Labor relations
Encyclopedia
Industrial relations is a multidisciplinary field that studies the employment
relationship. Industrial relations is increasingly being called employment relations because of the importance of non-industrial employment relationships. Many outsiders also equate industrial relations to labour relations. Industrial relations studies examine various employment situations, not just ones with a unionized workforce.
Industrial relations scholarship assumes that labor markets are not perfectly competitive and thus, in contrast to mainstream economic theory, employers typically have greater bargaining power than employees. Industrial relations scholarship also assumes that there are at least some inherent conflicts of interest between employers and employees (for example, higher wages versus higher profits) and thus, in contrast to scholarship in human resource management and organizational behavior, conflict is seen as a natural part of the employment relationship. Industrial relations scholars therefore frequently study the diverse institutional arrangements that characterize and shape the employment relationship—from norms and power structures on the shop floor, to employee voice mechanisms in the workplace, to collective bargaining arrangements at company, regional, or national level, to various levels of public policy and labor law regimes, to "varieties of capitalism
" (such as corporatism
), social democracy
, and neoliberalism
).
When labor markets are seen as imperfect, and when the employment relationship includes conflicts of interest, then one cannot rely on markets or managers to always serve workers’ interests, and in extreme cases to prevent worker exploitation. Industrial relations scholars and practitioners therefore support institutional interventions to improve the workings of the employment relationship and to protect workers’ rights. The nature of these institutional interventions, however, differ between two camps within industrial relations. The pluralist camp sees the employment relationship as a mixture of shared interests and conflicts of interests that are largely limited to the employment relationship. In the workplace, pluralists therefore champion grievance procedures, employee voice
mechanisms such as works councils and labor unions, collective bargaining, and labor-management partnerships. In the policy arena, pluralists advocate for minimum wage laws, occupational health and safety standards, international labor standards, and other employment and labor laws and public policies. These institutional interventions are all seen as methods for balancing the employment relationship to generate not only economic efficiency, but also employee equity and voice. In contrast, the Marxist-inspired critical camp sees employer-employee conflicts of interest as sharply antagonistic and deeply embedded in the socio-political-economic system. From this perspective, the pursuit of a balanced employment relationship gives too much weight to employers’ interests, and instead deep-seated structural reforms are needed to change the sharply antagonistic employment relationship that is inherent within capitalism. Militant trade unions are thus frequently supported.
which created the modern employment relationship by spawning free labor markets and large-scale industrial organizations with thousands of wage workers. As society wrestled with these massive economic and social changes, labor problems arose. Low wages, long working hours, monotonous and dangerous work, and abusive supervisory practices led to high employee turnover, violent strikes
, and the threat of social instability. Intellectually, industrial relations was formed at the end of the 19th century as a middle ground between classical economics and Marxism, with Sidney Webb and Beatrice Webb
’s Industrial Democracy (1897) being the key intellectual work. Industrial relations thus rejected the classical econ.
Institutionally, industrial relations was founded by John R. Commons
when he created the first academic industrial relations program at the University of Wisconsin in 1920. Early financial support for the field came from John D. Rockefeller, Jr.
who supported progressive labor-management relations in the aftermath of the bloody strike at a Rockefeller-owned coal mine in Colorado. In Britain, another progressive industrialist, Montague Burton
, endowed chairs in industrial relations at Leeds, Cardiff and Cambridge in 1930, and the discipline was formalized in the 1950s with the formation of the Oxford School by Allan Flanders and Hugh Clegg.
Industrial relations was formed with a strong problem-solving orientation that rejected both the classical economists’ laissez faire solutions to labor problems and the Marxist solution of class revolution. It is this approach that underlies the New Deal
legislation in the United States, such as the National Labor Relations Act
and the Fair Labor Standards Act
.
. Each offers a particular perception of workplace relations and will therefore interpret such events as workplace conflict, the role of unions and job regulation differently. The radical perspective is sometimes referred to as the "conflict model", although this is somewhat ambiguous, as pluralism also tends to see conflict as inherent in workplaces. Radical theories are strongly identified with Marxist theories
, although they are not limited to kosala
Consequently, trade unions are deemed as unnecessary since the loyalty between employees and organizations are considered mutually exclusive, where there can't be two sides of industry. Conflict is perceived as disruptive and the pathological result of agitators, interpersonal friction and communication breakdown.
Consequently, the role of management would lean less towards enforcing and controlling and more toward persuasion and co-ordination. Trade unions are deemed as legitimate representatives of employees, conflict is dealt by collective bargaining and is viewed not necessarily as a bad thing and, if managed, could in fact be channeled towards evolution and positive change.
