Chapter 1:

Nature of Industrial Relations

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 Q. Define Industrial Relation.

From many authors a few definitions have

been collected. These definitions are
mentioned in the following three points….
Industrial relations is the complex set of

interrelations among workers, managers

and government - Dunlop

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 Industrial relations is mainly
concerned with employer – employee
relationship
– E. F. L. Breach.
 The term IR explains the relationship

between employees and management

which stems directly from union
employer relationship
- Agnihotri
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Who are involved in industrial relations

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 Parties to industrial relations
Employer
Employees

Employer-
Employees Employer
Employee
Associations Associations
Relations

Courts&
Government Tribunals

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Q. Importance of Industrial Relations

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 Q. Importance of IR
 Importance of industrial Relations can be
enjoyed in the following points. :

 Creating dynamism
 Creating cooperation
 Management satisfaction
 Job satisfaction
 Maintenance of environment

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Importance of IR (con.)

 Reducing dispute
 Reducing absenteeism

 Reducing labor turnover

 Continuous development

 Improve Productivity

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Q. Causes of Poor Industrial Relations
 There are some causes of poor industrial
relations. Those are mentioned in the
following point:

 Autocratic attitude
 Class difference
 Personnel difference
 Discrimination
 Lack of job security

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 Anomalies/ irregularity in wage policy.
 Injustice in recruitment.

 Injustice in promotion.

 Lack of uniform outlook.

 Loopholes/ ambiguity in disciplinary

action.
 Flawed/ faulty supervision.

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 Lack of honesty.
 Absence of comparative advantage.

 Political instigation/ establishment.

 Less sense of citizenship/

nationality.
 Lack of commitment.

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Q. Forces Influencing Industrial Relations

There are 4 (four) forces influencing industrial relations.

1. SOCIAL FORCES
a) Social groups
b) Social values

c) Social status

2. PSYCHOLOGICAL FORCES
a) Motivation

b) Alienation /hostility/ separation

c) Morale

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3. POLITICAL FORCES
a) Democracy

b) Dictatorship

4. ECONOMIC FORCES
a) Unemployment

b) Inflation

c) Demand

d) Income gap

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 1.These Social forces arc briefly discussed
below:
1. SOCIAL FORCES
a) Social groups b)Social values c)Social status
a. Social groups: Employees in an organization
constitute a social group and they establish
interrelationship. If the relationship between the
group members is harmonious they can contribute
for the growth of industry.
b. Social values: Every member of the group must
comply with social values. Tie cannot ignore that
value-whether he agrees or not. If he violates the
values, definitely relationships may be hampered.
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C. Social status- It is a combination of both
social groups and social value. If employees
are remain in a social group and maintain
social value then their social status is
established. Every human being need their
social status in the society.

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2.Psychological Forces: Psychological forces
also divided into three forces.
(a) motivation
(b) alienation and
(c) morale
These forces arc discussed bellow:
a) Motivation: Motivation of employees can
play a vital role for good or bad industrial
relations, if employees are highly motivated
they work hard and maintain good relations
with management.

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B. Alienation /hostility/ separation: If creates
separation rather than integrity. Therefore
management should try not to alienate the
employees from one
another.

C. Morale: High morale is beneficial for good

relation and low morale is detrimental. Therefore
management should not create
such an environment so that employees have low
morale.
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3. Political Forces: Political forces do not
include national political forces but forces
within the organization. Political forces have
been divided into two- These forces arc
explained bellow:
A. Democracy: it ensures participation of
workers in making decisions and
executing the same. If management allows
them to participate, there is a possibility of
good relations.

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B. Dictatorship: It creates centralization of
power in the hands of a few. It is just
opposite to democracy. the degree of
dictatorship may Influence industrial
relations. But benevolent dictatorship may be
acceptable for a limited period.

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4. Economic Forces: Some economic forces
can also influence industrial relations. These
forces have been classified into four
sub-forces as discussed bellow;

a) Unemployment: Increased rate of

unemployment of employees' children or
dependents may create dissatisfaction
among them-Employment opportunity will
decrease such tension,

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b) Inflation- It decreases the purchasing
power and increases hardships of the
employees. The more the rate of inflation,
the more the pressure on management for
wages enhancement.

c) Demand- Demand for the product but less

income for buying the product may create
bitter relations among the employers &
employees,

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d) Income gap: Income gap between managers
and employees may create: dissatisfaction
leading lo bad industrial relations. Minimum
gap may be useful lo reduce sense of
deprivation of employees.

