To understand the changing dynamics of Industrial Relations

1. Towards a new
Paradigm of IR Strategy
Gaurav Singh | Gurpreet Singh | Valay Chauhan

2. Definition – Industrial Relations
• Industrial Relation is that part of management which is
concerned with the manpower of the enterprise whether
machine operator, skilled worker or manager
Bethel, Smith &
Group
• The term Industrial Relations include recruitment, selection and
training of workers, personnel management as well as collective
bargaining policies and practices
Dale Yoder
• The dealings or relationships of a usually large business or
industrial enterprise with its own workers, with labour in general ,
with government agencies, or with public
Merriam- Webster

3. Approaches
of IR
Unitary
Approach
Marxist
Approach
Pluralistic
Approach

4. Unitary Approach
• Mutual Co-operation , individual treatment, team – work
• Work conflict is considered to be temporary deviation
• No “WE-THEY” feeling
• Reactive IR Strategy
• Conflict is not only unnecessary but also destructive

5. Pluralistic Approach
• It perceives :
• Organizations as coalitions of competing interest
• Trade Unions as legitimate representatives
• Stability in Industrial Relations
• Conflict between management and employees is inevitable
• Unions balance the power between employees and management

6. Marxist Approach
• Conflict is a product of Capitalist society
• It focuses on type of society
• Industrial conflict is synonymous to political and social unrest
• Capitalism would promote monopolies
• Weakness and contradiction intrinsic to the capitalist system would result in
revolution and evolution of socialism over capitalism

7. Parties
to IR
Employees
Courts and
Tribunals
Employees
AssociationsGovernment
Employers

8. Factors affecting IR
Institutional Factors – labour legislation, employer’s federation , system of beliefs,
Economic Factors – structure of labour force, demand & supply, economic organization
Technological Factors – mechanization, automation , rationalization
Social and Cultural Factors – population, customs & beliefs, ethnicity
Political Factors – political parties & their ideologies , involvement in trade unions
Government Factors – industrial policy, labour policy, economic policy

9. Industrial Relations Strategy
• Antecedent control
• Interrupt and redirect
• Listen and talk it over
Reactive
Strategy
• Leverage subject matter, vertical & technical
expertise
• Accelerate project execution
• Increase employee attraction and retention
Proactive
Strategy

10. Industrial Relations - New Paradigm
Change
Models
Kurt
Lewin
Burke-
Litwin
Sociotech-
-nical
Sytems
Open
Systems
Parallel
Structure

11. Kurt Lewin change theory model
• The Kurt Lewin change theory model is based around a 3-step process
(Unfreeze-Change-Freeze) that provides a high-level approach to change. It gives a
manager or other change agent a framework to implement a change effort, which is
always very sensitive and must be made as seamless as possible.
• The Kurt Lewin model can help a leader do the following three steps:
• Make a radical change
• Minimize the disruption of the structure’s operations
• Make sure that the change is adopted permanently

12. Unfreeze
• Unfreezing means getting people to gain perspective on their day-to-day activities, unlearn their bad habits, and open up to new ways
of reaching their objectives.
• The current practices and processes have to be reassessed in order for the wheels of change to be set in motion.
Change
• Once team members have opened up their minds, change can start. The change process can be a very dynamic one and, if it is to be
effective, it will probably take some time and involve a transition period
• A change process has to be viewed as an investment, both in terms of time and the allocation of resources.
Freeze
• Once the organizational changes have been made and the structure has regained its effectiveness, every effort must be made to
cement them and make sure the new organization becomes the standard
• Further changes will be made down the line, but once the structure has found a way to improve the way it conducts its operations,
“re-freezing” will give the people the opportunity to thrive in the new organization and take full advantage of the change

13. Burke- Litwin model
• The Burke-Litwin model shows the various drivers of change and ranks them in
terms of importance. The model is expressed diagrammatically, with the most
important factors featuring at the top. The lower layers become gradually less
important. The model argues that all of the factors are integrated (to greater or
lesser degrees). Therefore, a change in one will eventually affect all other factors.
• Burke-Litwin believe environmental factors to be the most important driver for
change. Indeed, most change can be traced back to external drivers for change.
Important elements of organizational success, such as mission and strategy,
leadership and organizational culture, are often impacted by changes that originate
outside the organization.

