UNDERSTANDING EMPLOYMENT RELATIONS AND ITS EMERGING TRENDS

By: Prof. B.D Singh Dean (Executive Education) Asia-Pacific Institute of Management, New Delhi

• Understanding IR
– IR is most misunderstood & even maligned subject – People have written its obituary – a network of relations– a broader coverage than the definition in the hook. It is intangible, felt – IR is basically a relationship management between different groups---formal and informal (total relationship management), and relation will continue till humanity/ industries exists. – It is a relationship influenced by forces like economic, political, social, psychological and cultural. – It acrosses the boundary of organization and industry and interfaces with society. It grows and flourishes or stagnates and decades in accordance economical, social and political conditions prevailing. Legal framework regulates – The present is only a part of continuum linking the past with the present – There can’t be a solution for all times to come – New frontiers require new paradigms, dynamic, flexible and business frinedly.

communicating. nurturing & developing relationship on continuous basis – bringing in transparency & fairness in our dealings.relationships gets built .happy house/bleak house -HRM/IR interface -Equity and fairness. motivating & leading etc. individualism and collectivism.Union free relationship--. – inculcating ownership & we – feeling – introducing devices for lasting bondage – building bridges of trust – developing healthy relationships .Cooperation the main purpose of any relationship but conflict is inevitable correlate. we have relate ourselves to others . Co-operation requires positive approach of manage people – it requires building. collaboration Vs conflict -Peace time employees relations building bridges of trust and understanding . ER is essentially positive in nature -Cooperation can not be regulated /bought..Relationship can be co-operative or adversial (conflicting) In our life personal or organisational. judicious exercise of power and authority.

• Instrument like collective bargaining & strike & lockout • Actors in the game of ER act & interact . Inter group/ inter organizational • Interpersonal conflict arises out of terms of employment between employer & employees (Workmen) – Regulated by laws. • Industrial workmen – • Managers in industries • Inter group/ Inter organizational – individual employee is not able to deal with mighty employer. retrenchment etc. • All these actions & interactions are regulated by laws/ & judiciary • Industrial employment (standing orders) act. . service condition. Interpersonal – employer & employee 2. motivating & in the process reciprocating to their responses. It is generally harmful.managing human resource means directing. . Two( broadly) types of conflict – 1. Supreme Court judgments. most of the times bitter ones. industrial dispute act. controlling. they form unions / association on the principles of individual dispensability and collective indispensability – survival instinct fundamental right / ILO convention • Collective disputes/ industrial disputes – wage settlement. Requires immediate resolution.resulting in conflicts. High Court. trade union act. employees.• Conflict in inevitable. • Govt.

Change both in context & contents .Speed and responsiveness .Global mindset . Social. Psychological.Survival and excellence .Political. Technological and Market: local and global – Network of Relationship – non leaner/Criss .Global networking .Crossed – Social relation at workplace Changes as per the pulls and pushes of the market Started as reaction to exploitation by mighty employers Post independent IR : CRP Post liberalization ER : LPG .Customer concern .Global competition .Global standards .• From IR to ER • ER is a complex subject • Highly susceptible to forces within and outside the organisation • Does not have a fixed profile • • • • – Economic.Total quality .

Retails. Pvt. Telecom.(toffler) • Sunrise industries – IT. Pharmaceuticals. Insurance. ITES. etc. more of employment in these sectors – Employee centric Organizations – Require: Service oriented work force – E-industries (BPOs.Changing Business Skylines / Environment and Employee Relations Post industrial societies.the third wave. Health services. Hotel. KPOs) mushrooming • Shrinking organized sector: • Knowledge workers . Banking.

leaner-virtual organizations • Employers: mostly MNCs. and contingent employment.Employees: Diverse in character.• Entirely different organisation structure: Flatter. . white collar. dangerous. contract labour etc. executives outnumbered non executives. Technological changes eliminating the 3D jobs – dirty. Over the years. while banishing the rest to the periphery of the organization in casual. female workers. professionally driven. contracting out and outsourcing whereby the permanent employee strength shrinks to accommodate those with core and critical skills. migrant labour. contract. . in most companies. multi-ethnic/multi-cultural workforce.Small Medium size industries mostly in Private Sectors. pink collar. competitive mindset . There is a gradual reversal in the ratio of executives to non-executives. and drudgerous – and lower and middle level information gathering and processing tasks warranting different kinds of age.

