unions, agreements etc.
2. Economic Factors: includes types of ownership like sole proprietorship, company, MNC, Government organization, Cooperative organization etc., nature of workforce, source of labour supply, labour market relative status etc.
3. Social Factors: it includes caste, creed, social values, social status etc.
4. Technological Factors: includes work method, type of technology used, research and development, etc.
5. Psychological factors: includes owner’s attitude, workers attitude, motivation, morale etc.
6. Political Factors: includes political institutions, system of Government and attitude of Government etc.
7. Global factors: include international relations, global conflicts, etc.
8. Industry related factors: includes organizational climate, culture, philosophy and values of management etc.
The scenario of industrial relations is perceived differently by different people. For some, industrial relations are related to class conflict, others perceive it in terms of mutual co-operation, and still others understand it in terms of competing interests of various groups. HR managers are expected to understand these varying approaches because they provide the theoretical underpinnings for much of the role of HRM.
Industrial relation is an inter-disciplinary field which includes inputs from sociology, psychology, labour economics, and law and personnel management. Any problem in industrial relations has to be approached on a multi-disciplinary basis, by considering the contributions made by various social scientists. Approaches to industrial relations should thus be based on a systematic and comprehensive theories.
The three popular approaches to industrial relations are the unitary approach, Pluralistic approach, and Marxist approach. These approaches to industrial relations at a primary level are analytical categorizations and not theories having predictive values.
Also, authors are of the opinion that there is no one right approach, rather these approaches, individually or collectively, provide an opportunity for creating a paradigm for understanding the complexity and diversity among the various actors and players in Industrial Relations.
Industrial relation issues are complex and multifarious. They are the results of social, cultural, economic, political and governmental factors. An economist interprets industrial conflict in term of impersonal market forces, a psychologist interprets in term of individual goals, and organisational goals motivation, etc., similarly a sociologist interprets from his own view point But the study of industrial relations should be from the multi-disciplinary approach.
The enterprises are perceived as an integrated and harmonious system like a family. All members of industry share same objectives, interests and purpose. All work together to achieve objectives. Based on the proposition that “there is only one source of authority and this is the management which owns and controls decision, negotiation and bargaining.
Under the unitary approach, industrial relations are grounded in mutual co-operation, individual treatment, team work and shared goals.
Work place conflicts is seen as a temporary aberration
Union cooperates with the management and accepts the override power of management.
It emphasizes on reactive industrial relation and its strategy is based on direct negotiation with employees.
Participation of Government, tribunal and union is not sought or is seen as being necessary for achieving harmonious employee relations.
Criticism: seduce employees from unionism and socialism.
The unitary approach is based on the strong argument that there is only one source of authority i.e., the management, which owns and controls the dynamics of decision making in issues relating to negotiation and bargaining. Under unitary approach, industrial relations are grounded in mutual co-operation, individual treatment, team-work, and shared goals.
Work place conflict is seen as a temporary aberration, resulting from poor management, from employees who do not mix well with the organizational culture. Unions co-operate with the management and the management’s right to manage is accepted because there is no ‘we-they’ feeling.
The underlying assumption is that everyone benefits when the focus is on common interest and promotion of harmony. Conflict in the form of strikes is not only regarded as necessary but destructive.
Advocates of the unitary approach emphasize on a reactive industrial relations strategy. They seek direct negotiations with employees. Participation of government, tribunals and unions is not sought or is seen as being necessary for achieving harmonious employee relations.
The unitary approach is being criticized as a tool for seducing employees away from unionism and socialism. It is also criticized as manipulative and exploitative.
The unitary perspective on employee relations is one of cooperation. Employers and workers are seen as being on the same team or even the same family. They have the same interests and share the same values and goals. In this model, conflict is seen as distasteful or even evil, and both sides strive for consensus.
Those who subscribe to this theory (employers and employees alike) despise trade unions. Unions are portrayed as an outside force that competes for the employer's loyalty and pits employees against management. Many small businesses operate with this theory as well as any company where workers reject the idea of unionizing. Governments that favour this theory will place restrictions on unions or even make them illegal.
Assumptions
Assumptions about workplace relations
Assumptions about workplace conflict
Assumptions about trade unions
Assumptions about collective bargaining
Under this approach it is perceived that industry is made up of powerful and divergent subgroups, management and trade union.
There is conflict of interest and disagreement between managers and workers. Role of management is more towards persuasion and coordination. It is based on the assumption that the organization is composed of individuals who form distinct groups with their own set of aims, objectives, leadership styles and value propositions. It considers conflicts between management and employees are rational and inevitable. The role of management is to mediate amongst the different interest groups.
