What is significance of Industrial Relations? Parties Involved in Industrial Relations and Factors Affecting Industrial Relations

  • Industrial Relations suggest that a commercial enterprise maintains relations with the various section of the society like staff, state, customers, and the public, who is contacted to its business activities. The relationship between the employer (owner) and workers is termed as Industrial Relation 
  • In order to main maintain a sensible relationship with the staff, the main function of every organization should avoid any dispute with them or settle early as attainable
Definitions: “Industrial relations are the part of management which is concerned with the manpower of the enterprise- weather machine operator skilled worker or manager”  Bethel Smith and Other.

Importance/significance of Industrial Relation 

  1. Established Industrial Democracy: Industrial relation suggests that settling employees' problems through negotiation, mutual cooperation, and mutual agreement among parties that's management and workers Union. This helps in establishing industrial democracy in an organization that motivates them to contribute their best to the expansion and prosperity of the organization 
  2. It contributes to economic growth and development: Sensible Industrial Relation results to increase efficiency and higher productivity and financial gain this will result in the economic development of the economy.
  3. It improves the morale of the workforce: sensible industrial relation build-in mutual cooperation and customary united approach which encourages one to contribute their best, results in higher productivity and financial gain, provides additional job satisfaction, and helps facilitates to improve the morale of the worker.
  4. It ensures optimum use of scarce resources: sensible industrial relation ensuring less industrial unrest, grievances, and dispute. This may guarantee optimum use of resources, each human, and materials, eliminating all kinds of wages.
  5. It discourages unfair practices on the part of both management and union: industrial relations involve setting up machinery to solve the issues by the management and employee through the mutual agreement. This results in banning the unfair practice being employed by the leader or labor union.
  6. It prompts the enactment of sound labor legislation: Industrial relation necessity passing of bound labor laws to safeguard and promote the Welfare of the labor and safeguard the interest of all parties against the unfair practice.
  7. It facilitated changes: sensible Industrial Relation help in the improvement of co-operation, teamwork, performance, and productivity and hence in taking all advantages modern in inventions innovations. it helps the workforce to adjust them to change easily and quickly.

  • Primary Parties: Those persons or associations that are directly related to the functions of business relations.
  • Other Parties: The parties (especially the internal or external bodies or associations) that impact the business relations within the organization

  1. Employees: The staff who provide their services to the organization are a vital resource and helps to achieve the organization targets. They can share their views, ideas, and suggestions, with the management to enhance the business. 
  2. Employers: Employers are responsible for providing a favorable work environment for the workers. Employers have rights and powers like laying off inefficient employees, taking strategic decisions such as mergers, acquisitions, or closedown of the organization, and adapting technological changes within the operations. Motivating the workers to give their best.
  3. Government: The government plays a balancing role as a custodian of the nation. The government regulate industrial relations through labor courts and tribunals, protect the interest of the parties.
  4. Employers’ Association: It's an authority body, formed to protect the interest of the industrial owners. making a correct mechanism to resolve industrial disputes. 
  5. Trade Unions: When the workers come together and form an association and elect a representative among the members for the protection of their rights and to raise their demands in front of the management of demanding better working conditions and higher job security for the workers; Safeguarding the interest of the workers by demanding a higher level of democratic management control over the decision-making.
  6. Courts and Tribunals: The judiciary includes the ‘courts’ to resolve the legitimate conflicts and therefore the ‘judicial review’ to administer the justice of the constitution. These courts and tribunals play a vital role in the settlement of business disputes by eliminating the possibilities, Judicial flaws; Conflicting judgment; Poor evaluation of penalty; Confusing terms and conditions.
  7. Human Resource Function: The human resource department or team acts as an intermediary between the organization and its staff for managing the personnel problems and conflicts. It's their responsibility to make sure the upkeep of harmonious industrial relations within the company. Acting as a modification agent by bringing a mental revolution just in case of any conflict between the staff and the management. 

The following are causes of poor industrial relation 

  • Mental laziness on the part of management and Labour
  • An intolerant attitude of disrespect of the staff  on the part of the management 
  • Inadequate fixation of wage and wage structure
  • unhealthy working conditions
  • Indiscipline 
  • lack of human relations ability on the part of the supervisor and different managers 
  • Desire on the part of the employees for higher bonus and corresponding desire of the employer to allow a bit as doable 
  • Inappropriate introduction of automation while not providing the proper climate

  1. Individual Behaviour: Every person has a different perception, background, skills, knowledge, expertise associated with achievements that influence an individual’s behavior. therefore, behave differently in different situations, therefore impacting the work surroundings within the organization.
  2. Organizational Structure: The hierarchical structure creates additional formal relationships among the staff happiness to completely different hierarchical levels in a corporation. Also, the delegation and execution of decision-making power by the superior influences the commercial relations between the managers and thus the employees.
  3. Psychological Factors: Associate employee’s attitude and mentality towards the leader(employer) and therefore the given task and the employer psychology towards the staff may be positive or negative, which ultimately impacts the employee-employer relationship.
  4. Leadership Style: Every manager possesses certain leadership traits and different style to operate even in a very formal organization. Through his/her formal or informal ways that generating team spirit and motivating the staff, he/she impacts the organization’s industrial relations.
  5. Economic and Technical Environment: To cope up with the changes within the economic conditions or technology, organizations ought to structure the task of the staffs as well as their work period, conditions, and wages, that's results in a distinction in their behavior, attitude, adapting spirit, etc. towards the organization and its people.
  6. Legal and Political Environment: The legal framework and political circumstances impact the firms and their industrial relations. It frames rules, rights, authority, powers, roles, and responsibilities of all the parties of the organization.
  7. Enterprise Factors: It includes problems like the style of management prevailing within the organization. The climate conditions of enterprises refer to the business surroundings throughout that a business is functioning. Adjust to new change conditions.
  8. Global Factors: The varied problems include diplomacy refers to the study of relationships among countries, Economic and commerce policies. International trade agreements and relations. The role of the International Labour Organization includes a vital role to play in conveyance firms, trade unions, and government together to bring about improvements to operating conditions.
Edited by: Imaduddin Khan (BMS, MA in Business Economics,M.Com)
Reference: Bhavana Chauhan-Lad

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