Concepts of Industrial Relations

Meaning and Concept of Industrial Relations

• In the term Industrial Relation, “Industry”

means any productive work or more
specifically production process and “Relation”
is human relation in the production process.
Many scholars and specialists defined
Industrial Relation from their own perspective.
• In normal sense, the relationship between the
owner and the employees is called industrial
relation.
Meaning and Concept of Industrial Relations

But industrial relation is not that the relationship only

exists between owner and employees. Industrial
relation is accumulation of seven type‘s relationship.
That is:
– Relationship between worker and machine
– Relationship between workers to workers
– Relationship between owner and workers
– Relationship between owners to owners
– The relation between the state and the unions
– The relation between the various unions
– The relation between the employers and the government.
 Meaning and Concept of Industrial Relations

• Henry Richardson: Industrial Relation is an art of

living together for productivity.
• Prof. John T. Dunlop: Industrial Relation as a sum
total of relationship between workers, their
organization, managers and government or law.
• W.V. Owen & H.V. Finston: ―Industrial relations
deals with people at work or that industrial
relations is concerned with many problems
related to employer- employee relation‖
HRM & Industrial Relations
• Unitary Approach:
• The employer and employee work as a harmonious unit
and they work for a common goal.
• Hence, there is no possibility of conflicts arising between
them and they work as a team to attain the common goal.
• According to Edwards (2003), „Any conflict that may occur
is then seen as the result of misunderstanding or mischief.‟
Thus, conflict is perceived as disruptive.
• The concept of loyalty is privileged in the Unit arist
Approach because of its paternalist roots.
• Since there exist direct relations between the employer and
the employee, trade unions are considered as unnecessary.
• The orientation and application of rules may be managerial
but employees are expected to be loyal and sincere to the
organization.
• Pluralist Approach:
• The pluralist approach was developed in the United States of
America by John R Commons. He considered society as complex due to
the presence of multiple interest groups with their own goals. Hence,
conflict is inevitable in the system and there are possibilities of
compromise based on the interaction between different stakeholders.
• Collective bargaining was used as a mechanism to sort out the
conflict between the employer and employees. The presence of trade
union in an organization can serve as an interest group to protect the
interest of employees. According to Edwards (2003), „pluralism was
particularly salient in the approach of management: instead of
unitary denial that there was any rational basis for conflict,
managers should recognize the inevitability of dispute and seek
means to regulate them.‟ Employees understood the basis of conflict
and were ready to negotiate with the trade union in the overall interest of
the organization.
• The Pluralistic Theory is based on the premise that the enterprise
contains people with a variety of interests, aims and aspirations;
therefore, it is a coalition of different interests. Arthur Ross argued that
we should view an organization as a “plural society containing many
related but separate interests and objectives which must be maintained in
some kind of equilibrium”
 Classical Approach (Marxist Model)/ Radical Approach:
Classical Approach (Marxist Model)/ Radical Approach:
Karl Marx considered industrial conflict as a part of
the broader social conflict between classes and used it
to explain the fundamental historical process of change
and development in human society. He was concerned
with certain macro economic processes and deep-rooted
inequalities in society as a whole, and not with specific
industries or firms.
Marx divided the society into two classes
(i) capitalists, who own the means of production, and
(ii) proletariat, who own nothing but their own labour power.

These classes are antagonistic groups. Antagonism and

conflict are of the very essence of Marx‟s conception of
class. The reasons for this fundamental antagonism lie
in the capitalist mode of production.
 Human Relations or Neo-Classical Approach:
• This approach has its origin in the Hawthorne experiments conducted by
Elton Mayo, Roethilsberger, Whitehead, Whyte and Homans, etc.
According to this theory, conflict is an aberration and not the
natural state of human society. This aberration occurs when
tendency of the industrial society is to treat worker as an isolated
individual, and deprive him of all control over his environment. This loss of
mooring and control is a major source of conflict.
The core of human relations theory consists in the importance attributed
to the small informal social groups as a source of human satisfaction. This
satisfaction results from better human relations through the
encouragement in creating informal social groups and better
communication by providing not only downward communication but
upward communication also. They key to sound industrial relations
lies in achieving better human relations in the organisation. The major
criticism of this theory is that it treats the factory as if it were a self
contained and isolated social system. The sources of conflict lie as
much outside the factory as within it, and the argument that all
these strains can be handled by the management through better human
relations within the factory is not convincing.
Systems Approach (developed by John Dunlop)
• Dunlopian Model: According to the Dunlopian Model, the
industrial relations system is a sub-system of the wider
society or the total social system. An industrial relations
system at any particular time is regarded as comprised of
certain actors. Certain context and ideology which binds the
industrial relations system together and a body of rules
created to govern the actors at the place of work and work
community. Dunlop identifies three groups of actors:
workers, management and the Government.