Trade unions as legitimate representative of employees’ interest.
Based on the assumption that the parties strive and have opportunity to exercise economic as well as political powers. Compromise and concession approach between management and unions. Unions protect the interest of employees. State intervention through legislation.
Pluralism is a major theory in labour-management relations, which has many powerful advocates. The focus is on the resolution of conflict rather than its generation, or, in the words of the pluralist, on ‘the institutions of job regulation.’
Kerr is one of the important exponents of pluralism. According to him, the social environment is an important factor in industrial conflicts. The isolated masses of workers are more strike-prone as compared to dispersed groups. When industrial jobs become more pleasant and employees’ get more integrated into the wider society, strikes will become less frequent.
Ross and Hartman’s cross-national comparison of strikes postulates the declining incidents of strikes as societies industrialise and develop appropriate institutional framework. They claim that there has been a decline in strike activity all over the world in spite of an increase in union membership. The theories on pluralism were evolved in the mid-sixties and early seventies when England witnessed a dramatic resurgence of industrial conflicts.
However, the recent theories of pluralism emanate from British scholars, and in particular from Flanders and Fox. According to Flanders, conflict is inherent in the industrial system. He highlighted the need for a formal system of collective bargaining as a method of conflict resolution.
Fox distinguishes between two distinct aspects of relationship between workers and management. The first is the market relationship, which concerns with the terms and conditions on which labour is hired. This relationship is essentially economic in character and based on contracts executed between the parties.
The second aspect relates to the management’s dealing with labour, the nature of their interaction, negotiations between the union and management, distribution of power in the organisation, and participation of the union in joint decision-making.
The major critics of the pluralist approach are the Marxists according to whom exploitation and slavery will continue unabated in the institutional structure of pluralism. The only difference is that in such a social structure, the worker will be deemed to be a better-paid wage slave.
The pluralistic approach totally departs from the unitary approach and assumes that the organization is composed of individuals who form distinct groups with their own set of aims, objectives, leadership styles, and value propositions.
The organization is multi structured and there will be continued tension due to conflicts within and between the various sectional groups. In contrast to the unitary approach, the pluralistic approach considers conflict between management and employees as rational and inevitable.
The pluralistic approach perceives:
i. Organizations as coalitions of competing interests, where the role of the management is to mediate amongst the different interest groups.
ii. Trade unions as legitimate representatives of employee interests.
iii. Stability in industrial relations as the product of concessions and compromises between management and unions.
Legitimacy of the management’s authority is not automatically accepted. Conflict between the management and workers is understood as inevitable and, in fact, is viewed as conducive for innovation and growth. Employees join unions to protect their interests 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 resolution 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 be contained within the social mechanism of collective bargaining, conciliation, and arbitration.
Assumptions about the workplace role of trade unions
Assumptions about the role of collective bargaining
G. Margerison, an industrial sociologist, holds the view that the core of industrial relations is the nature and development of the conflict itself. Margerison argued that conflict is the basic concept that should form the basis of the study of industrial relations. The author criticised the prevalent approach to industrial relations, which was more concerned with studying the resolution of industrial conflict than its generation; with the consequences of industrial disputes than on their causes.
According to this school of thought, there are two major conceptual levels of industrial relations. One is the intra plant level where situational factors, such as job content, work task and technology, and interaction factors produce three types of conflict – distributive, structural, and human relations. These conflicts are being resolved through collective bargaining, structural analysis of the socio-technical systems and man-management analysis respectively.
The second level is outside the firm and, in the main, concerns with the conflict not resolved at the intra-organisational level. However, this approach rejects the special emphasis given to rule determination by the “Systems and Oxford models”. In its place, it suggests a method of inquiry, which attempts to develop sociological models of conflicts.
Beside this in an industry consists of a group of employees coming from different caste, colour, culture and family backgrounds having different attributes, such as – personality, educational background, emotions, sentiments, likes dislikes, ideologies, attitudes and behaviour. These all traits of a human personality creates problems of conflicts and competition among members of the industrial society. The concept of inter-personal and inter-group relations posing a problems of industrial relations.
The impact of industrial relations by these social factors cannot be ignored. Social factors like workers attitude, perceptions of the society, value system, customs, traditions, status symbols, acceptance or resistance to change and one’s degree of tolerance have got a direct impact on industrial relations.
