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GROUP MEMBERS
SNEHA
ADITI GUPTA
SUMIT EKKA
NEHA RAJ
RAVI KR. ANAND ADHIR ALBERT LAKRA
PROMOD HEMBROM
ACHINT CHABBRA
RAVI BAA
ROHAN IGNATIUS CHARLY
POOJA RANI
PRITY KUMARI
PRIYANKA PRIYA
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Defining Labor Relations
This discipline covers the relationship of workers
with the organization and with each other. Labor
relations is concerned with anticipating,
addressing and diffusing workplace issues thatmay interfere with an organizations business
objectives, as also with resolving disputes between
and among management and workers. It includes
the processes of ensuring that relations withworkers comply with applicable central and local
laws and regulations and resolving workplace
disputes.3
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JOURNEY : LABOR RELATIONS TO
EMPLOYEE RELATIONS
Labor Relation in India has been shapedlargely by principles and policies evolvedthrough tripartite consultative machinery at
the industry and the national levels. The Labor Relations system of India has its
origin in the colonial past.
The movement for independence, influencedthe evolution of the Labor relations system inIndia
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JOURNEY : LABOR RELATIONS TOEMPLOYEE RELATIONS
The Historical evolution of the Labor Relationssystem can be categorized under six phases: The Protective Phase (1947-1956)
The Consolidation Phase (1957-1965)
The Conflict Ridden Interventionist Phase(1966-1976)
The Directionless Phase (1977-1980)
The Productivity efficiency, Quality-orientation phase
(1981-1990) The Economic Growth Competitive Phase(1991-Onwards)
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JOURNEY : LABOR RELATIONS TOEMPLOYEE RELATIONS
The Current scenario points to a shift in the
relative bargaining power in Labor
relations, away from the workers to the
employers.
The current standing lays emphasis on term
employee encompassing a larger section of
working class than labor.
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KEY DIMENSIONS OF TRADITIONAL IR
AND EMPLOYEE RELATIONS
DIMENSIONLABOR RELATIONS
(I.R.)
EMPLOYEE RELATIONS
(SHRM)
Psychological ContractCompliance Commitment
Behavior References Norms, Customs, Practices Values, Mission
Relations
Low trust, pluralist,
Collective
High Trust, Unitarist,
Individual
Organizational Design
Formal Roles, Hierarchy,
Division of labor,
Managerial Control
Flexible roles, flat
structure, teamwork and
autonomy, self control
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Relevance of Labor Relations in the
field of SHRM
In many industries (public or private)unionization is the norm. Managers andbusiness owners in these industries have nochoice but to be well versed on the laws that
regulate the relationship with unionemployees.
Competitors maybe unionized and settlementsin those organizations may impact HR
practices, programs and policies needed toremain competitive in recruiting and retainingproductive employees.
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Relevance of Labor Relations in the
field of SHRM
Organized labor presents a number of key
strategic challenges for management
When workers unionize, the power based
within the organization is redistributed. The
employers ability to mange workers at their
discretion is severely curtailed.
Unionization involves bringing in outsideplayers whose support must be gained for any
new or ongoing management initiative
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Relevance of Labor Relations in the
field of SHRM
Organized labor presents a number of key
strategic challenges for management
Unionized work setting greatly impacts the
organizations cost structure particularly
payroll expenses.
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EMPLOYEE RELATIONS STRATEGY
Like other business and HR strategies, those concernedwith employee relations can, emerge in response to anevolving situation.(Mintzberg 1987)
Employee relations strategy define the intentions of theorganization about what needs to be changed in the waysin which organization manages its relationship with theemployees and their trade unions.
Eg:
1. Strategy- achieving competitive edge through innovation
2.Strategy- achieving competitive edge through costreduction
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BACKGROUND TO EMPLOYEE
RELATIONS STRATEGIES
Four approaches to employee relations have
been identified by the Industrial Relations
Services(1993)
Adversarial
Traditional
PartnershipPower sharing
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THE SHRM APPROACH TO
EMPLOYEE RELATIONS
Build stable and cooperative relationshipswith the employees that minimize conflict.
A drive for commitment through employee
involvement and communication processes. An emphasis on mutuality in achieving the
organizational goals through the
development of the organizational culturesbased on the shared values betweenmanagement and the employees.
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THE SHRM APPROACH TO
EMPLOYEE RELATIONS
A shift from collective bargaining to individual
contracts.
Use of employee involvement teams such as
Quality Circles, SDTs.
Continuous pressure on quality- TQM.
Emphasis on teamwork.
Harmonization of terms and conditions for all
the employees.
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STRATEGIC IMPACT OF THE
LEGAL ENVIROMENT
The legal environment is a major consideration of strategic
managers because of the potential exposure to liability,
plant location concerns, productivity influences, and other
impacts on cost structures. In future , strategic managers
may need to become more proactive in the design oflegislation so that the laudable social goals can be
obtained simultaneously with organizational growth and
efficiency.
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Labor Legislations in IndiaLAW IMPLICATION FOR EMPLOYERS
The Minimum Wages Act, 1948 Set minimum wage standards
The Payment of Wages Act, 1936 Regulate payment of wages in thestipulated wage period.
The Equal Remuneration Act, 1976 Equal pay for equal work regardless of
gender.
The Factories Act,1948 Requires employers to provide a
workplace free of hazards.It also provides with provisions for
health, safety and welfare.
