Overview of IR

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Industrial relations(IR)

Chapter--1

Overview of Industrial Relations


Industrial Relations (IR)

Definition: The Industrial relations(IR) encompasses


the relationship between the management and workmen and the
role of a regulatory body to resolve any industrial dispute.
Definition: Industrial relations is that field of study which
analyzes the relationship among the management and the
employees of an organization at the workplace and also provides
a mechanism to settle down the various industrial disputes. This
concept evolved in the late 19th century because of the industrial
revolutions.
Industrial Relations (IR)

As the name implies, Industry Relations comprises of


two words, Industry, and Relations. Where industry covers
the production activity in which the group of workmen is
engaged in, while the relations show the relationship
between the management and the workers within the
industry. IR plays a significant role in today’s working
scenario where the harmonious relationship between the
employers and employees is needed to have an
uninterrupted production
The Industrial Relations(IR) mainly covered

 Regulatory body to resolve industrial disputes.


 Collective Bargaining.

 The role of management, unions and government.

 Labor Legislation

 Worker’s Grievance Redressal system.

 Disciplinary policy and practice.

 Industrial Relations Training.


Industrial Relations: content

 Factors
 Parties

I. Primary parties
II. Others parties
 Scope

 Role

 Objective

 Others
Factors Affecting to IR
Individual Behavior

Every person has a different perception, background,


skills, knowledge, experience and achievements which
influences an individual’s behaviour. The employees,
therefore, behave differently in different situations, thus
impacting the work environment in the organization.
Organizational Structure

The hierarchical structure creates more formal


relationships among the employees belonging to different
hierarchical levels in an organization. Also, the delegation
and execution of decision-making power by the superior
influences the industrial relations between the managers
and the employees.
Psychological Factors

An employee’s attitude and mentality towards the


employer and the given task; and the employer’s
psychology towards the workers can be positive or
negative, which ultimately impacts the employee-employer
relationship.
Leadership Style

Every manager possesses certain leadership traits and


different style to function even in a formal organization.
Through his/her formal or informal ways of generating
team spirit and motivating the employees, he/she impacts
the organization’s industrial relations.
Economic and Technical Environment

To cope up with the changes in the economic


conditions or technology, organizations need to restructure
the task of the employees including their work duration,
conditions and wages; which leads to a difference in their
behaviour, attitude, adapting spirit, etc. towards the
organization and its people.
Legal and Political Environment

The legal framework and political circumstances


influence the organization and its industrial relations. It
contributes to the framing of rules, rights, authority,
powers, roles and responsibilities of all the parties of the
organization.
Parties Affecting/involved to IR
Primary Parties: Employees

The workers who provide their services to the organization are


an essential resource and contributes to generating the desired
output.
Following are some of the reasons for which employees find
maintaining sound industrial relations to be useful for them:
Sharing their views, suggestions and ideas with the management to
improve the business operations.
Becoming a part of organizational decision-making and ensuring the
betterment of the working conditions;
Speaking out their problems and grievances and seeking for the redressal of
the same.
Primary Parties: Employers

 Employers
 Employers are responsible for providing a favourable work
environment for the employees. They have many rights and
powers like laying off inefficient employees, taking strategic
decisions such as mergers, acquisition or shutdown of the
organization and adapting technological changes in the
operations.
Continue…

oEmployers

Following are the different ways in which managers can


benefit from sound industrial relations in the organization:
Motivating the employees to give their best and gaining
their trust and commitment.
Improving the overall efficiency and ensuring effective
communication among the employees and the management.
Dealing with problems of trade union along with
negotiation of employment terms and conditions with such
employee representative.
Primary Parties: Government

 Government
Before the 19th century, the government didn’t use to
intervene in the conflicts between the employer and the
employee. However, later on, there was a change in the
attitude of the government bodies, they started regulating
the industrial relations through labour courts and
tribunals, for the following reasons:
 Safeguarding the interest of both the parties;

 Ensuring that both the employer and the employee, abide


by the legal terms and conditions.
Parties involved: Others Party

 Employers’ Association
It is an authoritative body, formed to protect the
interest of the industrial owners. It performs the
following functions to safeguard the rights of the
employers:
 Representing the owners in collective bargaining with the
employees or government and also in case of national
issues;
 Creating a proper mechanism to resolve industrial disputes;

