You are on page 1of 33

PROJECT ON INDUSTRIAL RELATIONS AS A MANAGEMENT TOOL

SUBMITTED BY TYBMS DIV.A VISHAL GUPTA (28) MAHESH PAANIGRAHEE (29) MAYUR KUMTHEKAR (24) ABHISHEK GAVANDE (21) PRITAM GUJAR (22) ROHIT SHINDE (23)

CONTENTS :

Sr.NO 1 2 3 4 5 6 7 8 9 10

DESCRIPTION What is Industrial Relation? Difference between HRM and IR Scope, objectives and importance IR System Causes of poor IR Approaches and principle of good IR ILO and conflict management Challenges under IR Conclusion Bibliography

ACKNOWLEDGEMENT
It is a pleasure to have the opportunity to extend our heartiest thanks to everybody who helped us through the successful completion of our project, which was a great source of learning and experience for us. We express our gratitude to the company for allowing us to have in depth knowledge of their industrial relation and also for providing all the necessary information. While working with professionally managed organization we have realized the importance of practical experience and also to relate our theoretical knowledge with the practical market place.

What is Industrial relation?


Industrial relations has become one of the most delicate and complex problems of modern industrial society. Industrial progress is impossible without cooperation of labours and harmonious relationships. Therefore, it is in the interest of all to create and maintain good relations between employees (labour) and employers (management). The term Industrial Relations comprises of two terms: Industry and Relations. Industry refers to any productive activity in which an individual (or a group of individuals) is engaged. By relations we mean the relationships that exist within the industry between the employer and his workmen. The term industrial relations explains the relationship between employees and management which stem directly or indirectly from union-employer relationship. Industrial relations are the relationships between employees and employers within the organizational settings. The field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated. The term industrial relations have a broad as well as a narrow outlook.

Originally, industrial relations was broadly defined to include the relationships and interactions between employers and employees. From this perspective, industrial relations cover all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labour) relations. Now its meaning has become more specific and restricted. Accordingly, industrial relations pertains to the study and practice of collective bargaining, trade unionism, and labour-management relations, while human resource management is a separate, largely distinct field that deals with non union employment relationships and the personnel practices and policies of employers. The relationships which arise at and out of the workplace generally include the relationships between individual workers, the relationships between workers and their employer, the relationships between employers, the relationships employers and workers have with the organizations formed to promote their respective interests, and the relations between those organizations, at all levels. Industrial relations also includes the processes through which these relationships are expressed (such as, collective bargaining, workers participation in decision-making, and grievance and dispute settlement), and the management of conflict between employers, workers and trade unions, when it arises.

Distinction between HRM and IR


The term human relations lays stress upon the processes of inter-personal relationships among individuals as well as the behavior of individuals as members of groups. The term industrial relations is used widely in industrial organizations and refers to the relations between the employers and workers in an organization, at any specified time. Thus, while problem of human relations are personal in character and are related to the behavior of individuals where moral and social element predominate, the term industrial relations is comprehensive covering human relations and the relations between the employers and workers in an organization as well as matters regulated by law or by specific collective agreement arrived at between trade unions and the management. However, the concept of industrial relations has undergone a considerable change since the objective of evolving sound and healthy industrial relations today is not only to find out ways and means to solve conflicts or resolve difference but also energies toward constructive channel. secure unreserved cooperation and goodwill to divert their interest and

Scope Of Industrial Relations


The scope of industrial relations includes all aspects of relationships such as bringing cordial and healthy labour management relations, creating industrial peace and developing industrial democracy. The cordial and healthy labour management relations could be brought in By safeguarding the interest of the workers; By fixing reasonable wages; By providing good working conditions; By providing other social security measures; By maintaining healthy trade unions; By collective bargaining. The Industrial peace could be attained By setting industrial disputes through mutual understanding and agreement; By evolving various legal measure and setting up various machineries such as Works Committee, Boards of Conciliation, Labour Courts etc. The Industrial democracy could be achieved By allowing workers to take part in management; and By recognition of human rights.