Where R = Industrial relations system,

Thus, R = ƒ(a, i, b) ƒ= Function, a= actors,
 i = ideology,
 b = body of rules
 Gandhian Trusteeship Approach:
• Gandhiji‟s views on industrial relations are based on his
fundamental principles of truth and non-violence and
non-possession. Out of these principles evolved the
concept of trusteeship on which his philosophy of
industrial relations rests. This philosophy presumes the
peaceful co-existence of capital and labour, which calls
for the resolution of conflict by non-violent, non-
cooperation (i.e., Satyagraha), which actually amounts
to peaceful strikes in ordinary parlance. Gandhiji
accepted the workers‟ right to strike, but cautioned
that this right is to be exercised in a just cause, and
in a peaceful and non-violent manner; and it should
be resorted to only after employers fail to respond to
their moral appeals.
From the above it stands that Industrial or Labor
Management Relation comprises of all the issues
of industrial life connected with wages,
conditions of work and work place, trade
unionism, industrial hazards, fatigue, monotony,
absenteeism, labor turnover, productivity,
collective bargaining and the like.
Industrial relations is treated as a measuring
instrument for industrial productivity, the better
the industrial relation, the more is the
productivity.
 Objectives of IRS:
The objectives of industrial relations are as follows:
1. To maintain and develop good employer and
employee relations.
2. To maintain industrial peace.
3. To safeguard the interests of labour and
management.
4. To avoid as per as possible, industrial conflicts.
5. To establish industrial democracy.
6. To help the economic development of the country.
7. To encourage collective bargaining as a means of
self-regulation.
8. To help maintain discipline amongst workers.
9. To help Government in making lows.
10. To help union and management to develop
constructive attitudes to other.
 Principles of Sound Industrial Relations
Maintenance of sound industrial relations is as
crucial and difficult as that of human relations.
The following principles should be followed to
maintain sound industrial relations:
– Recognition of the dignity of the individual and of his
right to personal freedom and equality of
opportunity.
– Mutual respect, confidence, understanding, goodwill
and acceptance of responsibility on the part of
employer, management and workers and their
representatives in the exercises of the rights and
duties in the operation of the industry.
– Similarly, there has to be an understanding between
the various organizations of employers and
employees who represent the management and
workers.
 Conditions for Good Industrial Relations/Pre-
Requisites for Sound Industrial Relations

When in any industry or organization willing co-operation

emanates from employees towards the achievement of
organizational goals, there is said to be good industrial
relations. Good industrial relations depend on a great
variety of factors. Some of the more important factors are
discussed below:
• History of Good Industrial Relations: A good history of
industrial relations means harmonious relationship
between management and workers.
• Economic Satisfaction of Workers: Industrial relations
depend on the economic satisfaction of workers. Much of
man's conduct is dominated by the basic survival need
because: s/he wants to survive.
 Conditions for Good Industrial Relations/Pre-
Requisites for Sound Industrial Relations
• Social and Psychological Satisfaction: Identifying the social and
psychological needs of workers is a very important step to
determine the good industrial relations.
• Off The Job Conditions: For good IRS it is not enough that the
worker's factory life alone should be taken care of. His home life is
not totally separable from his work life and his emotional condition
is not separate from his physical condition. Each affects the other.
For this reason worker's off the job conditions should also be
improved.
• Enlightened Labor Unions: Strong and enlightened labor movement
can help to promote the status of labor without hampering the
interests of management. Labor unions always talk much of the
employer's obligations to the workers, but say very little about the
worker's responsibility to the employer.
• Negotiating Skills of Management and Workers: Good industrial
relations depend on the ability of employers, organizations and
trade unions to deal with their mutual problems freely,
independently and with responsibility.
 Conditions for Good Industrial Relations/Pre-
Requisites for Sound Industrial Relations
• Public Policy & Legislation: Government becomes a third major
force in determining industrial relations. Government intervention
helps in 3 ways;
– Acts as a check and balance upon different management action
– Helps in catching and solving problems before they become serious
– Provides formalized means to the workers and employers for
emotional release of dissatisfaction
• Better Education: Better education provide proper sense of
responsibility and thus they will he less influenced by outside
forces.
• Collective Bargaining: Collective bargaining is the cornerstone of
good industrial relations though the assistance of appropriate
government agencies might be necessary in public interest.
• Harmonious Industrial Relations: The peaceful and harmonious
industrial relations depend on the desire of the employers or
management to the bargain with their employees on the basis of
equality.
Urge on The Part of Employers: Good industrial relations
depend on the realization and urge on the part of employers or
management; for the promotion of their workers welfare.

