Appendix 10 Industrial Relations
‘Industrial relations’ is a term most commonly associated with strikes, employer–employee disputes and employee sabotage. However, as a subject, industrial relations is actually much broader than the media would have us believe. Some of the less savoury aspects of industrial relations, such as striking, picketing and the closed shop, are given a lot of media attention. Other subjects could be given more prominence but are less ‘sexy’ to the media magnate. For example, every year, far more days are lost through accidents at work than are lost through strikes (not counting the number of fatal accidents), but industrial relations tend only to make the news when they constitute a disaster (Green, 1994).
Industrial Relations and its Ingredients
The topic of industrial relations ‘broadly deals with the relationships encountered by work people in their working lives‘ (Green, 1994: 1) and can equally be contributed to and studied by economists, lawyers, sociologists, and psychologists, to name but a few. The scope of the topic spans from the individual in relation to the organization through to the ‘shop floor’, all the way to national and international bodies. Green (1994) divides the topic up into four sets of consideration:
· Institutions – such as trade unions, employer’s associations, the Trade Union Council, the Confederation of British Industry, government ministries, advisory bodies such as colleges, universities and independent bodies like the Industrial Society.
· Characters – such as shop stewards, convenors, full-time officials of unions and employer associations, personnel officers, directors, negotiators, arbitrators, judges, ministers of state.
· Procedures – such as bargaining, settling disputes, settling grievances, discipline, redundancy handling, policy making, union recognition in the workplace, tribunal hearings, industrial action and referrals to conciliation and arbitration.
· Topics – such as pay, working hours and conditions, content of work, contracts of employment, termination of employment, industrial policy, government policy, political decision making, internationalization, union membership, political affiliation, union duties and activities, maternity benefits, discrimination, safety, employee participation and industrial and technological change. Issues that pertain to the topic of health and safety at work are dealt with in Chapter 8 on the design of work environments.
Here is not the place to talk in detail about each of these elements of the industrial relations system. For this, the reader advised to consult texts such as Green (1994), Industrial relations: texts and case studies. In this section we take a look at the various frameworks available in which industrial relations can be understood, and also take pains to locate the topic in a socio-political context. This provides the basis for a more focused consideration of the psychology of inter-group conflict and bargaining.
Industrial Relations Perspectives
There are several analytic perspectives that can be brought to bear on the topic of industrial relations: unitarist and neo-unitarist, uralist, conflict or radical, systems and social action. These perspectives operate at the level of meta-theory. At the lower level of analysis, explicit theorization of the industrial relations situation is poorly developed. This may in part be due to the fact that industrial relations is fundamentally interdisciplinary, having no distinct status as a discipline and no distinct conceptual apparatus around which to frame review and discussion.
Unitarist and neo-unitarist perspectives
The unitarist perspective predominates in organizations like Kodak, Hewlett Packard, 3M and IBM. This perspective holds that everyone within an organization shares a common purpose and are all committed to this purpose. This automatically excludes the existence of conflict in any form and certainly institutional recognition of it (for example, unions). The relationship between employer and employee is seen as a partnership between the suppliers of capital, management and employees. Commentators such as Peters and Waterman (1982) are early champions of the unitary perspective. A frequent criticism of this viewpoint is its refusal to accept the existence of conflict. Unitarists counter the argument that conflict is integral to organizational life by arguing that conflict need not exist at all, and that where it does it signals a breakdown in the system, not that the system is flawed. Conflict, they argue may stem from:
· poor leadership by management;
· breakdowns in communication;
· failure to grasp the commonality of interest;
· resistance of employees;
Neo-unitarist philosophy is a new derivative, coming out of the 1980s. It is a market-oriented philosophy where the whole organization is geared to success in the marketplace, with commitment to customer satisfaction and high standards of quality. A key component of neo-unitarism is the importance given to HRM. It is held that any organizational change should be achieved through the development of the full potential of employees. It emphasizes the importance of the development and maintenance of organizational culture that seeks to develop everyone to their full potential and hence secure full and enthusiastic commitment to the aims of the organization. In support of this emphasis, the neo-unitarist perspective focuses strongly on the training of individuals, providing them with career development plans, opportunities for promotion and performance-related pay.
