The Concept of Industrial Relations and Background

The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and ‘Relations’. “Industry” refers to “Any productive activity in which an individual (or a group of individuals) is (are) engaged”. By “relations” we mean “the relationships that exist within the industry between the employer and his workmen.”

Concept of Industrial Relations

The term industrial relations explain the relationship between employees and management which stem directly or indirectly from union-employer relationship.Industrial relations are the relationships between employees and employers within the organizational settings.

The field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated.

The term industrial relations have a broad as well as a narrow outlook. Originally, industrial relations were broadly defined to include the relationships and interactions between employers and employees. From this perspective, industrial relations cover all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations.

Now its meaning has become more specific and restricted. Accordingly, industrial relations pertains to the study and practice of collective bargaining, trade unionism, and labor-management relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers.

The term industrial relations have a broad as well as a narrow outlook. Originally, industrial relations were broadly defined to include the relationships and interactions between employers and employees. From this perspective, industrial relations cover all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations.

Now its meaning has become more specific and restricted. Accordingly, industrial relations pertains to the study and practice of collective bargaining, trade unionism, and labor-management relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers.

Industrial relations is used to denote the collective relationships between management and the workers. Traditionally, the term industrial relations is used to cover such aspects of industrial life as trade unionism, collective bargaining, workers’ participation in management, discipline and grievance handling, industrial disputes and interpretation of labor laws and rules and code of conduct

In the words of Lester,Industrial relations involve attempts at arriving at solutions between the conflicting objectives and values; between the profit motive and social gain; between discipline and freedom, between authority and industrial democracy; between bargaining and co-operation; and between conflicting interests of the individual, the group and the community”.

The National Commission on Labor (NCL)also emphasize on the same concept. According to NCL, industrial relations affect not merely the interests of the two participants- labor and management, but also the economic and social goals to which the State addresses itself. To regulate these relations in socially desirable channels is a function, which the State is in the best position to perform.

Importance of Industrial Relations

Industrial relations seek to protect the rights of managers too. Managers expect workers to observe codes of discipline, not to join illegal strikes, not to indulge in damage to company’s property, not to assault supervisors or peers, and not to come inebriated to the workplace. Where a worker’s behavior deviates from expected lines, it is the management’s prerogative to take action.

There is a set procedure for handling any act of indiscipline or indiscretion on the part of an employee, and if the management satisfies the procedure, it is justified in taking action or even dismissing the employee from service.

Role:

• To help establish and maintain true industrial democracy which is a prerequisite for the establishment of a socialist society.
• To help in the economic progress of a country. The problem of an increase in productivity is essentially the problem of maintaining good industrial relations. That is why they form an important plank of the economic development plan of every civilized nation.
• To help management both in the formulation of informed labour relations policies and in their translation into action.
• To encourage collective bargaining as a means of self-regulation. They consider the negotiation process as an educational opportunity, a chance both to learn and to teach.
• To help government in making laws forbidding unfair practices of unions and employers. In a climate of good industrial relations, every party works for the solidarity of workers’ movement. Unions gain more strength and vitality.

In narrow sense, the term ‘industrial relations’ means relations between parties in industrial establishments. That means, nature of relationship established amongst the parties in the industry. Dictionary meaning of industrial relations is the relations between management and employees in industrial concerns. In short, the term, ‘industrial relations’ means the relations between employees and management arising out of day to day work in industry.

The healthy industrial relations are key to the progress and success. Their significance may be discussed as under:

Uninterrupted production

The most important benefit of industrial relations is that this ensures continuity of production. This means, continuous employment for all from manager to workers. The resources are fully utilized, resulting in the maximum possible production. There is uninterrupted flow of income for all. Smooth running of an industry is of vital importance for several other industries; to other industries if the products are intermediaries or inputs; to exporters if these are export goods; to consumers and workers, if these are goods of mass consumption.

Reduction in Industrial Disputes:

Good industrial relations reduce the industrial disputes. Disputes are reflections of the failure of basic human urges or motivations to secure adequate satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts, go-slow tactics, gherao and grievances are some of the reflections of industrial unrest which do not spring up in an atmosphere of industrial peace. It helps promoting co-operation and increasing production.