Objectives of Industrial Relations

1. To bring better understanding and cooperation between employers and workers. 2. To establish a proper channel of communication between workers and management. 3. To ensure constructive contribution of trade unions. 4. To avoid industrial conflicts and to maintain harmonious relations. 5. To safeguard the interest of workers and the management. 6. To work in the direction of establishing and maintaining industrial democracy. 7. To ensure workers participation in decision-making. 8. To increase the morale and discipline of workers.

9. To ensure better working conditions, living conditions and reasonable wages. 10.To develop employees to adapt themselves for technological, social and economic changes. 11.To make positive contributions for the economic development of the country.

Importance of Industrial Relations


The healthy industrial relations are key to the progress and success. Their significance may be discussed as under Uninterrupted production The most important benefit of industrial relations is that this ensures continuity of production. This means, continuous employment for all from manager to workers. The resources are fully utilized, resulting in the maximum possible production. Reduction in Industrial Disputes Good industrial relations reduce the industrial disputes. Disputes are reflections of the failure of basic human urges or motivations to secure adequate satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts, goslow tactics, gherao and grievances are some of the reflections of industrial unrest which do not spring up in an atmosphere of industrial peace. It helps promoting co-operation and increasing production.

High morale Good industrial relations improve the morale of the employees. Employees work with great zeal with the feeling in

mind that the interest of employer and employees is one and the same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of industry. The employer in his turn must realize that the gains of industry are not for him along but they should be shared equally and generously with his workers. In other words, complete unity of thought and action is the main achievement of industrial peace. It increases the place of workers in the society and their ego is satisfied. It naturally affects production because mighty cooperative efforts alone can produce great results.

Mental Revolution The main object of industrial relation is a complete mental revolution of workers and employees. The industrial peace lies ultimately in a transformed outlook on the part of both. It is the business of leadership in the ranks of workers, employees and Government to work out a new relationship in consonance with a spirit of true democracy.

Reduced Wastage Good industrial relations are maintained on the basis of cooperation and recognition of each other. It will help increase production. Wastages of man, material and machines are reduced to the minimum and thus national interest is protected..

Industrial Relation System


An industrial relations system consists of the whole gamut of relationships between employees and employers which are managed by the means of conflict and cooperation. A sound industrial relations system is one in which relationships between management and employees (and their representatives) on the one hand, and between them and the State on the other, are more harmonious and cooperative than conflictual and creates an environment conducive to economic efficiency and the motivation, productivity and development of the employee and generates employee loyalty and mutual trust.

Three main parties are directly involved in industrial relations: Employers: Employers possess certain rights vis--vis labors. They have the right to hire and fire them. Management can also affect workers interests by exercising their right to relocate, close or merge the factory or to introduce technological changes. Employees: Workers seek to improve the terms and conditions of their employment. They exchange views with management and voice their grievances. They also want to share decision making powers of management. Workers generally unite to form unions against the management and get support from these unions. Government: The central and state government influences and regulates industrial relations through laws, rules, and agreements. It also includes third parties and labour

Causes of Poor Industrial Relations


The main cause or source of poor industrial relations resulting in inefficiency and labour unrest is mental laziness on the part of both management and labour. However, the following are briefly the causes of poor industrial relations: 1. Mental inertia on the part of management and labour; 2. An intolerant attitude of contempt of contempt towards the workers on the part of management. 3. Inadequate fixation of wage or wage structure; 4. Unhealthy working conditions; 5. Indiscipline; 6. Lack of human relations skill on the part of supervisors and other managers; 7. Desire on the part of the workers for higher bonus or DA and the corresponding desire of the employers to give as little as possible; 8. Inappropriate introduction of automation without providing the right climate; 9. Unduly heavy workloads; 10. 12. Inadequate welfare facilities; Unfair labour practices, like victimization and undue 11. Dispute on sharing the gains of productivity; dismissal.

