Concept of Labour Relations

Labour relations can refer broadly to any dealings between

management and workers about employment conditions. Labour Relations comprises of two terms: Labour Relations Labour refers to any individual (or a group of individuals) is (are) engaged by relations that exist within the industry between the employer and his workmen. The term labour relations explains the relationship between employees and management .

Three partners in Industrial Relations

Trade Unions: Protect the interests of workers Insist upon the development of cultural and educational qualities of their members

Employers & their organizations: Protect the interest of employers and create healthy industrial atmosphere, so as to attain the objectives of the organization Obtain full co-operation of workers for achieving this objective
Government: Pass laws to protect the interest of both employers and employees and establish better industrial relations

Objectives of Labour Relations

Safeguard interests of labour and management by highest

level of mutual understanding for better production

Avoid industrial conflict and develop harmonious relations Raise productivity to a higher level in an era of full

employment

Objectives of Labour Relations (contd)

Establish and promote the growth of an industrial democracy

based on labour partnership in sharing profits and in managerial decisions

Eliminate strikes, lockouts by providing reasonable wages,

improved living and working conditions

Improve economic conditions of workers in existing state of

industrial managements and political government

Causes of Poor Labour Relations

Attitude of management and labour towards each other Inadequate fixation of wages or improper wage structure Indiscipline

Unhealthy working conditions at the workplace

Desire of workers for higher bonus, wages or daily allowances Desire of employers to pay as little as possible to its workers

Causes of Poor Labour Relations (contd)

Inadequate welfare facilities Dispute on sharing the gains of productivity Retrenchment, dismissal and lockouts by the management.

General economic and political environment such as rising

prices, strikes by others and general indiscipline having their effect on the employees attitudes

Effects of Bad Labour Relations

Effect on Workers: Loss of wages Physical injury or death on account of violence during labour unrest Economic losses Bitterness in relations Adverse affect on career

Effects of Bad Labour Relations (contd)

Effect on Employers / Industrialists: Less production Less Profit Bad effect on human relations Damage to machines and equipments Adverse effect on development of companies
Effect on Consumers: Rise in prices Bad effect on quality of goods

Effects of Bad Labour Relations (contd)

Effect on Government: Loss of revenue (less recovery of income tax. sales tax, etc.) Lack of order in society, (iii) Blame by different parties Other Effects: Adverse affect on International Trade (Fall in exports and rise in imports) Economic Development of the country Uncertainty in economy

Requisites for Successful Labour Relations

Top Management Support Sound Personnel Policies

Adequate Practices should be developed by professionals

Detailed Supervisory Training Follow-up of Results

What is a Dispute?
Every human being has certain requirement like economic

needs, social needs, security requirements.

When these requirements do not get satisfied, then result is

DISPUTE between worker & capitalist/employer.

Dispute is a type of human behavior which occurs when two or more parties are in opposition or in battle.

Disputes in Industries
Industrial dispute refers to any dispute or differences

between employers and employees or workmen, or between workmen and workmen, and is connected with fulfillment or non-fulfillment of the terms of employment or the condition of work of any person.
Industrial disputes are of two types: Individual disputes - related to reinstatement,

compensation etc. Collective disputes - related to wages, bonus, profit sharing, hours of work etc.

Causes of Industrial Disputes

Psychological causes: Authoritarian leadership Clash of personalities Difficulty in adjusting in given conditions or with one another Demand for self respect & recognition by workers Institutional causes: Non recognition of trade/ labour union by the management Unfair conditions and practices Matter of collective bargaining Pressure on workers to avoid participation in trade unions

Causes of Industrial Disputes (contd)

Economic causes: Terms & condition of employment: Dispute on promotion, lay off, retrenchment More work hours Working in night shift
Working conditions: Working condition such as too hot, too cold, dusty, noisy etc. Improper plant and work place layout Frequent product design changes etc.

Causes of Industrial Disputes (contd)

Wages & other benefits:
Inadequate wages Poor fringe benefits

No bonus or other incentive etc.

Denial of Legal & Other Right of Workers: Proceedings against labour law and regulation Violation of already made agreement

Results of Industrial Disputes

Strike
Boycott Picketing Gheraos Lockout

Termination of service of striking employees

Procedures for Settling Labour Disputes

Collective Bargaining
Conciliation Mediation Negotiation Arbitration

Adjudication

What is Collective Bargaining?

Collective bargaining is a technique used for compromising

the conflicting interests of employees and employer.

It is called collective because the employees as a group select

representatives to meet and consult with management.

