Strategic Management of Industrial Relations

An IR Strategy is an expression of an enterprise’s capacity to develop and implement a sound industrial relations management plan which ensures that industrial relations issues and risks are identified, assessed and managed. The IR Strategy should demonstrate the integration of industrial relations requirements with the normal procedures, practices and performance standards of the enterprise.

It involves an enterprise:

• Developing a policy statement on industrial relations management that has the total support of management.
• Defining responsibilities for industrial relations management within the enterprise.
• Identifying resources and procedures for implementing required industrial relations management measures.
• aving planning processes and procedures in place that enable identification of potential industrial relations issues and facilitate the development of measures to minimize impacts.
• Outlining methods used to assess the capacity of subcontractors to understand and comply with their industrial relations responsibilities, and
• Establishing procedures to review and monitor the implementation of measures which support the IR Strategy and to initiate corrective action when required.

Factors Affecting Employee Relations Strategy:

Two sets of factors, internal as well as external, influence an IR strategy.

The internal factors are:

1. The attitudes of management to employees and unions.
2. The attitudes of employees to management.
3. The attitudes of employees to unions.
4. The inevitability of the differences of opinion between management and unions.
5. The extent to which the management can or wants to exercise absolute authority to enforce decisions affecting the interests of employees.
6. The present and likely future strength of the unions.
7. The extent to which there is one dominating union or the existence of multiple unions leading to inter-union rivalry.
8. The extent to which effective and agreed procedures for discussing and resolving grievances or handling disputes exist within the company.
9. The effectiveness of managers and supervisors in dealing with problems and disputes related to IR.

• The prosperity of the company, the degree to which it is expanding, stagnating or running down and the extent to which technological changes are likely to affect employment conditions and opportunities.

The external factors affecting IR strategy are:

1. The militancy of the unions-nationally or locally.
2. The effectiveness of the union and its officials and the extent to which the officials can and do control the activities of supervisors within the company.
3. The authority and effectiveness of the employer’s association.
4. The extent to which bargaining is carried out at national, local or plant level.
5. The effectiveness of any national or local procedure agreements that may exist.
6. The employment and pay situation-nationally and locally.
7. The legal framework within which IR exists.

IR – STRATEGIES

1. Trade unionism

Unions have a crucial role to play in IR. Unions have broad objectives which are:’

1. To redress the bargaining advantage of the individual worker vis-a-vis the individual employer, by substituting joint or collective action for individual action,
2. To secure improved terms and conditions of employment for their members and the maximum degree of security to enjoy these tern1S and conditions,
3. To obtain improved status for the worker in his or her work, and
4. To increase the extent to which unions can exercise democratic control over decisions that affect their interests by power sharing at the national, corporate and plant levels.

The union power is exerted primarily at two levels-at the industry level, to establish joint regulation on basic wages and hours with an employer’s association or its equivalent; and at the plant level, where the shop stewards’ organizations exercise joint control over some aspects of the organization of the work and localized terms and conditions of employment.’ Unions arc a party to national, local and plant level agreements which govern their actions to a greater or lesser extent, depending on their power, and on local circumstances (read the next chapter for more details on unions).

Employers too, are directly involved in any dispute between them and the employees. Employers are endowed with certain inalienable rights vis-a-vis labor. The management has the right to hire and fire any worker, Not withstanding union restrictions. It is not just firing a worker here or there, but the management’ s ability to control the economic destiny of the workers that matters The management has the right to relocate, close , merge, takeover or sell a particular plant- these actions affect workers’ interests. The management has another powerful weapon-introducing or threatening to use technological change. Technological change can displace labour or annihilate skills.

Armed with these rights, the management resorts to several tactics to break a strike, some of them even unethical. The management is known to adopt dubious means to forego a strike, call off a strike, or tone down union demands. The management often breaks a powerful union, sets one faction against another, and favours the more satisfied and the less militant workers. Loyal workers from sister concerns arc brought in. on the pretext of a factory visit, and are induced into the plant and advised to break the strike

2. Grievance Procedure

Grievance procedure is a formal communication between an employee and the management designed for the settlement of a grievance. The grievance procedures differ from organization to organization.

The 15th session of Indian Labor Conference held in 1957 emphasized the need of an established grievance procedure for the country which would be acceptable to unions as well as to management. In the 16th session of Indian Labor Conference, a model for grievance procedure was drawn up. This model helps in creation of grievance machinery. According to it, workers’ representatives are to be elected for a department or their union is to nominate them. Management has to specify the persons in each department who are to be approached first and the departmental heads who are supposed to be approached in the second step. The Model Grievance Procedure specifies the details of all the steps that are to be followed while redressing grievances.