This perspective runs strongly counter to the traditional union philosophy of collective bargaining, which tends to determine the terms and conditions of employees on a group basis. The neo-unitary perspective makes the personnel function pivotal in any organization. Recruitment, selection, induction, career progression, training and remuneration are key components, it is held, of a company’s future.
Unitarist and neo-unitarist philosophy arose out of the human relations (HR) movement, and is probably the most dominant contemporary organizational paradigm.
Conflict or radical perspective
Conflict theories are based on the premise that conflict exists in society and is quite naturally mirrored in that mini-society, the workplace. Conflict theories maintain that recognition is essential and that systems have to be put in place to deal with conflicts when they arise. Development, they argue, can only occur through the dialectic of the owners of the means of production with those who offer their labour. Progress can only occur, it is held, when the homeostatic self-interest of the owners is challenged or overturned by the equality-seeking proletariat.
This perspective has shaped the UK industrial landscape. The worker–employer collaborations of unitarist organizations are new to the UK; the ‘Us’ versus ‘Them’ relationship of the unions and employer organizations has been the dominant relationship of the last 150 years. Whilst Marx’s theory is usually held to be the foundation of conflict theory, it is widely accepted that some of his century-old ideas are no longer valid. Indeed the uprising of the masses rebelling against the unfair capitalist system has not yet materialized and it can be argued that it is unlikely to. Yet Marxist theory has been developed into a more pluralist viewpoint.
Pluralist perspective
Rather than out and out conflict and rebellion of Marxist theory, the pluralists hold that the peaceful resolution of conflict is a better way forward. Whilst it is recognized that management hold the balance of power, pluralism holds that institutions and processes of organizational relations should seek to resolve any conflicts arising from this power by reaching a workable compromise acceptable to all stakeholders.
Hence the central role that collective bargaining and union representation has. Each group within the stakeholder web can maintain its identity, whilst the controlling mechanism run by management keeps a balance between the interests of the various groups. The overall consideration for management is to ensure that harmony exists and that compromises and agreements work.
There are two variations of pluralism: soft and hard. Hard pluralism is conflict based and looks to conflict resolution via collective bargaining. Soft pluralism takes a more problem-solving approach, involving joint consultation.
Systems approach
A different approach to understanding employee relations was developed by Dunlop in the late 1950s. To Dunlop, there were three main factors in his system of employee relations:
· Actors – the people and organizations involved in the system, such as managers (and their hierarchy), their representatives, the hierarchy of the workers and their representatives, and also the specialized employee relations agencies that operate within the system, such as ACAS (the Advisory Conciliation and Arbitration Service) and others who provide a service, such as consultants and conciliators.
· Context – these are the main elements of the environment within which the system operates, including technological aspects, budgetary and market constraints and the locus of power in society.
· The idealogy of the system – this is the set of beliefs held by participants that allow them to operate the system; the body of common ideas that define the role and place of the actor. Each individual within the system may have differing views, but there has to be sufficient common ground for everyone to establish a working relationship.
Dunlop’s model has had its major impact in America. Yet there are criticisms of the approach: it is static and difficult to analyse change using it. Any systems analysis is, by its nature, descriptive rather than prescriptive.
Social action
Originally developed by Max Weber, social action theory proposes an opposite viewpoint to the systems approach. It seeks to analyse why the actors in the system take certain lines of action as well to understand the actors’ own definitions of the situation they are in. Social action, it is argued, arises out of the expectations, norms, values, experiences and goals of the individuals working within the organization. It is a bottom-up, rather than top-down method of the systems analyst.
