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INTRODUCTION TO IR /ER HRM 501 1 INTRODUCTION TO IR /ER HRM 501 1

Learning Outcome ◦ Understand the History of Industrial Relations ◦ Understand the fundamental nature Learning Outcome ◦ Understand the History of Industrial Relations ◦ Understand the fundamental nature of the employment relationship ◦ Student will be able to recognize the different perspectives and analytical focus of industrial relations and human resource management ◦ Student will be able to critically analyze the changing nature of work and employment HRM 501 2

Industrial Relations IR is a multidisciplinary field that studies the employment relationship IR is Industrial Relations IR is a multidisciplinary field that studies the employment relationship IR is increasingly being called ER because of the importance of non – industrial employment relationships. IR is perceived as being concerned with male, fulltime, unionised manual workers in large manufacturing units involving restrictive practices such as strikes & collective bargaining HRM 501 3

 Employee relations is perceived to reflect the development of more diverse employment patterns Employee relations is perceived to reflect the development of more diverse employment patterns (non manual, increasing participation of female in productive work environment Example increasing part-time, with the growth of employment in the ‘high-tech’ service & commercial sectors and reduction of unionisation. ER management strategies are aimed at individualising the employment relationship IR’s with the study of trade unions & collective bargaining, coupled with the decline in union membership & power has observed that IR’s has forced 3 major challenges: HRM 501 4

The rise of non unionism (union density is falling) II. The emergence of HRM The rise of non unionism (union density is falling) II. The emergence of HRM III. A high concentration on quantitatively – oriented labour economies I. IR’s views the most effective way to manage the relationship and their representatives as well as parallel arguments about how governments should frame Laws & policies to best encourage efficient & equitable Industrial relations within organisations HRM 501 5

REASONS FOR THE STUDY OF IR Industrial relations is recognized as an important management REASONS FOR THE STUDY OF IR Industrial relations is recognized as an important management function at all levels of management within the organization and thus there need for: 1. Supervisors and line managers to acquire an adequate knowledge and possess basic skills in people management to be able to carry out their tasks efficiently. 2. Development of healthy relationship between workforce and the management – a good chance of enterprise being successful. 3. Building trust, confidence, and good personal relationship between people involved; sensible and workable agreements and willingness to work together. HRM 501 6

 It is important to study ER because they have powerful impacts on the It is important to study ER because they have powerful impacts on the economic efficiency of enterprises, industries and nation and they are central to equity and the welfare of employees Both managers & governments are opposed to institutions like trade unions & arbitration tribunals that reduce both the operation of free market forces and the capacities that suit their needs. HRM 501 7

HISTORY OF IR IR’s has its roots in the industrial revolution which created the HISTORY OF IR IR’s has its roots in the industrial revolution which created the modern employment relationship by spawning free labour markets & large – scale industrial organisation with thousands of wage workers. A society with these massive economic & social change, labour problems arose. Low wages, long working hours, monotonous & dangerous work, abusive supervisory practices led to high employee turnover, violent strikes and the threat of social instability. Many employees are redundant, unfairly dismissed, working harder long hours, being treated unfairly & discriminated, without an effort to vote their concern at work and thus trade unions emerged. HRM 501 8

 IR’s was formed at the end of the 19 th century as a IR’s was formed at the end of the 19 th century as a middle ground between classical economics and Marxism. Collective action by groups of employees seeking to promote & protect their wages is an important part of IR. However, Individual employees are constantly negotiating with their fellow workers & their superiors over new pattern of behaviour within the workplace or over compliance with existing rules. The relationship between individual employees & managers and within non – union workplace is gaining its importance. HRM 501 9

The ‘common-sense’ meaning & perception of IR’s comes partly from everyday usage of the The ‘common-sense’ meaning & perception of IR’s comes partly from everyday usage of the term by friends, family and partly from mass media, it focuses on sensational conflict between trade unions & employers It becomes important to go beyond common sense approach to a more considered & systematic definition of a IR that captures the breadth of real world practice, rather than narrow perception of the subject held by many people and to confirm a broader theoretical approach. HRM 501 10

