Industrial Relations: Concept and Meaning

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Khan Sarfaraz Ali

In the term Industrial Relation (IR), Industry means any productive work or more specifically production process
and Relation is human relation in the production process. Thus, industrial relations mean relationship between
management and employees; and relationship among the employees in the course of running of an industry or
organization. The concept industrial relation has been addressed as different terms i.e. labor relations, employee
relations, organizational relation and work life relations in the study of HRM.
According to V. Agnihotri, industrial relation is industrial workers’ relation with their management, which
directly or indirectly refers to trade union and management relationship. Henry Richardson defines industrial
relation as an art of living together for productivity.
Dunlop explained industrial relation as a sum total of relationship between workers, their organization,
managers and government or law. In the opinion of Arun Monappa, industrial relation is a set of functional
interdependence involving historical, economical, social, psychological, demographic, technological occupational,
political and legal variables.
In view of the definitions, industrial relation comprises of all the issues of industrial life allied to wages,
conditions of work and work place, trade unionism, industrial hazards, fatigue, monotony, absenteeism, labor
turnover, productivity, collective bargaining etc. Industrial relation is treated as a measuring instrument for industrial
productivity.

Parties in Industrial Relations

Mainly four parties are actively associated with industrial relations system. They are the workers or their union, the
management, the organization itself and above all the government. These parties are related with each other.
Workers’ union or trade union is a very important part in today's production system. It minimizes the autocratic
tendency of the management. Managers are the representatives of the employer. Government is also a very
important participant in labor management and industrial relations system. Government introduces and applies laws
to maintain the interests of the both parties.
Objectives of Industrial Relations
The primary objective of industrial relations is to maintain sound and effective relationship between two competitive
parties i.e. employee and management. Beside this, there are few other objectives of industrial relations. They are as
follow:
a) safeguard the interests of the workers and also to preserve management interests through mutual
understanding and goodwill at all levels;
b) avoid industrial conflict and improve mutual relations which are essential for efficiency of the workers and
for the national industrialization;
c) increase production capacity at all levels;
d) establish and maintain industrial democracy;
e) minimize, if possible to eliminate, strike, lockout, lay-off etc. through competitive and suitable compensation
and better working environment and benefits;
f) ensure governmental control in those industries or factories, which are running in loss or where there is some
governmental interest in production; and to
g) achieve a sound relationship between workers and management; and to increase production as well as to
protect interests and rights of the workers and management.
Influences on Industrial Relations
There are some aspects that influence the patterns of industrial relations. These influences act, interact and reinforce
one another in the course of developing industrial relations.