An example of this approach to industrial relations is taken by Morley, Webb and Stephenson (1988) from a social psychological perspective. They focus in particular on explaining the role of bargaining and arbitration in the resolution of conflict. They argue that negotiation is a fundamentally social activity and advocate exploring the ways in which negotiators work out what is going on, and why. They also advocate that negotiation is more than a process of bid and counter-bid, it is a social process in which collective images are created and changed. Finally, they see negotiation as the means by which social order is constructed (see later in Chapter 4 under ‘the psychology of negotiation’ for more on this).
What Constitutes ‘Good’ Industrial Relations?
It is generally agreed that ‘good’ industrial relations comprise the following elements:
· Trust;
· confidence of employees in management and of management in employees;
· good interpersonal relations between all those involved;
· realistic working agreements and arrangements;
· a willingness to work together.
The Socio-political Dimension on Industrial Relations
The rise of the Euro-company has implications for the industrial relations agenda and who sets it. It is typically argued that the industrial relations agenda is driven by management in a handful of corporate boardrooms. This proposition is based on the assumption that ‘changing systems of capital accumulation engender complementary institutional arrangements, including patterns of industrial relations‘ (Greer, 1994). This view is illustrated as follows.
In the first half of the 20th century, a dominant system of production (and capital accumulation) emerged that we now know as Fordism, because the automobile industry is prototypical of this system. Fordism (as also described in Chapter 4), is characterized by the production of standardized commodities on a mass scale, in large factories, using a largely semi-skilled workplace. This economic model generated two institutional developments (or types of employee regulation):
· Bureaucratic systems of personnel administration (mirroring the principle of standardization), which in turn afforded a highly formalized system of collective bargaining. This facilitated the rise of trade unionism, which was based on a workforce with collective strength with little if any individual labour market power. Trade unionism came to be seen by industry as the instrument through which to ensure regularity and predictability in the employment relationship – that is, by institutionalizing employee grievance, by the containment and ritualization of strikes.
· The development of state welfare provision. The collective strength of the labour movement was instrumental in facilitating the creation of various post-war settlements including the welfare system. This form of macro-economic state intervention was itself instrumental in stabilizing the labour system, structuring the ‘modern’ labour force and providing a secure framework for the expansion of private industrial capital.
The same kind of socio-political analysis can be applied in attempts to understand the low salience and strength of the contemporary system of collective bargaining as the basis for employee regulation. The weakening of the British national industrial relations system can be explained in terms of two factors:
· Most union leaders in post-war Britain were concerned with national reconstruction, which in turn required that they ensure ‘labour restraint’. The labour force itself had also inherited a demeanour of restraint stemming from the ‘depression’ years when employment was few and far between. However, as industry ‘rationalized’, employees (particularly new generation employees who had entered the labour force during economic boom 20 years or so after the war) started expressing discontent over working conditions. They started taking employment security for granted and had aspirations and expectations that were much higher than those of their parents. This led to an upsurge in conflict but this in the main fell outside the agenda of collective bargaining.
· The growing social role of the state. State intervention (via the provision of welfare for example) had increased expenditure to the point of ‘fiscal crisis’. This, coupled with increased competitiveness in a global economy and a worsening of labour market conditions (for example, unemployment) became a major source of regulatory instability.
The weakening of the ‘traditional’ industrial relations system appeared to coincide with the end of Fordism characterized by an increased differentiation and segmentation of product markets, technological advance that afforded product innovation, decentralized production systems, a more differentiated labour force including the rise in number of females entering the labour market (see Box 1). This, argue Hyman and Ferner:
tore apart the institutions of Fordism, collective bargaining, driving the process of decentralization of industrial relations practices and encouraging systems of company – and plant-specific regulation. (1994: 10)
All this can be said to have occurred in a context of a rise in the ‘transnational corporation’ and the use of increasingly sophisticated global technologies, which has reduced the status of the nation-state as the primary economic agent. This has opened the British economy up to the ‘anarchic vagaries of international finance’ and ‘the calculative interventions of giant transnationals’ (Hyman & Ferner, 1994: 10), and thus a weakening (that is, deregulation and fragmentation) of all traditional regulatory regimes including the industrial relations system.
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