Everything you need to know about the approaches to industrial relations. Industrial relations refer to the collective relationship between management, employees and government in any organization. It deals with the people at work.
Approaches to Industrial Relations is a comprehensive field of study, subtle as well as gross, a vast area of interactions, actions and reactions which affect not just a company or an industry, but also the economy.
Industrial relations can be described as the relationship between management and employees or among employees and their organizations that characterize or grow out of employment.
Some of the approaches of industrial relations are:- 1. Unitary Approach 2. Systems Approach 3. Pluralistic Approach 4. Marxist Approach 5. Strategic Management Approach 6. Psychological Approach 7. Sociological Approach 8. Human Relations Approach 9. Socio-Ethical Approach 10. Gandhian Approach 11. Dunlop’s Approach 12. V. V Giri Approach 13. Comparative Approach.
Approaches to Industrial Relations
Approaches to Industrial Relations: Unitary, Systems, Pluralistic, Marxist and Strategic Management Approach
The industrial relations scenario and factors affecting it, has been perceived differently by different practitioners and theorists. Some have viewed IR problems in terms of class conflict; some have viewed it in terms of mutuality of interests of different groups; some have viewed it as a consequence of interaction of various factors both within an organization and outside it; and so.
Based on these orientations, several approaches have been developed to explain the dynamics of IR. These approaches are unitary approach, systems approach, pluralistic approach, Marxist approach, and strategic management approach. Understanding of these approaches is helpful in devising effective IR strategy.
Approach # 1. Unitary:
The basic assumption in unitary approach is that everyone benefits when the focus is on common interest and promotion of harmony. IR is grounded on mutual cooperation, individual treatment of employees, teamwork, and shared goals. Workplace conflict is seen as a temporary aberration resulting from poor management of employees, or the mismatch between employees and organizational culture.
In other cases, employees cooperate with management and accept their right to manage the affairs of the organization. The earlier theorists have emphasized employee-oriented organizational processes to integrate the employees with the organization.
This approach appears to be good in its orientation as it emphasizes employees in the organization. However, it has failed to consider different variables affecting IR within individual organizations and the total industrial sector. Various such approaches like paternalistic and philanthropic have failed because of the wrong assumptions made about the work behaviour of employees. This approach has been criticized on the basis that it is manipulative and exploitative.
Approach # 2. Systems:
The systems approach of IR was developed by John Dunlop in 1958. He has presented a systematic theoretical orientation to the study of industrial relations. Before him, others have theorized industrial relations in terms of trade union purpose and collective bargaining but Dunlop has taken it in more comprehensive way. Therefore, he is regarded as father of industrial relations.
According to Dunlop, industrial relations system is a distinctive subsystem of society on the same logical plane as an economic system. Like the economic system, it is an abstraction. There are no actors whose activity is confined solely to the industrial relations or economic sphere.
Neither an economic system nor an IR system is designed simply to describe in factual terms the real world of time and space. Both are abstractions designed to highlight relationships.
There are three sets of actors and their interrelationships which are central to understanding the IR system:
i. A hierarchy of managers;
ii. A hierarchy of workers who are never without informal organization even if they are not formally organized in a trade union; and
iii. Specialized government agencies concerned with the relationship between workers and their organizations.
By interacting with each other, these three sets of actors establish rules which govern the workplace and the work community. Dunlop has observed that “just as the satisfaction of wants through the production and exchange of goods and services is the locus of analysis in the economic subsystem, so the establishment and administration of these rules is the major concern or output of the industrial relations subsystem.” It is these rules and procedures for their application which distinguish one IR system from others.
Dunlop has emphasized that three actors of IR are not free. Their interactions are influenced by forces in the environment, the most important of them being technology, markets, and power relations in the wider society. He further, argues that an IR system is essentially stable and cohesive.
While there is a conflict of interests between the actors, there is also a body of common ideas that each actor holds towards the place and function of the others in the system. This shared ideology and compatibility of views enables them to resolve conflict by framing appropriate rules.
Dunlop’s approach of IR has provided a much wider framework for developing IR strategy in organizations. However, this approach has been criticized both in terms of conceptual framework as well as its application in practice. For example, Dunlop’s model works fairly well as long as the environment and the practices of the parties remain stable.
However, the systems framework, with its stability and shared consensus among the actors concerning their respective roles, has a difficult time explaining the dynamic aspects of industrial relations.
Approach # 3. Pluralistic:
The basic emphasis of pluralistic approach is that an organization is a coalition of interested groups headed by the top management which serves the long-term needs of the organization as a whole by paying due concern to all the interest groups affected — employees, shareholders, consumers, and society.
In this process, there is possibility that the management may pay insufficient heed to the needs and claims of employees, and they may unite to bring collaborative force for the acceptance of these needs and claims. Thus, the stability in IR system is the product of concessions and compromises between management and unions.
The pluralistic approach assumes that labour and management have many conflicting interests, but such conflicts are not only natural but even necessary because it is only competing social forces which can constrain and check the exercise of absolute power. The role of State is quite limited in IR system and should not have excessive influence on any party to IR.