Characteristics of Collective Bargaining

Group action
Flexible and mobile Two party process Continuous process Dynamic Industrial democracy at work Not a competitive process An art

Importance of Collective Bargaining

Increase the economic strength of unions and management Maintaining stable peace in the industry Avoid interruptions in work like strikes, go-slow tactics etc. Lay down fair rates of wages and norms of working conditions

Forms of Collective Bargaining

Single plant bargaining
Multiple plant bargaining

Multiple employee bargaining

Forms of Collective Bargaining in India

Negotiated by officers
Negotiated by parties

Negotiated on voluntary basis

Conditions for Success of Collective Bargaining

Equal bargaining power of trade union and management
Free consultation and free enterprise Representative union Mutual confidence and good faith in each other Proactive approach by management

Conditions for Success of Collective Bargaining (contd)

Quick disposal of issues
Successful implementation of previous agreements

Workers should think beyond salaries

Emphasis upon problem solving, not legalism

Union cooperation

Functions of Collective Bargaining

Increase economic strength of employees and management
Establish uniform conditions of employment Secure prompt and fair redressal of grievances Lay down fair rates of wages and norms for working conditions Promote stability and prosperity of the company Ensure old age pension benefits Extend the democratic principles from political to the

industrial field

Collective Bargaining process

Collective bargaining process has the following stages:
1) Identification of problem 2) Preparing for negotiations 3) Negotiations of agreement 4) Contract administration

Shift Towards Individual Bargaining

Declining role of trade unions
Proactive approach used by organisations Competency based salaries and benefits Shift in loyalty from organisation to profession Increased rate of employee turnover

Concept of Ethics
Ethics refers to the standards or principles of moral conduct

governing an individual or a group of individuals within the framework of an organisational entity.

Ethical behavior depends on the persons frame of reference
It is not always clear when ones decisions are ethical. Usually unethical decisions are followed by shame and/or guilt

Ethics And The Law

Ethics means taking decisions that represent what you stand

for, not just what is legal.

An behavior has legal and ethical aspects

Lack of ethics erodes trust

Infosys and Tata Group vs Satyam and General Motors India Globalisation dictates more open discussion on ethics

Ethical business practices influence brand value

Components in Ethical Decisions

Normative judgments
Judging something as good or bad, right or wrong, better or

worse.
Moral standards (Morality) Societys accepted standards for behaviors that have serious

consequences to its well-being.

Behaviors that cannot be established or changed by

decisions of authoritative bodies.

Behaviors that override self-interest.

Factors Affecting Ethical Behaviour at Work

The person: Conscience of the employee Awareness of existence of moral issues in the situation
Influence of managers Managers interpersonal dealings with employees Urgency in meeting unfulfilled goals Walking the talk Reprimanding wrongdoings No taking credit or shifting blame

Factors Affecting Ethical Behaviour at Work

The organisation: Realignment of moral compass on joining new organisation Moral engagement within the organisation Openly talking about ethical conduct - ethically toxic organisations suffer from moral muteness Punishing unethical behaviour Training on ethics codes Whisleblower policies

What Is Organizational Culture?

The characteristic values, traditions, and behaviors a

companys employees share. How is culture is revealed? Ceremonial events Written rules and spoken commands Office layout Organizational structure Dress codes Cultural symbols and behaviours Figureheads

Employees and Ethical Dilemmas

Questions employees must ask when faced with ethical dilemmas: Is the action legal? Is it right? Who will be affected? Does it fit the companys values? How will it feel afterwards? How will it look in the newspaper? Will it reflect poorly on the company?

Unethical Behaviours

Abusive or intimidating behaviour towards other employees Lying to employees, customers or public Placing personal agendas before company interests Violating safety regulations Misrepresenting working times Discrimination on basis of gender, caste, age Sexual harassment Stealing Bribing, accepting kickbacks Internet abuse Intentionally providing non-conforming goods or services Alteration of documents Falsification or manipulation in reports and records Improper use of competitors inside information

Ethics in HRM Activities

Ethics in Job Design and Planning: Job description must be clear, detailed and unambiguous Job enrichment, empowerment and dejobbing to be preferred during job analysis for enabling fair treatment Planning to ensure future availability of employees of required skill and quantity at the correct time in the organisation Ethics in Recruitment: Best candidates to be searched from external sources if internal sources fail to provide suitable candidates Emphasis on ethics in recruitment material to attract candidates with ethics.

