Industrial relations - Assignment Example

?Industrial relations: Industrial relations nowadays are one of the major issues faced by different industries around the world and it also possessescomplex and delicate problems of modern industrial society. No progress, development or industrial growth can be achieved without considering harmonious relationship between employee and employer. Therefore it is essential for employers to maintain good relationships with workers and vice versa in order to collectively reach towards productivity and goals of the organization (Godard and Delaney, 2000). Concept of industrial relations: Generally the term industrial relation comprises of two words; Industry and relations. The word industry has a general understanding of any work or activity (productive) by which an individual (employee) or group of individuals are engaged in order to give productivity. Moreover the word relation means the way in which two or more concepts, objects or people are connected. Or in other words relationships that usually happen or exist within the organization amongst employer and employees (Guest, 1987). Industrial relations system: Industrial relations system generally is a system, which has the complete range of relationships between managers (employers) and employees. This also includes management of the relations in terms of conflicts and cooperation (Hassel, 1999). Moreover industrial relations system is considered to be in the ideal state if relations amongst management and employees (along with their representatives) are carried out considering mutual coordination, cooperation and harmony rather than carrying out conflicts, disputes and lack of sharing. Furthermore it provides or creates an ambiance which one way or other promotes economic efficiency, productivity and growth of the worker and in return receives loyalty of employee as a result mutual trust can be obtained. Keeping in view that the role of state is also involved in it (Godard and Delaney, 2000). Participants in industrial relations system: There are three main actors or participants in an industrial relations system which are directly involved in the system these are (Heery and Frege, 2006): government employees employers Government: The rules, regulations and legislations regarding industrial relations are usually made by government in most parts of the world. Though organizations tend to follow their own rules and regulations regarding hiring, firing and working conditions but overall standardization of rules are to be set by government and all organization are bound to follow those rules and regulations (Heery and Frege, 2006). Employees: Generally workers are the backbone of the industry and these workers are always willing to improve their conditions in terms of employment. If something is not working for them they always try to raise their voices in order to convince management about some particular issue. Moreover in some cases workers are willing to share decision making power in terms of management. Usually they tend to be united and form a union whose purpose is to raise their voices and issues and discuss this with management in order to find solution (Heery and Frege, 2006). Employer: Employers or bosses are the whole and sole of the company and are mainly responsible for hiring and firing of employees and choosing person for jobs. These bosses are usually strategic apex of the organization that in most cases have different managers working for them in order to run organization (Heery and Frege, 2006). Given below is the figure for better understanding of industrial relations process: Scope of industrial relations: Industrial relations can be classified in terms of employee and employer relationship that usually come from day to day operations however if we consider industrial relations in a broader spectrum it is the relations amongst employer and employee in order to carry out working of the industry to gain productivity. It may spread over the areas of marketing, quality control, price fixation and disposition of profits amongst others. Moreover the scope of industrial relations is very wide and has some issues involved in it. These are mentioned below (Godard and Delaney, 2000): Bargaining (collectively) Settlement of issues or disputes through a mechanism Labor laws and practices in an organizations Participations of employees in management Standing orders in terms of rules and regulations of the company or organization. Importance of industrial relations: Industrial relations plays vital role in the development of an industry or an organization. If a company is willing to attain growth and productivity the role of industrial relations will be very much efficient in it. Furthermore good industrial relations help in reaching goals before time in some cases (Godard and Delaney, 2000). Smooth production (uninterrupted production): The first and foremost advantage of good industrial relations is that it gives uninterrupted production, as workers usually remain happy with the working conditions and overall environment of the company. Their issues are properly dealt and their voices and problems are equally considered and heard by the bosses. So therefore uninterrupted production is achieved which means continuous employment cycle for all from managers to workers. In a broader spectrum this leads towards maximum resources utilization as a result the flow of money is possible for both employees and employer. Good working ambiance: Another importance of good industrial relations is that it promotes and creates healthy working environment for workers and employer. This one way or other leads towards the reduction of disputes and promotes friendliness amongst workers and managers. As a result productivity and mutual cohesiveness is achieved. Boost in morale (high morale): Good industrial relations encourage and boost the morale of the workers. As workers have this belief that their interest is safe guarded by the company and both employer and employee share the same interest which is to maximize the production of the company. Moreover in these circumstances worker develops the feeling that they are co owner of the company in terms of production gains, on the other hand employer also does not restrict profits to himself only. Wastage reduction: Wastage reduction can be done by implementing and endorsing good industrial relations, as these relations exists because of the conditions of coordination, cooperation and recognition between employer and employees. This further leads towards