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1-2. Nature ofIndustrial Relations:

Traditional & ChangingPerspectives

Debi S. SainiProfessor & ChairpersonHRM Area

Management Development Institute, Gurgaon

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The issues discussed in this presentation are:

1. Conflict dynamics & different approaches of IR Mgt.

2. Working of an IR system: Dunlops System Model

3. IR & related terms: IRLRER

4. Has Globalizations changed IR scene? How?

5. IR: ActorsIssuesInstitutionsProcedures

6. Traditional issues in IR

7. Frames of reference of IR: UnitaristPluralistMarxist

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Two Main Components of this Course:

Management of Personnel/People(Systems, effectiveness, engagement, productivity)

Management of Industrial Relations (Conflict, interests, rights, peace)

Lately, the two perspectives are gettingmerged into an integrated HRM framework

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The Roots ofIndustrial Conflict

3Peace Requires: Balancing of Business Needs & People Needs

High Earnings

Speed to Marketplace

Market Share

Product Quality

Customer Service

Customer Responsiveness

Low Costs

Efficiency/Productivity

Flexibility

Benchmarking

Responsive/Innovative

Future Oriented

Customer Satisfaction

Reward & gain sharing

Reasonable job security

Work-life balance

Flexibility

Empowerment

Welfare facilities

Social security

Learning Atmosphere

Respect for their Diversity

Growth opportunities

Recognition/ belonging

Participation/ Involvement

Management style

People Needs are Managed differently in

Different Orgs.

IBMTata Steel

Ballarpur IndustriesHero MotoCorp

NDPL

Business Needs People Needs

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First know: Why Labour-Mgt. Conflict Occurs

Conflict is at the centre in organizational working

Why:

Industrial Conflict: a Complex & difficult issue

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Difference in interests, values, goals, attitudes

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Mgts. differently handle conflict:

Positive or Negative Meaning of Work

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Work is interesting

Reflects good quality of life

Gives us meaning of life(WM feels: meditating/ bldg. a temple)

What does work mean to People: Two extremesPositive (win-win) Negative (loselose)

Sheer Drudgery/unpleasant

A way to kill time

Just a means to living

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Can we think ofsome basic approaches to

managing employer-employee relations?

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Graziano: CEO killed Maruti-Suzuki HR Chief burnt

HMSI Violence 2005 Tata Steel (35 K workers; no strike since 1958) Classic Stripes: 3-6 best employer co.

How do we go about understanding these issues?

6 500 WM including contract WMMost are blue-collared

4 WM 25 yrs. ago (in 10 x 10): Built 44 acre campus in Vasai3 plants now: Mumbai; Vasai; Hardwar No Union

Kishore Musale Charitable Trust:

Main motto: dignity at work.Believes in: valuing every individual, giving people their due,

freedom, respect, opportunity backed by lots of training.

Classic Stripes (Mfg.): Come Out of Control Mindsethttp://classicstripes.com/manufacturing_plants.html

Won Safety & Environt. 2003 award (SIGA given to 5 cos. worldwide) Kaizen Training: 2 hrs per month

A relationship committee: Meets twice in a month

Has a library with trade journals, magazines & books

DM: 1/3 Women workers; also physically-challenged

Shares with employees a %age of its annual profits

Classic Stripes: Some HR Initiatives contd

7Tata Steel Ltd.: HRM Model

Sr. Mgt. work at less than 60% of market worth; dont leave

Meets need for dignity, stability, security: No strike since 1958

Participation, paternalism (kin employment), family focus

Ethical working

CSR creates a sense of pride in employees

Comparing two US Cos.: South West Comparing two US Cos.: South West && American AirlinesAmerican Airlines

On same day (May 2010): AG meeting of airlines: SWA & AA--AA meeting was picketed by AA Pilots Assn.--Southwest celebrated 37 yrs. of service by founder, Herb Kellehar

Paper carried picketing news; same paper carried an ad: Kellehar knew, knows & will always know that

the secret to bus. success, small or large, is to put people first.

Kellehar sees employees as my principal customer.

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UnderstandingEmployee Relations& related Terms?

Employees as Individual (Market operates here)

Employees as collective(Class solidarity operates here i.e. Unions)

Org. needs: Employee retention & engagement, indl. peace in both situations

2 Sets of Concerns for Employer & Employee

9 ER & IR both deal with all aspects of employment relationsi.e. unionized & non-unionized [Today, Global focus: cooperationdecent work]But IRs key focus is unionized workers, & ERs key focus is individualized workers

ER: is ongoing relations-building process with employeesthrough HR practices & orgl. culture-bldg. effortsfor securing employee commitment/engagement

LR (labour Relations) focuses exclusively onemployment relations in a unionized environment (i.e. Unions & mgt.)

Employee Relations, IR & LR

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What does good ER Involve: Research?

1. Dialogue & communication for trust & culture

2. Partnership through involvement & feeling valued

3. Proactive, not reactive efforts (Hero MotoCorp)

4. Employee rights, fairness, just grievance mgt.

5. Employee discipline (Tata Steel; Classic Stripes)

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Employee Relations

Employee Communication

for Trust bldg.

Partnership& Employee Involvement

Employee Rights/fairness/Grievance mgt.

EmployeeDiscipline

Fig.: Key Dimensions of Employee Relations

ProactiveEfforts

Manifestations of Poor Employee Relations

Unionization

Poor Performance

Employee Absenteeism

Employee dissatisfaction & Turnover

Litigation

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What do youthink is meant by

Industrial Relations?

