Approaches to Industrial Relations - Definition, Approaches - The Investors Book (2024)

Definition: Industrial relations is that part of human resource management which studies the formal relationship of the workers with the administration and the employers and ensuring a proper mechanism to manage the industrial disputes and conflicts.

In the present scenario, the relationship between the employer and the employees have changed to a great extent what it used to be in the 1900s. The industries today are becoming more of technology-oriented, which has generated the need for skilled and educated personnel in the organizations.

Different scholars and experts have given various views in the context of industrial relations. To understand each of these approaches in details, read below:

Content: Approaches to Industrial Relations

1. Systems Approach
2. Unitary Approach
3. Pluralist Approach
4. Marxist Approach
5. Sociological Approach
6. Gandhian Approach
7. Psychological Approach
8. Human Relations Approach

Systems Approach

John Dunlop gave the systems theory of industrial relations in the year 1958. He believed that every human being belongs to a continuous but independent social system culture which is responsible for framing his or her actions, behaviour and role.

The industrial relations system was based on three sets of different variables:

1. Actors: By actors here we mean that the individuals or parties involved in the process of developing sound industrial relations. This variable is denoted by ‘A’.
2. Contexts: The contexts refer to the setup in which the actors perform the given tasks. It includes the industry markets (M), technologies (T) and the power distribution in the organization and labour unions(P).
3. Ideology: The similar ideas, mentality or beliefs shared by the actors helps to blend the system. It can be expressed by the initial (I)

Based on these variables, the following formula was derived by Dunlop:

John Dunlop’s Systems Approach Formula:

This formula represents that the industrial relations system can be seen as a joint function of all the elements mentioned above.

Unitary Approach

As the name suggests, the unitary approach can be seen as a method of bringing together the teamwork, common objective, individual strategy and mutual efforts of the individuals.

This theory believes that the conflicts are non-permanent malformations, which are a result of improper management in the organization.

Moreover, if everyone works towards the achievement of the common goals by maintaining peace and cooperation in the workplace, it will tend to benefit everyone associated with the organization. It also considered the organizational conflicts resulting in strikes to be useless and destructive.

The other aims of the unitary approach are as follows:

• To create a productive, effective and harmonious work environment;
• to develops a trustworthy, open, fair and transparent work culture;
• to create a cordial work environment;
• to restrict the role of the tribunals and other government associations like the trade unions and initiates direct negotiation between the management and the employees.

Pluralist Approach

The pluralist theory also called the ‘Oxford Approach’, was proposed by Flanders in the year 1970. This approach explained that the management and the trade unions are the different and robust sub-groups which unanimously form an organization.

Collective bargaining was considered to be a useful technique for resolving organizational conflicts. Due to this, the management’s role has transformed from imposition and control; to influencing and coordinating with the workers.

Following are some of the highlights of this approach:

• The organization should appoint personnel experts and industrial relations specialists to act as mediators between the management and trade unions. They need to look into the matters of staffing, provide consultation to the managers and the unions, and negotiate with both the parties in case of conflicts.
• The organization should ensure that the trade unions get recognized and the union leaders or representatives can perform their duties freely.
• In the case of industrial disputes, the organization can avail the services of the external agent for settlement of such issues.
• The managers should resolve to a collective bargaining agreement when there is a need for negotiation and settlement with the trade unions.

The following formula denotes the Flanders pluralist theory:

Where,

‘R‘ is the rules of industrial relations;
‘b‘ is collective bargaining;
‘c‘ is resolving conflicts through collective bargaining.

It depicts that the rules of industrial relations are a function of collective bargaining, or in other words, it is a function of handling conflicts through collective bargaining.

Marxist Approach

Lenin came up with the concept of a Marxist approach in the year 1978, where he emphasized the social perspective of the organization.

This theory perceived that the industrial relations depend upon the relationship between the workers (i.e., employees or labour) and the owners (i.e., employer or capital). There exists a class conflict between both the groups to exercise a higher control or influence over each other.

The assumptions of this approach are as follows:

• Industrial relations are a significant and never-ending source of conflicts under capitalism which cannot be avoided. However, cases of open disputes are quite unusual.
• Understanding the conceptions of capitalized society, capital accumulation process and the pertaining social relations, give a better overview of the industrial relations.
• The Marxist theory assumed that the survival of the employees without any work is more crucial than the survival of the employer without the labours.

