STUDY MATERIAL – BBA

INDUSTRIAL RELATIONS

INDUSTRIAL RELATIONS
MODULE - I
Meaning and Definition
This has always remained as a disputable topic whether industrial relation is same as
personal relation, human relation or labour management employer employee or union and
management relations. A discussion on industrial relation considers all these as almost same.
However this refers to all types of relationships between all the parties concerned with the
industry. Basically the relationship
ationship that exists between the management or the owner & workers
or employees is commonly called as industrial relations. IR is viewed as the process by which
people and their organization interact at the place of work to establish the terms and conditions
conditi
of employment.
Industrial Relations mean differently to different actors of the system. From the view point of
the Management IR is –
• The platform to derive best output of employees
• Ensures profit and growth of organisation.
• Gives the best value of ROI.
RO
• Creates a conducive environment.
• Maintains industrial peace.
• Ensures uninterrupted production.
• Cooperation among employees.
From the union or workers view point IR ensures –
• Improvements in wages and salaries
• Improvements in working conditions
• Quick redressal
dressal of grievances
• Control over management actions
From the Government / Society view point IR –
• Helps in social development
• Improves production and productivity
• Ensures economic growth
• Ensures social justice
According to Dale Yoder ‘It refers to the relationship between management and employees
or among employees and their organization that arise out of employment’. It is a vast complex of
relationship obtaining between management and employees, union and management, union
and employees and between employees
employees themselves. To achieve good IR it is necessary to
secure cooperation among all the parties that is employees, management, union and
government.

Dr. Amaresh C Nayak, Asso. Prof. (HR & OB)

 STUDY MATERIAL – BBA
INDUSTRIAL RELATIONS
According to Tead & Metcalfe “Industrial Relations are the composite result of attitudes and
approaches of employers and employees towards each other with regard to planning,
supervision, direction, and co-ordination
co ordination of activities of an organisation with minimum of human
efforts and frictions with an animating of cooperation for genuine well-being
well being of all”.
There
here is no unanimity on the meaning and scope of IR since different terms such as the
Labour Management Relation, Employer
Employer-Employee Relations, Union-Management
Management Relations,
Personnel Relations, Human Relations etc. are in use. In the strictest sense, the terms
ter IR mean
the relationship between management and workmen in a unit or in an industry. In a wider
connotation, it means the organization and practice of multi
multi-pronged
pronged relationship between
workers and management, union and worker and the union and manageme
management in an industry. In
an organization the relationship between the workmen and employers may be personal and
informal at one end, and may be highly institutional with legally prescribed structures and
producers at the other end or a combination of both these
these with variations in the degree of
implications.
Important Features of IR
i). It is derived from employment relationship in the organisation.
ii). Both conflict and cooperation exists simultaneously (Attitudes, Behaviour shape up the
relationship).
iii). It is influenced
d by Technology, Socio-economic
Socio economic Conditions, Political setup of the country,
Governments Labour Policy.
iv). It is regulated by Government Rules, regulations, laws, customs and traditions
v). Equity and Fairness are the foundation of IR.
vi). Balance maintenance between power and authority distribution.
vii). An environment of Integrity, trust and transparency is maintained.
Objectives of IR
i) To promote healthy labour-management
labour relations.
ii) To protect the interest of employees and management by securing the highest level of
mutual understanding and goodwill among them.
iii) To check the exploitation and autocratic / authoritarian approach of management.
iv) To raise productivity to a higher level and to contribute to economic development of the
country.
v) To improve quality or work life of employees.
vi) To provide safeguards against health hazards, unsafe conditions of work.
vii) To increase the performance and productivity of employees and organisation.
viii) To check industrial disputes & conflicts and minimize the occurrence of strikes, lockouts
and
d gheraos for healthy work environment.
ix) To minimize labour turnover and absenteeism by providing job satisfaction to the
workmen.

Dr. Amaresh C Nayak, Asso. Prof. (HR & OB)

 STUDY MATERIAL – BBA
INDUSTRIAL RELATIONS
x) To facilitate and develop industrial democracy based on workers partnership in
management of industry.
xi) To establish government controls over industries to regulate production and industrial
relations.
xii) To bring social harmony and protection of citizen’s and consumer’s interests.
Value and Scope
The functioning of Industrial relation is confined under three broader aspects as such the
Personnel management, Collective Bargaining and the Labour Legislations. In particular the
functioning of the Industrial relations includes maintaining the a) Relation between managers
and individual workers, b) Collective relations between employers a and
nd trade unions and c) The
role of Govt. in regulating these relationships.
Coverage of IR
The entire functioning of IR system cover the following aspects –
A. Institutions
• Employer’s organisation / federation
• Employee’s organisation / federation
• Government Agencies / Government Bodies