Industrial Relations are being affected by social factors or consequences like:
(i) Urbanisation.
(ii) Social mobility.
(iii) Housing and Transport Problems.
(iv) Disintegration of family structure.
(v) Stress and strain.
(vi) Gambling, drinking, prostitutions and other social evils. Industrial relations have changed with the change in society.
The industrial worker which had migratory character has now stabilized in industrial centres and has got an urban taste.
It is radical perspective. It is based on the proposition that the economic activities of production, manufacturing and distribution are mainly governed by objective of profit. It also regards those conflicts between employees and employers as inevitable.
Conflicts arises not only because of competing interests within the organization but also because of the division with in society between those who won or manage the means of production and those who have only their labour to offer.
The Marxist view of industrial relations is of a clash between the employer (capitalist) and the worker. The employer tries to maximize profit by paying workers as little as he can while striving for a monopoly in his industry to control prices.
Workers, on the other hand, believe that they are the most vital part of production and strive to get their fair share of profits through the formation of trade unions.
From a Marxist perspective, the inevitable result of this clash is a worker revolution, where workers take control of companies, eliminating the capitalist altogether.
Although Marxism has fallen out of favour since the collapse of the Soviet Union, it was highly popular in the first half of the 20th century, when workers were paid subsistence-level wages.
While there are no signs of Marxist revolution happening soon, the U.S. minimum wage has remained at a mere $7.25 (or $15,000 annually) for over 10 years.
Also known as the ‘Radical Perspective’, the Marxist approach is based on the proposition that the economic activities of production, manufacturing, and distribution are majorly governed by the objective of profit.
Marxists, like the pluralists, regard employer–employees conflict as inevitable.
However, pluralists believe that the conflict is inevitable in all organizations. Marxists see it as a product of the capitalist society.
Adversarial relations in the workplace are simple one aspect of class conflict. The Marxist approach, thus, focuses on the type of society in which an organization function.
Conflict arises not only because of competing interests within the organization, 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.
The Marxist approach argues that for social change to take place, class conflict is required.
Social change initiates strong reactions from the worker class and bridges the gap between the economically settled owners of factors of production and the economically dependent worker class.
This approach views pluralism as unreal and considers industrial disputes and class conflicts as inevitable for the circular functioning of an industry.
Trade unions are seen both as labour reaction to exploitation by capital, as well as a weapon to bring about a revolutionary social change.
Concerns 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 Marxists, all strikes are political.
Besides, Marxists regard state intervention via legislation and the creation of industrial tribunals as supporting management’s interest rather than ensuring a balance between the competing groups.
This view is in contrast to the belief of the pluralists who argue that state intervention is necessary to protect the overall interest of society
To Marxists, the pluralist approach is supportive of capitalism, the unitary approach anathema.
Consequently, enterprise bargaining, employee participation, cooperative work culture, and the like which help usher in cordial industrial relations are not acceptable to Marxists.
Such initiatives are regarded as nothing more than sophisticated management techniques designed to reinforce management control and the continuation of the capitalist system.
The class conflict analysis of industrial relations derives its impetus from Marxist social thinking and interpretation.
Marxism is essentially a method of social enquiry into the power relationships of society and a way of interpreting social reality.
The application of Marxian theory as it relates to industrial relations derives indirectly from later Marxist scholars rather than directly from the works of Marx himself.
Industrial relations, according to Marxists, are in the first instance, market-relations.
To Marxists, industrial relations are essentially politicised and part of the class struggle.
For Marxists industrial and employee relations can only be understood as part of a broader analysis of capitalist society in particular the social relations of production and the dynamics of capital accumulation.
As Marx himself put it, “the mode of production in material life determines the general character of the social, political and spiritual process of life.”
The Marxist approach is primarily oriented towards the historical development of the power relationship between capital and labour.
It is also characterised by the struggle of these classes to consolidate and strengthen their respective positions with a view to exerting greater influence on each other.
In this approach, industrial relations is equated with a power-struggle.
The price payable for labour is determined by a confrontation between conflicting interests.
The capitalist ownership of the enterprise endeavour to purchase labour at the lowest possible price in order to maximise their profits.
The lower the price paid by the owner of the means of production for the labour he employs, the greater is his profit.
The Marxist analysis of industrial relations, however, is not a comprehensive approach as it only takes into account the relations between capital and labour.
It is rather, a general theory of society and of social change, which has implications for the analysis- of industrial relations within what Marxists would describe as capitalist societies.