Employment
Employment is a contract between two parties, one being the employer and the other being the employee. An employee may be defined as:- Employee :...
relationship. Industrial relations is increasingly being called employment relations because of the importance of non-industrial employment relationships. Many outsiders also equate industrial relations to labour relations. Industrial relations studies examine various employment situations, not just ones with a unionized workforce.
Overview
Industrial relations has three faces: science building, problem solving, and ethical. In the science building face, industrial relations is part of the social sciences, and it seeks to understand the employment relationship and its institutions through high-quality, rigorous research. In this vein, industrial relations scholarship intersects with scholarship in labor economics, industrial sociology, labor and social history, human resource management, political science, law, and other areas. In the problem solving face, industrial relations seeks to design policies and institutions to help the employment relationship work better. In the ethical face, industrial relations contains strong normative principles about workers and the employment relationship, especially the rejection of treating labor as a commodity in favor of seeing workers as human beings in democratic communities entitled to human rights."The term human relations refers to the whole field of relationship that exists because of the necessary collaboration of men and women in the employment process of modern industry."It is that part of management which is concerned with the management of enterprise -whether machine operator,skilled worker or manager.It deals with either the relationship between the state and employers and workers organisation or the relation between the occupational organisation themselves.Industrial relations scholarship assumes that labor markets are not perfectly competitive and thus, in contrast to mainstream economic theory, employers typically have greater bargaining power than employees. Industrial relations scholarship also assumes that there are at least some inherent conflicts of interest between employers and employees (for example, higher wages versus higher profits) and thus, in contrast to scholarship in human resource management and organizational behavior, conflict is seen as a natural part of the employment relationship. Industrial relations scholars therefore frequently study the diverse institutional arrangements that characterize and shape the employment relationship—from norms and power structures on the shop floor, to employee voice mechanisms in the workplace, to collective bargaining arrangements at company, regional, or national level, to various levels of public policy and labor law regimes, to "varieties of capitalism
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
" (such as corporatism
Corporatism
Corporatism, also known as corporativism, is a system of economic, political, or social organization that involves association of the people of society into corporate groups, such as agricultural, business, ethnic, labor, military, patronage, or scientific affiliations, on the basis of common...
), social democracy
Social democracy
Social democracy is a political ideology of the center-left on the political spectrum. Social democracy is officially a form of evolutionary reformist socialism. It supports class collaboration as the course to achieve socialism...
, and neoliberalism
Neoliberalism
Neoliberalism is a market-driven approach to economic and social policy based on neoclassical theories of economics that emphasizes the efficiency of private enterprise, liberalized trade and relatively open markets, and therefore seeks to maximize the role of the private sector in determining the...
).
When labor markets are seen as imperfect, and when the employment relationship includes conflicts of interest, then one cannot rely on markets or managers to always serve workers’ interests, and in extreme cases to prevent worker exploitation. Industrial relations scholars and practitioners therefore support institutional interventions to improve the workings of the employment relationship and to protect workers’ rights. The nature of these institutional interventions, however, differ between two camps within industrial relations. The pluralist camp sees the employment relationship as a mixture of shared interests and conflicts of interests that are largely limited to the employment relationship. In the workplace, pluralists therefore champion grievance procedures, employee voice
Employee voice
Employee voice refers to the participation of employees in influencing corporate decision making. Employees are given a voice through informal and formal means to minimise conflict, improve communication and encourage staff retention through motivation and fair treatment...
mechanisms such as works councils and labor unions, collective bargaining, and labor-management partnerships. In the policy arena, pluralists advocate for minimum wage laws, occupational health and safety standards, international labor standards, and other employment and labor laws and public policies. These institutional interventions are all seen as methods for balancing the employment relationship to generate not only economic efficiency, but also employee equity and voice. In contrast, the Marxist-inspired critical camp sees employer-employee conflicts of interest as sharply antagonistic and deeply embedded in the socio-political-economic system. From this perspective, the pursuit of a balanced employment relationship gives too much weight to employers’ interests, and instead deep-seated structural reforms are needed to change the sharply antagonistic employment relationship that is inherent within capitalism. Militant trade unions are thus frequently supported.
History
Industrial relations has its roots in the industrial revolutionIndustrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...
which created the modern employment relationship by spawning free labor markets and large-scale industrial organizations with thousands of wage workers. As society wrestled with these massive economic and social changes, labor problems arose. Low wages, long working hours, monotonous and dangerous work, and abusive supervisory practices led to high employee turnover, violent strikes
Strike action
Strike action, also called labour strike, on strike, greve , or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became important during the industrial revolution, when mass labour became...