Approaches to Industrial Relations

Industrial conflicts are the results of several socio-economic, psychological and political factors. Various lines of thoughts have been expressed and approaches used to explain his complex phenomenon. One observer has stated, An economist tries to interpret industrial conflict in terms of impersonal markets forces and laws of supply demand. To a politician, industrial conflict is a war of different ideologies perhaps a class-war. To a psychologist, industrial conflict means the conflicting interests, aspirations, goals, motives and perceptions of different groups of individuals, operating within and reacting to a given socio-economic and political environment.

Psychological approach According to psychologists, problems of industrial relations have their origin in the perceptions of the management, unions and rank and file workers. These perceptions may be the perceptions of persons, of situations or of issues involved in the conflict. The perceptions of situations and issues differ because the same position may appear entirely different to different parties. The perceptions of unions and of the management of the same issues may be widely different and, hence, clashes and may arise between the two parties. Other factors also influence perception and may bring about clashes. The reasons of strained industrial relations between the employers and the employees can be understood by studying differences in the perception of issues, situations and persons between the management groups and labour groups. Sociological approach Industry is a social world in miniature. The management goals, workers attitudes, perception of change in industry, are all, in turn, decided by broad social factors like the culture of the institutions, customs, structural changes, status-symbols, rationality, acceptance or resistance to change, tolerance etc. Industry is, thus inseparable from the society in which it functions. Through the main function of an industry is economic, its social consequences are also important such as urbanization,

social mobility, housing and transport problem in industrial areas, disintegration of family structure, stress and strain, etc. As industries develop, a new industrial-cum-social pattern emerges, which provides general new relationships, institutions and behavioral pattern and new techniques of handling human resources. These do influence the development of industrial relations. Human relations approach Human resources are made up of living human beings. They want freedom of speech, of thought of expression, of movement, etc. When employers treat them as inanimate objects, encroach on their expectations, throat-cuts, conflicts and tensions arise. In fact major problems in industrial relations arise out of a tension which is created because of the employers pressures and workers reactions, protests and resistance to these pressures through protective mechanisms in the form of workers organization, associations and trade unions. Through tension is more direct in work place; gradually it extends to the whole industry and sometimes affects the entire economy of the country. Therefore, the management must realize that efforts are made to set right the situation. Conflicts cannot be resolved unless the management must learn and know what the basic what the basic needs of men are and how they can be motivated to work effectively.

Principle of Good Industrial Relations

The willingness and ability of management and trade unions to deal with the problems freely, independently and with responsibility. Recognition of collective bargaining. Desirability of associations of workers and managements with the Government while formulating and implementing policies relating to general economic and social measures affecting industrial relations. Fair redressal of employee grievances by the management Providing satisfactory working conditions and payment of fair wage.

Introducing a suitable system of employees education and training. Developing proper communication system between management and employees. To ensure better working conditions, living conditions and reasonable wages. To develop employees to adapt themselves for technological, social and economic changes. To make positive contributions for the economic development of the country.

Roles of state, management and Trade union

Role of state in industrial relations


In recent years the State has played an important role in regulating industrial relations but the extent of its involvement in the process is determined by the level of social and economic development while the mode of intervention gets patterned in conformity with the political system obtaining in the country and the social and cultural traditions of its people. The degree of State intervention is also determined by the stage of economic

develop. For example, in a developing economy like ours, workstoppages to settle claims have more serious consequences than in a developed economy and similarly, a free market economy may leave the parties free to settle their relations through strikes and lockouts but in other systems varying degrees of State participation is required for building up sound industrial relations. In India, the role played by the State is an important feature in the field of industrial relations and State intervention in this area has assumed a more direct form. The State has enacted procedural as well as substantive laws to regulate industrial relations in the country.