Indian Labour Conference, Labour courts, Tribunals
B. Characters:
• Worker’s, Unions,
• Employers, Federations,
• Managers, Labour Relations Officers,
• Labour Commissioners, Labour Officers etc.
C. Methods:
• Collective Bargaining
• Workers Participation in Management
• Disciplinary / Grievance Procedures
• Disputes and Dispute Settlement Machineries

Strikes, Lockouts, Conciliation, Arbitration, Adjudication
D. Contents:
• Employment conditions
• Pay / Allowances
• Working conditions
• Health, Safety, Welfare
are
• Social security
• Disciplinary Norms,
• Norms of termination, separation, retirement etc.
However, the Scope of Industrial Relations address the following areas, such as
(A) Labor relations i.e relations between labor union & management.

Dr. Amaresh C Nayak, Asso. Prof. (HR & OB)

 STUDY MATERIAL – BBA
INDUSTRIAL RELATIONS
(B) The role of various parties that is employers, employees& the state in maintaining
industrials.
(C) Maintenance of industrial peace& avoidance of industrial strike.
(D) Development & growth of industrial democracy.
Importance Of Industrial Relations
A good Industrial System adds value
value to the organisation, the employers and the employees
of the organisation in the following ways:
i) Foster industrial peace: in the process of IR both the parties discuss the matters &
consult each other. The concept of confusion, misunderstanding disappea
disappears from the
scene. In this way IR helps to create a peaceful environment in the organization.
ii) Promote industrial democracy: when the worker get a chance to participate in
managerial decision making it motivated workers give best & maximum to the
organization.
iii) Benefit to workers: IR benefits workers in several ways. For example, it protects workers
against unethical practices on the part of the management.
iv) Benefit to management: IR protects the rights of management too. When workers create
the problem of indiscipline,
iscipline, industrial relation provides managers with a system to handle
with employee indiscipline in the organization.
v) Improve productivity: Good IR lead to increased productivity in industrial organization.
The scope of Industrial relations and the val
value
ue contribution is not only limited with the above
said points. Besides this also Industrial relations helps in facilitating the change process in the
organisation and brings a high level of morality and loyalty of the employees in the organisation
by providing
iding fair benefits to the workers and satisfying their grievances.

APPROACHES TO INDUSTRIAL RELATIONS

1. SYSTEM APPROACH
Industrial relations system of any given country is a mixture of traditions, customs and a web
of action, reaction and interaction between the parties operating in an open social,
technological, economic and political environment. The industrial relations system can
conceived at the macro, micro and intermediary levels, as for instance, at the workplace,
industry, regional and national
national levels. The Industrial relations can be viewed from a system’s
angle. As a system, industrial relations can be defined as comprising the totality of power
interactions of participants in a workplace, when these interactions involve industrial relation
issues.
sues. It is viewed as an integral and non separable part of the organizational structure and its
dynamics. The components of industrial relations system are:
I. Participants: The duly recognized representatives of the parties interacting in several
roles within
in the system.

Dr. Amaresh C Nayak, Asso. Prof. (HR & OB)

 STUDY MATERIAL – BBA
INDUSTRIAL RELATIONS
II. Issues: The power interactions of the participants in a workplace create industrial
relations problems. These issues and the consequences of power interactions find their
expression in a web of rules governing the behaviour of the parties at a workplace.
III. Structure: It consists of all forms of institutional behaviour in a system. The structure may
include collective procedures, grievances settlement practices, etc. Legal enactments
relevant to power interactions may also be considered to be a part of the structure.
IV. Boundaries: In systems analysis, it is possible to find an issue which one participant is
totally indifferent to resolving while, at the same time, the other participants is highly
concerned about resolution of the same. These issues may serve to delimit systems
boundaries.
At least there are three marked features of this systems approach. As described below:
I. Inter-disciplinary
disciplinary character: Some theorists regard the systems approach to be
universally applicable to all human relationship
relationships,
s, in small or large units. It’s flexibility of
application in the behavioral sciences has been aptly demonstrated.
II. Suitability to work organisations and their sub – systems: The adaptability of the systems
approach to organisation is also a frequently discussed
discussed trait. This springs from the fact
that organisations and to some extent their sub-systems,
sub systems, are rational and purposeful.
III. Dynamic Aspects: A systems approach is oriented towards the study of interactions and
changing relations.
The following are some of the contributors of the Systems Approach in Industrial Relations:
A. John T. Dunlop:
His model laid down a generalized ‘industrial relations frame work, which according to him,
is designed to be applicable at once to three broad areas of industrial relations experience
namely:
(a) Industrial relations within an enterprise, industry or other segment of a country and a
comparison among such sectors;
(b) Industrial relations within a country as a whole and a comparison among countries; and
(c) Industrial relations as a totality in the course of economic development.
He defined an Industrial relations system as “An industrial relations system at any one time
in its development is regarded as comprised of certain actors, certain contexts, and ideology
which binds the industrial relations system together and a body of rules created to govern the
actors at the work place and work community. There are three sets of independent variables:
the ‘actors’, the ‘contexts’ and the ‘ideology’ of the system”.
(a) The actors in a system:
em: The actors in the system are:
i. Hierarchy of managers and their representatives in supervision (who issue
instructions downward);