It is based on fundamental principle of truth, non violence and non possession. It is based on the fundamental principles of truth, non-violence and non-possession. Workers can go for strike but with non-violence. Collective bargaining and reasonable demands should be placed by workers before employers.
Gandhiji has been one of the greatest labour leaders of modern India. He approached labour in completely new and refreshing manner. Gandhiji advocated peaceful co-existence of capital and labour. He believed in trust, non-violence and non-possession. He had immense faith in the goodness of man and believed that many of the evils of the modern world have been brought about by wrong systems and not by wrong individuals.
He held definite views regarding fixation and regulation of wages, organisation and functions of trade unions, necessity and desirability of collective bargaining, use and abuse of strikes, labour indiscipline, and workers participation in management, conditions of work and living, and duties of workers.
The Ahmedabad Textile Labour Association, a unique and successful experiment in Gandhian trade unionism, implemented many of his ideas.
Gandhiji had immense faith in the goodness of man and he believed that many of the evils of the modern world have been brought about by wrong systems and not by wrong individuals. He insisted on recognising each individual worker as a human being. He believed in nonviolent communism, going so far as to say that “if communism comes without any violence, it would be welcome.”
Gandhiji laid down certain conditions for a successful strike. These are – (a) the cause of the strike must be just and there should be no strike without a grievance; (b) there should be no violence; and (c) non-strikers or “blacklegs” should never be molested.
He was not against strikes but pleaded that they should be the last weapon in the armoury of industrial workers and hence, should not be resorted to unless all peaceful and constitutional methods of negotiations, conciliation and arbitration are exhausted. His concept of trusteeship is a significant contribution in the sphere of industrial relations.
According to him, employers should not regard themselves as sole owners of mills and factories of which they may be the legal owners. They should regard themselves only as trustees, or co-owners. He also appealed to the workers to behave as trustees, not to regard the mill and machinery as belonging to the exploiting agents but to regard them as their own, protect them and put to the best use they can.
In short, the theory of trusteeship is based on the view that all forms of property and human accomplishments are gifts of nature and as such, they belong not to any one individual but to society. Thus, the trusteeship system is totally different from other contemporary labour relations systems. It aimed at achieving economic equality and the material advancement of the “have-nots” in a capitalist society by non-violent means.
Gandhiji realised that relations between labour and management can either be a powerful stimulus to economic and social progress or an important factor in economic and social stagnation. According to him, industrial peace was an essential condition not only for the growth and development of the industry itself, but also in a great measure, for the improvement in the conditions of work and wages.
At the same time, he not only endorsed the workers’ right to adopt the method of collective bargaining but also actively supported it. He advocated voluntary arbitration and mutual settlement of disputes.
He also pleaded for perfect understanding between capital and labour, mutual respect, recognition of equality, and strong labour organisation as the essential factors for happy and constructive industrial relations. For him, means and ends are equally important.
Marxists, pluralists, and others on the ground that it encouraged dependency and discouraged individual development, and ignored the importance of technology and culture in industry.
Taking a balanced view, however, it must be admitted that the human relations school has thrown a lot of light on certain aspects such as communication, management development, and acceptance of work place as a social system, group dynamics, and participation in management.
He insisted on recognising each individual worker as human being. Further, he realised that labour-management relations can be either a powerful stimulus to economic and social progress or an important factor in economic and social stagnation. The industrial peace is an essential condition not only for the growth and development of the industry itself, but also for the improvement in the conditions of work and wages.
Mahatma Gandhi stated, “After a great deal of experience it seems to me that those who want to become passive resisters for the service of the country have to observe –
Perfect chastity
Adopt poverty
Follow truth
Cultivate fearlessness.”
He laid great stress on non-violence (ahimsa) as a symbol of strength and believed that nonviolence alone has the capacity to solve all problems. He emphasized on the peaceful co-existence of capital and labour. In his opinion, strikes should be avoided and voluntary arbitration should be used whenever and where possible.
Gandhian Rules to Resolve Industrial Disputes:
Workers should seek redressal of reasonable demands only through collective bargaining.
Workers should avoid strikes, as far as possible, in industries of essential services.
Strikes to be avoided and only resorted to as last measure, only non-violent methods should be used.
Workers should take recourse to voluntary arbitration where direct settlement fails.
Trade unions should seek authority from all workers before organising a strike and remain peaceful and nonviolent during strikes.
Formation of trade unions should be avoided in philanthropicalorganisations.
He pleaded mutual respect, recognition of equality and strong labour unions as the pre-requisites for healthy industrial relations.
