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Unit 1

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Unit 1

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awahabanjum9
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Concept and Approaches

UNIT 1 CONCEPT AND APPROACHES


Objectives
After completion of this unit, you should be able to:
 understand the concept of industrial and employment relations;
 understand the actors in industrial and employment relations;
 comprehend the definitions of industrial relations;
 gain insight into approaches of industrial and employment relations;
 understand the need and significance of industrial relations; and
 understand the factors affecting employment relations.
Structure
1.1 Introduction
1.2 Concept and nature of industrial and employment relations
1.3 Actors in industrial relations
1.4 Definition of industrial relations
1.5 Need and significance of industrial and employment relations
1.6 Approaches to industrial relations
1.7 Factors affecting employement relations
1.8 Issues and challenges for industrial and employment relations
1.9 Summary
1.10 Self Assessment Questions
1.11 Further Readings and References

1.1 INTRODUCTION
Growth of a nation is dependent upon its industrial development to a large extent. A
number of factors are important for the expansion of industrial system. Ever since the
factory system began in the world, workers have been the most important element for
ensuring production and productivity of an organization. Interface between the workers
and factors like technology, finances, materials result into production of goods and
services. Increasing competitiveness, technological advancements, customer
expectations have made the workforce of an organization a source of competitive
advantage. Employers expect them to contribute to the growth of orgnaisation by
putting in hard labour. Hence, managing workforce effectively has become a vital part
of the present-day of management. Workers have their own goals, objectives, attitudes
etc. It is essential that work goes on in the organization in a harmonious manner for
maximizing the productivity. To achieve harmony in functioning it is imperative that
interests of employer as well as employees are fulfilled and none of the parties feel
9
Industrial and Employment exploited. Ignoring the human element leads to poor relations between the management
Relations An Overview
and workers. The outcomes of poor relation manifest in the form of increased labour
turnover, absenteeism, indiscipline, poor quality of output, increased cost of
production, among others. Cordial industrial relations are essential for boosting
industrial growth and productivity which is essential not only for building self-reliance
but also for increasing GDP of the nation. Industrial harmony cannot be regarded as
a matter in which only the employers and employees are concerned; it is of vital
importance to the community as a whole. That is how the concept of industrial
harmony involves the cooperation not only of the employers and the employees, but
also of the community at large. Poor relations between management and workers
may result in industrial unrest which affects the economic growth of a nation. Therefore,
maintaining cordial relations between management and workers is of paramount
importance anywhere in the world.
Several changes in recent years have been responsible for more attention being paid to
employment relations within organizations. Impact of globalization has had a significant
impact on the way enterprises are managed and work is performed. Competitiveness
has increased due to which firms need to enhance their quality of goods and services
and reduce the cost of production to be able to offer best quality product at competitive
prices. To achieve this and innovation and workers’ skills become important besides
cost cutting. The quality of the workforce and training have become critical factors.
There is a need for multiskilled easily trainable employees.
Technology has been another important factor that has shifted attention to workplace
relations. Technology management is possible only through people. Technology is also
displacing traditional jobs and creating new jobs requiring different skills. Further
information technology, the limits of which are not known in terms of its potential to
effect change, is exerting a tremendous impact on the structure of organizations, the
nature and location of work and the way it is organized.
This has resulted in management effected less by command and supervision, and
more through emphasis on cooperation, information-sharing and communication,
and with a more participative approach to managing people. Modern technology
now makes it possible for aspects of work to be performed outside the enterprise,
for example from home, and even outside national borders. Part-time work is
increasing particularly due to the influx of more females into employment and their
preference in some cases for part-time work. Developing countries are also feeling
the impact of these changes. In this unit, we shall cover the concept of industrial and
employment relations.