Genuine Sympathy: Good industrial relations depend on the

genuine sympathy of the general public towards labor.

• Thus, the existence of strong, independent, responsible and

democratic trade unions and employers organizations, the
recognition of trade unions and the promotion of collective
bargaining, the machinery for the peaceful settlement of
industrial disputes, the existence of good human relations
at the level of the undertaking and the removal of
discriminations of all types based on any ground including
race, religion, nationality or language would go a long way
to improve the pattern of industrial relations in a country.
 Nature of Industrial Relations
• Conflictual Relation: this is always a conflictual
relation. Because, here always exist conflict between
the employer- employee and management –employee.
• Employer- Employee Relation: Industrial relation
should exist between employer and employee.
Because, normally employee to employee have no
conflict. If have, this must not severe.
• Running and Fictitious Relation: Industrial relations
ongoing relation. Because this relationship must never
be broken and the relationship is always fictitious.
• Relationship is stable and unchanged: Industrial
relationship is occurring from the period of industrial
revolution to still now.
 Nature of Industrial Relations
• Two Way Relationships: Employees want more from
doing less and the employers want to give minimum as
they can and they want more production. So, the
relationship is not one way.
• Dissimilar Power of Employer and Employee: Another
characteristic of industrial relation is dissimilarity of
power of employer and employee. The employer has
more power than the employees.
• Stable Conflict in the Field Of Profit: Employees want
share of profit and the employer don‘t want to share
the profit with the employee. So, they always stay in
conflict.
Importance of Industrial Relations
• Industrial Satisfaction and Development: industrial
relation is essential for making industrial satisfaction
and development of each employee.
• Establishing a Sound Industrial Environment:
industrial relations are essential for establishing
peaceful environment by reduce the conflict between
the partners.
• Facilities of Profit and Wages: it is essential for
increasing the profit for employer and increase the
wage for worker.
Importance of Industrial Relations
• Bringing Social Piece: social piece is come from
the industrial peace. Because, the worker feel
peace in home if we feel peace in work
environment.
• Develop Morale: by developing organization
structure and industrial relation, it develops the
morale of the employees.
• Maintaining Balance: there is a huge difference
between employer and employee. These
differences can be minimizing by good industrial
relations.
Actors/ Party‟s of Industrial Relations
Industrial relationship is the relation of owner/ management,
workers and the government agency. So, there are three
parties involved with industrial relation-
• Trade Union: trade union is the heart of industrial
relation. The employee can present their complaint
through the trade union. They have taken different
measures for getting the faire wages.
• Owners/ Management: managers are the
representative of owner. They negotiate with the trade
union for take a reasonable agreement.
• Government: government forms different rules and
impose these rules fro protect the employer and
employee. Government play important role as a
medial for resolve the conflict between the two
groups.
 Factors That Affect the Pattern of
Industrial Relation [2013-1.a]
There are some aspects that influence the patterns of
industrial relations. These influences act, interact and
reinforce one another in the course of developing industrial
relations some of the aspects arc mentioned below:
• Social Aspects: There are certain social aspects
which influence the pattern of industrial
relations. such as-
– Social Status: Workers- have a different social identity
and status. As a result, there is a distance in
relationship.
– Social Groups: Different social groups such as master-
servant, higher- caste lower-caste influence the
pattern of industrial relations.
– Social Values: Different social values play their role in
setting the pattern of industrial relations.
• Psychological Aspects: Several psychological
aspects such as motivation, alienation and
morale are significant determinants of industrial
relations.(motivation- job satisfaction, job
advantages, job enrichment etc.
– Alienation: It crates separation rather than integrity.
– Motivation: Motivation of employees can play a vital
role for good or bad industrial relations.
– Morale: Management should not create such an
environment so that employees have low morale
• Political Aspects: The political framework in
different countries such as democratic system,
autocratic system, and laissez-faire system is