Role of management in industrial relations


The management have a significant role to play in maintaining smooth industrial relations. For a positive improvement in their relations with employees and maintaining sound human relations in the organization, the management must treat employees with dignity and respect. Employees should be given say in the affairs of the organization generally and wherever possible, in the decision-making process as well. A participative and permissive altitude on the part of management tends to give an employee a feeling that he is an important member of the organization a feeling that encourages a spirit of cooperativeness and dedication to work. Management must make a genuine efforts to provide congenial work environment.

They must make the employees feel that they are genuinely interested in their personal development. To this end, adequate opportunities for appropriate programmes of 18training and development should be provided. Managements must delegate authority to their employees commensurate with responsibility. They must evolve well conceived and scientific wage and salary plan so that the employees may receive just compensation for their efforts. They must devise, develop and implement a proper incentive plan for personnel at all levels in the organization. There must be a well-planned communication system in the organization to pass on information and to get feed back from the employees. Managements must pay personal attention to the problems of their employees irrespective of the fact whether they arise out of job environment or they are of personal nature. They must evolve, establish and utilize appropriate machineries for speedy redressal of employees grievances. Manageemnts must provide an enlightened leadership to the people in the organization. An environment of mutual respect, confidence, goodwill and understanding on the part of both management and employees in

the exercise of their rights and performance of their duties should prevail for maintaining good industrial relations

Role

of

trade

unions

in

maintaining

industrial

relations
The trade unions have a crucial role to play in maintaining smooth industrial relations. It is true that the unions have to protect and safeguard the interests of the workers through collective bargaining. But at the same time they have equal responsibility to see that the organization do not suffer on account of their direct actions such as strikes, even for trivial reasons. They must be able to understand and appreciate the problems of managements and must adopt a policy of give and take while bargaining with the managements. Trade unions must understand that both management and workers depend on each other and any sort of problem on either side will do harm to both sides. Besides public are also affected, particularly when the institutions involved are public utility organizations.

International Labour Organization (ILO)


The International Labour Organisatoin (ILO) was set up in 1919 by the Versailles Peace Conference as an autonomous body associated with the League of Nations. The ILO was the only international organisation that survived the Second World War even after the dissolution of its parent body. It became the first specialized agency of the United Nations in 1946 in accordance with an agreement entered into between the two organizations. India has been a member of the ILO since its inception. The aims and objectives of ILO are set out in the preamble to its Constitution and in the Declaration of Philadelphia (1944) which was formally annexed to the Constitution in 1946. The preamble affirms that universal and lasting peace can be established only if its is based upon social justice, draws attention to the existence of conditions of labour involving injustice, hardship and privation of a large number of people, and declares that improvement of these conditions is urgently required through such means as the regulation of hours of work, prevention of unemployment, provision of an adequate living wage, protection of workers against sickness, disease, and injury arising out of employment, protection of children, young persons and women, protection of the interests of migrant workers, recognition of the principle of freedom of association, and organisation of vocational and technical education.

The Preamble also states that the failure of any nation to adopt human conditions of labour is an obstacle in the way of other nations desiring to improve labour conditions in their own countries. The three main functions of the ILO are; To establish international labour standards; To collect and disseminate information on labour and industrial conditions; and To provide technical assistance for carrying ort programmes of social and economic development. From the very beginning, the ILO has been confronted with the tremendous task of promoting social justice by improving the work and conditions of life in all parts of the world.

Conflict Management
Conflict has to be resolved as soon as the optimum level is crossed and before dysfunctional consequences start occurring. Following are some of the techniques employed to resolve conflict. Dominance through position Quiet often managers use positional authority to fire a lower ranking subordinate they consider to be a trouble-maker. Individuals, in organisation, with rare exception, recognize and accept the authority of their superiors as an acceptable way or resolving conflicts. Although they may not be in agreement with these decisions, the abide by them. Appeals procedures The people in disagreements may appeal to higher authority to help them to arrive at a solution by resolving the problem satisfactorily. Liaison groups To arbit differences between two warring factions, an arbitrator can be appoint who can use this expertise and persuasion to achieve coordination and get people together. Reduce interdependence On way to resolve conflict is to reduce interdependences. Departments may be provided with resources that are independent of those provided for other departments.