1.2 CONCEPT AND NATURE OF INDUSTRIAL AND


EMPLOYMENT RELATIONS
Industrial Relations deals with the worker- employer relation in an industry. This
relationship emerges out of work-related interactions between management and
workforce. It applies to both government- owned and privately- owned organizations.
State plays an important role in shaping industrial relations as it makes laws and sets
regulatory framework for labour. Government has attempted to make Industrial
Relations more healthy through various statutory and non-statutory methods. Legal
framework constitutes various labour legislations which provide basis for management
10 and workers not only for creating efficient work conditions but also for maintaining
good relationship. Industrial relations in a country are affected by various factors, the Concept and Approaches
prominent being political ideologies, economic factors, strength of trade unions,
awareness level of workers, and management beliefs.
Workers have been the weaker of the two parties ever since the factory system began.
Industrial relations function with the objective to bringing equality and equity between
the two parties, i.e., workers and management. It helps in standardizing terms and
conditions of working within organization, within industry and across industries.
Characteristics of industrial relations of a nation are determined by social structure,
attitudinal structuring, historical background, political structure, economic patterns. Thus,
the concept of industrial relations is dynamic, which is dependent upon the pattern of
society, economic system and political set-up of a country. Besides, the workers and
management, State is an important part of industrial relations since it influences these
relations substantially. Thus, industrial relations is tripartite in nature.
Industrial relations is multidisciplinary in approach. Understanding the origin and nature
of industrial relations involves the study of history. Government interventions can be
understood through the concepts of political science. Since industrial relations is governed
by a legal framework and evolves through the decisions of various lawsuits, law has
important bearing on it. It integrates the concepts of economics as it involves issues
related to wages, benefits, social security measures; it involves understanding the
conflicts, disputes, formation of workers’ unions, which involves sociology; it also
involves negotiations, understanding attitudes, ensuring workers’ safety-which may
involve psychology and social psychology. In today’s networked world, changes, events
and upheavals in one country can have significant implications for industrial relations as
well. Moreover, international bodies like International Labour Organisation have an
important impact upon labour related issues. Thus the discipline of international relations
also contributes towards understand industrial relations today.

1.3 ACTORS IN INDUSTRIAL AND EMPLOYMENT


RELATIONS
Industrial and employments relations has three actors:
 The workers and their organisations;
 Employers and their organisations; and
 The state
The three actors of industrial relations are discussed in detail as following paragraphs.
1) Workers and their organizations: The characteristics of workers like their
educational level, awareness level, level of skills acquired, poverty level, rural/
urban background, migrant nature, cultural characteristics, attitudes -all play an
important role in industrial relations. The objective of workers to work in an
establishment is to earn a living and provide for themselves and their families a
decent living. They want maximum financial and non-financial benefits so as to
have a comfortable living. Since individual worker is weak and his/her voice may
not be heard by management, therefore they often associate to form organisations
that give them strength. Such associations are generally known as trade unions,
which may or may not have political affiliations. The main purpose of formation of 11
Industrial and Employment trade unions id to give voice to workers and strengthen them to stand up for their
Relations An Overview
rights. Thus, trade unions safeguard the interests of the workers by putting pressure
on the management.
2) Employers and their organizations: the employers are important actors in
industrial relations. They create employment and provide remuneration to workers
in return for their labour. They regulate the work of employees so as to achieve
maximum productivity. Their objective is to generate maximum profits at minimum
cost. Since the cost includes expenditure on workers as well, therefore cutting
down this expenditure on workers may also be an objective for employers. To
pressurize management to accept their demands, workers often resort to pressure
tactics like strikes, gherao, pelting etc. which results into industrial unrest. To
strengthen themselves and increase their bargaining power, employers also organize
into associations.
3) State: Since maintaining harmonious employer-worker relations is important for
the growth of the economy of nation, therefore the State makes active efforts to
create a healthy work environment. Government’s role becomes important as it
frames policies, regulations and legislations for maintaining healthy employer-
employee relations so that productivity remains high. The state also creates platforms
for bringing together the representatives of employer, worker and the State for
discussions pertaining to labour policy issues. State also intervenes in when conflicts
cannot be resolved between management and trade unions through mutual
negotiations. State also intervenes in regulating wages, bonus and working conditions
through various laws relating to labour. Thus, the state is an important actor in
industrial relations in India.

