Industrial relations is business speak for the relationship between management and labor. The objectives of industrial relations include building cooperation between workers and bosses, controlling labor costs and making the company as productive as possible. The industrial relations definition covers harmonious worker/company relationships and confrontational, adversarial ones.
Management and Labor Perspectives
The concepts and values in industrial relations look different depending on whether you look at them through management's eyes or labor's. From management's perspective, the values include:
- Continuity of production. The work keeps going even while management and labor are negotiating contracts.
- Minimizing serious disputes. Strikes, walkouts and other employee protests stop production which hurts profits.
- Reducing waste.
On the employee's side, the key concepts and values are different and include:
- Wages they can live on.
- Improved working conditions ensuring employee safety.
- Training to develop their skills.
- A show of mutual respect.
Objectives of Collective Bargaining
Employees may deal with management individually if they're dissatisfied with their pay or working conditions. They may also work through a union. The objectives of collective bargaining are to influence industrial relations so that employees get what they need. Management can ignore one worker, but it's harder to ignore 100 standing united.
Types of Industrial Relations
As employees and employers have different agendas and priorities, they don't always see eye to eye. Industrial relations fall into four categories:
- Adversarial: Management calls the shots. Employees either fit in or they can go somewhere else. The only power workers have is to refuse to cooperate.
- Traditional. The day-to-day working relationship is good, but the company and the workforce talk to each other only through representatives, such as managers and union officials.
- Partnership. Management invites workers to participate in drawing up policies. However, management is still in charge of implementing them.
- Power sharing. Employees not only help shape policy, but they're also involved in implementing it.
Even within these categories, individual companies have a wide variety of approaches. Some may be willing to work with a union representing the employees, while other businesses may be adamantly opposed.
Whatever approach a company takes, good industrial relations requires an effective approach to conflict management. If the company representatives and the employees can sit down, discuss problems and negotiate solutions, they have a good shot at resolving issues. If one side distrusts the other or refuses to listen, problems are inevitable.
This doesn't necessarily mean employees will quit or the union will strike. The problems may be smaller but still harmful. For example, if the company is downsizing but management won't talk about it, rumors and gossip will fly around the workplace about what's really going on.
The Big Issues
While some industrial relations issues may be unique to a particular company or time, some of them crop up consistently at many businesses:
- Wage and hour disputes. In the 21st century, it's common to hear employees complaining about wage theft – being forced to put in work without getting paid for it. Managers have problems with employees who claim more hours than they put in or don't track their time accurately.
- Workplace safety. A safe workplace where employees can do their jobs without the risk of injury or exposure to toxic chemicals works out better for everyone. Some employers try to cut corners on safety, which can lead to injuries, lawsuits and on-the-job conflict.
- Annual leave. Employees' need for time off can create a variety of problems. Some companies avoid state and federal requirements for providing family leave or paid vacation. Employees and management may disagree on how the law applies. Employees may need time off for an emergency, even if they're not officially entitled to any.
- Attendance and timekeeping. Some employees are chronically late, have someone else punch the time clock to cover up or get very creative filling out time sheets. All of that reduces productivity.
Sometimes, the solution may be as simple as software that lets employees log in and out on their phones. Other times, the resolution may take serious negotiation.
Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com