Ethics in HRM Activities (contd)

Ethics in Selection: Prospective employees must perceive screening process as being fair so that they may see the importance of ethical behaviour in the organisation Using screening tests to select applicants having strong ethics Applicants expectations from screening process: Formal procedures will give chance to show competence Respectful interpersonal treatment Receiving useful feedback about own performance Matching between job and employee

Ethics in HRM Activities (contd)

Ethics in Training and Development: Employees must be trained to Recognize ethical dilemmas Use ethical frameworks to resolve problems Use HR functions (eg. Interviews) in ethical ways Use various tools (videos, bulletins) to train employees on ethics Successful training requires Comprehensively identifying employees training needs Qualified trainers Commitment on the part of employees and trainers

Ethics in HRM Activities (contd)

Ethics in Performance Appraisal: Clear standards to emphasise fairness Employees must understand the basis of appraisal Using appraisal for political gains is damaging to company Ethics in Rewards and Disciplinary systems Ethical behaviour must be rewarded and unethical behaviour punished Employees expect swift and harsh disciplinary actions for misdemeanours

Ethical Issues - Employee Privacy

Employee privacy violations upheld by courts: Intrusion (locker room and bathroom surveillance) Publication of private matters Disclosure of medical records Appropriation of an employees name or likeness Actions triggering privacy violations: Background checks Monitoring off-duty conduct and lifestyle Drug testing Workplace searches and Monitoring

Ethical Issues - Employee Privacy (contd)

What do employers monitor about employees: E-mail and activity Telephone calls Employers monitor employees to: Improve productivity Keep tabs on attendance Protect from computer viruses Detect leaks of confidential information Guard against liability for illegal acts and harassment suits caused by employee misuse

Ethical Issues - Employee Dismissal

Dismissal Involuntary termination of an employees employment with the firm Avoidance best way to handle dismissals Effective hiring can reduce many dismissals Terminate-at-will rule In absence of a contract, the employee can resign for any reason, at will, and the employer can similarly dismiss the employee for any reason (or no reason), at will

Ethical Issues - Employee Dismissal (contd)

Wrongful discharge Employee dismissal not complying with the law or with the contractual arrangements stated or implied in the employment application forms, employee manuals or other promises Limitations imposed by wrongful discharge on terminate-at-will: Statutory exceptions to certain types of dismissals Common law exception - implied contract Violation of public policy Good faith exception

Grounds For Dismissal

Unsatisfactory performance Persistent failure to perform assigned duties or to meet

prescribed standards on the job Lack of qualifications for the job An employees inability to do the assigned work although he or she is diligent Changed requirements or elimination of the job An employees inability to do the work assigned, after the nature of the job has changed Elimination of the employees job

Grounds For Dismissal (contd)

Misconduct in the workplace Deliberate and willful violation of the employers rules:

stealing, rowdy behavior, and insubordination. Insubordination Willful disregard of the bosss authority or legitimate orders Criticising the boss in public Disregard for the chain of command Deliberate defiance of clearly stated company policies, rules, regulations, and procedures Participating in an effort to undermine and remove the boss from power

Avoiding Wrongful Discharge Suits

Bases for wrongful discharge suits: Discharge not complying with the law Discharge not complying with contractual arrangement stated or implied by firm via its employment application forms, employee manuals, or other promises Avoiding wrongful discharge suits Set up employment policies and dispute resolution procedures that make employees feel treated fairly Do the preparatory work that helps to avoid such suits

Avoiding Wrongful Discharge Suits (contd)

Employment application must contain a clear statement that

employment and can be terminated anytime. Have clear written rules listing infractions that require discipline and discharge and religiously follow them. If a rule is broken, get the workers side of the story in front of witnesses, and get it signed. Then get both sides of the issue. If an employee shows evidence of incompetence, give a warning and provide opportunity to improve. All evaluations should be in writing and signed by the employee. Keep careful confidential records of all actions such as employee appraisals, warnings or notices, memos.

The Termination Interview

Plan the interview carefully Make sure the employee keeps the appointment time Never inform an employee over the phone Allow 10 minutes as sufficient time for the interview

Use a neutral site, never your own office

Have employee agreements, the human resource file, and a

release announcement prepared in advance Be available at a time after the interview in case questions or problems arise Have phone numbers ready for medical or security emergencies

The Termination Interview (contd)

Get to the point Avoid small talk As soon as the employee enters, give the person time to get

comfortable and then inform him or her of your decision Describe the situation Briefly explain why the person is being let go Remember to describe the situation rather than attack the employee personally Emphasize that the decision is final and irrevocable

The Termination Interview (contd)

Listen Continue the interview until the person talks freely and calmly

about the reasons for termination and support package Review all elements of the severance package Describe severance payments, benefits, access to office support people, and the way references will be handled. Dont promise benefits beyond those in the support package Identify the next step. The terminated employee may be disoriented and unsure what to do next. Explain where the employee should go next, upon leaving the interview.