1.4 DEFINITION OF INDUSTRIAL RELATIONS


Numerous definitions of industrial relations have been proposed. Some of the important
are:
Industrial relations is a concrete system of interaction between workers and management
in industry’ (Walker, 1967).
‘Industrial relations may be described as a study of institutions of job regulations’
(Flanders, 1970).
‘Industrial relations is concerned with bargaining, explicit and implicit between and
among employers and employees, over the making of the rules of work and with
factors that affect this bargaining’ (Laffer, 1974).
‘Industrial relations is the study of all aspects of job regulation and making and
administering of rules which regulate employment relationship - regardless of whether
they are seen as formal and informal, structured or unstructured’ (Bain and Clegg,
1974).
‘Industrial relations can be simply defined as management of labour problems in an
industrial society, or more operationally, as the theories, techniques and institutions for
the resolution of contending money and power claims in an employment relationship’
(Barbash, 1984).
12
Thus, it may be understood that industrial relations is concerned with relations formed Concept and Approaches
between workers and their organisations, employers and their organisations and the
State, which are based on economic or social interests and may extend to the industry,
sector, ultimately leading to production of goods and services by regulating work related
human activities and behaviours.
OBJECTIVES OF INDUSTRIAL AND EMPLOYMENT RELATIONS
The primary objective of industrial relations is to bring about good and healthy relations
between the labour and the management so as to enhance productivity for economic
growth of the nation. Other objectives are derived from this main objective. Kirkadly
divides objectives into four.
 Improving the economic condition of workers
 Regulate of production by the State
Nationalization of industries by making the State the employer; and
 Vesting the proprietorship of the industries in the workers.
In today’s time the objectives of industrial and employment relations include:
 To safeguard the interest of labour and management
 Securing mutual understanding and harmony between different players in
industry
 To avoid industrial conflicts and disputes to enhance efficiency
 To maximise productivity for the growth of nation
 To maintain industrial discipline
 To establish and maintain Industrial Democracy, by ensuring workers’
participation in management
 To maintain industrial peace by bring down strikes, lockouts
 Ensuring fair and reasonable wages to workers to improve their standard of
living
 Evolving a healthy social order.
 Promotion and development of healthy labour-management relations
Activity 1: Go through same existing literature and write a comprehension on the
concept of industrial and employment relations in your own words.
................................................................................................................................
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13
Industrial and Employment
Relations An Overview 1.5 NEED AND SIGNIFICANCE OF INUSTRIAL
AND EMPLOYMENT RELATIONS
 The most important benefit of industrial relations is that this ensures continuity of
production and also the resources can be fully utilized, resulting in the maximum
possible production.
 It reduces the industrial disputes. Strikes, lockouts, and grievances are some of
the reflections of industrial unrest which do not spring up in an atmosphere of
industrial peace.
 Good industrial relations improve the morale of the employees as a resulted
productivity can be enhanced. Wastages of man, material and machines are reduced
to the minimum.
 Literature has explored the industrial relations impact on organizational performance,
especially on the productivity dimension of performance.
More recent studies state that performance is determined by IR practices. This study
examines the impact of Industrial Relations strategies on organizational productivity
and performance. The effects of Trade unions, Grievances, Collective Bargaining &
Participative Management on RINL performance are tested here.

1.6 APPROACHES TO INDUSTRIAL RELATIONS


Different theorists and professionals have viewed Industrial Relations differently. On
the basis of the orientations of different practitioner different approaches have been
developed to explain the concept of Industrial Relations. some of the important
approaches are as following:
1. System’s approach
2. Unitary approach
3. Pluralistic approach
4. Marxist approach
5. The social action approach
6. The human relations approach
7. Mahatma Gandhi’s trusteeship approach
8. Socialistic approach
9. Minnesota model
These approaches are discussed in the following section:
1. Dunlop’s system approach
The systems approach of IR was developed by John Dunlop in 1958. Dunlop is regarded
as father of industrial relations. He proposed that industrial relations system is a separate
subsystem of society. There are three components of this sub-system. The interactions
14
and interrelationships of the three components of this sub-system constitute industrial Concept and Approaches

relations. The three components are:


i. Management (comprising managers)
ii. Workers (as informal and formal organisations)
iii. State (government bodies and organisations concerned with the relationship
between workers and their organizations).
The interactions and interrelationships between the three parties result into establishment
of rules and regulations that governs the work-related behaviours of management and
workers. These rules make the sub-system of industrial relations different from other
sub-systems of society and determine the existence of industrial relations and are the
important output of industrial relations. The three components of industrial relations
are influenced by the forces of environment, i.e, technological factors, economic factors,
market structures and other societal forces.
Though management and workers have divergent interests yet they share some common
objectives. These shared objectives drive them to resolve conflicts and work together
for achieving the common goals. This provides stability to industrial relations system.
There are certain inherent drawbacks in Dunlop’s approach. It assumes the stability of
factors of internal and external environment.
i. It does not explain how will the system function under dynamic conditions.
Dunlop’s approach focuses on rule making institutions and the settlement of
conflicts. It does not examine the causes of conflicts.
ii. There is no agreement as to whether the central feature of an industrial relations
system should be considered as a network of rules or as a process that makes
rule.
iii. Dunlop’s system concentrates on the process and ignores the role and impact
of informal groups formed at workplace thus discounting behavioural dynamics.
2. Unitary approach
Unitary approach perceives organization as an integrated system working in harmony.
All the members of the organization share the same objectives, interests and purposes,
working towards the common goals. Such an organisation ‘strives jointly towards a
common objective, each contributing to the best of one’s ability. Every worker has a
place in organization and willingly accepts his responsibilities for benefit of all, following
the leader appointed by the system. Utitarismis based upon paternalistic approach
and believes that there should be one source of authority in an organization and
others should work under this authority to achieve common objectives. It demands
loyalty of all employees. Management’s authority is regarded as legitimate and rational.
Any opposition to it (whether formal or informal, internal or external) is seen as
unwarranted. Workplace conflict is perceived as disruptive and therefore trade unions
are deemed as unnecessary. It is normal for employees to cooperate with management.
Conflict is as viewed as temporary aberration resulting from poor management of
employees, or the mismatch between employees and organizational culture. This
approach has the strength that it emphasizes on the significance of workers in the
organization.
15
Industrial and Employment The approach has failed to consider different variables affecting IR within individual
Relations An Overview
organizations and the total industrial sector. This approach has been criticized on the
basis that it is manipulative and exploitative. Also, it is argued that conflict is inevitable
to industry.
3. Pluralistic-Perspective
Pluralistic perspective also known as the Oxford Approach views society as containing
multiple but related interests which must be maintained in equilibrium. On the same
lines, organization is perceived as being made up of significant and divergent sub-
groups, namely management and trade unions. Since interests are opposing therefore
conflicts of interest and disagreements between management and workers/workers’
organisations over work-related issues and economic issues, like distribution of profits
as normal and inevitable. According to pluralistic approach, management should be
less authoritative and more cooperative as to maintain harmony. Trade unions are
deemed as legitimate representatives of employees. They should anticipate and resolve
this by securing agreed procedures for settling disputes. The focus is on the resolution
of conflict rather than its generation,
In contrast to the unitary approach, the pluralistic approach considers conflict between
management and employees as rational and inevitable. Conflict is dealt by negotiations
and mutual discussions and is not viewed as undesirable and something to avoid. In
fact, if divergent views and conflicts are properly managed, it could lead to could lead
to development and positive change. Thus, managers should be practical in accepting
conflict as natural outcome of relations between management and workers. Industry
has greater proclivity for conflict rather than harmony. Conflict is an important component
of pluralistic approach. A conflict situation enhances power of trade unions as give
them bargaining power in an effort to resolve the conflict. It is an essential ingredient
for the pluralist approach.
The pluralistic approach perceives organizations as combinations of competing interests,
where the role of the management is to resolve differences between the opposing
interest groups. Trade unions as considered as legitimate representatives of employee
interests. Employees join unions to protect their interests and influence decision-making
by the management. Unions, thus, balance the power between the management and
employees. Stability in industrial relations is achieved through bargaining between
management and unions. Pluralistic approach advocates the presence of a strong union
as necessary. Role of the State is to guard society’s interests by enacting legislations
and creating industrial tribunals that are responsible for resolution of conflicts and
disputes. The stress is on a negotiated order, a voluntary reconciliation between opposing
forces with minimal intervention from external agencies.
Pluralist frame of reference has been criticized on the grounds that an equilibrium in
relations between management and labour is difficult to attain and maintain. This is
because neither management nor unions are always able to assert equal influence. A
society may be free but power distribution is not necessarily equal among the competing
forces. Therefore, some kind of State intervention has become necessary to bring two
parties involved in a conflict on equal terms. It over-emphasises the significance of
collective bargaining and gives inadequate weight to the role of the other influencing
factors in the determination of rules. Institutional factors are viewed as of paramount
importance, while variables such as technology, market, values, and ideology, are not
given any prominence.
16
4. Marxist Approach Concept and Approaches

