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Overview of a course on industrial relations for government executives
- 1. Industrial relations/ employee relationsin organisations Perspectives for Executives in Government Opening Session A short Course for participants of Executive MBA, Batch 1, 2017-18, CIMP, 1-7 March 2017 Prof. Ramana Acharyulu
- 2. Course objectives 1. Tooffer a brief overview of the importance and significance of employee relations for better managing people in an organisation – crux of HRM 2. To offer a broad perspective of industrial relations and their influence on organisational success and performance 3. To offer a broad understanding of the legal and policy framework that exists in area of employee relations 4. To learn the role of negotiation and conflict management skills in industrial/ employee relations
- 3. Session plan • Session1: Industrial Relations/ Employee Relations – the changing context in Indian scenario • Session 2: Role of IR in HRM of an organisation – the case of Indian Banking Industry • Session 3: The Legal Framework and Laws that deal with Industrial Relations in India • Session 4: Trade Unions and Employee Associations – their role in organisations – The case of Blow-Plast Pvt ltd • Session 5: Management of Industrial Conflict – the case of Maruti Suzuki India Ltd • Session 6: Negotiation and Conflict Management Skills – essential models and principles
- 4. G U NG - H O • Let’s watch few clips…. • Each clip is of 2—3 min duration • Kindly make one / two points on watching each of these…
- 5. Overview of Industrial Relations IndustrialRelations – Session 1
- 6. Define Industrial Relations.. •The concept of industrial relations describes the relationship between the employees and management in the day to day working of an industry. • According to International Labor Organization (ILO): industrial relations deal with either relationship between the state and employers’ and workers organizations or the relations between the occupational organizations themselves.
- 7. Nature of IndustrialRelations • Concerned with relationship of management and workers. • To protect the interests of employees • Concerned with systems, rules and procedures used by unions & employees • Role of regulatory mechanism in resolving any industrial disputes.
- 8. Objectives of IndustrialRelations • To maintain industrial democracy based on participation of labour in the management and gains of industry. • To raise productivity by reducing tendency of high labour turnover and absenteeism. • To ensure workers’ participation in management of the company by giving them a fair say in decision-making and framing policies. • To establish a proper channel of communication. • To increase the morale and discipline of the employees.
- 9. Objectives.. Cont’d • Tosafeguard the interests of the labour as well as management by securing the highest level of mutual understanding and goodwill between all sections in an industry. • To avoid all forms of industrial conflicts so as to ensure industrial peace by providing better living and working standards for the workers. • To bring about government control over such industrial units which are running at a loss for protecting the livelihood of the employees.
- 10. Importance of IndustrialRelations • Uninterrupted Production: • IR ensures continuity of production. • Continuous employment for all involved right from managers to workers. • Uninterrupted flow of income for all. • Smooth running is important for manufacturers, to handle perishability and to consumers if the goods are for mass consumption and regular consumption (essential commodities, food grains etc.). • Good industrial relations bring industrial peace which in turn tends to increase production. • Contributes to economic growth and development.
- 11. Parties to IR Employer- EmployeeRelations Employees Employee Associations Government Courts & Tribunals Employer Associations Employers
- 12. The Actors ina System: The actors are: (a) hierarchy of managers and their representatives in supervision (b) a hierarchy of workers (non-managerial) and any spokesmen (c) specialised governmental agencies (and specialised private agencies created by the first two actors) concerned with workers, enterprises, and their relationships.
- 13. Evolution of IndustrialRelations in india The protective phase (1947-1956) Conflict Ridden Interventionist phase (1967-1980) The productivity-, Efficiency-. Quality- orientation phase (1981-1991) The consolidation Phase (1956-1965) The post reform decade (1992-till now)
- 14. Industrial Relations during1st / 2nd World Wars • The First World War was an opportunity in disguise for local factories in India. • Prices of virtually all products went up and profits soared, however, wages of lower employees were still the same. • There were various strikes and disputes between management and employees. • Workmen's Compensation Act (1923), • the Trade Union Act (1926), and • the Trade Disputes Act (1917) were promulgated. • Besides wages, employees were given a share of profits made by the firm. • Strikes, however, were sometimes prohibited under the Emergency Rules. • Following World War II, the Industrial Employment Act (1946) and Industrial Disputes Act (1947) were brought in.
- 15. Post-Independence Industrial Relations •The post-independence era saw a developing relation between industry and labour. • A conference called the Industrial Truce Resolution took place in 1947, and foresaw the establishment of: • the Minimum Wages Act, • Factories Act, and • Employees State Insurance Act in 1948. • This ensured peace between labour and industry. While industrial relations in India have evolved a long way, some features of the early system still exist today.
- 16. Evolution of IndianIndustrial Relations The protective phase (1947-66; 1st & 2ndfive-year plans): • Import-Substitution Industrialization. • National capitalism • Economy grows @ 2%-3%/year. • Formation of large employment- intensive public enterprises. • Largely centralized bargaining with static real wages. Relative industrial peace.
- 17. Evolution of IndianIndustrial Relations The ConsolidationPhase(1956-1965) • There should be no lockout or strike without notice. • No unilateral action should be taken in connection with any industrial matter. • There should be no recourse to ”go-slow tactics”. • No deliberate damage should be caused to plant or property. • Awards and agreements should be speedily implemented.
- 18. Evolution of IndianIndustrial Relations Conflict RiddenInterventionist phase (1967-80; 4th & 5th five -year plans): • Economic stagnation. • Economy grows at @ 2%/year ; two oil price shocks • Considerable slowdown in employment growth and declining real wages. • Crisis in IR system: massive strikes & industrial conflict, multiple unionism & decline in strength. Conflict, multiple unionism & decline in strength. • Government loosing control over the IR system.