important determinants of industrial relations.
– Democracy: It ensures participation of workers in
making decisions and executing the same.
– Dictatorship: The degree of dictatorship may
influence industrial relation. But, benevolent
dictatorship may be acceptable for a limited
period.
• Economical Aspects: There are certain economic influences
which provide the basic setting as well as the broader
framework for industrial relations. The economic status of
the employer and the workers in society differs widely
which influences the pattern of industrial relations.
– Unemployment: Increased rate of unemployment of employees
children or dependents may create dissatisfaction among them.
–  Inflation: The more the rate of inflation, the more the pressure
on management for wages enhancement.
– Demand: Demand for the product but less income for buying
the product may create bitter relations among the employers &
employees.
– Income Gap: Income gap between managers and employees
may create dissatisfaction leading to bad IR
 Causes of Poor Industrial
Relations
• Autocratic attitude
• Class difference
• Personnel difference
• Discrimination
• Lack of job security
• Anomalies in wage policy
• Injustice in recruitment &
promotion
• Negative political and
economic environment
• Lack of uniform outlook
• Violate the discipline
• Inter union rivalries
• Negative political and
economic environment
• Irregular labor practice
• Absence of motivation
power of the mangers/
supervisor
• Absence of extra facilities for the
employees Use machinery
without making good environment
for that.
 Causes of Poor Industrial Relations
• Loopholes in disciplinary
action
• Flawed supervision
• Lack of honesty
• Political instigation
• Lack of commitment
• Less sense of citizenship
• Mental inertia between
employers and employees
• Employer and employees
are always treating enemies
each other.
• Absence of proper wage
structure Unhygienic work
environment
• Extra load imposed to the
employees Absence of
workers welfare
• Absence of participation in
productivity
• Irregular retirement,
resignation, lockout, and
strike
 Means to Improve Industrial Relations
• Uniform policy • Commitment to national
development
• Cooperative attitude • Management should give approval
• Equity to the trade union of the
• organization.
Strict supervision
• To give the reasonable wages to
• Welfare activities the employees
• Favorable work • Introduce good working
• Honesty condition and provide facilities
• to the Employees
Political stability
• Make conscious for not
• Training in IR influence the political leader to
• Proper communication any employees
• Active participation • To introduce the training and
development program for the
• Government action employee
• Proper wage/benefit • To make and implement policies for
package proper distribution of dividend on the
• Proper disciplinary action basis of productivity
• Give training for the management level,
technical advisors and employees
 Conditions of Industrial Relations
• Recognition by the employer that the workers are a part of a team working
towards common objectives
• An attitude on the part of the employee of delivering the goods that is, giving their
money‘s worth;
• Fair redressed of the employees‘ grievances such as regarding working conditions,
facilities, attitude of superiors and other rights
• Avoidance by workers of being unduly influenced by political leaders staging
strikes as a protest or a publicity for their own political gains
• Payment of fair wages and adequate wage structure as well as establishment of
satisfactory working conditions
•  Adoption of a policy which ensures to the workers an equitable share of gains of
increased productivity
• Introduction of a suitable system of employees‘ education at all levels as well as
providing them with appropriate equipment, where necessary
•  Training in industrial relations and human relations to workers, technical staff and
at all managerial levels
• Sufficient communication to keep the employees informed about decisions which
affect their interests
• Establishment of an atmosphere of participation whether through joint
committees or other methods.
 Models of Industrial Relations

Four major models of industrial relations:

• Dunlopian models,
• Marxist model,
• Social Action Model,
• And Human Relations Model
 Dunlopian models,
• Dunlopian Model: According to the Dunlopian Model, the
industrial relations system is a sub-system of the wider
society or the total social system. An industrial relations
system at any particular time is regarded as comprised of
certain actors. Certain context and ideology which binds the
industrial relations system together and a body of rules
created to govern the actors at the place of work and work
community. Dunlop identifies three groups of actors: workers,
management and the Government.

