Proper industrial relations help you to run your company in an efficient manner. You can maintain morale among your employees with the right kind of industrial relations. Industrial relations are more of an art than a science, balancing a number of factors to get the right relationship between capital and labor. Knowing the factors affecting industrial relations will help you to properly calibrate this relationship.


Communication acts as a key factor in industrial relations. Two-way communication between labor and capital allows workers to stay fully informed of workplace expectations as well as changes that affect them. Management becomes aware of problems as they arise, rather than learning about things after they have reached the point of crisis. They can thus address issues in a timely fashion and keep rumor, innuendo and misinformation to a minimum.


Unions can affect industrial relations in a number of complex ways. When a union comes to a workplace, individuals no longer bargain on their own. Rather, they are represented collectively by a third party. This can make employees feel like they have more of a voice. It can also provide a means to collectively arbitrate labor disputes. Employees also have a means to register discontent with parts of their job through the grievance procedure. Unions can also complicate matters by bringing the concerns of a third party--i.e. the union--into the negotiation process.

Wages and Benefits

Wages and benefits are perhaps the most obvious factor affecting industrial relations. While wages and benefits don't make industrial relations run smoother all by themselves, they can help employees to feel more appreciated. Few things are more frustrating than working for less than what you feel you are worth. Keeping wages and benefits in line with industry standards--or above--helps keep a lid on worker discontent.


Every company has an ideology as part of its corporate culture. This ideology will necessarily include a component about how management relates to labor. The attitude that a company has towards its employees and how to deal with them--for example whether there is a greater emphasis on rewards or punishments--necessarily has an effect on industrial relations.