These steps are:

STEP 1: In the first step the grievance is to be submitted to departmental representative, who is a representative of management. He has to give his answer within 48 hours.

STEP 2: If the departmental representative fails to provide a solution, the aggrieved employee can take his grievance to head of the department, who has to give his decision within 3 days.

STEP 3: If the aggrieved employee is not satisfied with the decision of departmental head, he can take the grievance to Grievance Committee. The Grievance Committee makes its recommendations to the manager within 7 days in the form of a report. The final decision of the management on the report of Grievance Committee must be communicated to the aggrieved employee within three days of the receipt of report. An appeal for revision of final decision can be made by the worker if he is not satisfied with it. The management must communicate its decision to the worker within 7 days.

STEP 4: If the grievance still remains unsettled, the case may be referred to voluntary arbitration.

1. Model Grievance Procedure

The draft Model Grievance procedure, accepted by the labour conference in 1958, is as follows.

1. An arrived employee shall first present his grievance verbally in person to the officer designated by the management for this purpose. The response shall be given by the officer within 48 hours of the presentation of the complaint. If the worker is not satisfied with the decision of the officer or fails to receive the answer within 48 hours he will, either in person or accompanied by is departmental head, present his grievance to the head of the department.
2. The head of the department shall give his answer within 3 days or if action cannot be taken within this period, the reason for delay should be recorded. If the worker is dissatisfied with the decision of the department all head, he may request that his grievance be forwarded to the Grievance Committee.

li>The Grievance committee shall make its recommendation to the manager within 7 days if the workers request. If decision cannot be given within this period, reason should be recorded. Unanimous decision of the committee shall be implemented by the management. If there is a difference of opinion among the members of the committee, the matter shall be referred to the manager along with the views of the members and the relevant papers for final decision.

• In either case, the final decision of the manger shall be communicated to the employee within three days from the receipt of the Grievance Committee’s recommendations.

1. If the worker is not satisfied even with the final decision of the manager, he may have the right to appeal to the manager for revision. In making this appeal he may take a union official with him to facilitate discussion with the management. The management will communicate the decision within 7 days of workman’s revision petition.
2. If worker is still not satisfied, the mater may be referred to voluntary arbitration.
3. Where a workers has taken a grievance for readdress under the grievance procedure the formal conciliation machinery shall not interview till all steps in the procedure have exhausted. A grievance shall be presumed to assume the form of a dispute only when the final decision of top management is turned down by the worker.

The Grievance Committee shall consist of 4 to 6 members.

3. Disciplinary Procedure

Maintenance of harmonious human relations in an organization depends upon the promotion and maintenance of discipline. No organization can prosper without discipline. Discipline has been a matter of utmost concern for all organizations. Maintenance of effective discipline in an organization ensures the most economical and optimum utilization of various resources including human resources. Thus, the objective of discipline in an organization is to increase and maintain business efficiency. Effective discipline is a sign of sound human and industrial relations and organizational health.

• . Approaches to Discipline
  1. human relations approach,
  2. human resources approach,

• group discipline approach,

1. the leadership approach, and
2. judicial approach.

Strategic Approach to Industrial Relations

The different approaches to discipline include,

The employee is treated as human being and his acts of indiscipline will be dealt from the viewpoint of values, aspirations, problems, needs, goals behavior etc. Under human relations approach the employee is helped to correct his deviations. The employee is treated as a resource and the acts of indiscipline are dealt by considering the failure in the areas of development, maintenance and utilization of human resources under the human resources approach. The group as a whole sets the standards of discipline, and punishments for the deviations. The individual employees are awarded punishment for their violation under the group discipline approach. Every superior administer the rules of discipline and guides, trains and controls the subordinates regarding disciplinary rules under the leadership approach.

In Judicial approach, in disciplinary cases are dealt on the basis of legislation and court decisions. The Industrial Employment (Standing Orders) Act, 1946, to a certain extent, prescribed the correct procedure that should be followed before awarding punishment to an employee in India. No other enactment prescribed any procedure for dealing with disciplinary problems. But over a period of time, a number of principles regarding the basic formalities to be observed in disciplinary procedures emerged, gradually resulting from the awards of several Industrial Tribunals, High Courts and the Supreme Court. Principles of Natural Justice.