Where R = Industrial relations system,

Thus, R = ƒ(a, i, b) ƒ= Function, a= actors,
 i = ideology,
 b = body of rules
• ACTORS: In every country, workers,
management and the Government all interact to
build up the country's industrial relations system.
• IDEOLOGY: In any economy there is an ideology
which is shared in common by the government,
businessmen and workers; such as democratic
capitalism, democratic socialism, free economy,
mixed economy.
• RULES: Rules and regulation making by the
Government which influence the pattern of
industrial relations.
 MANAGEMENT ROLES:
• Exploitative Authoritarian system
– Labor was exploited ruthlessly
– Wages paid was barely subsistence
– No, job security
– No welfare system
• Benevolent Authoritarian System: It believes in labor welfare.
• Consultative Style: Under this style, the management consults with
the labors in different issues, even in making different decisions.
• Participative Style: Under this style labor is not a commodity but is
a friend. Here, the opinions of the labors have a great impact on
decision making.
• All the important variables of the industrial scene are integrated
into the system. So the Dunlopian approach can explain the
dynamics of industrial relations. It is also helpful in analyzing
industrial conflict.
 Marxist Model:
• Marxist Model: Marxist model gives structural explanation of industrial
relations:

• Industrial relations occur within a dynamic conflict situation which is

permanent and unalterable so long as the structure of society remains
unchanged.
• Conflict arises because of labor market.
•  Interest of buyers and interest of sellers engages themselves in a perpetual
conflict over the distribution of revenue. Both have a common interest in
increasing total revenue. But conflict is not reduced because actual
distribution of additional increments of revenue is determined by the power
situation. There is no automatic distribution based on a sense of equity.
• The concept of alienation is important in this model. Alienation arises from the
capitalist system. In the capitalist system labor is sold and it is bought by the
capitalist to satisfy his/her needs rather than workers. Worker is estranged
from the things he creates & becomes dissatisfied.
• CAUSES OF DISSATISFACTION
• Two aspects are important as they represented the most
developed form of treating workers as a commodity.
– Division of labor as a means of promoting wealth for the
capitalist but restricting the freedom of the worker.
– Factory system of promotion as the most complete method of
domination of the worker by the capitalist.
• Alienation will not be overcome by increasing wages; it will
simply make the worker ‗a better paid
• slave‘. Alienation will only be overcome with the overthrow
of the capitalist system when labor not treated as a
commodity.
• Conflict is endemic in the industrial situation for the
Marxist- it is an inevitable part of the wage system. Labor is
alienated in the capitalist system because it is treated as a
commodity. Abolition of private property is crucial in order
to overcome alienation from the Marxian viewpoint.
 Social Action Model:
• Social Action Model: The social action model of
industrial relations implies the followings:
• The social action model is one in which actors own
definitions of the situations in which they are engaged
are taken as an initial basis for the explanation of their
social behavior and relationships.
• This theory points out the reciprocal nature of the
relationship between social structure and behavior.
• Social structure limits social action. "Thus a worker's
ability to take strike action or an entrepreneur‘s ability
to invest may be limited by his personal and by more
general economic conditions.
 Social Action Model:

• One of the most important features of the action model is

the attitude it adopts towards social theory. It can better be
viewed as a method of analysis rather than a theory. It tells
us, where and how to look to explain social action; it does
not tell us, what the answer will be.
• The action approach suggests that general explanations of
social action are not possible simply because of the nature
of the subject of the social sciences-men do not react to
the stimuli in the same way as matter in the natural
sciences.
• The action approaches to pay sufficient attention to
behavioral influences.
 Human Relations Model:
• Human Relations Model: Industrial conflicts are
due to poor social relations such as inadequate
communications. One of the most important
finding of the Hawthorne studies was the crucial
role played by informal social groups in the
workplace. Although the informal social group can
help to create a climate which will frustrate the
aims of management it can also provide workers
with outlets for their emotions and sentiments.
Absence of informal groups may be a cause of
frustration and dissatisfaction, ultimately they
maybe a cause of industrial conflict.
• Thanks!!!!