IR-CHALLENGES
Employers are now compelled to view industrial relations and human resource management from a strategic perspective; in other words, not only from the traditional viewpoint of negotiating terms and conditions of employment and performing a personnel and welfare function. Industrial relations and human resource management are directly relevant to competitiveness, and how they are managed will impact on enterprise performance e.g. its productivity and quality of goods and services, labour costs, quality of the workforce, motivation, prevention of disputes and not only their settlement, and aligning employee aspirations with enterprise objectives. Minimum Wages In countries which have a legal minimum wage three concerns are evident. The first is that minimum wage levels sometimes tend to be fixed on extraneous considerations (e.g. political), or on inadequate data needed to define the level of wages. The second concern is that such instances have an adverse effect on competitiveness in the global market and on employment creation where the minimum wage is fixed above a certain level. Flexible/Performance Pay Many employers, and even some governments, have expressed a wish to review traditional criteria to determine pay levels such as the cost of living and seniority. Pay systems which are flexible

The objectives of pay reform will not be achieved unless reforms are the result of consensual agreement and are part of a larger human resource management strategy and change in human resource management systems. Cross-Cultural Management Asia is a heterogeneous region, characterized by ethnic, cultural, linguistic and religious diversity. Due to substantial increases in investment in Asia from both Asian and Western investors, many employers and unions are dealing with workers and employers from backgrounds and cultures different to their own. Many of the resulting problems and issues (reflected for instance in the proliferation of disputes due to cross cultural 'mismanagement') fall within the concept of crosscultural management. The problems arise due to differences in industrial relations systems, attitudes to and of unions, work ethics, motivational systems and leadership styles, negotiating techniques, inappropriate communication, consultation and participation procedures and mechanisms, values (the basic beliefs that underpin the way we think, feel and respond), expectations of workers and interpersonal relationships. These cross-cultural management issues in turn pose the following problems:

i. What particular industrial relations and human resource management considerations at the regional, sub-regional and country level affect the development of sound relations at the enterprise level in a cross-cultural environments ii. What would be the most effective programmers for this purpose'.? iii. How can investors in Asia familiarize themselves with the environmental and cultural considerations in the recipient country relevant to their managing people at work? iv. How could information be collected, analyzed and disseminated? Dispute Prevention Most countries (other than those in transition to a market economy) have long-standing dispute settlement procedures at the national level (conciliation, arbitration, industrial or labour courts). Essential as these are, they operate only when a dispute arises. Equally important are dispute prevention through communication, consultation and negotiation procedures and mechanisms which operate largely at the enterprise level. They are not particularly common in many Asian enterprises. Their importance has increased in the current decade when changes in the way organizations are structured and managed have created the potential for workplace conflict. A more positive movement from personnel management to strategic human resource management is called for.

Industrial Relations/Human Resource Management Training Not many developing countries in the region have facilities for training in labour law and industrial relations - negotiation, wage determination, dispute prevention and settlement, the several aspects of the contract of employment, and other related subjects such as safety and health. More facilities are probably available in human resource management (the distinction is becoming increasingly thin). Since industrial relations have assumed a particularly important role in the context of globalization, structural adjustment and in the transition to a market economy, employers in each country would need to identify what aspects of industrial relations resource management should be accorded priority, how training in them could be delivered, and what concrete role is expected from the employers' organization.

CONCLUSION
In todays competitive business world where profit is every thing maintaining a balance between profit and industrial relation is not a easy cup of tea. There are tough competitions and thus there exists a lot of room to improve so as to become the market leader from all aspects. Industrial relation has become a management art as if it is efficiently use it can be a boon to an organization. Many believe that industrial relation and profit making are antonyms. But IR is much required by an organization to have a longer run in the competitive market.

BIBLIOGRAPHY

Industrial Relations, Tata Mc Graw Hill WWW.kwalitychemicals.COM Michael V P, HRM and Human Relations, Himalaya
.

You might also like