The components of the industrial relations policy of Kerala. have had far reaching implications for industrial relations. In the process they are resorting to competitive labour policies that are ‘investor friendly’. and the cancellation of the registration of an unusually large number of unions in West Bengal. and creating jobs.— ..• Changing role of Govt. etc.: Controller  Facilitator (GOI has not done much under political pulls and pushes) Some states are waking up to the need for wooing investment. the liberal response of the Tamil Nadu Government to requests from employers for notice of change. foreign and domestic. lay-off. the relaxations and exemptions to labour inspections in Rajasthan and Uttar Pradesh.

. and occupational safety. environment. Where trade union action is lacking. has added yet another dimension Suo-Moto action by SC/ High Court . in both the organized and the unorganized sectors.Emergence of S. nongovernmental organizations are rushing to fill the vacuum.Z.E. . etc. particularly in matters concerning minimum wages and living conditions in the unorganized sector.

have created another type of IR problems. Since they represent the larger aggregations of population and wider societal interests. . International pressure is mounting standards with international trade. when their rights are impinged upon by the action or inaction of either employees or employers the court – consumer courts to the Supreme Court – rule that the interests of workers and managements should take a back seat.• The core conventions of ILO and dictates of WTO. to link labour New Actors on the Horizon – The consumers and community have emerged as the new actors on the horizon.

Internet. CAM. JIT. SMSs. E-Mailing. CIM . Video Conferencing • Changing work System: TQM. Fax.Changing nature of work practices • Contracting – outsourcing in place of self-sourcing • Casualisation of work places • Hiring work facilities • Use of electronic gadgets • PCs.

Contd… • • • • • • • • Changing look of the offices-transparent. Home working. Share working . smart 24x7x365 Work culture Paperless or less paper at least Offices software E-Documentation/ office software Intelligent offices Flexibility: Flexi timing. Tele working. Flexi payment Changing Employment pattern – Life long employment – Part time.

Contd… • Changing reward/ compensation system • Variable pay in place of guaranteed pay • Employee’s ownership: ESOP • Gain sharing/Profit sharing • Cafeteria benefit system • Emphasis on insurance and social security • New crop workers want to share power. responsibility and gain .

trade union taken as nuisance . Passive: Strike.unprecedented pressure.Meant for CRP • economy – Slow. non unionism individual bargaining Union less organizations in fashion . Collective bargaining. Ad hoc. Gherao. zero defect.Emerging Trends and Issues • • • • • • IR at cross road. Quick Responsiveness. Reactive. just in time (JIT) Interest of society and Community supreme No nonsense. Litigation You cannot play the modern game of cricket with old rules/dispensation of gulli-danda Forces of inertia (Status Quo) Emerging market requires: Speed. Customer focus.

The attitude of judiciary is also changing. Pro-labour stance of government is getting reduced. New players in the game of employee relations .• Changing Pattern of C & R Management – Fixed • • • • / Assured Time Wages are replaced by variable / performance – based wages. Job security to employability.

in association with other social partners. The decline in the number of ‘skill’ workers and their replacement by ‘knowledge’ workers.• • • • The aggressive approaches of Indian employers in the service sector to trade unionism. address itself to new problems arising out of closure of units due to environmental considerations. and environment in and around work. and Trade unions should focus on managing the expectations of the successive new generations of workers rather than being content with their role in situations of discontent. Initiatives such as the recently formed Trade Unions Partnership for Environmental Protection (TUPEP) are welcome in the wake of mounting concern about the health. safety. The two extreme styles and strategies – ‘bleak house’ and ‘happy house’. The declining membership of trade unions. • . TUPEP may. etc.

some of the shifts include: 1. 3. Assertion of managerial rights than the rights of workers. 5. 7. Centralization to decentralization. Skill-up gradation . Gain sharing / Productivity-sharing than simple wage like or annual increase. Bargaining for adapting to change 6. 2.Collective Bargaining – in collective bargaining. Parity to disparity (Equity) 4. Collective to individual contracts.

Not only have the players changed (the inclusion of consumers and community). and power structures have been re-examined and altered time and again.Social security – the shift from welfare to ‘money fare’ through the conversion of several of the welfare benefits into cash is. Shifting roles of traditional actors – Over the years. . technology. a number of changes have taken place in the industrial relations scenario. The other trend is a shift in retirement benefits from defined benefits to defined contributions. a worrisome development. This puts the real value of retirement benefits at serious risk. however. techniques. • Employers directly reaching the work men and negotiating with them • Disinvestment / Privatization and VRS are almost accepted facts of Industrial Relations.