The stress is on a negotiated order, a voluntary reconciliation between opposing forces with minimal intervention from external agencies. For example, through collective organization in trade unions, employees mobilize themselves to meet management on equal terms to negotiate the terms of their collaboration.
This approach has certain basic limitations. The basic assumption that in a free society, labour and management will arrive at an acceptable negotiated term does not hold good. This may be a costly affair, at least, in the short-run. This was substantiated by the fact that there were widespread strikes during mid-1960s and early 1970s in England where this approach was evolved and practised.
A society may be free but power distribution is not necessarily equal among the competing forces. Therefore, some kind of State intervention has become necessary to bring two parties involved in a conflict on equal terms.
Approach # 4. Marxist:
Like pluralistic approach, marxist approach also treats that labour and management conflict is inevitable. However, this approach differs from the earlier one so far as the cause of conflict is concerned; it ascribes that the conflict is the product of the capitalist society which is based on classes.
The two classes — labour and capital — have essentially different interests in an organization, and these interests are conflicting. The objective of capital has been to enhance productivity by gaining control over the labour process. The wages of the labour are seen as a cost and, therefore, makes attempt to minimize it. Labour, being a factor of production, should be hired so long as it can generate profit.
The labour-capital conflict cannot be solved by the existing systems of bargaining, participation, cooperation, and other means of building harmonious relationships; rather, it can be solved by the change in the capitalistic system as a whole. This has led to the emergence of new IR systems in most of the socialist countries.
At many other places, it has generated the use of coercive power such as Gherao, etc. by the workers against management. The marxist approach of IR may have some merits but it has somewhat limited scope in countries not based on socialism as practised in communist bloc.
Approach # 5. Strategic Management:
Strategic management approach to industrial relations is comparatively new developed in 1980s in USA and has spread throughout the world in a very short period of time. This approach puts question about the relevance of the two institutions of IR — trade unions and collective bargaining in the changed situation.
Faced with the new situation of globalization of world economy, the American companies started to have a relook at their old IR strategies in which major issues concerning trade unions and management used to be settled through collective bargaining.
The new competitive environment necessitated proactive actions in which the collective bargaining yielded place to decentralized bargaining; bargaining for more wages and benefits to concessional bargaining in which such benefits were to be reduced in order to make an organization cost-effective; emphasis on multi-skilling, flexible deployment, and greater involvement of workers in improving productivity and performance; and considerable improvement in workplace to yield better results.
The US companies have adopted the strategy of locating their plants in union-free regions and discouraged workers to form unions. Workers also realized the benefits of the new system which encouraged to earn more by developing new skills rather than going through unionized activities to earn more. They became more interested in career development.
As a result, the trade unions, working on the basis of old objectives and methods, could not attract younger, better educated, and more skilled workers, and union membership has reduced to mere 20 per cent.
Strategic management approach to IR suggests proactive strategy for developing IR system in place of reactive strategy suggested by the earlier theories.
The proactive strategy is based on the following features:
i. In the earlier system, the IR actions depended on the demands and pressures put by the trade unions. In the new approach IR actions and strategy are linked with the organization’s business strategy.
ii. IR activities are not confined to IR department alone but extended to the total management. The top management which was earlier responsible for strategic management has focused its attention on combining HRM with business strategy in order to put proper emphasis on human resources as a means for developing competitive competence.
iii. There is more emphasis on individuals as individuals and not as collectivity. More attention has been given to career development through multi-skill training and development activities.
iv. In place of collective bargaining, attempts are made to sort out problems at the work group levels.
v. There is discouragement for unionization. Many of the organizations which have adopted this approach are union free. There is decreasing attraction to union activities among new workers.
On the issue of strategic management approach to IR, it may be observed that most unions steadfast adherence to the traditional representation approach — which focuses on the grievance procedure, formalized work rules, and seniority rights — has not proven attractive to employees who express concerns for issues such as day care and career development, and who desire to exert influence over the corporate reorganization that is occurring at an accelerated pace.
They have gone on to view that the collective bargaining process is being squeezed and pressured to adapt to forces that operate above and below its traditional process and structure. Thus, there is a need to develop a broader conception of the institutional structure within which industrial relations activities occur.
Approaches to Industrial Relations: Marxist, Syndicalism, Socialistic, Pluralistic, Integrativeand Gandhian Approach.
The following points highlight the six main approaches to industrial relations. The approaches are: 1. Marxist Approach 2. Syndicalism Approach 3. Socialistic Approach 4. Pluralistic Approach 5. Integrative Approach of Business 6. Gandhian Approach.
1. Marxist Approach:
As against Reformist approach there emerged another school that emphasized revolution and class struggle for attaining the egalitarian society. The founder of this school, Karl Marx advocated complete socialization of production as the only method of putting an end to the concentration of wealth and to the exploitation of workers by the owners of capital. Under this approach all the enterprises are owned by the State and the workers themselves constitute the management.
The class structure of the society was buttressed by the State that was under the control of capitalist running class. Therefore, the remedy was for the workers to destroy this state and set up proletarian state. This approach takes the color of workers’ control rather than that of workers’ participation as it contemplates workers as management themselves.