Collective bargaining and mutual negotiation between management and labour should be used to settle industrial disputes.
According to Shri. V.V. Giri , late President of India, collective bargaining and mutual negotiation between management and labour should be used to settle industrial disputes .
He suggested that there should be bipartite machinery in every industry to settle differences with active encouragement of Government.
Mr. V.V. Girl who was Labour Minister and later became the President of India was strong supporter of collective bargaining and mutual negotiations for the settlement of industrial disputes.
He was of this opinion that” Voluntary efforts on the part of management and the trade union for winding up their differences is a tonic to the industry and any compulsion from outside is bitter medicine.
He was of this firm opinion that “there should be bipartite machinery in every industry and every unit of the industry to settle differences from time to time with active encouragement of government but outside interference should not encroach the industrial peace.”
Giri Approach gave emphasis that industrial peace might be secured through machinery of collective bargaining. The trade unions should grow strong and self-reliant without the assistance of any outsider. There must be mutual settlement of disputes through collective bargaining and voluntary arbitration and not the compulsory adjudication.
This approach gave emphasis that internal settlement should be preferred and compulsory adjudication should be taken up as the last resort and only in exceptional circumstances.
Industry consists of living human beings who want freedom of thoughts and expression and control over their lives.
When employer treats them inanimate object, conflict arises.
Industry consists of living human beings who want freedom of thoughts and expression and control over their lives. When employers treat workers as inanimate object and encroach upon their interests and desires, conflicts and dispute arises. Workers should give good pay, working conditions etc.
Human resources are made up of living human beings and not machines. They need freedom of speech, of thought, of expression of movement and of control over their timings. This approach implies that relationship between employees and employers are between two human beings, the human relations include the relationship during the out of employment situations also.
The Human Relations approach considers human beings as having the right and freedom of thought and action. The focus of this approach is on the relationship and transaction between the management and the workers. The main proponent of the Human Relations approach is Keith Davis. In his opinion, the goals of this approach is to ensure collectivism among the members for efficient production through extensive coverage of mutual interests.
The most important part of any organization is human being. Machine, material and money are secondary. “Take care of your employees. They automatically take care of your organisations”. Every human being wants freedom of speech, self-respect, and to enjoy all those facilities for which he is entitled for.
But when an employee is not provided a handsome package of financial and non-financial incentives and is not properly treated during his stay at the organisation it leads to tension, conflicts and ill-will. The problem of industrial relation in an industry arises out of tension which is created because of employer’s pressure and worker’s reactions and protests.
Tension among the employees affects their work culture and output which gradually affects the entire industry and ultimately it may lead to spoilage of work culture at national level. Therefore management should avoid these situations and expert services of other behavioural scientists should be taken if necessary to deal with such situations.
To avoid disputes, it is very essential to understand human behaviour which is pre-requisite for industrial peace. Management must learn and know the basic needs of the man and should always try to win the people. Because these are the employees who can run or ruin the business, They Can Make You Or Can Break You.
(i) Economic Needs – Which include basic needs for food, shelter and clothing for oneself and his dependent. These needs can be satisfied by increasing his wages.
(ii) Psychological Needs – Needs for security from life hazards and uncertainties created by new challenges and new relationships. These are deep rooted and psychological in nature which disturb an employee’s peace of mind.
The human relations approach highlights certain policies and techniques to improve the morale, efficiency and job satisfaction of employees. The key to industrial peace lies with the quality of human relations in the industry. Human relations approach has its origin in the Hawthorne experiments and the research of ELTON Mayo. According to him, industrial conflicts are due to inadequate communications and lack of understanding of inter-personal factors like personality differences and irrational behaviour.
An informal social climate should be created to provide workers with outlets for their emotions and sentiments. Further, effective communication can help both the parties to develop accurate perceptions and understand each other’s social, safety and psychological needs.
In the words of Keith Davies, human relations are, “The integration of people into a work situation that motivates them to work together productivity, co-operatively and with economic, psychological and social satisfactions.”
In the words of Keith Davies, human relations are “the integration of people into a work situation that motivates them to work together productively, cooperatively and with economic, psychological and social satisfactions.”
According to him, the goals of human relations are – (a) to get people to produce, (b) to cooperate through mutuality of interest, and (c) to gain satisfaction from their relationships. The human relations school founded by Elton Mayo and later propagated by Roethlisberger, Whitehead, W. F. Whyte and Homans offers a coherent view of the nature of industrial conflict and harmony.