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 Q. Models of Industrial Relations
 A few models have been proposed by many
scholars on industrial relations. These models
have focused many dimensions of industrial
relation pattern of an organization. In the
following page, we will discuss four models
only. These four models are:

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 Four Models of Industrial Relations
1. Dunlopian Model
2. Unitary Approach
3. Pluralistic Approach
4. Mahatma Gandhi’s Trusteeship
Approach

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 1. Dunlopian Model
It has three actors
Management

Workers

Government

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 Equation

IR= f ( a. i. b)
a= actors
i= ideology
b= body of rules

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In this model there are three actors first actors is
A. Management
 The management pattern may be of various
types
1. The exploitative
2. Benevolent Authoritarianism
3. Consultative Style
4. Participative Style
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Exploitive authoritative : Exploitive authoritative
Management is described as exploitive
authoritative its managers are
 highly autocratic

 have little trust on subordinates

 motivate people through fear and

punishment
 occasional rewards engage in downward

communication and
 limit decision making to the top.

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Benevolent authoritative: Benevolent authoritative
Management is called benevolent authoritative its
managers have
 a patronizing confidence and trust on
subordinates
 motivate with reward and some fear and

punishment
 permit some upward communication

 solicit some ideas and opinions from

subordinates and
 allow some delegation of decision making but

with close policy control.

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 Consultative: Consultative Management is referred
to as “consultative”. Managers in this system have
 substantial but not complete confidence and
trust on subordinated
 usually try to make use of subordinates, ideas
and opinions
 use rewards for motivation with occasional
punishment and some participation
 engage in communication flow both down and
up
 make broad policy and general decisions at the
top while allowing specific decisions to be made
at lower levels and act consultatively in other
ways.
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 Democrative: Democrative Management as
the most participative of all and referred to it
as “participative group” system 4 managers
have
 complete trust and confidence in
subordinates in all matters
 they always get ideas and opinions from

subordinates and constructively use

them.

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 B. Workers
 The workers’ union assume the following roles
in different socio economic systems
Sectional Bargainers
Class Bargainers

Agent of the state- USSR/USA

Partners in social control

Enemy of the system- higher wage

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 C. The Government
 The third actor is Government. The
Government may assume any of the following
roles
 Laissez- faire Philosophy

 Paternalism.

 Tripartism.

 Voluntarism.

 Interventionism.

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 2. Unitary Approach

 In unitarism, the organization is perceived as

an integrated and harmonious whole with the
ideal of "one happy family“
 Consequently, trade unions are deemed as
unnecessary since the loyalty between
employees and organizations are considered
mutually exclusive

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 3. Pluralistic Approach
 Society as complex set due to the presence of
multiple interest group with their own goal
 Conflict is inevitable in the system
 Collective Bargaining is used to sort out conflict
 Presence of Trade union can serve as an interest
group to protect the interest of employees

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4. Mahatma Gandhi’s Trusteeship
Approach
 Harmonious and balanced approach to industrial
relations where one side would never dominate other
but would take into account the other’s interest before
taking any decision
 Wealth could never be privately held, wealth would
always be held by people in trust of society
 Thus it is necessary for people to respond to the needs
of society and not use wealth for individual interest
alone.

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Q. Challenges of IR: Emerging Trends
and Issues
 Globalization
 Import liberalization

 Privatization

 Information Technology

 Downsizing

 Workforce diversity

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 Q. Challenges of IR: Emerging
Trends and Issues
 Free flow of manpower
 Economic condition and social pressure

 Adoption of international rules and

regulations

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 Q. Conditions for good Industrial
Relations
 Recombination
 Favorable attitude
 Redressed of grievance
 Avoidance by workers
 Payment of fair wages
 Adoption of policy

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 Q. Conditions for good Industrial
Relations
 Trust
 Suitable system
 Employee training
 Atmosphere of participation

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