2. Syndicalism Approach:
France was the original home of Syndicalism blending Anarchist Communism with trade unionism in its most popular time. The doctrine was responsible for movements for workers’ control in countries as far as Norway and Australia. Anarchism is the father of Syndicalism, but trade unionism is its mother.
Syndicalism had two distinct aspects:
(a) Policy of direct action against capitalism- a general strike to overthrow the system, and
(b) A vision of the future society.
Syndicalists agreed that after nationalization and actual administration of the various industries and services, production would be in the hands of the organized workers through the trade unions. They proposed the control of production to be exercised by the direct- producers themselves. Sometime later they gave up the idea of separate ownership of industries by workers. Instead, they put forward the idea of the federation of the various groups of industries managed by a General Council to regulate and distribute in the interest of the producers in general.
The idea became so much fashionable that Snowden quotes the Spectator- Apart from its methods Syndicalism means no more than a form of co-operation. Similarly Times is quoted, “The root idea of Syndicalism is not only not objectionable but excellent. It was the parent of co-operation, and will eventually be realized in co-partnership. It is by far the most rational and feasible form of Socialism”.
3. Socialistic Approach:
Socialistic approach considers workers’ participation in management as an important factor in the development and perfection of socialistic democracy. This ensures fullest decentralization and participation in management as multi-dimensional program for socialist construction. The economic reconstruction is based upon the nationalization of the means of production and exchange.
Under Communism, state machinery is abolished and the functions of the State are taken away by the society through public organization based on mutual consent and co-operation and the compulsion element in relation to members of the society is removed. In the process of taking away powers from the state and delegating its functions to the society, workers’ participation in management is of great importance.
Workers’ self- governing bodies may be formed which can participate effectively and efficiently in management. Such bodies have actual experience of the activities of the people and are much aware of the local conditions prevailing there. These bodies initiate the taking away of powers of State. Socialist democracy is created from the workers of lower rank and they are trained in such a way that they can promote the professional interest of the workers in the most effective manner. The collective management of the means of production creates integrated personality and national integration.
4. Pluralistic Approach:
This philosophy is applicable mainly in Britain, Japan and America. Allan Flaunders, Clegg and other are the main profounder. According to this approach, collective bargaining is the mode of participation and is the method of solving the disputes between management and the workers by negotiation.
Conflict is endemic in an industrial organization. According to this conflict theory of trade unionism the management shows an inherent tendency to overlook the interests of workers and it always tries to exploit labor and due to that, management must, therefore, be coerced and threatened with obstructive policies and practices in order to safeguard and promote the interest of workers.
So it is the responsibility of the workers or the union to oppose the management’s proposal, it is the objective of the other to oppose it and so with the result negotiations start and common matters are settled in between. It is the prime function of the trade unions to protect the interest of the workers in this perennial conflict. This approach suffers from certain drawbacks. It is incorrect to believe that workers can derive permanent benefit from any arrangements that overlooks the largest interest of the community, the consumer and the industry.
It is also not correct to believe that unions can derive their strength only by withdrawing co-operation and that the interests of the workers can be served only by adopting restrictive and obstructive practices. On the other hand, the workers are the worst sufferers, if and when productivity is impaired. Conflict is destructive passion and constant pre-occupation which drives to encourage basal tendencies in human nature. Moreover, collective bargaining is on the verge of vanishing and out-dated now- a- days.
5. Integrative Approach of Business:
In the present age, in contrast to past, a trade union has become essentially a social organization looking after the all-round interests of workers as a social group. The trade union must play the more positive role of sharing in the development of industry and of preparing and training workers to discharge their responsibilities as citizens.
The industry has certain responsibilities to fulfill towards the employees, the shareholders, the consumers, and community and above all towards the nation. To the employee it must offer fair and appropriate conditions of service, and opportunity for industrial development, satisfaction of the urge for status, dignity and fellowship.
Participation signifies workers’ identification with the progress and development of business. The managing ability of all employees is an untapped source of social wealth. Participation aims at utilizing the intimate knowledge and experience possessed by worker as a result of the direct daily contact with processes and operation carried out in a business. This knowledge can be invaluable assistance to management. Participation that rests on understanding between workers and management is an important but delicate task.
All this implies that it is the responsibility of management to show continuously to labor the common purpose for which both management and the labor have to work. The common purpose embodies advantages to workers and the management and both must strive for its accomplishment.
6. Gandhian Approach:
Gandhi believed that all money and property originally belongs to society and those who are possessing it are only the trustees of the society whose duty is to increase the earning and value of the trust property. He should charge only that much from the trust property as is absolutely essential for his subsistence and honorable living. Excess of one’s income over and above one’s is a social surplus to be employed for the benefit of the society. Breach of trust is a crime and is punishable under law.
Under the trusteeship theory of Gandhi certain limited property rights are admissible. The Trusteeship theory of Gandhi does not recognize the inherent, unrestricted, irresponsible and absolute right of private property.
In accordance with Gandhi’s theory of trusteeship, there must be parity between the remuneration of the trustees and the workers and should normally not be more than the latter. The managerial skills of the trustees, the talents and expertise of labor were neither to be exploited nor used to sub-serve vested interests of the law.
