MEANING OF INDUSTRIAL
RELATIONS
The field of Industrial Relations
(also called labour relations) looks
at the relationship between
Management and Workers,
particularly groups of workers
represented by a Union
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Factors in analysing I.R
1. Levels of labour relations
a. Shop floor level
b. Regional level
c. National level
2. Ability to adapt to change
3. Legislation and regulation
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Perspective Theories of
Industrial Relations
1. Unitary Perspective
2. Pluralistic Perspective
3. Marxist Perspective
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Unitary Perspective
1. The organization is perceived as an integral and
harmonious whole with the idea of “one happy
family”.
2. Management and other members of the staff share a
common purpose emphasizing mutual cooperation.
3. It demands loyalty of all employees.
4. Trade Unions are considered as unnecessary
5.Conflict is perceived as disruptive and the result of
agitators, interpersonal friction and communication
breakdown.
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Pluralistic Perspective
• Organization is perceived as being made up of powerful and
divergent sub-groups
• Each sub-group has its own legitimate loyalties
• Each sub-group has its own objectives and leaders
• The two prominent sub-groups are “Management” and “Trade
Unions”.
• The role of Management leans less towards enforcing or controlling
and more towards persuasion and co-ordination
• Trade Unions are considered as legitimate representatives of
employees
• Conflict is dealt by collective bargaining
• Collective bargaining is not considered a bad thing. If managed
properly, it can result in positive change.
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Marxist Perspective
• There is a fundamental division of interest between
capital and labour
• This perspective sees inequalities of power and
economic wealth as the root of capitalist economic
system
• Conflict is seen as inevitable and trade unions are a
natural response of workers to their exploitation by
capitalist
• The Marxist view is that joint management and
regulation would enhance management position
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Conflict Between IR and HRM
• Key Differences between HRM and IR
1. IR is collectivist and pluralist in outlook, dealing with relations
between employers and Unions and between them and the state.
The outcomes are standardized rules and procedures. Some of the
central features of IR are freedom of association, collective
bargaining, right to strike & lockout and resolution of conflict
through trade unions
HRM does not encompass the third party (The state). It is bipartite
but individual focussed. This is evident from the key HRM subjects
such as recruitment and selection, appraisal, training and
development, motivation and retention of staff through rewards.
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• Key differences between HRM and IR
2. IR consists of a large component of rules set by the
state through laws, by the parties through negotiated
agreements or by courts and tribunals
HRM deals less with rules and more with policies and
practices designed to maximize organizational
integration, employee commitment, flexibility and
quality of work. Collective bargaining and Industrial
relations have a very minor role in the HRM model
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• Key differences between HRM and IR
3. IR is focussed on resolving conflicts between two parties
or between one of them and the state, through
negotiations and collective bargaining.
HRM is designed to maximize employee commitment
and quality of work. HRM believes in Managing people
for common interest of the organization. HRM focuses
on good management rather than external rules and
collective bargaining.
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• Key differences between HRM and IR
4. HRM believes in individual employee relationship
IR involves Unions rather than individuals directly.
5. In IR the pay is based on cost of living and collective bargaining
HRM seeks to introduce a performance element into pay.
6. IR is considered as a specialist’s function and does not involve line managers
HRM also involves line managers in HRM role.
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• Key differences between HRM and IR
7. IR focuses on loyalty and allegiance towards trade unions
HRM focuses on commitment to the goals and values of the
organization
8. Emergence of new categories of employees has increased the
distinction between IR and HRM. IR deals with all parties as a
collective body whereas HRM deals with different categories of
workers in accordance with their knowledge and capability
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Summary of incompatibility
between IR and HRM
• IR considers the mass: HRM considers the individual
• In IR, pay is determined by bargaining: HRM introduces
the performance factor in determining the pay
• IR seeks to resolve conflicts through negotiations or
through legislation: HRM seeks to match organizational
goals with employees’ individual goals
• In IR, communication with employees is through Unions:
In HRM it is not necessarily so
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• IR has traditionally promoted standardization
(rules & regulations): HRM is more concerned
with flexibility
• Training, development and motivation are
central issues of HRM: Conflict resolution and
collective bargaining are the central issues of IR
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Harmonizing HR and IR
Preconditions to harmonize HR and IR
• Change in attitude of Management and workers
• Acknowledgement of the fact that there is a link between
growth of the enterprise and growth of the employees
• Recognition that employer and employee interests are
not only divergent but also common e.g. productivity is
an important issue to both
• Both HRM and IR should be prepared to accommodate
each other. At present, IR views HRM as its rival
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