UNDERSTANDING EMPLOYMENT RELATIONS AND ITS EMERGING TRENDS

By: B.D Singh Prof. HRM & Dean MDP & Consultancy IMT, Ghaziabad

Understanding IR IR is most misunderstood & even maligned subject People have written its obituary IR is basically a relationship management &

relation will continue till humanity/ industries exists. exists. Relationship can be co-operative or adversial (conflicting) coIn our life personal or organizational, we have relate ourselves to others - relationships gets built I R is a culture of working together in industry a network of relations Cooperation can not be regulated /bought CoCo-operation requires positive approach of manage people it requires building, nurturing & developing relationship on continuous basis bringing in transparency & fairness in our dealings, communicating , motivating & leading etc. etc. inculcating ownership & we feeling introducing devices for lasting bondage building bridges of trust developing healthy relationships

Conflict in inevitable. It is generally harmful. Requires immediate resolution. resolution.

Two( broadly) types of conflict 1. Interpersonal employer & employee 2. Inter group/ inter organizational

Interpersonal conflict arises out of terms of employment between employer & employees (Workmen) Regulated by laws. Govt. employees, Industrial workmen Managers in industries (i.e. conflict also among Managers)

Inter group/ Inter organizational individual employee is not able to deal with mighty employer, they form unions / association on the principles of individual dispensability and collective indispensability survival instinct fundamental right / ILO convention Collective disputes/ industrial disputes wage settlement, service condition, retrenchment etc. Instrument like collective bargaining & strike & lockout Actors in the game of ER act & interact - managing human resource means directing, controlling, motivating & in the process reciprocating to their responses, most of the times bitter ones, resulting in conflicts. All these actions & interactions are regulated by laws/ & judiciary Industrial employment (standing orders) act, industrial dispute act, trade union act, High Court, Supreme Court judgments.

ER is a complex subject
Highly susceptible to forces within and outside the organization
Economic, Social, Psychological, Political, Technological and Market: local and global Network of Relationship non linear/Criss - Crossed linear/Criss Social relation at workplace

Does not have a fixed profile

Changes as per the pulls and pushes of the market Started as reaction to exploitation by mighty employers Post independent IR : CRP Post liberalization ER : LPG - Global competition - Global networking - Global mindset - Global standards - Survival and excellence

- Change both in context & contents

Changing Business Skylines / Environment and Employee Relations

Post industrial societies- the third wave- (toffler) societieswaveSunrise industries IT, ITES, Telecom, Hotel, Health services, Insurance, Pvt. Banking, Pharmaceuticals, Retails, etc. more of Pvt. etc. employment in these sectors
Employee Based Organizations

Require: Service oriented work force E-industries (BPOs, KPOs) mushrooming

Knowledge workers

Shrinking organized sector: Traditional Manufacturing sector

Technological upgradation, restructuring, Disinvestment, Mergers & acquisitions retrenchment,

Entirely different organisation structure: Flatter, leaner-virtual structure: leanerorganizations Employers: mostly MNCs, professionally driven, competitive mindset In Employers: the new context, heavier responsibilities fall on employers and their organizations. organizations. Some need to give greater attention to empowerment, rather than exploitation of human resources. Building skills and giving the resources. workforce greater say and stake in the enterprise becomes imperative. imperative. Employees: Diverse in character, white collar, pink collar, female workers, Employees: multi-ethnic/multimulti-ethnic/multi-cultural workforce, migrant labour, contract labour etc. etc. The colour of the collar of the worker in the organized sector is changing. changing. There is a gradual reversal in the ratio of executives to nonnonexecutives. executives. Over the years, in most companies, executives outnumbered non executives. Technological changes eliminating the 3D jobs dirty, executives. dangerous, and drudgerous and lower and middle level information gathering and processing tasks warranting different kinds of age, contracting out and outsourcing whereby the permanent employee strength shrinks to accommodate those with core and critical skills, while banishing the rest to the periphery of the organization in casual, contract, and contingent employment. employment.

Changing role of Govt.: Controller Govt.: under political pulls and pushes)

Facilitator (GOI has not done much

Some states are waking up to the need for wooing investment, foreign and domestic, and creating jobs. In the process they are resorting to competitive jobs. labour policies that are investor friendly . The components of the industrial relations policy of Kerala, the relaxations Kerala, Pradesh, and exemptions to labour inspections in Rajasthan and Uttar Pradesh, the liberal response of the Tamil Nadu Government to requests from employers for notice of change, lay-off, etc., and the cancellation of the registration of layetc. an unusually large number of unions in West Bengal, have had far reaching Bengal, implications for industrial relations. relations.

