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Unit 7: Industrial Relations

Of all the resources available to an enterprise it is only people who are capable of being Notes
motivated. It is also a resource which is capable of being developed by management, and
one over which the employer has a great degree of control. Productivity can be improved
by the employer through the development and motivation of human resources. Effective
two-way communication is an important source of motivation. Hence the link between
productivity, motivation and effective two-way communication.
The link between productivity and communication is to be found in the fact that proper
productivity management requires concerted or joint action between management and
workers. For this purpose confidence between management and workers is essential, and the
starting point of confidence-building is sharing information (and not merely ‘top-town’
communication). This has prompted the view that productivity management is also information
management - information helps to promote the commitment that is necessary to improve
productivity. Two-way communication can also promote productivity improvement through
innovation and creativity.

In many organizations communication between people often occurs in the context of small
group activities. Therefore two-way communication must reinforce productive small group
activities and help to build and maintain an effective team. Effective communication would:
(i) Create an atmosphere of trust, which is important to promoting increased productivity.
If the environment generates mistrust, workers are likely to be suspicious as to
whether they are receiving a fair share of the benefits of productivity gains. Without
two-way communication workers would not be in a position even to judge whether
their share is a fair one.
(ii) Promote an atmosphere of ‘intimacy’ and commitment to the group, which in turn
would bind people together and prompt cooperation. It is basic human psychology
that a high degree of communication and working together for a common goal tend
to create a feeling of intimacy among those involved in these processes.
(iii) Promote especially where the elements of trust and intimacy are present integration
of the worker in the activities of the group and a feeling of ‘belonging’ leading to
greater motivation and productivity.
(iv) Promote participation, which involves common goals, teamwork, discipline/
commitment and cooperation. Communication is a great motivator and makes people
feel secure in their jobs, helps to identify the contribution of workers with the enterprise’s
success, and enhances the quality of working life. It therefore leads to greater job
satisfaction.
(v) Develop the skills and attitudes of the individual, engendering self-confidence and a
sense of self worth. In a highly hierarchical and ‘top-down’ form of management there
is little scope for development of the individual which is needed for innovation and
creativity which, in turn, promote better productivity. Innovation and creativity result
in better utilization of available resources which, in the final analysis, is what
productivity is.

(vi) Create a high degree of consensus in decision making. With consensus implementation
of decisions will be quicker and easier because disputes or differences of opinion
would be less likely compared to enterprises where decisions are taken unilaterally
with little consultation and information-sharing.

It is worthwhile underlining some of the salient points in regard to the importance
of two-way communication and small group activities:

• Productivity improvement is primarily management’s responsibility. As such, it
is for management to create the necessary climate which is conducive to change

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