P.M and H.R.M – Industrial Relations - Industrial Relations Management

Many students of management and laypeople often hear the term HRM or Human Resource Management and wonder about the difference between HRM and the traditional term Personnel Management In earlier times, the Personnel Manager of a factory or firm was the person in charge of ensuring employee welfare and interceding between the management and the employees.In recent times,the term has been replaced with HR manager. This article looks at the differences in usage and scope of functions as well as the underlying theory behind these nomenclatures.In the section on introducing HRM, we briefly looked at the main differences.We shall look into them in more detail here.

Personnel Management

Traditionally the term personnel management was used to refer to the set of activities concerning the workforce which included staffing, payroll, contractual obligations and other administrative tasks. In this respect, personnel management encompasses the range of activities that are to do with managing the workforce rather than resources. Personnel Management is more administrative in nature and the Personnel Manager’s main job is to ensure that the needs of the workforce as they pertain to their immediate concerns are taken care of. Further, personnel managers typically played the role of mediators between the management and the employees and hence there was always the feeling that personnel management was not in tune with the objectives of the management.

Human Resource Management

With the advent of resource centric organizations in recent decades, it has become imperative to put “people first” as well as secure management objectives of maximizing the ROI (Return on Investment) on the resources. This has led to the development of the modern HRM function which is primarily concerned with ensuring the fulfillment of management objectives and at the same time ensuring that the needs of the resources are taken care of.In this way, HRM differs from personnel management not only in its broader scope but also in the way in which its mission is defined. HRM goes beyond the administrative tasks of personnel management and encompasses a broad vision of how management would like the resources to contribute to the success of the organization.

Personnel Management and HRM: A Paradigm Shift?

Cynics might point to the fact that whatever term we use, it is finally “about managing people”.The answer to this would be that the way in which people are managed says a lot about the approach that the firm is taking. For instance, traditional manufacturing units had personnel managers whereas the services firms have HR managers. While it is tempting to view Personnel Management as archaic and HRM as modern, we have to recognize the fact that each serves or served the purpose for which they were instituted. Personnel Management was effective in the “smokestack” era and HRM is effective in the 21st century and this definitely reflects a paradigm shift in the practice of managing people.

Industrial Relations Changes has brought lot of changes in

  1. Management, entrepreneurs, employees because of necessity and compelling Circumstances.
  2. In the trade unions
  3. In the workers themselves
  4. Attitude of the government, politicians
  5. Judiciary also

The management has a significant role to play in maintaining smooth industrial relations. For a positive improvement in their relations with employees and maintaining sound human relations in the organization, the management must treat employees with dignity and respect. Employees should be given ‘say’ in the affairs of the organization generally and wherever possible, in the decision-making process as well. A participative and permissive altitude on the part of management tends to give an employee a feeling that he is an important member of the organization – a feeling that encourages a spirit of cooperativeness and dedication to work.

  • Management must make genuine efforts to provide congenial work environment.
  • They must make the employees feel that they are genuinely interested in their personal development. To this end, adequate opportunities for appropriate programmes of 18training and development should be provided.
  • Managements must delegate authority to their employees commensurate with responsibility.
  • They must evolve well conceived and scientific wage and salary plan so that the employees may receive just compensation for their efforts.They must devise, develop and implement a proper incentive plan for personnel at all levels in the organization.

There must be a well-planned communication system in the organization to pass on information and to get feedback from the employees

  1. Status of Trade unions:
  2. The trade unions have a crucial role to play in maintaining smooth industrial relations. It is true that the unions have to protect and safeguard the interests of the workers through collective bargaining. But at the same time they have equal responsibility to see that the organization does not suffer on account of their direct actions such as strikes, even for trivial reasons. They must be able to understand and appreciate the problems of managements and must adopt a policy of ‘give and take’while bargaining with the managements. Trade unions must understand that both management and workers depend on each other and any sort of problem on either side will do harm to both sides. Besides public are also affected, particularly when the institutions involved are public utility organizations.

  3. Change and Workers
    1. Workers have started making hay while the sun shines they joined unions which are powerful, not unions which are principled.
    2. Might is right those who can get us more will be our leader, theirs is our union.
    3. Interests of management, ustifiable demands etc gone with the winds the net result employers dilemma and lack of their enthusiasm. This was a stage at which the most union minded comradary states Kerala and west Bengal – became almost devoid of industries worth the name in Bengali language ‘for going to office wages,and to work O.T’was a saying.
    4. Gamut of industrial social security Acts came into being only keeping in mind the interest of industrial workers without any thought about the industry or the employers.
  4. Attitude of government and politician
    1. Politicians were jubilant while there was nationalization since they can hold the reins
    2. The profit loss of P.S.U was linked with government money, which is unlimited,as such politician and government machineries were comfortable industrial relations got a boom
    3. Back bone ;less management was seen in most of the industries,workers’wages enhanced, without increasing their responsibility or accountably.
    4. Almost after half a century after independence ;when the euphoria of independence waned –there was a sudden stop on nationalization, reversal started.
    5. More privatization ;disinvestments started, this has created strain or industrial relations.
    6. Amalgamation, merger takeover, N.R.1. Companies, Foreign Companies invasion,started with full speed, workers baffled, unions got submerged, global competition necessity was felt by one all as such industrial relations was at balance.
    7. The new pattern of employment in information Technology, computer world- the word workers disappeared hence unions become out of questions.If persons areposted as supervisors and managers straigh away – they are not coming underworkmen Act. The new employment set up of the country has money and comfort as such the relations of employer’s employee is cordial.
    8. Industries which were having workers saw the competitive world and both employer employee appreciated the necessity for good relations to compete with others. This has become a golden relations’ period.
  5. Change in Judiciarystrong
    1. Judicial Activism was pronounced, judges were free decide for the country’swelfare
    2. A slight shift was perceptible in some place where employers action was justified.
    3. Through there were frequent brushings between judiciary and parliament,by and large development of the nation got a boom.