Central laws being the same, their interpretation by the judiciary is changing. changing. In 2005 alone, in five different cases, the Supreme Court held that sleeping on duty, using abusive language against superiors. Strikes have to be not only superiors. legal (refer to the strike by government employees in Tamil Nadu,) but also Nadu,) justified. justified. Where trade union action is lacking, non-governmental nonorganizations are rushing to fill the vacuum, particularly in matters concerning minimum wages and living conditions in the unorganized sector, and occupational safety, environment, etc. in both the organized and the etc. unorganized sectors. sectors.

The core conventions of ILO and dictates of WTO, IMF and SWB International pressure is mounting to link labour standards with bi-,triinternational trade either through sanctions through bi-,tri-, or multimulti-lateral institutions (governments and international agencies, such as New Actors on the Horizon The consumers and community have emerged as the new actors on the horizon. Since they represent the horizon. larger aggregations of population and wider societal interests, when their rights are impinged upon by the action or inaction of either employees or employers the court consumer courts to the Supreme Court rule that the interests of workers and managements should take a back seat. seat.

Changing nature of work practices Contracting outsourcing in place of self-sourcing selfCasualisation of work places Hiring work facilities Use of electronic gadgets PCs, SMSs, E-Mailing, Internet, Fax, Video Conferencing EChanging work System: TQM, JIT, CAM, CIM

Contd
Changing look of the offices-transparent, smart offices24x 24x7x365 Work culture Paperless or less paper at least Offices software E-Documentation/ office software Intelligent offices Flexibility: Flexibility: Flexi timing, Flexi payment Changing Employment pattern
Life long employment Part time, Home working, Tele working, Share working

Contd
Changing reward/ compensation system Variable pay in place of guaranteed pay Employee s ownership: ESOP Gain sharing/Profit sharing Cafeteria benefit system Emphasis on insurance and social security New crop workers want to share power, responsibility and gain

Emerging Trends and Issues

IR at cross road- unprecedented pressure- Meant for CRP roadpressureeconomy Slow, Ad hoc, Reactive, Passive: Strike, Gherao, Passive: Gherao, Collective bargaining, Litigation You cannot play the modern game of cricket with old rules/dispensation of gulli-danda gulliForces of inertia (Status Quo) Emerging market requires: Speed, Quick Responsiveness, requires: Customer focus, zero defect No nonsense, trade union taken as nuisance , non unionism individual bargaining

Changing Pattern of C & R Management Fixed / Assured Time Wages are replaced by variable / performance based wages. Job security to employability. ProPro-labour stance of government is getting reduced. The attitude of judiciary is also changing. New players in the game of employee relations

The aggressive approaches of Indian employers in the service sector to trade unionism; unionism; The two extreme styles and strategies bleak house and happy house . The declining membership of trade unions, The decline in the number of skill workers and their replacement by knowledge workers; workers; and Trade unions should focus on managing the expectations of the successive new generations of workers rather than being content with their role in situations of discontent. Initiatives such as the recently formed Trade Unions Partnership for Environmental Protection (TUPEP) are welcome in the wake of mounting concern about the health, safety, and environment in and around work. TUPEP may, in association with other social partners, address itself to new problems arising out of closure of units due to environmental considerations, etc.

Collective Bargaining in collective bargaining, some of the shifts include: Centralization to decentralization; Collective to individual contracts; Parity to disparity; Increased wages/incomes and benefits accompanied by erosion of job control; 5. Concession bargaining 6. Assertion of managerial rights than the rights of workers; 7. Skill-up gradation Skill1. 2. 3. 4.

Social security the shift from welfare to money fare through the conversion of several of the welfare benefits into cash is, however, a worrisome development. The other trend is a shift in retirement benefits development. from defined benefits to defined contributions. This puts the real value of contributions. retirement benefits at serious risk. risk. Employers directly reaching the work men and negotiating with them Disinvestment / Privatization and VRS are almost accepted facts of Industrial Relations. Relations. Shifting roles of traditional actors Over the years, a number of changes have taken place in the industrial relations scenario. Not only have the scenario. players changed (the inclusion of consumers and community), techniques, technology, and power structures have been re-examined and altered time reand again. again.