On the contrary, society as a whole must derive the benefits. Such a theory of trusteeship, not contrary to the interests of the capitalist but it sought common good through a proper utilization of their experience and talent. For Gandhi, trusteeship involved the building of consensus of a society for implementing it for social good.
Gandhi wanted that the rich should become the trustees of the society by sharing their surplus wealth with the poor and under- privileged. Gandhi was deeply influenced by Ruskin’s Unto This Last and he was of the firm opinion that by nature all human being were equal and there should not be any economic discrimination or disparity among different individuals in respect of income, consumption and other bare necessities of life.
Approaches to Industrial Relations: Psychological, Sociological, Human Relations, Socio-Ethical and Gandhian Approach
The industrial relations can be viewed from the various angles which may range from the economic and social, political to the legal, psychological and managerial.
1. Psychological Approach to Industrial Relations:
The psychologists are of the view that the problems of industrial relations are deeply rooted in the perception and the attitude of local participants. The influence of individual’s perception on his behaviour has been studied by Mason Harie. He studied the behaviour of two different groups, namely, “Union leaders” and the “Executives” through a test.
For the test, a photograph of an ordinary middle-aged person served as input, which both the groups were expected to rate.
It is interesting to note that both the groups rated the photograph in different manner, i.e., the Union leaders referred the person in the photograph as “Manager” where the group of “Executives” saw “Union leader” in the photograph.
The result of study led Harie to conclude that:
a. The general impression about a person is radically different when he is seen as a representative of management from that of the person as a representative of labour.
b. The management and labour see each other as less dependable.
c. The management and labour see each other as deficient in thinking regarding emotional characteristics and interpersonal relations.
This variance in perception of parties is largely because of their individual perception. It is for this reason that almost invariably some aspect of the situations are glorified, some suppressed or totally distorted by the individual making a judgement in the issue. The conflict between ‘labour’ and ‘management’ occurs because every group negatively views / perceives the behaviour of other, i.e., even the honest intention of a party is looked with suspicion.
In most of industrial conflicts, not only the interest but also the personalities of actors in the system are at stake. The problem is further aggravated by the unfulfilled needs of power, prestige, recognition, economic motives etc. Also strained interpersonal and inter-group relations breed disharmony in the system.
2. Sociological Approach to Industrial Relations:
The industry is a social world in miniature and the workshop is in reality a community made up of various individuals and groups with differing personalities, educational background, family breeding, emotions, likes and dislikes, and a host of other personal factors, such as attitudes and behaviour. These differences in individual attitudes and behaviour create problems of conflict and competition among the members of an industrial society.
Since ages, the problems of industrial relations have been looked upon as one basically concerned with wages, employment, conditions, and labour welfare. But in fact sociological aspects of the problem are more important than others.
This largely includes various sociological factors like value system, customs, norms, symbols, attitude and perception of both labour and management that affect the industrial relations in varied ways. Though, the workers carry out their jobs in given industrial environment, their work behaviour is largely monitored by afforested social factors.
Further, the social consequences of industrialisation like organisation, social mobility, and migration generate many social evils like family disintegration, stress and strain, delinquency, personal and social disorganisation (leading to growing incidence of gambling, drinking, prostitution, drug abuse, etc.) do influence workers’ efficiency and productivity that in turn influence industrial relations system of an industry.
In fact, as industrialisation gets momentum, a set of new industrial-cum-social patterns emerges and in its wake, new relationships, institutions, behavioural patterns and techniques of handling human resources develop. These influences shape the industrial relations in one or other ways.
In analysing industrial relations, the role of social change cannot be overlooked. As it equally influences both labour and management, which is obvious from the fact that today’s management has increasingly become professional, there is a greater thrust on the use of behaviour techniques in dealing with human side of enterprise.
Decision-making has now been increasingly democratised, ideas about authority, power and control have undergone a sea change. The profile of the industrial worker has also changed; instead of being a migrant, he has now been stabilised in the industrial centres. In this context, the National Commission on Labour has rightly remarked that the worker has become more urban in taste and outlook than his predecessor.
He is no longer unskilled or neglected by society. He has a new personality and shares in the benefits offered by a welfare society. He is secure in his employment once he enters it. A process of the industrial culturisation of the working class has set in social mobility today which accounts for the emergence of a mixed industrial workforce. The role of state and political parties has been redefined in the light of these changes.
All these complex changes had a profound impact on industrial relations which have been lifted from an ideological plane to the business plane, from an “idealistic and philosophical” base to a more pragmatic and the ‘matter of fact’ base, from a relationship which was indirect and rather passive to a relationship which is direct, involved and perhaps more meaningful in terms of aspirations and achievements by both the groups. The Industrial relations are nowadays determined by power.
The conflict and collaboration are now looked upon as interrelated phenomena. Sociologically speaking, in the process of change, industrial relations are becoming more complex that would further complicate with the passage of time. Hence, it calls for scanning of such factors both at macro and micro level to deal with the dynamics of the system.