Industrial relations and productivity:

One basic element that distinguishes the world of human beings from the animal world is the necessity to work. Work is one of the basic conditions necessary for the existence of man.The animal world does not have to work in order to live, but man cannot live without work.It has been said that earth is the mother and labour is the father of all wealth in this world. The primitive man used a part of his labour to produce the crude tools which in the present day terminology could be called his capital. The man owned his own tools and was the owner of whatever he could produce with those tools. These tools could not be said to be independent of the man and could not be termed as an independent factor of production. Thus, there were basically, and continued to be even toda.Only two factors of production, that is, human labour and nature.In the course of time as the tools became more and more complex they came to be owned by individuals separate from the producers and they are today called an independent factor of production. So is the land.With further specialization in labour and the concentration of ownership of land and capital into fewer and fewer hands, we have come to identify four factors of production: land labour, capital and organization.Thus,when a factory is established to produce something we say that four factors of production have combined to work together to produce a result.In this process of production we utilize them and, therefore, they are called the inputs. The four inputs that we mentioned earlier can be further classified under two heads:

  1. material inputs, that is, land and capital and
  2. human input ,that is, labour including organizing labour.

Improving productivity, therefore, means to secure a higher output out of a given input, more so in terms of input of human labour.

Generally speaking, all other inputs are assisting labour to make it more effective and productive. It has been said so far that given the technological and material inputs and a given capacity of the worker,the will to work materially affects the productivity of the workers and, therefore, of the enterprise.Apart from the other influences on the morale of the workers, the quality of industrial relations has a direct bearing on the workers” will to work. The term ‘industrial relations’ here, covers:

  1. the relationship between the employer and his individual employees
  2. the relationship between the employer and the union; and also
  3. the relationship between the workers and their unions

When it is said that the quality of industrial relations has an important bearing on productivity,it is to be realized that it is not so much the role of strikes and lock outs that I have in mind while emphasizing the importance of industrial relations to productivity. Apart from the fact of the open stoppages of production or even the announced ‘go slow’ or ‘work to rule’ practices which directly reduce production even under normal conditions when the work processes are supposed to function smoothly, the quality of industrial relations continues to influence the worker's behaviour and his attitude to work. And while stressing the responsibility of the management for the quality of industrial relations,the limitations of individual management, in this respect, have also to be born in mind. There are many factors influencing the quality of industrial relations that are beyond the control of any individual management.Factors like political climate of the country, multiplicity of trade unions, trade union rivalry, intra-union factionalism and economic factors like inflation and depression, market fluctuations and technological changes cannot be controlled by any one management. They constitute the political and economic environment within which the enterprise has to function.

In a way increase in productivity expenditure on sees that Industrial Relations is stable input is reduced capital investment also may be reduced hence general economy improves with heightened productivity we see.

  1. Industrial workers touch their peak of efficiency
  2. Wasteful expenditure, wastages are systematically reduced.
  3. Total cost is reduced
  4. Automatically the quality improves by fine tuning by dedicated, motivated workers.
  5. Workers emoluments are increasing and get share in the increasing profits.
  6. Industrial environment becomes healthy for expansion diversification and more employment industrial relations and productivity are influenced by
  • The competitive market and dynamics of change necessities required.globally has pushed us to resort to automation introduction of new and modern technology, mechanization, computerization etc.all those are aimed to improve not only production,but productivity also which can be achieved only by improved relation with workers.
  • Up gradation of employees by proper training development programmes etc. only will bring them at par to match with technology change etc as envisaged earlier simultaneously, they are to be motivated there should be morale boosting which will improve the relations and go to improve productivity.
  • A capable H.R.M management should be there to cope up with the aspirations of new set of workers under new technology the managers should be talented to deal and convert the workers in to a useful team to achieve common goal.
  • From its side, the government rules, regulations sops, etc should be compatible with the industrial needs. They should aid the improvement in productivity, such as pressure for a bonus which is productivity linked etc putting more responsibility on workers in industrial production. This will improve employers relations which is also a part of industrial relations

Following actions of management may affect labour relations.

  1. unbalanced management of men material by supervising managers here workers may be displeased and lower their efficiency
  2. Untrained low caliber management, cannot cope with modernization resulting in fall out and cannot contribute to improve productivity or industrial relations.
  3. Failure to make scientific management to evolve systems and boost
  4. productivity.
  5. In competency at all three levels of management to bolster production or
    productivity.

The productivity can be increased along with better industrial relations and allied activities like.

  1. Adoption of supply chain management to get best raw materials where maximum utilization becomes possible
  2. Giving better environment to workers and improved working conditions environment should remove boredom or monotony and create zeal and dynamism.
  3. Updated machines with full scale mechanisation will reduce cost of production
  4. The work force should be correctly selected properly trained and fully loaded. This should be followed by training for updating.
  5. Proper rewards, either monetary or non-monetary should be arranged,incentive plans mutually agreeable should be framed and adhered to for moral boosting.
  6. Grievance Procedures should be implemented to ‘nip the grievance in the loud’ stage to avoid conflict, dispute etc.
  7. ‘Quality circles’ should be formed along with workers to take care of quality products wastage avoidance etc, which will improve productivity, but above two quality control and wastage control, can be there if relations are good thus interlinking has become a perpetual need.


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