Industrial Relations Framework

The Industrial relations framework emerged as a response to the Social Question or the ‘Labour Problem’ – which has been defined by some authors as the problem of improving the conditions of employment of the wage-earning classes [1]. To mitigate the problems of the labour class, whose interests were seen as antithetical to the interests of the producers; a variety of flavours and philosophical leanings developed amongst academicians. Thus IR was conceived differently by different theorists, right from formalization of workplace norms (Dunlop) and job regulation (Flanders) to the social regulation of production (Hyman 1995). The general understanding in the beginning of the historical evolution of the field of IR was that labour problems stemmed from unbridled laissez-faire capitalism, and there was need to seek greater pragmatism, social stability and justice by reforming the current model of employee relationship.

Philosophically speaking, the greatest threat to the idea of reforming the labour system arose from orthodox and neo-classical economics. Classical economics holds two principles dearly, the principle of free trade, and Say’s Law, the idea that a free-market system always returns to a state of full employment. The first principle was applied initially to trade in the international market, but was quickly adapted to use in local market, and importantly also the labour market. The ensuing competition, was considered sufficient to protect the interests of the worker. Similarly, Say’s law implied that deficiency in demand was impossible in a perfectly competitive market. The implication of this macroeconomic theory were applied to labour markets with the belief that dynamics of demand and supply would force the wages up an...

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...e emergence of HRM – human resource management.

When one considers the role of workers and labour in any firm, one can think of them in two distinctive ways – cost competitiveness that considers labour to be a cost that has to be minimized, a view that leads to poorly paid workers and unending labour management conflict. On the other hand, one may consider competing on productivity and commitment – a view which considers workers to be assets, which can afford them high pay and better treatment. As HRM has evolved it has come up with interesting innovations, such as some form of performance based pay, employee participation, supportive HR policies and the like. In this regard, Ichniowski et al mention that these practices may create certain performance advantages such as efficiency in work processes and increased productivity by incentivising workers to work harder