growth in terms of production and therefore overall reduction of wastages in terms of machines, materials and man is achieved. Mental revolution: Mental revolution of workers can be achieved by implementing good industrial relations. In other words by implementing democracy in terms of relationship amongst workers and employers can result in mental revolution. Both should consider themselves as partners in terms of production. The importance of workers role should be accepted and appreciated by employer and workers should also understand the significance of employer’s authority. Main objectives of industrial relations: Given below are some of the main objectives of industrial relations: To maintain peace and harmony amongst the workers and managers so that overall production can grow. Safeguarding the interest of employee and employer so that good will can be created and production can be increased. Issues, disputes and conflicts should be avoided in order to carry out day to day operations peacefully and harmoniously. So as to achieve growth in terms of production. To raise the company’s growth in terms of production and to minimize the number of absenteeism and frequent turn over. To avoid clash of ideologies and to minimize or stop strikes and lockouts in an organization. Improvement in workers conditions (financially, physically, mentally) is another main objective of industrial relations To ensure implementation of industrial democracy based on partnership considering labors in terms of sharing of profits. This will leads towards overall growth of the employee in terms of personality and stature. Sustainability in Australian businesses: Nowadays sustainability has become integral part in doing business in any industry. From an environmental issue it has transitioned to intense and serious business issue. All managers and industry leaders are devising ways these days in order to implement sustainability or in other words embedding it throughout the operations of their business and business related goals. However carrying out a business in terms of sustainability is a bit difficult and possesses lots of challenges not only in Australia but across the globe (Paramanathan, Farrukh, Phaal, and Probert, 2004). Sustainability according to the definition of World Commission on Environment and Development is “the economic development that caters and fulfils the need of the present generation without posing threats or compromising the potential ability of future generations in order to meet their own needs” (WCED, 1987). Moreover sustainability has this tendency or potential of affecting different parts of business strategy; this may include pricing, resources availability (capital), operating cost, supply chain management, regulatory compliances and customer preferences (Paramanathan, Farrukh, Phaal, and Probert, 2004). Given below a chart which shows how sustainability can be achieved (process): (KPMG, 2011) According to the research conducted by KPMG and Institute of Chartered Accountants in Australia, in order to build a sustainable business, an organization must take start from designing a strategy or plan of action. Moreover this plan of action or strategy should be implemented. Furthermore embed or plant sustainability into core business processes so that value can be created keeping in mind that this value came through reporting or in other words feedback. So by following these steps companies in Australia can achieve sustainability in terms of business as per the research of KPMG and Institute of Chartered Accountants in Australia (KPMG, 2011). Limitations to sustainability growth: According to research of KPMG and Institute of Chartered Accountants in Australia sustainability also has some limitations towards its growth in Australian market and beyond. According to them these are some of the factors that limit sustainability growth in Australia. Upon overcoming these issues Australian organizations can attain sustainability. These issues are highlighted below (KPMG, 2011): (KPMG, 2011) Regulatory change: Sustainability of an organization can be limited if regulatory changes are not implemented timely. For instance pricing issues, carbon emission issues, changes to energy and various other factors in this regards. Moreover the role of government is also key factor in regulatory change. For example Australian federal government is planning to introduce plain packaging for tobacco products from 1 July 2012. The main reason for this regulation is to reduce the rate of smoking and to enhance and improve public health (KPMG, 2011). Eco efficiency: In order to achieve sustainability and growth an organization should try to come up with solutions in terms of energy efficiency. If an organization is not able to control energy efficiency it may result in increasing burden in terms of finance plus it may lead towards high prices of packing of products and various other operational and production costs. So therefore eco efficiency possesses a great threat in terms of limiting sustainability growth (KPMG, 2011). Customer preferences and brand loyalty: The question that sustainability can affect the customer preferences and brand loyalty has no solid grounds in most of the situations however there are few incidents or cases which reports that sustainability may affect the buying of customer. For example during 1990s Nike was accused of having sweatshops as a result media and other human rights activist has raged protests and campaigns were launched against Nike (KPMG, 2011). Operating license: Public opinions and government restriction can cause company to loose license or may result in changing the rules and regulations or conditions which were previously imposed upon it. Moreover one mistake from a company can result in changing laws for other companies as well. That was the case with B.P Oil Company, as oil spill of 2010 in Gulf of Mexico resulted in changing of rules and putting tighter control in terms of rules and regulations on oil and gas companies around the world (KPMG, 2011). Workforce consideration: Sustainability can be achieved through workforce consideration and good industrial relations. As it is mainly dependent upon organization’s ability to attract, motivate and consume effective and efficient workers in order to get more production. If proper workforce considerations are not done then chances of limiting the sustainability of an organization increases (KPMG, 2011). Supply chain pressure: Supply chain one way or other is affected by sustainability. As sustainability