Industrial Relations – Meaning, Importance, goals and Scope

Industrial relations involves the study and strategies necessary for analyzing the connections and communications amongst management and employees of an organization.

Its practices are involved in dealing with the management of working personnel, managements, their behavioral inclinations, organizational structure, and psychological factors along with the economic, technical, legal, and political environment in a corporate setup.

This article will take you deep into what industrial relations are and how they work in optimizing organization, performance, ROI, and growth of a company. So, let us get started here and now-

What are Industrial Relations?

Industrial relations are a set of procedures and systems used by employers and employees to determine the following:

• Terms and conditions of employment: Terms are meant to ensure and protect the interests of the employees and the employers. It guarantees that employers don’t exploit their employees or vice versa.
• Working conditions and behavior towards the employees

Any industry or company is based upon the complex dynamics of industrial relations between the employer and the employees. Other associated bodies such as the labor/trade unions, employer organization, and state are also a part of it.

Industrial relations are meant to ensure mutual trust and good relationships between the employers and their employees and other associated bodies. These are meant for the betterment of the employers and the employees. It is also beneficial for the growth of the industry and economy as a whole.

Industrial relations are combined results of the attitudes of the employers and employees towards each other. It involves direction, supervision, planning, and coordination of an organization’s activities to yield genuine cooperation with proper regard for the well-being of all the members of that industry/organization.

Importance of Industrial Relations

A prosperous industry knows that its employees are its biggest asset. Industrial relations are crucial for the smooth functioning and growth of any industry. Following are some of the areas that are positively affected by industrial relations:

1. Production

Good industrial relations mean that the workforce and the employees are content and continue to work in their respective positions for the industry’s growth and betterment.

This consistent, continuous work enhances productivity.

2. Disputes

If the management (employer) and the employees have good industrial relations, this means that they don’t have any disputes.

In such a scenario, they work harmoniously and productively, without any disputes.

3. Employees’ attitude

When there is a beneficial and good industrial relation between the employers and the employees, the employees feel that their interests coincide with that of the management and so they happily put their efforts for the betterment of the industry.

Industrial relations create a sense of belongingness in the employees. Happy employees equal to prosperous

4. Wastage

Good industrial relations ensure that there is no wastage of workforce, machinery, or time. Everyone contributes effectively to the growth of the industry. No unnecessary efforts are needed to resolve conflicts and disputes.

Everything is channelized and resolved via a proper procedure. It does not in any way hampers the working of the industry.

The goals of good Industrial Relations

Industrial relations are meant to achieve specific goals that are incredibly eminent for the success of any industry:

1. Provide a platform to the employees

It aims to provide a platform to the employees via which they can have a say in the decision making of the management that directly or indirectly affects them. It prevents the master-servant from establishing where the servants have no say. It maintains the modern employer-employee relationship.

2. Reduce disputes

It is meant to provide a system by which mutual negotiations could resolve disputes.

3. Regulating work

Ensuring consistent and continuous work is also a goal of industrial relations. It is necessary for enhancing productivity and maintaining consistent growth in the industry.

4. Prevent strikes, lockouts, and protests

Industrial relations hamper strikes sorts of activities by employees or labor unions from happening. It is done by providing an interactive platform to the employees to negotiate and settle any disputes with the employers quickly.

5. Avoiding unnecessary interference by the government

It impedes government interference in matters of industrial disputes between employees and employers can result in deterioration of the reputation of the company.

6. Socialize industrial activity

This is done by involving the government to participate as an employer. It enhances security.

The primary goal of industrial relations is to ensure the smooth functioning of the industry to enhance productivity.

Nature

1. It is dynamic

The needs of the employees are subject to constant change. The expectations of the trade unions, employer associations, and the other social and economic institutions also change. Hence, the approach and terms of industrial relations also change from time to time.

2. It is interactive

The word “relations” in the term “industrial relations” stands for the interactions between employers, employees, and the other associated bodies. The sole purpose of industrial relations is to ensure smooth and profitable interactions.

3. It has a mechanism

It has a mechanism for solving disputes and maintaining smooth functioning.

4. Collective good

It is meant for the well being of the industry, employees, employers, and the economy. It offers a platform for collective bargaining where mutual negotiations can be made for the common good.