This approach is based on the ideology of Karl Marx. 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. Marxism questions the power relationships of society. The theory is
based on premise that industrial relations represent class conflict and is more of market-
relations. It proposes that the mode of wealth creation by capitalists determine the
social relations at work and general character of society. The Marxist approach is
primarily based on power relationship between management and labour and is
characterised by the struggle of both the classes to gain supremacy so as to exert
greater influence over the other party. it ascribes that the conflict is the product of the
capitalist society which is based on classes.
Labour and capital have essentially different interests in an organization, and these
interests are conflicting. Both the parties get affected as an outcome of confrontation
between conflicting interests. The objective of management is to enhance productivity
by gaining control over the labour. The wages of the labour are seen as a cost and,
therefore, management makes attempt to minimize it. Labour is viewed as a means of
generating profit. Workers endeavour for maximum possible wages to improve their
standard of living and resort to pressure tactics like strike to get their demand accepted.
Systems like bargaining, participation, cooperation do not offer permanent solution for
resolving the labour-management conflict. It can be solved by uprooting capitalistic
system.
Marxists view conflict as an essential feature of capitalism, a system where the society
is divided between those who own and control the means of production and those
who offer their labour to carry out production. Though plularists also consider conflict
as inevitable but they differ from Marxists as they consider conflict as a natural process
in any industry anywhere. Marxists believe that class-conflict is essential for social
change to take place and trade unions are nothing but response of labour towards
exploitation by capitalist. It acts as a weapon to bring radical a social change to improve
the position of labour in the society. While pluralists argue that state intervention is
necessary to protect the overall interest of society, Marxists believe that state intervention
is supportive of capitalist’s interest rather than that of worker.
The main drawback of Marxist approach of industrial relations is that it has a narrow
focus as it only takes into account the relations between capitalist and labour in explaining
industrial relations.
5. Social Action Approach
The social action approach is a modification of the system approach. In the system
approach, external environment plays a dominant role while the actors such as
employers, employees and their representatives play a passive role in the process.
On the contrary, in the social action approach an active role is played by the workers
and employers. The actors’ understanding of the work situation becomes more
important than the social factors and their opinion determines their attitude and
behavior towards industrial relations. The main protagonist of this approach is Max
Weber. The theory considers negotiations as an important tool for resolving conflicts.
The actors are willing to cooperate with each other and bargaining forms the basis
for such cooperation. 17
Industrial and Employment The social action approach of Weber has laid considerable importance to the question
Relations An Overview
of control in the context of increasing rationalisation and bureaucratization. As per this
approach, a trade union has both economic purposes as well as the goal of involvement
in political and power struggles. Some of the major orientations in the Weberian
approach have been to analyse the impact of techno-economic and politico-organisational
changes on trade union structure and processes, to analyse the interpretation of workers’
approaches to trade unionism, and to analyse the power of various actors of the
industrial relations environment – government, employers, trade unions and political
parties. Thus, the Weberian approach gives the importance to “control” as well as to
the power struggle to control work organisations.
6. Human Relations Approach
The human relations school founded by Elton Mayo and later propagated by
Roethlisberger, Whitehead, W. F. Whyte and Homans offers a comprehensive
view of the nature of industrial conflict and harmony. The human relations approach
focuses on ways to improve employee motivation and productivity. Keith Davis is
the main proponent of this theory. According to him, human relations aim to integrate
employees with the work-place such that they feel encouraged to cooperate with
each other to work effectively and efficiently, deriving economic, psychological
and social satisfactions. It creates an environment at work place where people’s
productivity is enhanced through mutuality of interest. The human relations approach
highlights certain policies and techniques to improve employee morale, efficiency
and job satisfaction.
Although human relations school has taken into consideration aspects like
communication, group dynamics, employee participation in management, it received
criticism on the ground that it encouraged dependence between employees, did not
focus on individual development, and discounted the significance of technology in
industry.
7. Mahatma Gandhi’s Trusteeship Approach
Mahatma Gandhi applied the principle of trusteeship to industrial relations. Employers
should not consider themselves as sole owners of enterprises, though they may be the
legal owners. They should regard themselves only as trustees, or co-owners. Workers
should regard themselves as trustees, and should consider themselves as the owners of
the resources of the enterprise, protect them and put them to the best use. It means
that only that amount of wealth should be used by capitalist as is necessary to satisfy
his needs and wants. Excess wealth belongs to society so be used for benefit of all.
This means that there should be no conflict of interest between capitalist and labour.
Though legally wealth belongs to capitalists but morally it belongs to labourers and
should be used for their welfare.
Mahatma Gandhi believed in in philosophy of Sarvodaya, i.e. the good of all - benefit
should reach even to the lowest stratum of the society. When this approach is applied
to industry it refers to peaceful co-existence of capital and labour. Any conflict that
arises is very natural in a society governed by self-interest, but it should be resolved by
means of satyagraha i.e., non-violent non-cooperation. Labourers can pressurize
capitalist for their grievances redressal through non-violent non-cooperation, is means
peaceful strikes. He believed that it is the right of workers to go on strikes to secure
18 justice. He had himself led some strikes for Textile workers of Ahmadabad. He believed
that strikes, if taking place, should before genuine reasons. He laid down certain Concept and Approaches