14. External environment
Mission & Strategy
Leadership
Organization Culture
Structure
Work Unit climate
Task Requirements & Individual Abilities
Individual Values
Employee motivation
The Burke-Litwin model
shows the various
drivers of change and
ranks them in terms of
importance. The model
is expressed
diagrammatically, with
the most important
factors featuring at the
top. The lower layers
become gradually less
important.

15. Sociotechnical systems
• Sociotechnical systems (STS) in organizational development is an
approach to complex organizational work design that recognizes the
interaction between people and technology in workplaces.
• The term also refers to the interaction between society's complex
infrastructures and human behaviour. In this sense, society itself, and most
of its substructures, are complex sociotechnical systems.
• Sociotechnical refers to the interrelatedness of social and technical aspects of
an organization.

16. • Sociotechnical theory is founded on two main principles:
• One is that the interaction of social and technical factors creates the conditions for
successful (or unsuccessful) organizational performance. This interaction consists partly of
linear“ cause and effect" relationships (the relationships that are normally "designed") and
partly from "non-linear", complex, even unpredictable relationships (the good or bad
relationships that are often unexpected). Whether designed or not, both types of interaction
occur when socio and technical elements are put to work.
• The corollary of this, and the second of the two main principles, is that optimization of
each aspect alone (socio or technical) tends to increase not only the quantity of
unpredictable, "un-designed" relationships, but those relationships that are injurious to the
system's performance.

17. Open Systems Planning
• Open systems planning is a powerful process for managing personal and organizational
change.
• Open systems by definition are changing. When there is awareness, the system can manage
this change to meet its own needs. Change management in this model is a three-step
process.
• How are things NOW?
• How do I/we want things to be in the FUTURE?
• HOW do I/ we get there?
• The clearer we are about the situation NOW and the desired FUTURE state, the easier it is
to act powerfully to improve the situation.

18. NOW Map
System
(Can be person, group etc.)
Influence
(Anything that influences the
system or is influenced by it)
Nature of relationship
(Use a phrase, and a picture if you
can, to describe this)
Feelings
(Add a few words to describe
how you feel about the
relationship e.g. angry,
frustrated, happy etc.)
A manager Customers Remote, uninvolved
Picture could be manager in a box
separate from customers.
Frustrated
Boss Friendly, supportive
Picture could be two people at one
desk both smiling
Content
IT department Demanding but unproductive.
Picture could be one angry person and
a group of people running around in
circles.
Cross

19. Future Map
System
(Can be person, group etc.)
Influence
(Anything that influences the
system or is influenced by it)
Desired feelings
(Add a few words to describe how
you would like to feel about the
relationship e.g. excited, content,
happy etc.)
Nature of relationship
Use a phrase, and a picture if you
can, to describe how the
relationship would be if you felt
that way
A manager Customers Satisfied, hopeful. Working and learning together.
Picture could be the manager working
on a project with customers.
Boss Content, satisfied Friendly, supportive, productive.
Picture could be two people at one
desk working on a project
IT department Powerful Professional, no nonsense, effective
People looking at a planning chart and
saying "We are on track!"

20. Parallel Structure
The term organizational parallel structure has two distinct meanings within the
broader topic of business management. The most common meaning relates to
a parallel system of learning throughout a business entity, separate and
complementary to traditional top-down bureaucratic structure. The term can
also refer to parallel leadership hierarchies created through parent company
acquisitions. In the latter meaning, two companies may emerge in ownership
but keep distinct operating branches as divisions within the parent company.