3. Human Relations Approach to Industrial Relations:
Among all the areas of management, perhaps one of the most delicate and tricky ones is concerned with human resources management. Their handling is radically different from that of physical, material and financial resources because these are not inanimate or passive, but are composed of pulsating human beings having their own emotions, perception, attitude, personality etc.
These characteristics make them complex individuals and when they interact with others, either individually or in groups, their complexity further multiplies. So when such resources are not properly managed, the problem of industrial relations surfaces which can be only managed by deciphering and managing the dynamics of human behaviour both at the individual and group level.
As the management of people at work is an exclusive prerogative of Human Resources specialists, the various Human Resources Management policies including those relating to leadership and motivation have profound influence on their work behaviour. Certainly, every style of leadership elicits a peculiar response from the people.
For instance, a manager, using an autocratic style, designs, a close supervision system and feels that display of authority would drives people to work.
But this style leads to dissatisfaction and hatred among people, whereas, in a democratic style, it is held that a desired organisational behaviour can be cultivated if employees’ needs and wants are properly satisfied. The manager working with such a style positively motivates people. In fact, no style is good or bad is every situation demands a specific leadership behaviour on the part of HR specialist.
Dissatisfied Needs Produce Tension and Lead to Conflicts?
Another important factor that is like a common denominator in all conflicts is the dissatisfied needs of the individual. Hence, for maintaining good human relations in general and industrial relations in particular, the study of human needs is of paramount importance. Broadly speaking, there are four types of basic needs, namely, physiological, safety, social and egoistic needs. The physiological needs are the ones in-born needs that include needs for food, water, clothing, shelter, etc.
These needs are vital for the very preservation of a human being and maintenance of his efficiency at a particular level. The safety and security needs refer to the avoidance of any danger which comes in one’s life including the need of physical security, financial security and job security. The social needs are largely acquired ones and are the result of one’s socialisation. These needs are of companionship belonging, affection. The egoistic needs are higher order needs, and relates to one’s desire for self-esteem and esteem from others.
Generally, it is believed that the needs are interdependent and overlapping. Each higher order need emerges only after the lower level needs are satisfied. But in all the cases, the needs do not necessarily follow a fixed pattern as the human behaviour is multi variant and multidimensional.
So, it is necessary for management to design a suitable motivational strategy to provide environment for their optimum need satisfaction, required for maintaining good human relations in the organisation.
Employee Perceptions Too Play a Major Role:
As every organisation has its problem, limitations. Employees also have their own preconceived notions, needs, problems. No specific diagnosis can be made for maintaining good industrial relations in the industry. It has now been increasingly recognised that much can be gained by the manager and the worker if they understand and apply the techniques of human relations to industrial relations.
The workers are likely to achieve greater job satisfaction, develop greater involvement in their work and achieve a measure of identification of their objectives with the objectives of the organisation. The manager, on his part, would develop a greater insight and effectiveness in his work.
It has been rightly said that “the industrial progress of the future will ultimately depend upon how far industry is willing to go in for establishing a community of mutual responsibility between the highest paid executive and the lowest paid production worker. One of the principal objectives of this human relations movement must be this much-needed integration”.
4. Socio-Ethical Approach to Industrial Relations:
Though, not much widely accepted but one of the often discussed approaches to industrial relations is the socio-ethical approach. This approach holds that industrial relations besides having a sociological base do have some ethical ramifications. As good industrial relations can be only maintained when both the labour and management realise, their moral responsibility in contributing to the said task through mutual cooperation and greatest understanding of each other’s problems.
In India, in this context, a tripartite study group at the behest of the National Commission on Labour studied the sociological aspect of labour-management relations. The study group observed that “The goal of labour-management relations may be stated as maximum productivity, leading to rapid economic development, adequate understanding among employers, workers and the government, of each other’s role in industry and willingness among parties to cooperate as partners in the industrial system.
For improving the status of worker in an organisation, the NCL stated thus- “Care should be exercised to ensure that the incentives granted to monopoly public sector enterprises do not tend to do the work of more wages.”
In the opinion of the Study Group, “the incentive earnings should result only from increased productivity.” It is further declared that “there is a need for framing uniform Statutory Standing Orders for all Central Government undertakings.” It also suggested that the standard rules governing the conduct and discipline of employees in public sector undertakings be framed. It laid emphasis on the need for minimum government intervention in industrial relations.
The Approach of Dr. V. V. Gin to Industrial Relations:
V. V. Giri has laid stress on collective bargaining and mutual negotiations between employers and employees for the settlement of disputes. His emphasis is on “voluntary efforts of the management and the trade unions to wind up their differences through voluntary arbitration rather than through compulsory arbitration.”
He observed, “There should be a bipartite machinery in every industry and every unit of the industry to settle differences from time to time with the active encouragement of government. Outside interference should not encroach upon industrial peace.”