The human relations approach highlights certain policies and techniques to improve employee morale, efficiency and job satisfaction. It encourages the small work group to exercise considerable control over its environment and in the process helps to remove a major irritant in labour-management relations. But there was reaction against the excessive claims of this school of thought in the sixties.
According to this approach, the industrial relations system is a study of institutions of job regulations and the stress is on the substantive and procedural rules as in Dunlop’s model.
Flanders, the exponent of this approach, considers every business enterprise a social system of production and distribution, which has a structured pattern of relationships. The “institution of job regulation” is categorised by him as internal and external – the former being an internal part of the industrial relations system such as code of work rules, wage structure, internal procedure of joint consultation, and grievance procedure.
He views trade unions as an external organisation and excludes collective agreements from the sphere of internal regulation. According to him, collective bargaining is central to the industrial relations system.
The “Oxford Approach” can be expressed in the form of an equation – r = f (b) or r = f (c) where, r = the rules governing industrial relations
b = collective bargaining
c = conflict resolved through collective bargaining.
The rules of the industrial relations system were determined through the rule making process of collective bargaining. Collective bargaining was considered as apex to the industrial relations system. Collective bargaining as per this approach is considered as a political institution involving power relationships between the employer and the employees.
The “Oxford Approach” can be criticised on the ground that it is too narrow to provide a comprehensive framework for analysing industrial relations problems.
It over emphasises the significance of the political process of collective bargaining in and gives insufficient weight to the role of the deeper influences in the determination of rules. Institutional and power factors are viewed as of paramount importance, while variables such as technology, market, status of the parties, and ideology, are not given any prominence.
1. Unitary Perspective:
2. Pluralistic Perspective:
3. Marxist Perspective:
Approaches to Industrial Relations:
Psychological Approach:
Sociological Approach:
Human relation Approach:
Key proponent: Braverman
Frame of reference: Marxist
Focus: Labour’s relationship with industrial processes
Reference to industrial relations: Implicit
Theory: improved technology and scientific management techniques are
Result: labour is increasingly alienated and exploited, leading to resistance by organised and unorganised industrial conflict.
Key proponents: Kochan, Katz and McKersie
Frame of reference: Pluralist
Focus: a general theory of industrial relations
Reference to industrial relations: Explicit
Theory: emphasises the strategic choice of actors in deciding industrial relations outcomes, as influenced by:
(i) declining union membership
(ii) breakdown of collective bargaining frameworks
(iii) retreating government intervention
(iv) pro-active human resource management techniques
(v) spread of organisational authority for industrial relations
Key proponents: Stigler and Friedland, Joskow
Focus: State intervention in industrial relations
Theory: (i) ‘capture theory’ (ii) ‘bargaining theory’
Regulatory capture is an economic theory that says regulatory agencies may come to be dominated by the industries or interests they are charged with regulating. The result is that an agency, charged with acting in the public interest, instead acts in ways that benefit the industry it is supposed to be regulating.
Key proponents: Mayo, Maslow, McGregor, Herzberg
Frame of reference: Unitarist
Focus: Workers’ social and psychological needs
Theory: a system of management, maximise output by meeting social andpsychological needs of employees in the workplace.
Result: worker morale maximised, motivated employees productive.
Neo-Human Relations theories add individual satisfaction andmotivation is through worker ‘self-actualisation’ by ‘hierarchy of needs’
Key proponent: Taylor
Focus: Use and control of labour
Theory: system of management maximising output by greatest technicalefficiency of work methods, achieved by:
Key proponent: Friedman and Friedman
Focus: The settlement of wages, employment and the allocation of work.
Theory: people are ‘rational economic maximisers’, ‘perfectly competitive’ labour and product markets yield most efficient economic outcomes.
International Labour Organization defines Labour welfare as: Labour Welfare means “such services, facilities and amenities which may be established in or in the vicinity of undertakings to enable the persons employed in them to perform their work in healthy and peaceful surroundings and to avail of facilities which improve their health and high morale.”
“Labour welfare refers to the efforts made by the employers to improve the working and living conditions over and above the wages paid to them. It comprises all matters affecting the health, safety, comfort and general welfare of the workmen, and includes provision for education, recreation, thrift schemes, and convalescent homes”. It covers almost fields of activities of workers e.g., social, economic, industrial and educational.
Labour welfare implies the setting up of minimum desirable standards of the provision of facilities like health, food, clothing, housing, medical assistance, education, insurance, job security, recreation etc. Such facilities enable the worker and his family to lead a good working life, family life and social life.