promotes security and performance in many ways and also influences consumer choices. For example organizations around the world are now considering sustainable sources of raw materials and are also looking towards employee resourcing in terms of human rights in order to create a good brand image. One fine example of supply chain pressure came from a case study of Nestle Kit Kat (chocolate) when in 2010 Greenpeace targeted Kit Kat chocolate (product of Nestle) through viral advertisements and protests for using palm oil as a ingredient and its results impacting the deforestation of rainforest, Nestle because of this pressure later announced that the company will not use any ingredient which will result in destruction of forest (rain) (KPMG, 2011). Basic principles for sustainability (enterprises level): Social dialogues and good industrial relations: In order to achieve sustainability in an organization social dialogues and good industrial relations are mandatory. As many organizations tend to engage in social dialogues and good industrial relations in order to increase productivity and to conduct day to day operations effectively and conveniently. Moreover organizations these days promote collective bargaining, consulting, sharing of information and participation in order to create a win-win situation for them (Lo and Sheu, 2007). Social dialogues and good industrial relations are beneficial for industries in so many ways. For instance the first and foremost benefit is that it leads toward increasing production. Furthermore its application can result in creating healthy and safe environment for employees and employer in an organization, it promotes fairness and helps workers to develop in terms of gaining skills which in most cases is required by organizations in order to grow and to achieve sustainability. Human resource development: Sustainability of an organization is dependent upon the way how organization manages its resources (raw materials, employees). However organizations should consider social dialogues and workers participation in order to create or deal with issues related to human resource development. As in these cases workers are considered to be the main agents of change and equally important in terms of generating profits (assets). Moreover emphasis on employees training in order to increase their skill which will further lead towards gaining more productivity and efficiency both for company and for worker as well. Therefore human resource development plays a key role in order to take organization towards sustainability (Stubbs and Cocklin, 2008). Conditions of work: Another important way of adopting sustainability is to provide ideal conditions for work. These conditions should not tolerate discrimination, harassment, and intimidation. Furthermore relaxing, safe and healthy environment should be given to workers. Moreover employees should be rewarded as well if they have achieved goals before time. Equal opportunities should be given to all workers and proper counseling should be introduced. In other words conditions of work can define the ability of the company to reach towards sustainability (Bryson and Lombardi, 2009). Productivity (wages and share benefits): If an organization achieves success it is mainly due to the working of management and employees collectively. Therefore proper consideration should be given to workers as they are vital assets of an organization. Share allocation is another good idea as it will create good relations amongst employees and employer and also will result in more production. Therefore sustainability can be achieved by considering the productivity factor (Dyllick and Hockerts, 2002). Corporate social responsibility: Corporate social responsibility is an effective tool which makes ways for sustainability of an organization. As organization tends to voluntary evolve, in terms of social responsibility, by itself without taking dictations from government or other industries. So therefore it is a self implicated tool, that most companies or organizations adopt who have gone through maturity (Salzmann, Ionescu-somers, and Steger, 2005). Corporate governance and business strategies: Accountability, fairness, transparency and right for rule are key drivers of good corporate governance. As it is one of the major players in terms of achieving sustainability in an organization. Good governance and business strategies if aligned properly can ease and serves as a mediator of sustainability in an organization (Steurer, Langer, Konrad, and Martinuzzi, 2005). Important current issues in the minds of policy makers and senior managers across Australia: Achieving sustainability and carrying good industrial relations are two main topics that are being discussed by the policy makers and managers around the world especially in Australia. As these topics possess great deal of knowledge and holds a key in order to create good working environment for employees and employer and consequences lead towards optimum productivity and friendly working environment. However research conducted by KPMG and Institute of Chartered Accountants in Australia reveals that sustainability in Australian business industries is restricted or limited because of various different factors out of which workforce considerations is most important. As policy makers and high level senior managers of Australia are considering ineffective workforce considerations to be one of the major barriers towards attaining sustainability (KPMG, 2005). Workforce consideration is a broader term, however the overall idea is to manage the workforce and make sure that the workforce is able to contribute towards the success of Australian industries. Workforce has an important role in any industry and so is the case in the Australian industry. The senior managers and the policy makers are concerned regarding the overall productivity, loyalty and satisfaction of employees. It is important for the policy makers to come up with policies that could balance the needs and demands of both the employers and the employees. Some of the major concerns of the employees include; career development, training and skill development, incentives and rewards, retention of employees, performance and productivity. However on the other hand, employers are looking to maximize their profits and thus they are reluctant to take such actions like offer training on a regular basis, sharing of profits with the employees, giving easy working hours to labors etc. Career development is one of the main concerns of