In his opinion, industrial peace is to be secured through the machinery of collective bargaining. Giri declared, “Compulsory adjudication has cut at the very root of the trade union organisation. If workers find that their interests are best promoted only by combining, no greater urge is needed to forge a bond of strength and unity among them. But compulsory arbitration sees to it that such a bond is not forged. It stands there as a policeman looking out for signs of discontent and at the slightest provocation, takes the parties to court for a dose of costly and not wholly satisfactory justice. The moment the back of the policeman is turned, the parties grow red in the face with redoubled determination, and the whole cycle of litigation starts all over again. Let the trade unions become strong and self-reliant and learn to get on without the assistance of the policeman. They will then know how to organise themselves and get what they want through their own strength and resources. That will also be the means of their achieving greater self-respect. It may be that until the parties have learnt the techniques of collective bargaining, there are some unnecessary trials of strength; but whoever has heard of a man learning to swim without having to drink some gulps of water?”
This view served as the basis of what has been known as the “Giri Approach” to the attainment of industrial peace. This approach to labour problems encourages mutual settlement of disputes, collective bargaining and voluntary arbitration and not compulsory adjudication. In other words, it can be said that it puts ethical pressure on the parties for the maintenance of good industrial relations through peaceful settlement of disputes.
5. Gandhian Approach to Industrial Relations:
Gandhiji’s views on industrial relations are based on his fundamental principles of truth and non-violence, and non-possession or aparigraha. Out of these principles evolved, the concepts of non-cooperation and trusteeship on which his philosophy of industrial relations rests. This philosophy presumes the peaceful coexistence 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 has accepted the workers’ right to strike, but remarked 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. The principle of trusteeship held that the present capitalist order can be transformed into an egalitarian one.
It does not recognise the right to property except to the extent permitted by society for its own welfare; the individual does not have any right to hold or use wealth in disregard of the interests of society; and the character of production is to be determined by social necessity rather than by personal whims or greed.
The capitalist is expected to hold industry in trust for the community; and it is envisaged that, as individual workers in collaboration with employers, they, too, are expected to be co-trustees with the latter.
The trusteeship theory implies that there is no room for conflict of interests between the capitalist and the labourers. Though, wealth legally belongs to its owners, morally it belongs to society. If capitalists fail to pay minimum living wages to workers, workers should appeal to the employers conscience. If this does not work, they should resort to non-violent non-cooperation. As a precondition to this two things are expected from workers- One is an awakening and other is the unity among them.
By awakening among workers, Gandhiji meant developing and nurturing faith in their moral strength and their awareness of its existence which means that the workers should realise the fact that without their cooperation, capitalists cannot work and if the workers resort to non-cooperation, their exploitation by capital would stop.
Gandhiji advocated that for resolving disputes the following rules to be observed:
a. The workers should seek redressal of reasonable demands only through collective action;
b. If they have to organise a strike, trade unions should seek by ballot authority from all workers to do so, remain peaceful and use non-violent methods;
c. The workers should avoid strikes as far as possible in industries of essential services;
d. The workers should avoid formation of unions in philanthropic organisations;
e. The strikes should be resorted to only as a last resort after all other legitimate measures have failed; and
f. As far as possible, workers should take recourse to voluntary arbitration where efforts at direct settlement have not succeeded.
India’s industrial relations system has been largely influenced by Gandhian thought. A basic element in this thought is the emphasis on peaceful settlement of industrial disputes. In tune with the Gandhian philosophy, the government expects the parties to resolve their disputes peacefully; it also emphasises the need for mutual negotiations as a means of resolving disputes. Only after exhausting the available means of resolving differences are the parties free to take direct action.
Besides, the provision for the arbitration of disputes in case the parties desire to refer their disputes to arbitration, it is imperative on the part of trade union to serve a 14-day notice of strike on the employer.
Approaches to Industrial Relations – Top 6 Approaches
Industrial relations issues are complex and multifarious. They are the results of social, cultural, economic, political, and governmental factors. An economist interprets industrial conflict in terms of impersonal market forces; a psychologist interprets in terms of individual goals, organisational goals, motives etc. Similarly, a sociologist interprets from his own view point. But the study of industrial relations should be from the multidisciplinary approach.
(i) Psychological Approach to Industrial Relations:
According to psychologists, issues of industrial relations have their origin in the differences in the perceptions of management, unions and rank and file workers. The perpetual differences arise due to differences in personalities, attitudes, etc. Similarly, factors like motivation, leadership, group goals versus individual goals etc., are responsible for industrial conflicts.
(ii) Sociological Approach to Industrial Relations:
Industry is a social world in miniature. Organisations are communities of individuals and groups with differing personalities, educational and family backgrounds, emotions, sentiments etc. These differences in individuals create problems of conflict and competition among the members of industrial society.
(iii) Human Relations Approach to Industrial Relations:
Human resources are made up of living human beings but not machines. They need freedom of speech, of thought, of expression, of movement and of control over their timings. This approach implies that relationship between employee and employer as between two human beings. The term human relations include the relationship during the out of employment situations.
(iv) Gandhian Approach to Industrial Relations:
Mahatma Gandhi’s views on industrial relations are based on his fundamental principles of truth, non-violence and non-possession. Under the principle of non-violence and truth, Gandhi meant a peaceful co-existence of capital and labour. Trusteeship implies co-operation between capital and labour.
