Module 1
Introduction to Industrial Relations
1.1 Overview
• Industrial Relations„ comprises of two terms: 'Industry' and
'Relations'.
Industry: Any productive activity in which individuals are engaged.
Relations: Relationships that exist within the industry between the
employer and his workmen.
• The term industrial relations explain the relationship between
employees and management which stem directly or indirectly from
union-employer relationship.
• Industrial relations are the interactions between employers,
employees (and their unions), and the state concerning workplace
dynamics, encompassing collective bargaining, dispute resolution, and
the establishment of employment terms and conditions.
• Effective industrial relations foster industrial peace, improve
working conditions and morale, and enhance productivity by
balancing the interests of all parties involved, ultimately contributing
to economic growth.
1.2 Definitions of IR
i) According to Dale Yoder, “IR is a whole field of relationship that
exists because of necessary collaboration of men and women in
employment process of an industry”.
ii) According to ILO (International Labor Organization), “IR deals
with either relationship between the state, employers and workers
organization or relation between occupational organization themselves”.
1.3 Scope of IR
• Protecting the interest of the employees
• Providing reasonable wages to employees
• Providing safe and hygienic working conditions
• Providing social security measures
• Maintaining strong Trade Unions
• Collective bargaining
1.4 Objectives of IR
• To develop employee-employer relationship
• To provide workers with wages and other benefits
• To maximize production and minimize conflicts
• To provide an opportunity to workers in decision making
• To develop trade union and improve worker's strength
• To maintain industrial democracy
1.5 Importance of IR
1. Foster Industrial Peace
• Employees and managers discuss the matter and consult each other
before initiating any actions.
• Thus, confusion and misunderstanding disappear. In this way, IR
helps create a peaceful environment in the organisation.
2. Promote Industrial Democracy
• Employees and employers have a right to say in the organization.
• Thus there is democracy and this can be achieved only when there is
good IR.
3) Benefit to Workers
• IR benefits workers in several ways. For example, it protects
workers against unethical practices on the part of management.
• It also provides a procedure to resolve workers‘ grievances relating
to work.
4) Improve Productivity and reduce wastage
• Good industrial relations serve as the key for increased productivity in
industrial organisations.
1.6 Approaches to IR
1) Psychological Approach
2) Sociological Approach
3) Human Relation Approach
4) Gandhian Approach
5) Unitary Approach
6) Radical/Marxist Approach
1) Psychological Approach
• According to psychologists, conflicts arise in industry due to
differences in personalities and attitudes.
• The study has been made by Mason Haril on behavior of union
leaders (labor) and Executives (management).
• He gave a photo of ordinary middle aged person and asked both
groups to rate.
• Union members said he is the manager and the management said he is
the union leader.
• Thus Haril concluded perception of both management and employees
differ which leads to industrial conflicts.
2) Sociological Approach
• Industry is a social world.
• Organizations are communities of individuals and groups with
different personalities, educational and family backgrounds,
emotions etc.
• These differences create problems, conflicts, competition among
members of industrial society.
3) Human Resource Approach
• Employees should be treated as human beings, not machines.
• They need freedom of speech, thought, expression , movement.
• If the manager uses autocratic style that involves supervision then
they will develop hatredness.
• But in democratic style people get positively motivated.
4) Gandhian Approach
• Gandhian principles are based on truth and non-violence.
• According to him workers should avoid strike as far as possible.
• He said if the workers organize strike, they should remain peaceful
and use non-violent methods.
5) Unitary Approach
• Here organization is an integrated and harmonious system that is
viewed as one happy family.
• Managers and staffs share same objectives and interests and work
together to obtain goals and there is no 'we-they' feeling.
• There is loyalty from all employees.
• Conflict is temporary if there is poor management.
• Workers should be skilled and ready to tackle any business situations.
• Managers should motivate employees and rewards should be given.
6) Radical/Marxist Approach
• Here both management and employees try to strengthen their
positions in the process of bargaining.
• For ex., employer pays less wages to employees and maximize their
profits whereas employees don‟t agree and this results in conflict.
1.7 Parties to IR
The main participants in industrial relations are:
(i) Employers.
(ii) Employees/workers.
(iii) Government.
• Employers have their associations to deal with labour problems and their
unions in a collective way.
• Workers are represented by their trade unions.
• Government tries to regulate the relations between the two i.e., employees
and employers by implementing labour laws.
• These three variables interact with each other within environment which
prevails in industrial sector at any time.
1.8 System Model of IR
i) Dunlop’s Model
Dunlop defines an industrial relations system in the following way –
• Industrial relations systems as a subsystem of society.
• An industrial relations system in its development comprises of certain
actors, contexts, an ideology, which binds the industrial relations
system together, and a body of rules created to govern the actors at
the workplace and work community.
• There are three sets of independent variables – the „actors’, the
„contexts‟ and the „ideology‟ of the system.
• The actors are – (a) managers, (b) workers, and (c) government.
• The contexts are the environment in which the actors are interacting
with each other at various levels and
• The ideology is their philosophy of industrial relations.
• Dunlop contended that the IR system was a subsystem of the wider
society that existed to resolve economic conflict.
• The main contexts that shaped the conduct of industrial relations were
technology, economy and distribution of political power. The
behaviour, actions and role of the individuals are shaped by the
cultures of the society.
• Finally, the whole system is bound together by shared understandings
and beliefs.
• For example, when the employer fixes wages for its employees,
government's legislation makes sure that there is a minimum wage
clause taken into consideration and when unions bargain on collective
agreement, they not only decide on the wages but also the extra
benefits that the employees will get from the employer.