21. Its all about managing People
• Research shows that there is a direct relationship between a company’s
financial success and its commitment to management practices
• Culture and capabilities of an organization - derived from the way it manages
its people- are the real and enduring sources of competitive advantage
• Despite enormous amount of research done, organizations still want
evidence of relationship between good economic results and firm’s capability
of managing their people

22. Evidences
Substantial gains, on the order of 40
percent, can be obtained by implementing
high performance management practices
One standard deviation
increase in use of such
practices is associated with a
7.05 percent decrease in
turnover and on a per employee
basis, $27,044 more in sales and
$18,641 and $3,814 more in
market value and profits,
respectively
One standard deviation improvement in
human resources system was associated
with an increase in shareholder wealth
of $41,000 per employee”- about a 14
percent market value premium

23. Apple’s Story
• In 1985, 20 % employees were laid off; in 1991 10 % and in 1993 2500 people were laid off
• Apple was not giving job security to their employees but rather gives challenging job assignments
and after completion of their respective projects they terminate the employment of respective
employees
• Eventually people feared of losing their jobs at the end of job assignment and they started
slowing down their work
• Resulted in poor services, high accident rate and increased turnover and absenteeism adversely
• Later on they realized this and Stephen Jobs told fortune,” Innovation has nothing to do with
how many R&D dollars you have…it’s not about money. It’s about people you have, how you’re
led and how much you get it”.

24. 7 practices of successful organizations
• Employment Security
• Selective Hiring
• Self Managed teams and Decentralization as Basic Element of Organizational
Design
• Comparatively High Compensation Contingent on Organizational Performance
• Extensive Training
• Reduction of status difference
• Sharing Information

25. Contrast between HRM Vs IRIndustrialRelations
HumanResourceManagement
• Parties : employees, employer,
trade unions & government
• Implementation of HR policies
results in IR
• Demand for change and
reformulation of HRM
objectives and goals
• Parties : employee and employer
• Formulation of objectives,
policies , procedures and
programmes of HR
• Reformulation of policies on the
basis of conflicts

26. The Strategic Choices
• Protest-agitate framework – if providing negative gain to labour, shift from collective to
composite (labour while accepting changes in IR, broadens its bargaining to include quality,
market share, financial matters) bargaining
• Proactive approach to restructuring by labour by first accepting changes, contributing to
improving organizational efficiency and profitability and then moving to gain sharing
mechanisms with final stage of working backwards to negotiate easier redeployment of labour on
expansion for market demands.
• To achieve all of the above, substantial investment on training and research is of prime
importance.

27. • Centralized trade unions – currently existing only for having representation in
tripartite bodies and ILO, have a good potential if they organise the growing
unorganised sector by improving their wages and conditions thereby helping
organized enterprise unions as management in organized sector would then have
less incentive to push work to unorganized sector.
• Management choices – IR needs to be brought in purview of strategy.
• Use ‘sound labour relations’ as competitive advantage.

28. • Employing policies involving ‘no retrenchment’ (SAIL, Philips, CG etc.),
formalize productivity increases in bargaining agreements (Mahindra BPR –
3X productivity by reengineering)
• Sensible technological improvements as in case of RAV4 by Toyota
(production work centred approach) by subordinating automation to worker
autonomy

29. • Strategic HR choices relating to industrial restructuring must accept pluralist
concept of union identity and worker interests as stakeholders
• Placing the worker in centre of restructuring process and integrating him with
organizational change is essential.
• Training concerning behaviour skills, socialization are of more significance as seen
in Japanese firms towards lean practices and are also relatively easier as in contrast a
high skill requirement in German firms.
• However the most critical choice revolves around providing worker with
autonomy and empowerment.

30. References
• Burke & Litwin, ‘A Causal Model of Organisation Performance and Change’,
Journal of Management, Vol 18, No 3 (1992), pp 523–545.
• “Frontiers in Group Dynamics” Lewin (1947)
• http://www.nickheap.co.uk/articles.asp?ART_ID=79
• “Industrial Restructuring and Labour relations” Somnath Gosh
• “Performance Management :Systems, Processes and Organizational
Practices” Somnath Gosh