conditions for a successful strike:
(a) the cause of the strike must be just and and address only redressal of genuine
grievances.
(b) Workers should try all peaceful and constitutional methods of negotiations
(c) Strikes should not be resorted to unless all efforts for peaceful negotiations
are exhausted
(d) Strikes should be peaceful and non-violent.
The philosophy of trusteeship aims at achieving economic equality and the prosperity
of workers in a capitalist society by non-violent means. Gandhiji believed that industrial
peace was an essential condition not only for the growth and development of the
workers, but also employers, industry and overall society. He proposed collective
bargaining as an effective means of negotiations between workers and employers. He
advocated mutual settlement of disputes through voluntary methods of dispute settlement
which can be achieved through mutual arbitration and mutual settlement of disputes.
Constructive industrial relations can be achieved through mutual respect, equality, and
strong labour organisation.
8. Socialistic Approach
Socialistic approach considers workers’ participation in management as an important
factor in the development and perfection of socialistic democracy. This ensures fullest
decentralization and participation in management as multi-dimensional program for
socialist construction. The economic reconstruction is based upon the nationalization
of the means of production and exchange.
Under Communism, state machinery is abolished and the functions of the State are
taken away by the society through public organization based on mutual consent and
co-operation and the compulsion element in relation to members of the society is
removed. In the process of taking away powers from the state and delegating its functions
to the society, workers’ participation in management is of great importance.
Workers’ self- governing bodies may be formed which can participate effectively and
efficiently in management. Such bodies have actual experience of the activities of the
people and are much aware of the local conditions prevailing there. These bodies
initiate the taking away of powers of State. Socialist democracy is created from the
workers of lower rank and they are trained in such a way that they can promote the
professional interest of the workers in the most effective manner. The collective
management of the means of production creates integrated personality and national
integration.
Activity 2: Make a pictorial representation showing the commonalities and
differences between the above presented approaches.
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19
Industrial and Employment
Relations An Overview 1.7 FACTORS AFFECTING EMPLOYMENT
RELATIONS
There are various factors that affect employment relations. Some factors are internal to
the firm, while other factors may be related to external environment.
1. Internal Factors
These are the factors within the organization. These pertain to management and workers/
trade unions of workers
i) Management related factors
 Attitudes of management towards workers and trade unions
 Management belief in industrial democracy
 Concern of management for worker welfare Style of leadership, i.e., autocratic,
participative etc.
 Effectiveness and capability of managers and supervisors in resolving grievances
and handling disputes.
 Management concern for worker welfare
 Clarity of management policies related to work and workers
ii) Workers related factors
 Union attitudes towards management
 Inter union rivalries in case of more than one union
 Readiness of workers to work
 Union leadership
 Readiness to comply with policies
Bargaining power of trade unions
2. External Factors
 Influence of political parties on trade unions
 Economic factors, for example, inflation, economic downturns etc.
 Success of collective bargaining at national, local or plant level
 State interventions
 Labour laws of the nation
 Regulatory framework
 Effectiveness of dispute settlement machinery
 Employment situation nationally or locally Legal framework within which IR
exists
20
Concept and Approaches
1.8 ISSUES AND CHALLENGES FOR INDUSTRIAL
AND EMPLOYMENT RELATIONS
There are various issues and challenges for industrial and employment relations in India
that have emerged after the introduction of structural changes under economic reforms
and as a result of advancements of technology. Economic reforms have changed the
business environment in various ways. There have been a number of changes in regulatory
environment, aspirations of workers, expectations of employers. Thus, industrial
relations system needs to adapt to these changes .Firms are changing their mode of
working to meet the competition. Big firms are downsizing their operations for cost
cutting and using contracting and sub-contracting to bring down costs. As a result,
workers are being retrenched and laid off. Part-time and casual workers are employed
for cost cutting. Unorganised sector is expanding, while organized sector is getting
smaller in size. Due to casualization of labour, job insecurity is increasing.
Adoption of technology in business operations and automation of processes is another
reason for retrenchment of labour and job insecurity. Usage of technology in production
and other business processes makes training of workers essential. Technology and
modern methods of working are making jobs redundant. Management must make
efforts to educate and train workers on usage of technology driven machines and
processes so as to prevent job obsolescence. Multiskilled workers are required in the
modern day firm.
The influence voice of international community on various aspects of business, including
labour issues is increasing through international bodies like WTO, ILO, IMF.
Mangement cannot ignore the demand and concern of such forces.
The traditional industrial relations system and its institutions and practices were most
suited to the tasks of protecting and promoting the interests of workers with secure
permanent employment. The trend is towards increasing casualisation of labour, the
restructuring process, and technology changes/ upgradation have made the problems
of unemployment of labour more widespread and acute.
The growing emergence of start- ups has added a new dimension to labour issues.
The number of micro, small and medium-sized firms have increased. Most of these
firms remain beyond the purview of labour legislation and the organizations of labour in
these scattered units are weak and ineffective.
Growing globalization of economy means greater opportunities for foreign firms to
start operations in India. They need to understand and implement labour laws in India
and understand workers’ expectations to maintain harmonious employee relations.
As more and more workers are getting educated, they are becoming aware and
conscious of their rights. Also, there is a growing concern about human rights and
prevention of exploitation of labour. Thus, management must take all the measures to
ensure fair and proper working conditions.