Gandhi advocated the following rules to resolve industrial conflicts:
(a) Workers should seek redressal of reasonable demands through collective action.
(b) Trade unions should decide to go on strike taking ballot authority from all workers and remain peaceful and use non-violent methods.
(c) Workers should avoid strikes to the possible extent.
(d) Strikes should be resorted to only as the last resort.
(e) Workers should avoid formation of unions in philanthropically-oriented organisations.
(f) Workers should take recourse to voluntary arbitration to the possible extent where direct settlement failed.
(v) Dunlop’s Approach:
John T.Dunlop in his book on ‘Industrial Relations System (1958)’ presented an analytical framework of industrial relations. The purpose of his presentation was to provide tools of analysis to interpret and to gain understanding of the widest possible range of industrial facts and practices. He presented industrial relations system and contextual factors.
Actors of industrial relations include workers at all levels of an enterprise and their associations specialised government and private agencies and employers and their associations. The rules include the regulations and laws that govern the relationship among the three actors. The ideology is a Philosophy or a systematised body of beliefs and sentiments held by the actors.
The contextual factors are the environmental factors of technology and market that interact with each other and influence the industrial relations system. The locus and distribution of power in the larger society is a complex sub-system. The relative distribution of power among the actors influences the industrial relations pattern.
(vi) Interactive Outcome of HRM Approach:
HRM deals with the management of people from the stage of acquisition to the stage of separation including human resource development, compensation and utilisation of people. Thus, human resource management mostly deals with the interactive behaviour between employee and employer.
However, these are other agencies providing outsourcing services in the HRM process like recruiting agencies, training agencies and benefits administrators. According to Pulapa Subba Rao, HRM process involves close interaction between employee and employer or his/her representative with regard to employment, development, compensation and relationships.
These interactions produce either satisfaction or dissatisfaction to both the employee and employer. The dissatisfied employee presents his/her dissatisfaction or grievance procedure to the employer for redressal. Dissatisfied-employees form into an association and present the problem to the employer, when fail to present the problem to the employer individually.
Similarly, the dissatisfied employer either individually or through their association presents the problem to their groups or their associations for redressal. If, either or both the parties fail to get the redressal, the parties seek the assistance of government agencies and private agencies in addition to referring to labour laws, rules and courts of law for redressal.
This entire process produces relations among employees, their associations, employers, their associations, government agencies, private agencies and outsourcing agencies. According to Pulapa Subba Rao, this set of interactive relationships produced by the HRM process is referred to as industrial relations. According to him, the industrial relations in its turn influence the HRM process.
The appropriate HR practices by the employer result in satisfied employee satisfied employer and desired HR outcome which in turn invariably produce sound industrial relations without much intervention of a third party.
Appropriate HR practice can also be referred to as proactive industrial relations intervention.
Inappropriate HR practice results in dissatisfied employees and their associations and dissatisfied employers and their associations, which in turn attract the intervention from government agencies and private agencies. Thus, these agencies turn the unsound industrial relations situation into sound industrial relations system with the help of reactive industrial relations interventions.
Thus, according to Subba Rao, inappropriate HR practice requires third party interference and reactive industrial relations intervention. Therefore, industrial relation is an outcome of HRM practices. However, industrial relations situation influences the HRM practices later.
Theoretical Approaches to Industrial Relations (System Model Approach):
The systems model approach was suggested by John Dunlop in the 1950s. According to Dunlop- “Industrial relations system consists of three agents- management organizations, workers and formal/informal ways they are organized and government agencies. He proposed that three parties’ employers, labor unions, and government are the key actors in a modern industrial relations system. He also argued that none of these institutions could act in an autonomous or independent fashion. Instead they were shaped, at least to some extent, by their market, technological and political contexts. Hence according to Dunlop, industrial relations is a social sub system subject to three environmental constraints- the markets, distribution of power in society and technology, each of them more or less intimately affects each of the others so that they constitute a group of arrangements for dealing with certain matters and are collectively responsible for certain results.”
The two main participants in the system are the employees and the employers. Basically three approaches define their dynamics and relationships. The first approach is the unitary approach, where the management and union are seen as one cohesive unit, who work together towards a common goal of creating better organizational environment.
The Pluralist approach is the second approach that has management and union as two separate entities. The management assumes a command and control orientation, whereas, the union assumes itself as the protector of employee rights through collective bargaining.
The third and the final approach is the Radical approach. The radical approach has management and union approaching each other with suspicion. The management looks at union as a problem-creator and a roadblock. The union looks at management as a threat. The obvious outcome is conflict.
As one progresses from Unitary approach to radical approach there is a definite increase in politicisation. The increase in politicisation leads to a more and more confrontation. The Unitary approach is ideal, the Pluralist approach is the practical reality and the radical approach the least desirable.
Approaches to Industrial Relations – 7 Main Approaches
The main approaches to industrial relations are as follows:
1. Psychological Approach:
This approach suggests that the conflicts between labour and management are deeply rooted in the perceptions and attitudes of all the participants. Differences in the perception of the parties are due to their individuality. Conflicts arise when each party negatively perceives the other’s behaviour. Labour and management view and interpret the situations differently and these differences create the problems of industrial relations.