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∗
Associate Management Counselor, Bangladesh Institute of Management (BIM)
sarfarazbim@gmail.com / 01817528067
 a) Social aspects: There are certain social aspects which influence the pattern of industrial relations, such as
social status, social groups, and social values.
b) Psychological aspects: Several psychological aspects such as motivation (job satisfaction, job advantages,
job enrichment etc.), alienation and morale are significant determinants of industrial relations.
c) Political aspects: Political framework and influence is another important determinant of industrial
relations.
d) Economic aspects: There are certain economic influences (e.g. unemployment, inflation, and demand for
the product) which provide the basic setting as well as the broader framework for industrial relations. The economic
status of the employer and the workers in society differs widely which influences the pattern of industrial relations.
Conditions for Good Industrial Relations
Good industrial relations mean willing co-operation derived from employees towards the achievement of
organizational goals. Good industrial relations depend upon a great variety of factors as illustrated below:
History of Good Industrial Relations: A good history of industrial relations means harmonious relationship
between management and employees. On the other hand, a bad history is characterized by militant strikes and
lockouts. Both have perpetuating tendency that does not mean they cannot change their attitude. The probability of
conflict is greater when conflict has become accepted as normal. The probability of peaceful relations is greater
when mutual understanding is expected to continue as a part of standard operations.
Economic Satisfaction of Workers: Industrial relations depend on the economic satisfaction of workers.
Social and Psychological Satisfaction: Identifying the social and psychological needs of workers is a very
important step to determine the good industrial relations. It has been revealed by the Hawthorn experiments; a
person has several other needs besides his physical needs. Employment relationship is not only an economic
contract, supportive climate requires more than economic rewards. The supportive climate of an organization is
essentially built around social and psychological rewards. Worker's participation in management, job enrichment,
suggestion schemes, handling of grievances, effective two way communication are some examples of social and
psychological rewards.
Off The Job Conditions: For good Industrial relations it is not enough that the employee’s organizational
life alone should be taken care of. His/her home life is not totally separable from their work life and emotion is not
isolated from their physical condition. For this reason employee's off the job conditions are also important.
Enlightened Labor Unions: Strong and enlightened labor movement can help to promote the status of labor
without hampering the interests of management. Labor unions always talk much of the employer’s obligations to the
workers, but say very little about the worker’s responsibility to the employer.
Negotiating Skills of Management and Workers: Good industrial relations depend on the ability of
employers, organizations and trade unions to deal with their mutual problems freely, independently and with
responsibility.
Public Policy and Legislation: Government becomes a third major force in determining industrial relations.
Government’s intervention helps in three ways - i) in catching and solving problems before they become serious, ii)
it provides formalized means to the workers and employers for emotional release of dissatisfaction, and iii) acts as a
check and balance upon different management action.
Collective Bargaining: Collective bargaining is the cornerstone of good industrial relations though the
assistance of appropriate government agencies might be necessary in public interest.
Harmonious Industrial Relations: The peaceful and harmonious industrial relations depend on the desire of
the employers or management with their employees on the basis of equality.
Urge on The Part of Employers: Good industrial relations depend on the realization and urge on the part of
employers or management; for the promotion of their workers welfare.
Genuine Sympathy: Good industrial relations depend on the genuine sympathy of the general public
towards labor.
Thus, the existence of strong, independent, responsible and democratic trade unions and employers
organizations, the recognition of trade unions and the promotion of collective bargaining, the machinery for the
peaceful settlement of industrial disputes, the existence of good human relations at the level of the undertaking and
the removal of discriminations of all types based on any ground including race, religion, nationality or language
would go a long way to improve the pattern of industrial relations in a country.
Principles of Good Industrial Relations
Maintenance of good industrial relations is as crucial and difficult as that of human relations. The following
∗
Associate Management Counselor, Bangladesh Institute of Management (BIM)
sarfarazbim@gmail.com / 01817528067
principles should be followed to maintain for good industrial relations:
i) recognition of the dignity of the individual and of his/her right to personal freedom and equality of
opportunity;
ii) mutual respect, confidence, understanding, goodwill and acceptance of responsibility on the part of
employer, management and workers and their representatives in the exercises of the rights and duties in the
operation of the industry.
iii) there has to be an understanding between the organizations of employers and employees who represent the
management and workers.
Scopes of Industrial Relations
There may be many reasons that turn into industrial conflicts and disputes. These areas need attention for industrial
relations. In brief, the scopes of industrial relations are as follow -
Economic: Wages, increment, bonus, pension, gratuity, provident fund etc.
Organizational: Working terms and conditions, working period, leave, work system etc.
Personnel Management: Selection procedure, appointment, promotion, transfer, discipline, compliance,
motivation, punishment etc.
Welfare: Employee welfare, entertainment, sports, cultural program etc.
Behavioral: Behavior patterns between management and workers, or workers and workers.
Tactical and Legal: Lay-off, lockout, strike etc.
Institutional: Weakness of the trade unions and their behavior, violation of the law/contract by any party,
and inefficient management.
Political: Influence of the government on the management, political influence and pressure on the trade
unions.
Social: Influences of formal and informal groups, influences of geographical areas on the management and
workers.

Reference:
1. Khan Sarfaraz Ali and Dr.Nasima Khatun. A Handbook on HR Solution (2009).

(ISBN: 978-984-33-0505-3). Dhaka.

∗
Associate Management Counselor, Bangladesh Institute of Management (BIM)
sarfarazbim@gmail.com / 01817528067