Industrial relations do to the industry what grease does to machinery; it provides smooth running/functioning.

Scope

Industrial relation is a vast term, and so is its scope

1. It formulates policies regarding recruitment, training, and collective management.
2. It is responsible for providing a platform where the employers and employees interact and solve disputes (if any).
3. Employer-employee relationship: Maintaining the smooth dynamics of employer and employee relationships falls under industrial relations.
4. Labour relations: Industrial relations cover this aspect of relations as well. It ensures good relations between the individuals (employers and employees) and the group of individuals (unions and management).
5. The role of various parties: An industry is not merely based on the relationship dynamics of the employers and the employees. Various other parties, like the state and other social and economic institutions, also play a vital role in it. Hence, the scope of industrial relations covers this aspect as well.

According to Dale Yoder, “Industrial relations include policies regarding recruitment, selection, training of workers, personnel management, and collective bargaining.”

Factors affecting Industrial Relations

Industrial relations are affected by various interrelated and interdependent factors. These factors interact with each other and shape the structure of industrial relations. Following is the list of such factors that determine the texture of industrial relations:

1. Institutional factors

Institutional factors such as labor laws, state laws and policies, collective bargaining agreement, employment organizations or federations, etc.

2. Economic factors

Some of the economic factors are:

• The type of ownership of the industry (private, government, cooperative, MNC, etc.)
• Type of government (communist, socialist, capitalist).
• Economic cycle.
• Nature of the workforce and its source. Etc.

3. Social factors

In the early periods of industrialization, social factors such as class (high class, low class), caste, and other social norms determined the employer-employee relationship up to a great extent.

In today’s modern world, this has changed, but still, the social norms continue to affect industrial relations up to some extent.

4. Technological factors

Technological factors such as the machinery used, rate of technological change, etc., directly affect the wage levels, employment status, work conditions, and collective bargaining process.

It is also important to note that technological advancement affects the working environment and thus the industrial relations. Hence, it is a significant factor that affects industrial relations.

5. Psychological factors

These factors include the owner’s attitude towards employees, employees’ attitude towards work, motivation, level of job satisfaction, interest, morale, man-machine interaction, etc.

These factors have a significant impact on the employees’ professional as well as personal life. Hence, psychological factors have a profound effect on industrial relations.

6. Political Factors

They have a significant impact on industrial relations. The ruling government’s attitude towards the different types of industries (private, cooperative, MNC, etc.), the laws and policies formulated by the government, the government’s stand upon labor problems, political philosophy are some of the aspects of this factor.

7. Enterprise related factors

It consists of a style of management, organizational health, organizational climate, adaptability, Human Resource policies, the extent of competition, etc. The things related to management (employer) and its policies. It plays a very vital role in industrial

8. Global Factors

It is one of the most critical and most vast factors. It includes internal relationships, trading policies of power blocks, international labor laws, dominant economic-political ideology, global cultural milieu, etc.

All the factors mentioned above collectively affect industrial relations. Some of these have a significant impact on industrial relations. In contrast, some have a bit lesser, but we cannot think of forming productive industrial relations while ignoring any of these.

Summing up!

Ask any leading industry, “What is the secret of your success?” They are most likely to say, “Our employees.” As I had said, an earlier satisfying workforce equals a prosperous and growth-driven organization.

Maintaining mutual trust and goodwill between employers and the employees is the key to any industry’s success. This dynamics of relations is maintained via industrial relations.

Industrial relation is a multidisciplinary academic field aimed at studying various employment-related relationships and formulating policies and procedures to ensure and protect the interests of employers and the employees both.

Industrial relations are the procedures and policies set to ensure smooth working and high productivity. But these (employees and the employers) aren’t the only factor affecting industrial relations. Various social, economic, political, global, and psychological factors influence and shape industrial relations.

If employed correctly, industrial relations can help prevent strikes and protests by the employees, provide a healthy work environment, enhance productivity, and lead to the industry’s overall growth.

So, all in all, if you want to optimize employee engagement, employee motivation, and employee performance along with top-notch organizational framework beyond destructive disputes and all, incorporating the right strategies of industrial relations is the key.

What are your thoughts about the importance of industrial relations in channelizing a hassle-free, organized, and well-optimized organization? Tell us what you think in the comment section below.

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