2. Sociological Approach:
Industry is a part of society. So, various sociological factors such as value system, norms, customs, traditions and status symbols affect relations among the parties. The social consequences of industrialisation like social mobility and migration generate many social evils like disintegration of family, stress and strain, delinquency, personal and social disorganization (leading to growing incidences of gambling, drinking, prostitution, drug abuse, etc.). These influence workers’ efficiency and productivity which, in turn, impact industrial relations.
3. Human Relations Approach:
This approach focuses on human beings as a key factor of production in industry. Unlike other resources such as finance and material, human beings have emotions, sentiments, desires, perceptions, attitudes, personality, etc. For harmonious industrial relations, there is a need for proper integration of individuals’ needs with the organization’s requirements. Management should motivate the employees in order to raise productivity.
4. Socio-Ethical Approach:
This approach to industrial relations emphasizes that besides having a sociological base, it does have some ethical ramifications. Good industrial relations can be maintained only when both the labour and management realize their moral responsibility in contributing to the said task through mutual cooperation and greatest understanding of each other’s problems.
5. V.V. Giri Approach:
This approach to industrial relations was given by V.V. Giri, the 4th President of India. He emphasized collective bargaining, voluntary arbitration and mutual negotiations between the employers and the employees for settlement of industrial disputes. This approach stresses internal settlement of issues rather than relying on some outside compulsion. Voluntary arbitration is preferred to compulsory arbitration.
6. Gandhian Approach:
This approach to industrial relations is based on the fundamental principles of truth, non-violence and non-possession. There is a presumption that capital and labour can co-exist peacefully. Gandhiji emphasizes that if the employers follow the principle of trusteeship then there is no scope for conflict of interest between labour and management.
Gandhiji accepted the workers’ right to strike, but cautioned that they should exercise this right for a just cause and in a peaceful and non-violent manner and this method should be resorted to when all other methods fail to get the employer’s response.
7. Systems Approach:
A system is an organized or complex whole, an assemblage or combination of things or parts forming a complex unitary whole. The systems approach tells us that no single element or phenomenon should be dealt with without regard for its interacting consequences with other elements. This suggests that there is always an interaction between the four basic elements, i.e., input, transformation, output and feedback.
In the field of industrial relations, the systems approach to industrial relations was developed by John T. Dunlop. Dunlop described an Industrial Relations System (IRS) as consisting of three actors: workers and their organization, managers and their organization and the governmental agencies concerned with the work community.
These groups interact with a specified environment which includes: technological environment, market or economic constraints and the balance of power in society. An IRS creates an ideology that regulates the relations among the participants. An ideology is a set of ideas and beliefs commonly held by the actors that helps to build or integrate the system together as an entity.
Approaches of Industrial Relations in Big, Small and International Organizations
There are different types of organizations:
1. Big organization
2. Small organization
3. Local or international.
They constitute of 3 main actors:
1. Shareholder- Represented by management, association of employers. Always to gain as much profit and productivity.
2. Employees- Being represented by trade unions. To get good salary and good working conditions.
3. Government- Being represented by specialize government agencies concern with workers, enterprise and their relationship.
Each of the actors above are always conflicting between one another in order to achieve their objectives. Besides the above 3 main actors, in the present context academicians have also considered another actor which can also influence the nature of IR i.e. Stakeholders.
Approach # 1. Comparative:
(a) Importance of Comparative Approach:
(i) Inform public policy debate
(ii) Changing world economy
(iii) Development of ‘fair’ international employment standards
(b) Problems of Comparison:
(i) Lack of common terminology and definitions.
(ii) Differences between stated institutional framework and reality of actual practice
(iii) Problems of transferability
(c) Logic of Industrialization:
(i) All countries subject to same economic, technological and market forces
(ii) All need concentrated, disciplined workforce with new and changing skills
(iii) Similar government role in providing economic and social infrastructure for industrialisation (competing for same international investment)
(d) Modified Convergence:
(i) Countries at different stages of industrialisation
(ii) Alternative solutions to common problems
(iii) Regional based convergence
(v) Distinctive value systems and cultural features
(vi) Heterogeneity within national industrial relations systems (decentralisation & flexibility)
(vii) Different strategic choices by Government, employers and unions at macro (society) and micro (organisation) levels on nature, content and process of employment relationship
(viii) Political-economic framework of newer industrialised countries versus pluralistic framework of older industrialised countries.
Approach # 2. System:
Originated by Dunlop, being subjected to a variety of interpretation, uses and criticism. However they do not invalidate the systems approach but they suggested accommodation and Refinement. It is a broad based integrative model that sought to provide tools of analysis to interpret and gain understanding the widest possible range of IR facts and practices and to explain why particular rules are establish in particular IR systems and how and why they change in response to changes affecting the system.
This model sees IR as a subsystem of society distinct from but overlapping, the economic and political subsystem. Actors, working within contexts (environment), developing a body of rules, held together by an ideology. System producing rules (IRS) and system governed by rules (production). Emphasis on roles rather than people. Importance of environmental influences.