Sociological Approach

The industries comprise of different human beings who need to communicate with the individuals of other organizations.

Due to the difference in their attitude, skills, perception, personality, interests, likes and dislikes, needs, they are usually involved in one or the other conflict. Even the social mobility and other aspects including transfer, default, group dynamics, stress, norms, regulations and status of the workers influence their output and the industrial relations.

This theory also emphasizes on the impact of various changes in the work environment (i.e., economic, technical and political) on the interactions and relationship shared by the employer, employees, institutions and the government bodies.

Gandhian Approach

The Gandhian approach to industrial relations was proposed by the father of our nation, Mahatma Gandhi or Mohandas Karamchand Gandhi, who was also a well-known labour leader.

Following are the various features of the trusteeship or Gandhian theory:

1. Gandhi Ji was not against strikes; instead, he gave the following conditions to carry out a favourable strike:
   • The workers or labours can go on a strike only if there is a specific grievance.
   • There should be complete non-violence while carrying out strikes.
   • The ones who are not involved in the strikes should not be tormented.
2. Though Gandhi Ji was not against carrying out strikes, he believed that it should be the last option to which the labour should resort to, after the failure of all the constitutional and peaceful ways of resolving conflicts and negotiating with the employer.
3. The Gandhian approach illustrated that nature had provided us with human capabilities and different kinds of property. Thus, such nature’s gift belongs to the whole society and cannot be considered as of personal possession by anyone.
4. The objective of this theory is to adopt non-violent ways to bring in economic parity and material enhancement in a capitalist society.
5. Gandhi Ji perceived that every organization is a joint venture, and the labour should be treated as associates or co-partners with the shareholders. Moreover, the workers should have proper knowledge of all the business transactions as it is their right.
6. He focussed on increasing the production and believed that the gains should be shared with the employees because of whom it has been possible.
7. He also emphasized that the industrial disputes and conflicts between the parties should be resolved healthily through interactions, arbitration and bilateral negotiations.

This theory gained massive popularity and is applied to address disputes and misunderstandings in the organizational setup even today.

Psychological Approach

The psychologists perceived the problem of the industrial relations as a result of the varying perception and mindset of the key participants, i.e., the employees and the management.

The ‘thematic application test’ was conducted by Mason Harie to understand the behaviour, mindset and perception of the two significant workgroups, i.e., executive and the union leaders, in a particular situation.

In this test, both the groups were asked to rate and interpret the photograph of an ordinary middle-aged person, and the results were drastically contrasting. The union leaders perceived the person to be a ‘manager‘ whereas, the executives thought that the person was a ‘union leader‘.

The major interpretations of this test were as follows:

• The general belief of a management representative is entirely different from that of a labour representative.
• Both the management and labour do not consider each other to be trustworthy.
• Even each of these groups considers that the other one lacks emotional and interpersonal attributes.

These contrasting impressions are a result of certain economic as well as non-economic factors, like values, power, position, personal objectives, recognition, beliefs, education, social security and income of the individuals.

Also, each of these parties forms a negative image or perception of each other. Due to which they always find fault in the actions and behaviour of one another.

As a result of the factors mentioned above, there remains a tensed interpersonal relation leading to conflicts which ultimately hinders the image and interest of the individuals involved.

Human Relations Approach

The person behind the concept of the human relations approach is Keith Davis. The organization and the society comprise of human beings who vary in various aspects as their behaviour, emotions, attitude, mindset and personality. But, they have come together to achieve common organizational goals and objectives.

The concept of human relations approach underlines the need for making the individuals familiar with the work situations of the organization and uniting the efforts of the workers. The purpose is to meet the social, psychological and economic objectives, by enhancing the overall productivity.

Some of the primary objectives of the human relations approach are as follows:

• To ensure cooperation by promoting the mutual interest of the organization;
• to enhance the productivity of the individuals;
• to satisfy the psychological, social and economic needs of the employees.

This theory focused on enhancing the level of efficiency, worker’s morale and job satisfaction by applying specific techniques or tools and policies.

The human relations approach highlighted a technique for enforcing proper control over the work environment by forming small workgroups and at the same time eliminating the hurdles of sound labour-management relations.