Objectives of Labour welfare:
(a) Provides social comfort to employees.
(b) Helps in overall improvement of employees.
(c) Provide financial support indirectly to the employees.
(d) Contribute in developing sense of responsibility and belongingness among employees.
(e) Improve working conditions at the workplace for employees.
(f) Maintain and retain the existing workforce.
(g) Reduce rate of absenteeism from work and labour turnover from job.
(h) Improve lives of employees comfortable and happy.
(i) Improve productivity and efficiency of employees at workplace.
(j) Provide healthy and proper working conditions.
(k) Ensure betterment of employees and families and society as a whole.
Principles of Labour Welfare:
(a) Principle of Integration or Coordination – Welfare programmes cannot be segregated. They cannot be taken up part-by-part. It is a whole programme. For example, health and welfare should cover up all the aspects of health and hygiene, physical, social and moral hygiene.
(b) Principle of Association – Any welfare programme meant for the development of workers’ community should associate workers with the planning and execution of the programme. Workers should be associated for conducting activities.
(c) Principle of Responsibility – Workers should be incorporated and they should be hold responsible for the activities aiming at workers’ welfare. For example, workers participate in safety committees, sports committees, canteen committees, etc.
(d) Principle of Accountability – Every programme, every person and every activity should be answerable. Welfare programme are socially audited and evaluated. Successful programme are retained Weaker programme are straightened.
(e) Principle of Timeliness – Timely help is a valuable help. A stick in time saves nine. When a worker needs economic assistance for trading a sick child or for building a house, there should be reasonable lapse of time but beyond a limit he can’t wait. Appropriate action begins taken for welfare might serve the purpose. In certain circumstances of emergency, delay in assistance means denial of human value and justice.
Importance of Labour Welfare:
1. Improvement of Industrial Relations:
Labour Welfare measures are so comprehensive that they satisfy workers, if properly implemented. This satisfaction on the part of workers is a great stimulus for the industrial relations to improve. When workers are convinced that adequate measures have been taken to improve their work environment and their conditions of service, then they naturally repose confidence in the management and thus it helps maintenance of industrial peace.
2. Creation of Permanent Labour Force:
Well- adopted labour welfare measures restrict labour mobility. Workers generally feel reluctant to leave an organization where their welfare is sincerely looked after. This attitude that welfare measures create helps the creation of permanent labour force which is important for an organization to pursue plans and programmes on a continuous basis.
3. Increase in General Efficiency and Income of Workers:
The comprehensive welfare measures assuring workers good accommodation, proper health-care, suitable work environment make the workers contented. Their contentment is a great inducement for them to work more. They become more efficient as they are not worried about their primary needs. Since their productivity increases, they earn more; their income increases.
4. Enhancement of the Morale of Workers:
Labour welfare measures act as a booster to the morale of the workers. Workers with better amenities of life shun many of their vices and offer willing co-operation to management. This is a great benefit for the organisation.
5. Development of the Sense of Belonging:
Labour Welfare measures make the workers feel that they are one with the organisation. Management thinks so much for them, does so much for their welfare that they cannot isolate themselves from the organisation – they feel oneness with the organisation. This feeling that they have some stake in the organisation will help restore industrial peace. It will enhance their devotion to the job and thus the enterprise, as a whole, will be benefitted.
6. Change in Outlook of Employers:
The change in the dealings of the workers consequent upon the introduction of labour welfare measures make the employers satisfied with them. Thus, there is a change in the outlook of the employers towards labour; a cordial relation is set up and the work environment improves considerably. When the employers find the workers willing to work and devote themselves to the development of the organisation, they do not even hesitate to allow them to participate in management.
7. Improvement of the Moral and Mental Health of Workers:
Welfare measures include such measures as would prevent the workers from indulging in vices such as drinking, gambling etc. and thus their moral and mental health improves contributing overall improvement in the health of the organisation and society.
8. Benefit to the Society:
Besides providing economic benefits to workers, labour welfare measures extend to workers various facilities that have direct bearing on their better mode of living. Because of medical benefits extended to them, the workers enjoy better health and infant mortality among the workers declines.
The workers feel happier and the society as a whole is benefitted with people having better standards of living and better equipped with more purchasing power to contribute to the general welfare of the country in general and the society in particular.