 The broader approach include a change in terminology from ‘IR to ER’ – The broader approach include a change in terminology from ‘IR to ER’ – a change that has gained widespread scholar support in recent years. ER is also defined as ‘the study of formal & informal rules which regulate the employment relationship and the social processes which create & enforce these rules. HRM 501 11

Rules and the Employment relationship “Every IR system creates a complex of rules to Rules and the Employment relationship “Every IR system creates a complex of rules to govern the workplace and work community, i. e. , to define the status of the actors and to govern the conduct of the actors at the workplace & work community” (Dunlop) HRM 501 12

 The “broad” approach to regulate rules & regulation which have called ‘neo – The “broad” approach to regulate rules & regulation which have called ‘neo – institutionalist’ mean rules that regulate the ER on more diverse than ‘commonsense’ often suggests. There are number of formal & informal rules that regulate the employment relationship HRM 501 13

Formal rules – are usually written and the result of a deliberate social process Formal rules – are usually written and the result of a deliberate social process Examples a collective agreement negotiated between union & an employer & lodged under the workplace relations Act Company policy manuals Union rule book Informal rules – are sometimes consciously negotiated, but unwritten agreements between parties or even accepted social practices at work. Examples shared understanding between employers & managers over appropriate behaviours, “custom & practice’. HRM 501 14

Substantive rules - forces on the real terms under which employees are rewarded for Substantive rules - forces on the real terms under which employees are rewarded for selling their labour & the condition under which they work e. g. Wage rates, Working hours, Holiday entitlements, Sick leave Procedural rules - govern the processes by which substantive rules are made & enforced e. g. grievance procedures, company practice recruitment or dismissal of employees, the procedures followed by conciliation & arbitration tribunals. Example: if a dispute develops that cannot be handled by the superior. Employees (either by themselves or with representative) must raise the issue with their superior and then with the department Manager. If the issue is not resolved, a meeting with the Manager of HR and the GM is the final step before unresolved issue goes to private arbitration HRM 501 15

THE CHANGING NATURE WORK AND EMPLOYMENT OF Employment relations in Pacific, Australia, western European THE CHANGING NATURE WORK AND EMPLOYMENT OF Employment relations in Pacific, Australia, western European countries , NIC’s is changing. Decline of union membership, power & the emergence of non union forms of employee representation. Examples: Worker participation, consultation Team work has led to decentralization of collective rule – making process HRM 501 16

LABOUR MARKET RESTRUCTURING Decline in employment in the manufacturing industry There has been a LABOUR MARKET RESTRUCTURING Decline in employment in the manufacturing industry There has been a major shifts in employment over the last decades with a shift from manufacturing industry to service sector e. g. Banking, finance, retail, property, hotel, entertainment, travel, insurance, stock exchange market, insurance, etc. Decline in permanent full-time work A declined in manufacturing sector employment has brought major changes in the stock of standard & non standard jobs e. g. Standard jobs denote full time, permanent work, non standard jobs refer part-time, casual work, self employment. Increasing growth & development of international call centres, have encouraged part-time jobs HRM 501 17

The growth of part-time job There is an increasing growth of part-time workers esp. The growth of part-time job There is an increasing growth of part-time workers esp. the females Growth of part-time job is a by – product of the service sector The tendency of employers to convert full-time jobs into part-time job is a typical trend in almost all countries including Fiji e. g. shift work for cashier / sales assistants The casualization of the labour force The vast majority of these casual employees work on a part-time basis Casual workers tend to work in lower skilled occupation e. g. clerical, sales, service work HRM 501 18

 Downsizing and delayering Downsizing is a term used to describe the ‘planned elimination Downsizing and delayering Downsizing is a term used to describe the ‘planned elimination of position or jobs which may occur by reducing work or eliminating functions, hierarchical levels or units e. g. removal of white collar jobs- managerial positions. The expected outcome of downsizing are: 1. Lower overhead costs 2. Less bureaucracy 3. Faster decision making 4. Greater entrepreneurship 5. Increase in productivity HRM 501 19

Generally downsizing is accompanied by delayering Delayering – involves the removal of one or Generally downsizing is accompanied by delayering Delayering – involves the removal of one or more layers of managerial or supervisory staff from an organisation. The main objectives of delayering are to: (i) Streamline decision making (ii) Improve internal communication (iii) Reduce labour costs Manufacturing organizations had been more likely to undertake downsizing activities than those in the service sector Downsizing & delayering are intended to improve organisational effectiveness, productivity, competitiveness. HRM 501 20