Gender related problems 6. Work life balance disturbed 4. Government as facilitator & not as regulator • All these activities have become regular features and are increasingly impinging on emerging E. in future. Almost law free atmosphere. Issues regarding multi cultural & multi ethnic workers 7. Union free organisations 5. Employee Relation has to address to all the issue . This trend is going to be accelerated. Volatile labour market 2.SEZ Beating recession– Preventing ????? 8. Attrition rate very high 3.Burning problems at ER front 1.s.R.

trust. and varied. creating space within which self-control is possible. but consistently so Positive. harmonization Outcomes: Procedures. genuine increases in productivity/competitiveness. situational management Realistic plans.Beliefs and New Values Of ER Old Beliefs Aims: Capital and labour pursue different aims Mode of Operation: Win-lose. mutual confidence and trust . and contracting around agreements which take account of differences: boundary and inter dependence management. situational. despite some legitimate differences Facing realities. transparency Mature. agreement Information: Hold information close to one’s chest Style of Management: controlling Feelings Generated: Negative Openness. hard nosed management decides and adjust if necessary New Values Both can have many things in common. sharing in gains. rules.

Human resource policies to be tailored to fit the targeted market niche view of rapid changes in environment and growing emphasis on competition • 2. leading to activity trap Standardization of HRM policies.Current and Suggested Role of HRM Current Role 1. Strategic Orientation: • Independent goals. etc Suggested Role • Strategic linkage with the goals of the organization • Flexibility. not clearly linked to that of the organization. Management Philosophy: • Emphasis on direction & control • Seek to achieve consensus and • Employees as a cost • Hire and fire commitment of people through peoples’ participation • People as a resource • Attract and retain motivate people .

• Maintain discipline and seek compliance with organizational needs • Build positive work ethos and • Hierarchical personnel policies and practices organization culture for employee motivation • Emphasis on horizontal personnel practices with a view to harmonize employee pay. Performance Management: • Emphasis on feelings and reliance • Develop a holistic & ro??? PMS– on subjective appraisal systems with focus on both– the performance & an eye on harmony development 4. apartheid in relations– Share holders—stake features of the social system in holders workplace . benefits. and working conditions 3. Relationships: • Master and servant relationship • Emphasize reciprocity and mutuality reinforcing the negative.

5. dealers. and retaining . customers. etc. Change in Approach: • Power centre • Service centre • Fire-fighting role • Proactive approach • Building organizational pyramids to • Restructuring the organization to take care of employee aspirations make them flat/horizontal • Employee orientation • People and business orientation (to include care of customers and other constituents) • People training (includes not only • Employee training employees but also vendors.

• Evolve a value system based on trust. . and equity.Handling the interface between Human Resource Management and Industrial Relations The management can establish a good industrial relations interface with HRM in the following ways: • Develop sensitivity to human needs and human problems at work and beyond work. and reward systems – there is a need for objectivity and concern for balancing the aspirations of the people with that of the organization. fairness. Pay attention and practice the core values professed by the organization: walk the talk and talk the walk. • Institutionalize openness in subordinate – superior relationships. transparency. Allow the subordinates to speak hard facts and ventilate their grievances even though they appear to be initially. unpalatable and fictitious assumptions respectively. • Deal with employee grievances promptly and explain the logic and rationale of decisions to convince the aggrieved. In all areas of decision-making . promotion.specifically transfer.

• Tell the human resource management department and professionals to operate through the line of departments/professionals • Consciously provide exposure and understanding to line managers on human resource management aspects. Rules and procedures should unleash and facilitate. • Review HR/IR policies and practices from time to time. . • Let line managers handle the day-to-day human resource management activities and issues/problems. • Information sharing and consultation are prerequisites for shared understanding and co-operation. not block and hinder human potential in the organization.People cooperate when they understand.

Rusi Mody replied that the management was doing what the union could have done – taking good care of the employees – and that if ever the management were to shirk back in its responsibilities to the employees they would need the shoulder of a trade union. if employees are regarded as people and taken good care of. Tata. Rusi Mody was invited by J. In other words. veteran trade union leader in the same company and a renowned politician. . where young Rusi Mody was Personnel Officer. Do you agree with this viewpoint? Discuss this in today’s context.D. the then Chairman of Tata Iron and Steel Company. to require why the workers in the company.R. were not joining unions even though workers in all the other firms in similar lines of business in the same neighborhood in Calcutta were forming into trade unions.Case-let A few decades ago. they would not need a trade union. and Abdul Bari.

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