- 19. Evolution of IndianIndustrial Relations The productivity- Efficiency- Quality- orientation phase (1981-91; 6th & 7th five-year plans): • Initial domestic economic liberalization; economy grows @ 5.7%/year. • Regional variation in economic development increases. • Variation in wage growth: skilled versus unskilled, labour productivity increases, period of ‘jobless 'growth. • Rise of ‘independent 'enterprise unionism.
- 20. Evolution of IndianIndustrial Relations The Post-Reform Decade, 1992-2009 • Stabilization & Structural Adjustment Reforms: Economy grows @ 6.2%- 6.5% • In the five years (2004-09) growing @ 7%-8%/year. • Regional variation increases massively. • Max growth in services: IT, IT-enabled services, ‘hotels, trade & restaurants’’, but also in autos & ancillaries; more recently in overall manufacturing.
- 21. Causes of poorIndustrial Relations • Economic causes: • Poor wages and poor working conditions • Unauthorised deductions from wages, • Lack of fringe benefits, • Absence of promotion opportunities, • Faulty incentive schemes are other economic causes. • Other causes for Industrial conflicts are: • Inadequate infrastructure, • Worn-out plant and machinery, • Poor layout, unsatisfactory maintenance etc. • Organisational causes: Faulty communications system, unfair practices, non-recognition of trade unions and labour laws
- 22. Maruti Suzuki –Manesar Unrest • The peace of the last twenty years in Industrial Relations (IR) has been ruffled by the recent bitterly fought Maruti Suzuki conflict between labour and management. • The Maruti Suzuki strike has brought to the several issues that have been silently plaguing IR over the years… • Kindly read the case circulated to all of you and come prepared for discussions in the class • The issues for class discussions are:…..
- 23. Questions/issues for caseanalysis • Who are the key actors whose approaches and actions lead to the state of affairs in MSIL? What role did they play in MSIL? • Why was there managerial indifference towards Manesar workers? • What other factors contributed to IR breakdown in Manesar plant? • What cross-cultural issues need attention to avoid such problems in future? Is increasing ethno-centrism a good sign in HR of MSIL? • Was there a discrepancy between the projected and actual roles played by state agencies in the case? Yes/No, explain… • What do you think would have happened if the Chief of HR was not killed but only injured like others? • Should MSIL adopt an ”empowerment” HR strategy or ”fit” HR strategy to pursue its growth and profit goals? • What are the lessons to be learnt from the case?
- 24. Few contrasting casesfor discussion - Eicher tractors factory at Alwar, Rajasthan - Tata Motors, Pune/ Bajaj Auto, Pune - The decline of Textile mills in Mumbai - The Gandhian approach at Jamalpur Railway workshop, Bihar - Four Teams to work on to analyse and present salient aspects of the above cases – Dates for presentation to be announced separately
- 25. Approaches for industrialrelations • Broad framework – to be examined in depth through in-depth assignments of volunteering participants… core issues to be examined… • As following in next slides…
- 26. Unitary perspective • Inunitarism, the organization is perceived as an integrated and harmonious whole with the ideal of "one happy family", where management and other members of the staff all share a common purpose, emphasizing mutual cooperation. Furthermore, unitarism has a paternalistic approach where it demands loyalty of all employees, being predominantly managerial in its emphasis and application. • Consequently, trade unions are deemed as unnecessary since the loyalty between employees and organizations are considered mutually exclusive, where there can't be two sides of industry.
- 27. Pluralist perspective • Theorganization is perceived as being made up of: • powerful and divergent sub-groups, • each with its own legitimate loyalties and • with their own set of objectives and leaders. • In particular, the two predominant sub-groups in the pluralist perspective are the management and trade unions. • The role of management: • enforcing and controlling and • toward persuasion and co-ordination. • Trade unions are deemed as legitimate representatives of employees, • Conflict is dealt by collective bargaining and • Viewed - not necessarily as a bad thing and, if managed well, could in fact be channelled towards evolution and positive change.
- 28. DUNLOP’S APPROACH • Dunlopdefines an industrial relations system in the following way: An industrial relations system at any one time in its development is regarded as comprised of certain actors, certain contexts, an ideology, which binds the industrial relations system together, and a body of rules created to govern the actors at the workplace and work community.
- 29. THE INDUSTRIAL SOCIOLOGYAPPROACH • G. Margerison, an industrial sociologist, holds the view that the core of industrial relations is the nature and development of the conflict itself.
- 30. ACTION THEORY APPROACH •Theaction theory approach takes the collective regulation of industrial labour as its focal point. The actors operate within a framework, which can at best be described as a coalition relationship.
- 31. THE HUMAN RELATIONSAPPROACH • In the words of Keith Davies, human relations are “the integration of people into a work situation that motivates them to work together productively, cooperatively and with economic, psychological and social satisfactions.” According to him, the goals of human relations are: • (a) to get people to produce • (b) to cooperate through mutuality of interest • (c) to gain satisfaction from their relationships.
- 32. Marxist approach • Regardconflict between employees and employers as inevitable • They believe that conflict is a result of capitalist society • Industrial conflict is seen as synonymous with social and political unrest, that challenges the class system in the society • Trade unions are seen as labour reaction to exploitation by capital and are seen as a weapon to bring about social change
- 33. THE GANDHIAN APPROACH •Workers should seek rebred of just and reasonable demands through collective actions. • Trade unions should decide to go on strike taking ballot authority from all workers, and remain peaceful using non violent methods. • Workers should avoid strikes to the extent possible. • Strikes are to be the last resort • Workers should take recourse to voluntary arbitration where direct settlement fails.
- 34.