Scope, Significance, Need and Importance of Industrial Relations

10/07/2021 2 By indiafreenotes

Scope

  • Collective relations between trade unions and management. It is called union-management relations.
  • Relationship among employees, between employees and their superiors or managers.
  • Collective relations among trade unions, employers’ associations and government.

Significance

Good industrial relations result in increased efficiency and hence prosperity, reduced turnover and other tangible benefits to the organization.

  • It facilitates change: Good industrial relations help in improvement of cooperation, team work, performance and productivity and hence in taking full advantages of modern inventions, innovations and other scientific and technological advances. It helps the work force to adjust themselves to change easily and quickly
  • It discourages unfair practices on the part of both management and unions: Industrial relations involve setting up a machinery to solve problems confronted by management and employees through mutual agreement to which both these parties are bound. This results in banning of the unfair practices being used by employers or trade unions.
  • It improves morale of the work force: Good industrial relations, built-in mutual cooperation and common agreed approach motivate one to contribute one’s best, result in higher productivity and hence income, give more job satisfaction and help improve the morale of the workers.
  • It establishes industrial democracy: Industrial relations means settling employees problems through collective bargaining, mutual cooperation and mutual agreement amongst the parties i.e., management and employees unions. This helps in establishing industrial democracy in the organization which motivates them to contribute their best to the growth and prosperity of the organization.
  • It prompts enactment of sound labor legislation: Industrial relations necessitate passing of certain labor laws to protect and promote the welfare of labor and safeguard interests of all the parties against unfair means or practices.
  • It ensures optimum use of scare resources: Good and harmonious industrial relations create a sense of belongingness and group-cohesiveness among workers, and also a congenial environment resulting in less industrial unrest, grievances and disputes. This will ensure optimum use of resources, both human and materials, eliminating all types of wastage.
  • It contributes to economic growth and development: Good industrial relations lead to increased efficiency and hence higher productivity and income. This will result in economic development of the country.

Need

Industrialization has altered the lives of workers all over the globe quite dramatically. If an organization lacks good Industrial Relations, then it will not be possible for you to achieve its objectives and targets successfully. The worker with an original brain is made to work on a miniscule, negligible portion of a piece of operation endlessly, repeatedly and with frustrating regularity. Apart from loss of freedom to do things on his own, the worker is made to carry outwork that is totally monotonous and terribly boring. As the pressure of work increased, interactions between workers got reduced leaving very little space for the worker to breathe easily.

  • Good Industrial Relations facilitate industrial peace and industrial prosperity.
  • It helps better coordination between employees and employers. It contributes to the increase in output and productivity of the organization.
  • It helps in achieving the targets, goals, and objectives of the organization. Good Industrial Relations relations enable the smooth running of an organization.

Importance

  • Organisations which ignore the importance of industrial relations face high cost of production.
  • With increased productivity, the management is in a position to offer financial and non- financial incentives to workers.
  • Joint consultation between employees and management paves the way for industrial democracy and they contribute to the growth of the organisation.
  • The labours today are more educated and they are aware of their responsibilities and rights. Management has to deal with them not merely as factors of production, but as individuals having human dignity and self-respect. The objective is to change the traditional views of management and labour towards each other and develop mutual understanding and co-operation and work towards achievement of common goal. Good industrial relations lead to industrial peace and increase in production.
  • Conducive industrial relations motivate the workers to give increased output. Problems are solved through mutual discussions, workers’ participation, suggestion schemes, joint meeting, etc. Good industrial relations, increase labour efficiency and productivity.