Mental Revolution:

The main object of industrial relation is a complete mental revolution of workers and employees. The industrial peace lies ultimately in a transformed outlook on the part of both. It is the business of leadership in the ranks of workers, employees and Government to work out a new relationship in consonance with a spirit of true democracy. Both should think themselves as partners of the industry and the role of workers in such a partnership should be recognized. On the other hand, workers must recognize employer’s authority. It will naturally have impact on production because they recognize the interest of each other.

High morale:

Good industrial relations improve the morale of the employees. Employees work with great zeal with the feeling in mind that the interest of employer and employees is one and the same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of industry. The employer in his turn must realize that the gains of industry are not for him along but they should be shared equally and generously with his workers. In other words, complete unity of thought and action is the main achievement of industrial peace. It increases the place of workers in the society and their ego is satisfied. It naturally affects production because mighty co-operative efforts alone can produce great results.

Reduced Wastage:

Good industrial relations are maintained on the basis of cooperation and recognition of each other. It will help increase production. Wastage of man, material and machines are reduced to the minimum and thus national interest is protected.

Thus, it is evident that good industrial relations is the basis of higher production with minimum cost and higher profits. It also results in increased efficiency of workers. New and new projects may be introduced for the welfare of the workers and to promote the morale of the people at work. An economy organized for planned production and distribution, aiming at the realization of social justice and welfare of the massage can function effectively only in an atmosphere of industrial peace. If the twin objectives of rapid national development and increased social justice are to be achieved, there must be harmonious relationship between management and labor.

Objectives of Industrial Relations:

• To safeguard the interest of labour and management by securing the highest level of mutual understanding and good-will among all those sections in the industry which participate in the process of production.
• To avoid industrial conflict or strife and develop harmonious relations, which are an essential factor in the productivity of workers and the industrial progress of a country.
• To raise productivity to a higher level in an era of full employment by lessening the tendency to high turnover and frequency absenteeism.
• To establish and promote the growth of an industrial democracy based on labor partnership in the sharing of profits and of managerial decisions, so that ban individuals personality may grow its full stature for the benefit of the industry and of the country as well.
• To eliminate or minimize the number of strikes, lockouts and gheraos by providing reasonable wages, improved living and working conditions, said fringe benefits.
• To improve the economic conditions of workers in the existing state of industrial managements and political government.
• Socialization of industries by making the state itself a major employer
• Vesting of a proprietary interest of the workers in the industries in which they are employed.

History

Industrial relations got its roots in the industrial revolution and the spread of capitalism which created the modern employment relationship by spawning free labour markets and large-scale industrial organizations with thousands of wage workers. Kaufman, the Global Evolution of Industrial Relations.

As both societies wrestled with these massive economic and social changes, labour problems arose. Low wages, long working hours, monotonous and dangerous work, and abusive supervisory practices led to high employee turnover, violent strikes, and the threat of social instability and due to confluence of these event and ideas associated with rise of democratic governments in the western world of the late nineteenth and twentieth centuries. It emerged from both negative and positive impulses

The negative aspect, industrial relations was a reaction against deplorable working condition and with unrepressed profit making and employee clout in the nine teeth century and twentieth century capitalism and this led to the deplorable situations a conflict between capital and labour and hardship for employee of that time

So we come to the conclusion that industrial relation was part of the reform wing. Industrial relations arose from the conviction that cordial relationship between workers and employer could be improvised through a combination of scientific discovery, education, legal reform.

Current situation

Therefore, the maintenance of a good human relationship is a must in today business environment, because in case of its absence the organizational structure may crumble. Employees constitute the most valuable assets of any organization.

Any neglect of the important factor is likely to result in increased cost of production in term of wage and salaries, benefits and services; working conditions, increased labour turn-over, absenteeism, indiscipline and cleavages, strikes and transfer on the ground of discontent and the like, besides deterioration in the quality of the goods produced and strained relations between labour and management.

The Germans practice co-determination which gives workers of the organization representation at the management of the companies these known as the law allows workers to elect representatives (usually trade union representatives) for the supervisory board of directors.