industrial relation theories

Chapter 1

Theories and Concepts Used to Analyse Industrial Relations

Approaches Used to Define Industrial Relations (1) (1) Institutional-based definitions:

industrial relations are the sum of institutions and institutional processes that establish and administer the rules regulating workplace relations

(2) Social Psychology-based definitions:

industrial relations are the sum of social psychological interactions between individuals

(3) Class-based definitions:

industrial relations are the sum of institutions, interactions and processes that are a product of wider social and economic influences, in particular the class divisions of contemporary capitalism

Approaches Used to Define Industrial Relations (2)

Definitions that seek to include all matters contained in the first three definitions within other terms:

(4) Human Resource Management:

contracts of employment (involving trade unions, worker collectives, labour courts and government agencies), as well as management of conflict arising out of the personal interactions of individuals in the workplace, are part of labour management functions ( i.e. recruitment, selection, training, development, performance management, and so on)

(5) Employment Relations (or Employee Relations):contracts of employment (involving trade unions, worker collectives, labour courts and government agencies), as well as the management of conflict arising out of the personal interactions of individuals in the workplace, are equal parts of workplace relations, together with the normal functions of Human Resource Management.

Preferred Definition of Industrial Relations

Industrial relations encompasses ‘the processes of regulation and control over workplace relations, the organisation of tasks, and the relations between employers and their representatives, and employees and their representatives, and is the sum of economic, social and political interactions in workplaces where employees provide manual and mental labour in exchange for rewards allotted by employers, as well as the institutions established for the purpose of governing workplace relations’ (Gospel & Palmer, 1993, p.2).

Frames of Reference (1)

Unitarism

Assumptions about workplace relations - management and employees share common interest - one source of legitimate authority (management)

Assumptions about workplace conflict - inevitable, aberration, destructive, to be avoided - caused by poor management, dissidents, agitators or poor

communication

Assumptions about trade unions - a competing and illegitimate source of authority - an unwarranted intrusion in the workplace - create conflict where none would otherwise exist

Assumptions about collective bargaining - creates and institutionalises unnecessary divisions of interest - serves to generate workplace conflict rather than resolve it


Pluralist

Assumptions about workplace relations - managers and employees have different objectives - multiple sources of legitimate authority

Assumptions about workplace conflict - inevitable, caused by different opinions and values, benefit to an

organisation - avoid by accepting trade unions, include in decision-making

Assumptions about the workplace role of trade unions - not the cause of conflict - are expression of diverse workplace interests that always exist - a legitimate part of workplace relations

Assumptions about the role of collective bargaining - deals with problems on a collective basis - most efficient means for institutionalising employment rules - fairer outcomes by balancing employee and management power


Marxist

Assumptions about workplace relations - reflects a wider class conflict between capital and labour - reflects coercion of working class into dominant capitalist values

Assumptions about workplace conflict - inevitable: capital seeks to reduce costs, workers seek fairer price

for labour - will only cease by revolutionary change in distribution of property

and wealth Assumptions about trade unions

- should raise revolutionary consciousness of workers - should not limit action to improving material lot of workers - union leaders who accommodate management betray the workers

Assumptions about collective bargaining - merely offers temporary accommodations - leaves important managerial powers in tact

Theories of Industrial Relations (1)

Human Relations Theory and Neo-Human Relations Theories

Key proponents: Mayo, Maslow, McGregor, Herzberg

Frame of reference: Unitarist

Focus: Workers’ social and psychological needs

Reference to industrial relations: Implicit

Theory: a system of management, maximise output by meeting social and psychological needs of employees in the workplace.

(i) managers identify and satisfy employees’ social and psychological needs

(ii) employees seen as different to other production resources

(iii) employees organised into teams

(iv) employees included in work allocation decision-making processes

Result: worker morale maximised, motivated employees productive.

Neo-Human Relations theories add individual satisfaction and motivation is through worker ‘self actualisation’ by ‘hierarchy of needs’


Systems Theory

Key proponent: Dunlop

Frame of reference: Pluralist

Focus: a general theory of industrial relations

Reference to industrial relations: Explicit

Theory: industrial relations is a sub-system of wider society with four elements:

(i) actors: employers, employees, their representatives, government agencies

(ii) environmental contexts: technology, market, budgets, distribution of power

(iii) procedural and substantive rules governing the actors

(iv) binding ideology, common beliefs encouraging actors to compromise


Labour Process Theory

Key proponent: Braverman

Frame of reference: Marxist

Focus: Labour’s relationship with industrial processes


Theory: improved technology and scientific management techniques are

(i) de-skilling work

(ii) fragmenting tasks

(iii) centralising knowledge in management

(iv) diminishing workers control of pace and conduct of work

Result: labour is increasingly alienated and exploited, leading to resistance by organised and unorganised industrial conflict.


Strategic Choice Theory

Key proponents: Kochan, Katz and McKersie

Frame of reference: Pluralist

Focus: a general theory of industrial relations

Reference to industrial relations: Explicit

Theory: emphasises the strategic choice of actors in deciding industrial relations outcomes, as influenced by:

(i) declining union membership

(ii) breakdown of collective bargaining frameworks

(iii) retreating government intervention

(iv) pro-active human resource management techniques (v) spread of organisational authority for industrial relations


Scientific Management

Key proponent: Taylor

Frame of reference: Unitarist

Focus: Use and control of labour


Theory: system of management maximising output by greatest technical efficiency of work methods, achieved by:

(i) unchallenged management powers to allocate work tasks

(ii) managers relationship with employees is rational and objective

(iii) managers treat workers impersonally and collectively

(iv) work tasks reduced to basics for low-skilled, low-paid

employees in assembly line production

(v) employees are chosen to suits the tasks to be performed

(vi) employees given training in best work methods

(vii) employees motivated by incentive payment schemes


Regulation TheoryKey proponents: Stigler and Friedland,

Joskow Frame of reference: PluralistFocus: State intervention in industrial

relationsReference to industrial relations: ExplicitTheory: (i) ‘capture theory’ (ii) ‘bargaining

theory’


Labour Market TheoryKey proponent: Friedman and FriedmanFrame of reference: UnitaristFocus: The settlement of wages, employment

and the allocation of work.Reference to industrial relations: ExplicitTheory: people are ‘rational economic

maximisers’, ‘perfectly competitive’ labour and product markets yield most efficient economic outcomes.

industrial relation theories

Technology