employees. As employees in most cases are unaware of what line of action regarding career they should choose. Furthermore employers (Australian) are less interested in giving any inputs and advices regarding career development. Majority of companies do not worry about their employees. They are only concerned about the amount of profit they get in the end. Though there are some exceptions as well. Therefore it is the need of an hour that policy makers across Australia should endorse implementing career development in organizational level (Wooden, 2001). Training and skill development is another important issue in this regard. As employers tends to gain maximum benefits from employees, so therefore in order to save money in terms of hiring new employee they rely on their old employees giving them training and skill developments. Not because they are very much concerned about workers but because they want to save their money. In most cases these trained skilled labors are not very much paid. And since the worker, who seeks training, has already signed contract with them he or she is then not allowed to work for other company until the contract reach towards expiry date. Moreover another important issue that most policy makers and senior managers of Australia are looking to address is incentives and rewards systems, as recognition and appreciation of work can lead towards overall improvement, and improvement in terms of confidence of workers. Usually organization does not practice the reward system up to the mark and where it is practiced manipulation of managers or bosses questions its effectiveness. However in organizations where unbiased and fair reward system is practiced they tend to grow rapidly and the working environment of those countries remain healthy which one way or other increases the production capabilities of workers as a result overall production increases as well (Wooden, 2001). Similarly senior managers and policy makers of Australia are also judging and assessing the retention policy of companies. Though luckily Australian economy is not very much affected by the global recession but still there is hiring and firing of workers going on. Policy makers and senior managers have concerns that different companies have not shown any practice of retention policy. These companies are only focusing on their own benefits and are not very much bothered about the consequences afterwards. Therefore this issue needs to be addressed as retaining employees can stabilize economy (Wooden, 2001). These are some of the current issues that are source of concern for policy makers and senior managers of Australia. Addressing these issues will solve problems of the workers and will create peace and harmony overall. Conclusion and Recommendations: Nowadays it is almost mandatory for all industries to have good industrial relations in order to develop and progress in terms of resources (staff, material and assets). As organizations that tend to follow good industrial relations always stay ahead and reach their goals collectively and effectively. Giving benefits not to managers and workers only but also helps in contributing towards society overall. Moreover they achieve and maintain healthy working environment and safety conditions for workers. In this way workers are more relaxed as a result they enjoy their work and give optimum results (Labuschagne, Brent, and Erck, 2005). It is the duty of government, senior managers and policy makers to ensure that good industrial relations are carried out by employers so that overall productivity can be achieved. Furthermore the role of each segment of industrial relation is also crucial in it. For instance the role of government is to check and make sure that all rules and regulations are implemented and practiced accordingly. The role of employers is to check the overall working conditions and making sure that the lives of his workers are safe and they are working stress free. And finally the role of employee is to make sure that he is utilizing all resources in a correct direction. As a result of this joint effort by all three segments the organization is likely to grow with rapid speed. Similarly if good industrial relations are practiced by the organization it has more chances of avoiding clash and other insecurities that usually comes in given conditions. Moreover it will create bonding amongst worker and employer as workers will have sense that they also have a say in an organization and they also are integral part of the organization. Likewise sustainability is another important phenomenon that is very much in consideration these days by business managers and policy makers. Sustainability in a working environment can be achieved by following few steps; the first step is to make a strategy, second is to implement it, third is to embed it in business process, and final part is to create value through reporting or to get feedback. Similarly sustainability in a workplace can be achieved if some important factors are addressed properly. For instance regulatory change in an organization should be adopted and practiced properly as per the rules and regulations of the government. Furthermore operation license should be valid and legal. All lawful means should be adopted by the organization in terms of having license. Customers need should be understand and actions and plans should be taken accordingly. Workforce consideration should be done effectively providing workers with all basic need and helping them out in difficult situation. Avoiding clash in an organization and necessary measures should be taken in order to provide safe and healthy working conditions plus performance appraisal should be implemented. In return workers should follow the working ethics and serve employers in order to raise the productivity by working hard, not going on lockouts or strikes not destroying property etc. Furthermore organizations can gain access to sustainability with ease provided they are well in terms with eco efficiency and are not using any raw material which directly or indirectly affect environment as in some cases public pressure tends to boycott products and ethically its absurd using raw material of this nature which affect environment. Therefore all three (government, employee, employer) segments should work collectively in order to achieve sustainability and to create good industrial relations. As each segment is interlinked with the other and no one can survive or single handedly perform the task. 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