Burning problems at ER front 1. Volatile labour market

2. Attrition rate very high 3. Work life balance disturbed 4. Union free organizations 5. Gender related problems 6. Issues regarding multi cultural & multi ethnic workers 7. Almost law free atmosphere- SEZ 8. Government as facilitator & not as regulator All these activities have become regular features and are increasingly impinging on emerging E.R.s. This trend is going to be accelerated, in future. future. Employee Relation has to address to all the issue

Towards new Management of ER Managerial Beliefs/Practices and Structural Contradictions 1. The company is viewed as the property of the management. Workers have no management. say/stake. say/stake. 2. Mainly the management is interested in the organization, not the union/workers. union/workers. 3. Organizations expect commitment, while viewing people as dependable and disposable . 4. There is conflict of interest and little concern for mutuality in rights and obligations. obligations. 5. Workers can be punished, but not managers for wrong personnel punished, decisions/abuse of authority. authority. 6. Continued emphasis on direction and control 7. In the name of responsible unionism, organizations expect unions to manage (maintain) discipline, but later on grudge that unions have become the de facto management. management. 8. Management responsibility is permanent and that of unions is transient (or quasi permanent). permanent). 9. Third party dominance invited willy-nilly which causes a shift in the locus of willycontrol. control.

Typology of the Effect of old Beliefs and New Values

Old Beliefs
Aims: Capital and labour pursue different aims Mode of Operation: WinWin-lose, hard nosed management decides and adjust if necessary

New Values
Both can have many things in common, despite some legitimate differences Facing realities, creating space within which selfself-control is possible, and contracting around agreements which take account of differences: differences: boundary and inter dependence management, situational management Realistic plans, sharing in gains, genuine increases in productivity/competitiveness, trust, harmonization Openness, transparency Mature, situational, and varied, but consistently so Positive, mutual confidence and trust

Outcomes: Procedures, rules, agreement Information: Hold information close to one s chest Style of Management: controlling Feelings Generated: Negative

Current and Suggested Role of HRM

Current Role
1. Strategic Orientation:

Suggested Role

Independent goals, not clearly Strategic linkage with the goals of the linked to that of the organization, organization leading to activity trap Flexibility. Flexibility. Human resource policies to Standardization of HRM policies, etc be tailored to fit the targeted market niche view of rapid changes in environment and growing emphasis on competition 2. Management Philosophy: Emphasis on direction & control Seek to achieve consensus and commitment of people through peoples participation People as a resource Attract and retain motivate people

Employees as a cost Hire and fire

Maintain discipline and seek compliance with organizational needs Hierarchical personnel policies and practices

Build positive work ethos and organization culture for employee motivation Emphasis on horizontal personnel practices with a view to harmonize employee pay, benefits, and working conditions

3. Performance Management: Emphasis on feelings and reliance on Develop database for objective subjective appraisal systems with an eye measurement of facts for analysis with on harmony an eye on the bottom line developmental 4. Relationships: Master and servant relationship Emphasize reciprocity and mutuality in reinforcing the negative, apartheid relations features of the social system in workplace

5. Change in Approach: Power centre Service centre FireFire-fighting role Proactive approach Building organizational pyramids to Restructuring the organization to make take care of employee aspirations them flat/horizontal Employee orientation People and business orientation (to include care of customers and other constituents) People training (includes not only Employee training employees but also vendors, dealers, customers, etc. and retaining etc.

Handling the interface between Human Resource Management and Industrial Relations
The management can establish a good industrial relations interface with HRM in the following ways: Develop sensitivity to human needs and human problems at work and beyond work. Evolve a value system based on trust, transparency, fairness, and equity. Pay attention and practice the core values professed by the organization: walk the talk and talk the walk. In all areas of decision-making - specifically transfer, promotion, and reward systems there is a need for objectivity and concern for balancing the aspirations of the people with that of the organization. Institutionalize openness in subordinate superior relationships. Allow the subordinates to speak hard facts and ventilate their grievances even though they appear to be initially, unpalatable and fictitious assumptions respectively. Deal with employee grievances promptly and explain the logic and rationale of decisions to convince the aggrieved.

People cooperate when they understand. Tell the human resource management department and professionals to operate through the line of departments/professionals Consciously provide exposure and understanding to line managers on human resource management aspects. Let line managers handle the day-to-day human resource management activities and issues/problems. Information sharing and consultation are prerequisites for shared understanding and co-operation. Review HR/IR policies and practices from time to time. Rules and procedures should unleash and facilitate, not block and hinder human potential in the organization.

Case-let
A few decades ago, Rusi Mody was invited by J.R.D. Tata, the then Chairman of Tata Iron and Steel Company, and Abdul Bari, veteran trade union leader in the same company and a renowned politician, to require why the workers in the company, where young Rusi Mody was Personnel Officer, were not joining unions even though workers in all the other firms in similar lines of business in the same neighborhood in Calcutta were forming into trade unions. Rusi Mody replied that the management was doing what the union could have done taking good care of the employees and that if ever the management were to shirk back in its responsibilities to the employees they would need the shoulder of a trade union. In other words, if employees are regarded as people and taken good care of, they would not need a trade union. Do you agree with this viewpoint? Discuss this in today s context.