Dr. Amaresh C Nayak, Asso. Prof. (HR & OB)

 STUDY MATERIAL – BBA
INDUSTRIAL RELATIONS
ii. A hierarchy of workers (non-managerial)
(non managerial) and any spokesmen, (which follows the
instructions given by the managers and which maymay be organized into several
complementary or competing units such as works councils, unions; and parties); and
iii. Specialized governmental agencies (and specialized private agencies created by the
first two actors) concerned with workers, enterprises, and their
their relationships which
may override the hierarchies of managers and workers on almost all matters.
In other industrial relations systems, the role of the specialized governmental agencies,
at least for many purposes, may be minor or constricted.
(b) The context
ext of a system: The speakers of the environment within which the actors,
interact. This consists of :
i. The technological environment (place and nature of work, methods of work, layout
and technology, the simplicity vs. complexity of jobs, the work flow, jo
job design, etc.);
ii. The market or budgetary constraints (demand fluctuations, changes in consumer
preferences, financial constraints on the organisations, competition, etc.’); and
iii. The locus and distribution of power in the larger society (the distribution of power
within the organisation need not necessarily be exactly on the lines of its distribution
in the outer environment, yet it is a pointer to the power equations and political
equilibrium within the organisation).
(c) The ideology of Industrial Relation System:
System: The set of ideas and beliefs commonly held
by the actors helps to bind or to integrate the system together as an entity.
Each industrial relations system contains its ideology of shared understandings. The
ideology defines the role and place of each a actor
ctor and the ideas which each actor holds
towards the place and function of the others in the system. The ideology or philosophy of a
stable system involves a congruence of compatibility among these views and the rest of the
system. Each of the actors in a an
n industrial relations system may be said to have its own
ideology. An industrial relations system requires that these ideologies be sufficiently
compatible and consistent so as to permit a common set of ideas which recognize an
acceptable role for each ot
other.
(d) The Establishment of Rules: The actors in a given context frame rules for the conduct of
their day-to-day
day relations. these rules are broadly grouped under three categories:
i. Rules governing compensation in all its forms;
ii. The duties and performance expected
expected form workers, including rules of discipline for
failure to achieve these standards; and
iii. Rules defining the rights and duties of workers.
In short, Dunlop’s Industrial relations system is an analytical enquiry into the structure
and process of the dynamics
dynamics of relations between management, workers and the
government.

Dr. Amaresh C Nayak, Asso. Prof. (HR & OB)

 STUDY MATERIAL – BBA
INDUSTRIAL RELATIONS
Evaluation:
Dunlop’s formulation and application of the concept of Industrial relations system has been
criticized on the following grounds:

(i). That it is essentially a non

non-dynamic model of industrial relations from which it is difficult
to explain industrial relations change;

(ii). That it concentrates on the structure of the system, ignoring the processes within it;

(iii). That it tends to ignore the essential element of all industrial relations, that of
o the nature
and development of conflict itself.

(iv). That it focuses on formal rules, to the neglect of important informal rules and informal
processes;

(v). That it may not be integrated, and it is problematic whether or not the actors where a
common ideology;

(vi). Thatt it fails to give an account of how inputs into the system are converted into out puts;

(vii). That it is environmentally biased, and provides no articulation between the ‘internal’ plant
level systems and the wider systems;

(viii). That it favours an analytical approach

approach based on comparison rather than a problem
solving approach built on description; and

(ix). That it makes no special provision for the role of individual personalities in industrial
relations as the actors are being viewed in a ‘structural’ rather than in a ‘dynamic’
‘d sense.
The systems model provides a useful framework for classifying and describing elements
within any industrial relations system by focusing on ‘outputs’ or rules of industrial relations
system, on their ‘processes’ such as collective bargaining and other types of rule making,
and on their ‘inputs’ such as the actors involved in rule making.

Dr. Amaresh C Nayak, Asso. Prof. (HR & OB)