Page 158 - DMGT106_MANAGING_HUMAN_ELEMENTS_AT_WORK

Managing Human Element at Work

Notes system at all these levels are not necessarily the same. At the national level, industrial
relations operates so as to formulate labour relations policy. In market economies this is
usually done through a tripartite process involving government, employers and workers
and their representative organizations. At the industry level, industrial relations often takes
the form of collective bargaining between employers’ organizations and unions. This process
may result in determining wages and other terms and conditions of employment for an
industry or sector. It may also result in arrangements on issues which are of mutual concern
such as training, ways of avoiding or settling disputes, etc. At the enterprise level, the
relationship between employers and workers is more direct, but the interests of workers
may be represented by unions. Employers’ organizations, however, are not usually involved
(though sometimes they are when negotiations take place between them and unions in
respect of enterprise issues) at the enterprise level in representing the employers interests
with workers or their union, but this does not mean that they do not have an important
promotional role at this level. Sound industrial relations at the national level build trust and
confidence between representatives of workers and employers. Sound relations at the
enterprise level build trust and confidence between workers and management, which is the
point at which the system must ultimately be effective. Effectiveness at one level would
naturally have same impact on the other.
7.2.2 Requirements of Sound Industrial Relations System

A sound industrial relations system requires a Labour Management Relations Policy (LMRP).
There are many specific objectives of such a policy, all of which go to make up the policy
at the national level. The following are some of the objectives, the emphasis varying from
country to country depending on the priorities and stage of development of each of them
at any given point of time:

• Employment and job security and increased employment opportunities.
• Raising living standards through improved terms and conditions of employment.
• Productivity improvement which enables employers to be more competitive and to
increase their financial capacity to raise the living standards of the employees.
• Minimizing conflict, achieving harmonious relations, resolving conflicts through peaceful
means and establishing stable social relationships.

In Western industrialized societies, “harmony” and “harmonious relations” are not explicitly
referred to either as an objective or as a means, though basically it represents an important
objective in such societies. However, this concept is explicitly referred to in many Asian
societies. Development has an economic and social dimension on the one hand and a cultural
dimension on the other. The economic and social aspects involve guiding or influencing
economic and social change in a desirable direction. This means not only economic
development measured in terms of growth rates and per capita incomes, but also equity in
terms of income distribution and employment opportunities, life expectancy, population
growth rates, literacy, poverty alleviation, etc. It is one of the least advertised, and for the
very affluent the least attractive, of economic truths that a reasonably equitable distribution
of income throughout the society is highly functional.

A sound industrial relations climate in an enterprise is essential to a number of issues which
are critical to employers, employees and the community. The efficient production of goods
and services depends to an extent on the existence of a harmonious industrial relations
climate. Efficiency and quality depend on a motivated workforce, for which a sound industrial
relations climate is necessary. Productivity—a key consideration of profitability, the ability
of enterprises to grant better terms and conditions of employment and for economic and
social development - needs a sound labour relations base. Productivity does not depend on
individual effort alone. Many mechanisms which contribute towards productivity gains are
workable only where there is teamwork and cooperation e.g. small group activities, joint

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