 Giving an insight into the employee relations in an


organization and providing suggestions accordingly.
Parties involved: Others Party
Trade Unions
When the workers unite together to form an association and elect a
representative among themselves; for the protection of their
rights and to raise their demands in front of the management; it
is named as a trade union. Listed below are the objectives of
such associations:
 Negotiating collectively with the administration for meeting the individual
interest of an employee;
 Upgrading the status of the employees in the organization;
 Demanding better working conditions and higher job security for the workers;
 Safeguarding the interest of the employees by demanding a higher level of
democratic control over the decision-making at the organizational, corporate
and national levels.
Parties involved: Others Party

 Courts and Tribunals


The judiciary includes the ‘courts’ to resolve the legitimate
conflicts and the ‘judicial review’ to administer the justice of
the constitution. These courts and tribunals play an essential
role in settlement of industrial disputes by eliminating the
possibilities of the following:
 Judicial flaws

 Conflicting judgment.

 Poor evaluation of penalty.

 Confusing terms and conditions.


Parties involved: Others Party

 International Labor Organization (ILO)


 Worker’s compensation, i.e., minimum wages;
 Employee’s work duration and number of holidays;

 Women employment;

 Employee’s safety, security and health in the work


environment;
 Industrial relations;

 Medical facilities and examination along with maternity


protection.
Parties involved: Others Party
 Human Resource Function
The human resource department or team acts as a mediator
between the organization and its employees for dealing with
the personnel issues and conflicts. It is their responsibility to
ensure the maintenance of harmonious industrial relations in
the company.
 Addressing the disputes at the initial level;
 Acting as a change agent by bringing a mental revolution in case of any
conflict between the workers and the management;
 Performing the role of an administration expert and a strategic partner by
ensuring the implementation of the policy decisions taken at the top level.
Industrial Relations: SCOPE
Industrial Relations: SCOPE
Employer-Employee Relations
The relationship that pertains between the business owner
and the employees of a particular company is known as
the employer-employee relationship. To maintain sound
relations, the employer must treat the employees fairly
and should value their efforts.
Also adopting the various human resource strategies like
employee relations program, performance-based
promotions and even making the productive employees
the stakeholders of the company.
Industrial Relations: SCOPE

Group Relations
The interactions and communication between the
workers belonging to different workgroups are studied
under group relations.
Industrial Relations: SCOPE
 Labour Relations
In an organization, the relationship shared by the managers
and the workers is termed as labour relations. It includes
their behaviour, thoughts, actions and perception against
each other.
Industrial Relations: SCOPE
 Public relations
It is also termed as community relations. The interaction
and relationship of the organization (i.e., its owner,
management and employees) with the society or external
bodies is termed as public relations. For long-term
existence in the business, every organization needs to
maintain cordial public ties.
Industrial relations: Roles & objectives
Industrial relations: Roles & objectives
 Handling Grievance:
Industrial relations aim to maintain cordial relationship
between the management and the employees by
resolving the disputes and setting up a mechanism to
address the grievances of both the parties.
 Mental Revolution:

It emphasizes on transforming the way of thinking of both


the management and the workers. The employer must
value the worker’s contribution towards the organization,
and at the same time, the employees must respect the
authority of the management.
Industrial relations: Roles & objectives
 Employees’ Rights Protection:
Under industrial relations, various acts (like in India
National Labor Relations Act) and associations were
formed to safeguard the rights and interests of the
employees (irrespective of their membership of the
labour union).
 Contract Interpretation:

Industrial relations emphasizes on providing proper


training to the supervisors and the managers on the
labour law contracts to clarify any misunderstanding.
Industrial relations: Roles & objectives
 Boosting Morale:
The motivated workforce is the most efficient resource of
the organization. Therefore, industrial relations
emphasizes on building employee’s confidence and
boosting their morale to perform better than before.
 Collective Bargaining:

The worker’s representative and the management put up


their proposals in front of each other and negotiates over
the same. This is to reach a mutual decision which is
written down in a collective bargaining agreement.
Industrial relations: Roles & objectives
 Increasing Productivity:
Industrial relations aims at improving the efficiency and
productivity of the organization by ensuring employees’
long-term retention and minimizing the rate of their
absenteeism.
Industrial relations: Roles & objectives
 Before the industrial revolutions, organizations
paid very less attention to the workers’ relationship with
the management and with each other. They treated the
labour as machines and concentrated on their production
capability and efficiency.

 In the modern-day business world where the


companies are becoming more people-oriented and work
continuously for achieving employee satisfaction and
retention, the study of industrial relations plays a
significant role in the organizations.

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