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Industrial Relations: Simply Speaking:

Industrial relations (IR)

is the process of rule making

that mediates between divergent interests

of capital and labour

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How can we view Industrial Relations

J. H. Richardson (Leeds University)

Industrial relations is

the art of living together

for purposes of production

ImportantSome

regulation is needed

inall relations;

State determines

the regulatory framework

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How can we view Industrial Relations contdHugh Clegg (Clegg & Flanders pioneers of Classical Oxford School of IR)

Industrial relations is a study of

workers and their unions,

employers and their associations,

and State & its institutions/agencies

concerned with regulation of employment.

Imp.: Different powers, roles, interests, duties of Actors

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Is Globalization Syndromelinked to

Industrial Relations: How?

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What Does Globalization mean?

Global movement of capital

Global movement of businesses

Driven by principles of free market economy

& less obstructed people movement

Across borders within companies

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Globalization & Other Causes of Changes in Business1. GLOBALIZATION Syndrome

2. Information Revolution/Internet

3. New Technology

4. Emergence of Service Industry

5. HR Philosophy:

M. Thatcher has been named UKs most effective prime minister of the 20th centuryby BBC History Magazine 30 Aug, 2006, TOI

Globalization has led to: Internl integration of economies PSU reforms & privatization Collaborations & jt. ventures Dominance of market

rationality Decline of welfare state

Psychological Contract &Focus on: Employee Relations

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What is meant by:IR Actors

IR InstitutionsIR Procedures

IR Issues

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Focus of the Discipline of IRA. Characters (or actors) in IR

Union leaders

HR Managers

Conciliation Officers/ Mediators

Arbitrators/judges

Labour Courts/

Labour Lawyers/Management Consultants

Others

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Focus of the Discipline of IRB. IR Institutions

(permanent form of custom or law)

UnionsEmployer associations State/Labour BureaucracyILCILOTribunal/Labour Court Labour lawHigher judiciary

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Focus of the Discipline of IR cond

C. IR procedures (aim at: Procedural justice)

Bargaining/NegotiationConciliation ArbitrationAdjudicationReferenceProcedure for going on strikes/ lockoutsInquiries/Disciplinary procedure

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IR is studied by many academic disciplines Economics

History

Law

Sociology

Political Science

Management

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What do you thinkare some of the key issues

in IR?

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Traditional Problems/Issues in IR

1. Job satisfaction: Job designWorking conditionssupervision

2. Negotiating Wage/salary/VRS/bonus/benefits

3. Alienation & discontent

4. Grievance management

5. Trade union, strikes, lockouts

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Traditional Problems in IR6. Industrial dispute settlement

7. Indiscipline, absenteeism & mobility

8. Labour Laws

9. Labour welfare/QWL

10. Communication

11. Joint consultation, participation, involvement

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Three Basic Approachesto looking at IR:

Pluralism, Unitarism, RadicalismWhat are these?

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Frames of Referencein Industrial Relations

& New Issues in IR

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Frames of Reference: Unitarism & PluralismUnitarism

1. Assumptions about InterestsCommon interest/objectives

2. Assumptions about conflictInevitable, destructive: Be avoided Caused by: Poor mgt/communication

3. Assumptions about trade unionsUnwanted intrusion

4. Assumptions about collective bargainingCB generates workplace conflictrather than resolve it

Pluralism1. Assumptions about Interests

Mgrs. & employees have: different objectives

2. Assumptions about conflictInevitableBe negotiatedCaused by difference of opinions/values

3. Assumptions about trade unionsNot the cause of conflict: Conflict inherentLegitimate part of workplace relations

4. Assumptions about Collective bargainingCB ensures fairer outcomes Balances employee & mgt. power

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III. Marxist (Radical/ Critical) Perspective

Market economies are social arrangements created by historical forces

Private property is a social construct, not created by nature

Owners of capital accumulate capital; take all or most of it

Power of ownership & control cause WMs impoverishment

Classes struggle: for control of industry, economy & state

Differential access to education, media, government jobs

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III. Marxist (Radical) Perspective contd View of society based on post-capitalism is wrong

Capitalist profit is key influence on co. policy

Control enforced downwards by capitals agentsSurplus value generation by capitalist

Employees socialized into accepting status quo

Class conflict is the source of societal changeWithout conflict society will stagnate

Capitalism will collapse due to its inherent contradictions

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III. Marxist Perspective contd CB: limited accommodation of fundamental divisions

Unions/IR instts. deal with marginal issues

Law not independent referee

Industrial Justice: only if revolution

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How do we Conceptualizethe Different Workings of

IR System?

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I. Traditional Pluralism(German Pharma)

II. Paternalistic Pluralism(Tata Steel/NDPL)

III. Ambivalent Pluralism(Most unionized cos.Maruti-Suzuki Ltd.)

IV. Repressive Pluralism(Simran Foods Ltd.)

V. Coercive Unitarism(Glaziano before the violence; SMEs)

VI. Ambivalent Unitarism(Or manoeuvredunitarism through law, shenanigans, paternalism, collusion with bureaucracy)

VII. Paternalistic Unitarism

(Most Indian SMEs, Flaxo Exports)

VIII. IBM type Unitarism(New Unitarism)

(Hero-Honda, Air Tel)

Eight Broad Typologies of IR Models

Debi Saini 2010

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What can be Learnt from these two Sessions: Conflict in industry is inevitable, given different interests

Variegated models of IR are practiced by different organizations

IR is a system of rule-making about gains of & power in industry

IR concept is changing into employee relations in new era

IR focuses on actors, institutions, procedures

Unitarism & Pluralism are 2 broad approaches to IR

IR can be divided into 8 broad typologies