1.9 SUMMARY
Maintaining cordial relations between management and workers is of paramount
importance anywhere in the world. Poor relations between management and workers
may result in industrial unrest which affects the economic growth of a nation. Industrial
21
Industrial and Employment Relations deals with the worker- employer relation in an industry. This relationship
Relations An Overview
emerges out of work-related interactions between management and workforce. The
three actors of industrial relations are workers, employers and the state. The primary
objective of industrial relations is to bring about good and healthy relations between
the labour and the management so as to enhance productivity for economic growth of
the nation. Different theorists and professionals have viewed Industrial Relations
differently. On the basis of the orientations of different practitioner different approaches
have been developed to explain the concept of Industrial Relations. There are various
factors that affect industrial relations. Some factors are internal to the firm, while other
factors may be related to external environment. Introduction of structural changes under
economic reforms advancements in technology have posed various issues and challenges
for industrial relations in India.

1.10 SELF ASSESSMENT QUESTIONS


1. Explain the concept of industrial and employment relations.
2. Discuss the role of the main actors of industrial relations.
3. What are the main objectives of industrial relations
4. Describe the systems approach to industrial relations
5. What are the salient features of pluralistic approach?
6. What are the causes of poor industrial relations?
7. Compare pluralist approach of industrial relations with unitary approach.
8. What are the challenges for industrial relations in India in post liberalization era?
9. Explain the factors affecting industrial relations in India.
10. What are the highlights of human relations approach?

1.11 FURTHER READINGS AND REFERENCES


 Ghosh, P. & Nandan, S. (2015). Industrial relations and labour laws. McGraw-
Hill Education.
 Venkata Ratnam, C. V. & Dhal, M. (2017). Industrial relations. Oxford University
Press.
 Srivastava, S. C. (2012). Industrial relations and labour laws. Vikas Publishing
House.

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