Termination Assistance
Outplacement Counseling is a systematic process to train a

terminated employee in conducting a self-appraisal and securing a new job appropriate to the needs and talents Outplacement counseling is part of terminated employees support package and is often done by specialized outside firms. Outplacement firms help the employer devise its dismissal plan regarding: How to break the news to dismissed employees. Deal with dismissed employees emotional reactions Institute the appropriate severance pay and equal opportunity employment plans

Interviewing Departing Employees

Exit interviews are conducted with employees who are

leaving the firm for any reason Its aim is to elicit information about the job or related matters that might give the employer a better insight into what is right or wrong about the company The assumption is that because the employee is leaving, he or she will be candid The quality of information gained from exit interviews is questionable

Layoffs
Layoff are not terminations. Temporary layoffs occur when: There is no work available for employees. Management expects the no-work situation to be temporary

and probably short term. Management intends to recall the employees when work is again available.

Alternatives to Layoffs
Voluntarily reducing employees pay to keep everyone

working Concentrating employees vacations during slow periods Taking voluntary time off to reduce the employers payroll Taking a rings of defense approach by hiring temporary workers that can be let go early Offering buyout packages to find enough volunteers to avoid dismissing people

Adjusting to Downsizings and Mergers

Implemention of reduction in force: Identify objectives and constraints Form a downsizing team Address legal issues Plan post-reduction actions Treatment of departing employees during a merger:
Avoid the appearance of power and domination

Remain businesslike and professional

Maintain a positive feeling about the acquired company How the organization treats the acquired group will affect

those who remain

Fair Treatment And Justice

Apart from compensation, employees expect fair treatment Fairness is inseparable from justice Components of organisational justice: Distributive justice - fairness and justice of the result of a

decision Procedural justice - the fairness of the process by which the decision was reached A just company is equitable, fair, impartial and unbiased

Need for Fair Treatment

Courts consider fairness of employers disciplinary procedures

while reviewing disciplinary decisions Positive employees outcomes related to fairness: Enhanced commitment Enhanced satisfaction Take more steps to support employers interests Job applicants who felt unfairly treated expressed desire to appeal to the outcome, while those who felt fairly treated reacted favourably

HRs Role in Fostering Ethics and Fair Treatment

Why treat employees fairly? Theyre not employees, theyre people - Peter Drucker Avoidance of employee litigation Enhanced employee commitment Enhanced satisfaction with the organization, with jobs, and with leaders Increased organizational citizenship behaviors

Fair Interpersonal Treatment Perceptions

Ethical behaviours: Employees are praised for their work Employees are trusted Employees complaints are treated with effectively Employees are treated with respect Employees questions and problems are responded to quickly Employees are treated fairly Coworkers help each other out Coworkers treat each other with respect

Fair Interpersonal Treatment Perceptions

Unethical behaviours: Supervisors yell and swear at the employees Supervisors play favourites Employees are treated like children Employees are lied to Employees suggestions are ignored Employees are threatened to be fired or laid off Coworkers argue with each other Coworkers put each other down

Fairness Guidelines for Supervisors

Perceptions of fair treatment depend on: Engagement - Involve individuals in decisions affecting them by asking for inputs and allowing them to refute the merits of others ideas and assumptions
Explanation - Ensure everyone involved and affected

understands why final decisions are made and the thinking that underlies the decisions
Expectation clarity - Make everyone know upfront by what

standards they will be judged on and the penalties for failure

Basis For Fair And Just Discipline Process

Clear rules and regulations Define and address workplace issues Inform employees what behaviours are unacceptable

System of progressive penalties

Range and severity of penalty depends on type of offense

and number of occurrences

An appeals process
Right of employee to grieve the decision ensures that

supervisors mete out discipline fairly and equitably

Fairness in Dismissals
Foster a perception of fairness in the dismissal situation by :
Instituting a formal multi-step procedure (including warning) Having a supervising manager give full explanations of why

and how termination decisions were made

The person doing the dismissing is important Establishing an neutral appeal process

Template Slide
Ethics in Performance Appraisal: Clear standards to emphasise fairness Employees must understand the basis of appraisal Using appraisal for political gains is damaging to company
recognize ethical dilemmas Successful training requires

Comprehensively identifying employees training needs