, and the threat of social instability. Intellectually, industrial relations was formed at the end of the 19th century as a middle ground between classical economics and Marxism, with Sidney Webb and Beatrice Webb
Beatrice Webb
Martha Beatrice Webb, Lady Passfield was an English sociologist, economist, socialist and social reformer. Although her husband became Baron Passfield in 1929, she refused to be known as Lady Passfield...
’s Industrial Democracy (1897) being the key intellectual work. Industrial relations thus rejected the classical econ.
Institutionally, industrial relations was founded by John R. Commons
John R. Commons
John Rogers Commons was an American institutional economist and labor historian at the University of Wisconsin–Madison.-Biography:Born in Hollansburg, Ohio, John R. Commons had a religious upbringing which led him to be an advocate for social justice early in life...
when he created the first academic industrial relations program at the University of Wisconsin in 1920. Early financial support for the field came from John D. Rockefeller, Jr.
John D. Rockefeller, Jr.
John Davison Rockefeller, Jr. was a major philanthropist and a pivotal member of the prominent Rockefeller family. He was the sole son among the five children of businessman and Standard Oil industrialist John D. Rockefeller and the father of the five famous Rockefeller brothers...
who supported progressive labor-management relations in the aftermath of the bloody strike at a Rockefeller-owned coal mine in Colorado. In Britain, another progressive industrialist, Montague Burton
Montague Burton
Sir Montague Maurice Burton founded Burton, one of Great Britain's largest chains of clothes shops....
, endowed chairs in industrial relations at Leeds, Cardiff and Cambridge in 1930, and the discipline was formalized in the 1950s with the formation of the Oxford School by Allan Flanders and Hugh Clegg.
Industrial relations was formed with a strong problem-solving orientation that rejected both the classical economists’ laissez faire solutions to labor problems and the Marxist solution of class revolution. It is this approach that underlies the New Deal
New Deal
The New Deal was a series of economic programs implemented in the United States between 1933 and 1936. They were passed by the U.S. Congress during the first term of President Franklin D. Roosevelt. The programs were Roosevelt's responses to the Great Depression, and focused on what historians call...
legislation in the United States, such as the National Labor Relations Act
National Labor Relations Act
The National Labor Relations Act or Wagner Act , is a 1935 United States federal law that limits the means with which employers may react to workers in the private sector who create labor unions , engage in collective bargaining, and take part in strikes and other forms of concerted activity in...
and the Fair Labor Standards Act
Fair Labor Standards Act
The Fair Labor Standards Act of 1938 is a federal statute of the United States. The FLSA established a national minimum wage, guaranteed 'time-and-a-half' for overtime in certain jobs, and prohibited most employment of minors in "oppressive child labor," a term that is defined in the statute...
.
Theoretical perspectives
Industrial relations scholars have described three major theoretical perspectives or frameworks, that contrast in their understanding and analysis of workplace relations. The three views are generally known as unitarism, pluralist and radicalPolitical radicalism
The term political radicalism denotes political principles focused on altering social structures through revolutionary means and changing value systems in fundamental ways...
. Each offers a particular perception of workplace relations and will therefore interpret such events as workplace conflict, the role of unions and job regulation differently. The radical perspective is sometimes referred to as the "conflict model", although this is somewhat ambiguous, as pluralism also tends to see conflict as inherent in workplaces. Radical theories are strongly identified with Marxist theories
Marxism
Marxism is an economic and sociopolitical worldview and method of socioeconomic inquiry that centers upon a materialist interpretation of history, a dialectical view of social change, and an analysis and critique of the development of capitalism. Marxism was pioneered in the early to mid 19th...
, although they are not limited to kosala
Unitary perspective
In unitarism, the organization is perceived as an integrated and harmonious whole with the ideal of "one happy family", where management and other members of the staff all share a common purpose, emphasizing mutual cooperation. Furthermore, unitarism has a paternalistic approach where it demands loyalty of all employees, being predominantly managerial in its emphasis and application.Consequently, trade unions are deemed as unnecessary since the loyalty between employees and organizations are considered mutually exclusive, where there can't be two sides of industry. Conflict is perceived as disruptive and the pathological result of agitators, interpersonal friction and communication breakdown.
Pluralist perspective
In pluralism the organization is perceived as being made up of powerful and divergent sub-groups, each with its own legitimate loyalties and with their own set of objectives and leaders. In particular, the two predominant sub-groups in the pluralistic perspective are the management and trade unions.Consequently, the role of management would lean less towards enforcing and controlling and more toward persuasion and co-ordination. Trade unions are deemed as legitimate representatives of employees, conflict is dealt by collective bargaining and is viewed not necessarily as a bad thing and, if managed, could in fact be channeled towards evolution and positive change.