APPROACHES TO IR 1. Unitary Perspective Assumes organization is, or should be, an integrated APPROACHES TO IR 1. Unitary Perspective Assumes organization is, or should be, an integrated group of people with a single authority / loyalty structure Managements prerogative i. e. (its right to manage & make decisions) whether formal or informal, internal or external. Underlying assumption is organisation system is in basic harmony, conflict in unnecessary and exceptional Conflict, when it arise, is believed to be primarily frictional in nature such as: (i) Clashes of personalities within the organisation (ii) Poor communication by management of its plan & decision HRM 501 21

(iii) Lack of understanding on employees part that management’s decision & action are made (iii) Lack of understanding on employees part that management’s decision & action are made for the good of all within the organisation Unitary perspective regards trade union as ‘disruptive’. Trade unions are unwelcomed into the organisation from outside which competes for the loyalty of the employees. Managements intention is to concentrate on human relation approach. Trade union is not seen as importance, as they are likely seen as little more than a political power HRM 501 22

2. Pluralistic Perspective views society as being ‘post – capitalist’ Composed of individuals with 2. Pluralistic Perspective views society as being ‘post – capitalist’ Composed of individuals with their own interests, objectives, leadership (either formal & informal) This perspective encourages competition which can lead to a rise in the complex of tensions. The management group is responsible for the efficiency, productivity, profitability of the organisation whereas the main concern of the employee group is in terms of better pay & working conditions, job security. HRM 501 23

 The pluralistic perspective accepts employees combining informal organisation such as trade union to The pluralistic perspective accepts employees combining informal organisation such as trade union to express their interest, influence management decision or to achieve their objectives. Trade unions are much an internal part of the organisation and its managerial processes as they are an external body to the organisation. They do not themselves cause the conflict within organisation but provide highly organised and continuous form of expression. HRM 501 24

3. Marxist perspective Views society as capitalist The Marxist assumes the following: (i) Class 3. Marxist perspective Views society as capitalist The Marxist assumes the following: (i) Class (group) conflict is a source of change, without conflict the society would stagnate (ii) Class conflict arises primarily in the distribution & access to economic power within the society. i. e. those who own capital & those who supply labour HRM 501 25

 Growth of trade unionism is seen as an inevitable employee response to capitalism. Growth of trade unionism is seen as an inevitable employee response to capitalism. However, Marxist perspective, trade unionism and IR’s is viewed as political activities. Inherits social & political conflict – between those who own or manage the means of production & those who have their labour to sell. HRM 501 26

 The defining feature of the labour process under ‘capitalism’ is that capitalist own The defining feature of the labour process under ‘capitalism’ is that capitalist own machinery, technology & the raw materials, but not labour – they must buy this from workers in the form of labour The central task of management is to convert a worker’s capacity to perform work (labour power) into actual work effort (labour) in order to contribute to profitable production & achieve capital accumulation HRM 501 27

4. System Model This is based on the analysis of system in an attempt 4. System Model This is based on the analysis of system in an attempt to identify the fundamental factors that influence the system. Theorist, Dunlop, J. T. identified the factors as: - (i) Actors – people and the organizations involved and include employee, trade unions, mangers, employer’s organization and government agency HRM 501 28

(ii) Context – these actors create rules within which the system operates the procedures (ii) Context – these actors create rules within which the system operates the procedures to be used and the substance of the agreements e. g. wages, hours, holiday, etc. The rules are made within an environment which is made up of three parts: ◦ Technological–determine the location of plant, number and type of employees, skills required etc. ◦ Market and Budget Constraints–type of market (local, national/international), economic factors and the supply of money to the organization. ◦ Outside Power Relationships-the way in which power is distributed in society among various groups. HRM 501 29

(iii) Ideology – Ideas that bind the actors together in the system. While the (iii) Ideology – Ideas that bind the actors together in the system. While the actors hold different ideas and views, their views must coincide at many points for the system to work - understanding and acceptance by each other. HRM 501 30

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