1.9 Industrial Employees of India
• Industrial employees in India are governed by a set of labor laws, such
as the Industrial Employment (Standing Orders) Act, 1946 and the
Industrial Relations Code, 2020, which aim to define and regulate
working conditions.
• Key aspects of industrial employment include the requirement for
employers to have written conditions of employment, provisions
for wage payments, and regulations concerning safety and social
security.
1.10 Problems of Industrial Workers (Absenteeism,
Commitment, Work Ethics)
1) Absenteeism
i) Work-Related Factors
• Employees frequently miss work due to a lack of satisfaction with
their jobs, poor working conditions, lack of welfare facilities,
inadequate transport, or heavy workloads and overtime.
ii) Individual and Health Reasons
• Sickness, accidents, and personal or family issues are common
reasons for absence, leading to productivity loss and increased
administrative costs for the company.
2) Commitment
i) Migratory Nature
• The high mobility of the workforce, means many employees lack a
strong sense of belonging to the workplace, which can lead to lower
commitment.
ii) Lack of Recognition and Security
• Employees feel a lack of commitment when they are not recognized
for their work or feel insecure about their job prospects.
• Poor relationships with superiors or coworkers can also lack
commitment and contribute to a negative environment.
3) Work Ethics
i) Poor Work Environment
• A negative work environment, which can include issues like
harassment, poor leadership, and a lack of engagement, can lead
to a decline in work ethics.
ii) Job Dissatisfaction
• When workers are unhappy with their jobs, their work ethic can
suffer. This can manifest as decreased quality of work or less effort.
iii) Mental and Physical Strain
• Issues like burnout and work stress negatively affect an employee's
work ethic and overall performance that harms productivity.
1.11 Employee Relations
• Employee relations refers to an organization's efforts to maintain
positive relationships with employees.
• The goals of good employee relations include inspiring employee
loyalty, increasing engagement, reducing turnover, and creating a
positive company culture.
1.12 Significance of Employee Relation in Industry
• Employee relations refers to the manner in which management
addresses and interacts with the staff.
• Maintaining good employee relations helps reduce workforce
conflicts, boost staff morale and raise overall productivity.
• Employers need to maintain good employee relations in order to
ensure that business runs smoothly, avoid problems and employees
are able to give their very best.
• An organization that abides by good employee relations program,
provides fair treatment to all employees so the latter is only able to
give their best, but also remain loyal to the company.
• Work becomes easy if it is shared among all: A healthy relation with
fellow workers would ease the work load and in turn increases
productivity.
• Responsibilities must be divided among team members to
accomplish the assigned tasks within the stipulated time frame.
• If the management has a good rapport with colleagues, he will always
be eager to assist in the assignments, making the work easier.
• The organization becomes a happy place to work if the employees
work together as a family. An individual tends to lose focus and
concentration if his mind is always clouded with unnecessary tensions
and stress.
• An individual feels motivated in the company of others whom he
can trust and fall back on whenever needed. One feels secure and
confident and thus delivers his best.
• Healthy employee relations also discourage conflicts and fights
among individuals. People tend to adjust more and stop finding faults
in each other.
• Individuals don‟t waste their time in meaningless conflicts and
disputes, rather concentrate on their work and strive hard to perform
better.
• They start treating each other as friends and try their level best to
compromise and make everyone happy.
• A healthy employee relation reduces the problem of absenteeism
at the work place. Individuals are more serious towards their work
and feel like coming to office daily.
• It is wise to share a warm relation with fellow workers, because
you may need them any time.
• You might need leaves for some personal reasons; you must have a
trusted colleague who can handle the work on your behalf.
• A healthy employee relation also spreads positivity around.
1.13 Contemporary (Current) Issues in Employee Relations
1) Communication and conflict
• Poor communication can result in misunderstandings and distrust.
• Direct conflict between employees or between employees and
management is also a major issue.
2) Harassment and discrimination
• This includes unfair treatment or inappropriate behavior based on
factors like race, gender, age, or religion.
3) Performance and attendance
• This covers problems, such as failing to meet performance
standards, chronic absenteeism and poor time management.
4) Compensation and benefits
• Issues can arise from dissatisfaction with wages, pay raises, or the
fairness of the compensation and benefits packages.
5) Workplace safety and compliance
• This includes injuries from inadequate safety measures and failing
to adhere to legal or regulatory standards.
6) Employee engagement and morale
• A lack of connection, feeling undervalued, or unclear roles can
lead to disengagement, which impacts motivation and performance.
1.14 Managing IR Changes
1. Identify the change
• Before you can address employee relations during a change, it's
crucial to clearly identify the change itself.
• Determine the specific change that is occurring, whether it's a
reorganization, merger, or new company policy. This will help you
understand the impact it may have on employees.
2. Assess employee concerns
• During times of change, employees may have concerns, questions,
or anxieties.
• It's essential to create a space where employees can express their
thoughts and feelings.
• Facilitate open communication and gather feedback from employees
regarding their concerns or suggestions.
3. Develop a communication plan
• Effective communication is vital in managing employee relations
during change.
• Develop a comprehensive communication plan that outlines how
and when you will communicate with employees about the change.
• Use various channels such as team meetings, email updates, or one-
on-one discussions.
4. Implement support initiatives
• During times of change, employees may need additional support to
navigate the transition successfully.
• Implement support initiatives such as training programs,
workshops, or mentorship opportunities to help employees adapt to
the change and develop new skills if necessary.