Types of Welfare Services:
I.L.O. divided welfare services into two groups:
1. Intramural: Welfare services within the premises of industries like urinals, washing and cleaning facilities, rest rooms, creches, canteens, drinking water etc
2. Extramural: Welfare services outside the premises of industries such as maternity benefits, social insurance schemes, gratuity, provident fund, medical facility , family planning and child welfare, education and housing, recreational facilities, etc.
Theories of Labour Welfare:
1. The Policing Theory of Labour Welfare:
a. The policing theory is based on assumption that Human Being is so much selfish and always tries for own benefits whether on the cost of others welfare. Man is selfish and self-centered, and always tries to achieve his own ends, even at the cost of the welfare of others.
b. Any of the employers will not work for the welfare of employees until he is forced to do so.
c. This theory is based on the contention that a minimum standard of welfare is necessary for workers.
d. The assumption on which the theory is based is that without compulsion, supervision and fear of punishment, no employer will provide even the barest minimum of welfare facilities for workers.
e. This is based on the contention that a minimum standard of welfare is necessary for labourers.
f. Here the assumption is that without policing, that is, without compulsion, employers do not provide even the minimum facilities for workers.
g. According to this theory, owners and managers of industrial undertakings get many opportunities for exploitation of labour. Hence, the state has to intervene to provide minimum standard of welfare to the working class.
2. The Religious Theory of Labour Welfare:
a. This is based on the concept that man is essentially “a religious animal.” Even today, many acts of man are related to religious sentiments and beliefs. These religious feelings sometimes prompt an employer to take up welfare activities in the expectation of future emancipation either in this life or after it. The theory views were an essentially religious. Religious feelings are what sometimes prompt employers to take up welfare activities in the belief of benefits either in his life or in support after life.
b. Any good work is considered an investment, because both the benefactor and the beneficiary are benefited by the good work done by the benefactor. This theory does not take into consideration that the workers are not beneficiaries but rightful claimants to a part of the gains derived by their labour.
3. The Philanthropic Theory of Labour Welfare:
a. Philanthropy is the inclination to do or practice of doing well to ones fellow men. Man is basically self- centered and acts of these kinds stem from personal motivation, when some employers take compassion on their fellowmen, they may undertake labor welfare measures for their workers.
b. This theory is based on man’s love for mankind. Philanthropy means “Loving mankind.” Man is believed to have an instinctive urge by which he strives to remove the suffering of others and promote their well-being. In fact, the labour welfare movement began in the early years of the industrial revolution with the support of philanthropists.
4. The Paternalistic or Trusteeship Theory of Labour Welfare:
In this theory it is held that the industrialists or employers hold the total industrial estate, properties and profits accruing form them in trust for the workmen, for him, and for society. It assumes that the workmen are like minors and are not able to look after their own interests that they are ignorant because of lack of education. Employers therefore have the moral responsibility to look after the interests of their wards, who are the workers.
In other words, the employer should hold the industrial assets for himself, for the benefit of his workers, and also for society. The main emphasis of this theory is that employers should provide funds on an ongoing basis for the well-being of their employees.
5. The Placating Theory of Labour Welfare:
a. As labour groups are becoming better organized and are becoming demanding and militant, being more conscious of their rights and privileges that even before, their demand for higher wages and better standards increases. The placing theory advocates timely and periodical acts of labour welfare to appease the workers.
b. This theory is based on the fact that the labour groups are becoming demanding and militant and are more conscious of their rights and privileges than ever before. Their demand for higher wages and better standards of living cannot be ignored. According to this theory, timely and periodical acts of labour welfare can appease the workers. They are some kind of pacifiers which come with a friendly gesture.
6. The Public Relations Theory of Labour Welfare:
This theory provides the basis for an atmosphere of goodwill between labour and management, and also between management and the public, labour welfare programmes under this theory, work as a sort of an advertisement and help an organization to project its good image and build up and promote good and healthy public relations.
The labour welfare movements may be utilized to improve relations between management and labour. An advertisement or an exhibition of a labour welfare programme may help the management projects a good image of the company.
7. The Functional Theory of Labour Welfare:
The concept behind this theory is that a happy and healthy person is a better, more productive worker. Here, welfare is used as a means to secure, preserve and develop the efficiency and productivity of labour. The approach to any solutions, especially as that as between the workers and the management should be dialogue and an understanding of one another’s viewpoint. Once agreement has been reached, compliance by both parties can be assured to a very great extent. This also called the efficiency theory. This theory is a reflection of contemporary support for labour welfare. It can work well if both the parties have an identical aim in view; that is, higher production through better welfare. This will encourage labour’s participation in welfare programmes.
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