The Industrial Disputes Act, 1947 Requires 60 days advance notice of plant
closure.
Compensation to workmen in case of
closing down of undertaking.
The Employee State Insurance Act, 1948
And Employees Provident Fund Act, 1952
Social Security.
The Industrial Employment
(Standing Order) Act, 1946
Require employers in industrial
establishments formally to define
conditions of employment under them 16
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Labor Legislations in India
LAW IMPLICATION FOR EMPLOYERS
Inter State Migrant Workmen Act,1979 Regulate the employment of inter-state
migrant workmen and provide for their
condition of service
Payment of Bonus Act ,1965 Provides for the payment of bonus on the
basis of profit
Payment of Gratuity Act, 1972 Provides for payment of gratuity
Trade Unions Act, 1926 Provides for registration of trade union
Employees Compensation Act,1923 Provide for payment of compensation to
workmen for injury by accident.
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COMPARATIVE STUDY OF LABOR
LEGISLATIONS
Recognition of trade union in USA
The NLRB is responsible
for overseeing a particular
union as the official
bargaining representativeof a group of employees,
and hearing allegations of
violations of the act from
employers, unions and
employee groups.
Recognition of trade union in India
In the year 1957 code of
discipline was formed for
recognition of trade union
but it was not mandated by a
law. The recognition can be
had by way of mutual
agreement between the
employer and the office
bearers of registered tradeunion or by the orders of the
Labor Court under certain
conditions.
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COMPARATIVE STUDY OF LABORLEGISLATIONS
Establishment of union under NLRB
Group of employeespetition the NLRB throughassistance of a unionrepresentative to conduct
an election NLRB requires at least
30% of the employees tohave signed authorizationcards, which indicate an
expressed interest inhaving unionrepresentation from aspecific union
Registration of union Trade Union Act
An application forregistration of a trade unionis made to the Registrar ofTrade Unions.
No registration unless at
least10% or 100 of theworkmen (whichever isless), subject to a minimumof 7, engaged or employed inthe establishment orindustry with which it is
connected are the membersof such trade unions on thedate of making suchapplication for theregistration
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COMPARATIVE STUDY OF LABORLEGISLATIONS
When the NLRB receives theauthorization cards anddetermined that there issufficient interest to conductan election, it determines
whether the organizationshould have a bargainingunit that cover all theemployees or separatebargaining unit for differentgroups of employees
Works committees are set bythe establishments withequal number ofrepresentatives of workersand managementfor
endeavouring to composeany differences of opinionin matters of commoninterest, and therebypromote measure forsecuring and preserving
amity and cordial relationsbetween the employer andworkmen.
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Why Employees Unionize?
Need to unionize Benefits
Historical
Background
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Collective Bargaining
Collective bargaining is the process whereby
workers organize collectively and bargain
with employers regarding the workplace. In
a broad sense, it is the coming together of
workers to negotiate their employment.
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Scope of Collective Bargaining
Wages fixation, increments and bonuspayment Hours of work and overtime
Terms and conditions of work, safety,
welfare and health care Grievanceprocedure labour productivity, labour
standard and modernization Union
Management relations including workers
participation
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PROSPECTIVE USERS
Anyone who has a paid job or who employs
other people in paid work
Employers, employees and unions negotiating
benefits such as wages, working conditions
and related issues
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Benefits to management
Workers have a voice and an outlet in thecollective bargaining process that reducesuncertainty and instability in the workplace.
Workers are often more motivated followingcollective bargaining as they have participatedin the process and the outcome.
Collective bargaining aids in labour market
flexibility by helping workers to understandand accept the need for modernization andrestructuring.
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Benefits to workers
Collective bargaining provides workers witha collective voice which may be moreeffective than dealing with managers one by
one.Collective bargaining helps ensure adequate
wages and working conditions and helpsworkers to receive a fair distribution of
gains that might result from theintroduction of new technology.
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Process of Collective Bargaining
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Levels of Collective bargaining
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Collective Bargaining Committees
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Steps in Collective Bargaining Process
1. Preparing for negotiations through collective bargaininginvolves assembling and consulting extensive data such as:
(i) Internal company data related to issues to be discussed (e.g.benefits, leave, work hours and overtime, grievance
procedures, discipline, dismissals etc.)
(ii) Labor practices employed by other companies or factories inthe same industry or region
(iii) Relevant national legislation related to the issues to bediscussed.
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Steps in Collective Bargaining Process
2. Establishing bargaining teams composed of four to six
representatives on each side of the negotiating table, including
appointed chief negotiators for management and for workers.
Try to have all types/level of workers/managementrepresented as well as all the different job categories so that
that there will be good representation at all levels and types of jobs.
The chief negotiators should not be the highest-level of staffmember in each team, as lower level management/supervisors and
regular rank-and-file workers will have the most credibility to
represent the interest of the groups they represent.
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Steps in Collective Bargaining Process
3. Members of the bargaining teams must consultthoroughly with all groups that they representprior to coming to the negotiation table. Thisconsultation process is key to building trust
and buy-in to the collective bargaining process.It involves:
(i) Explaining the steps of the negotiation process
(ii) Learning the major issues
(iii) Asking questions to understand and notewhat are the main concerns, interests andexpectations regarding these issues.
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Steps in Collective Bargaining Process
4. Conducting negotiations through collective bargaining:
(i)Open the negotiations with a first meeting devoted to establishing the
bargaining authority of the representatives of each side and todetermine
the rules and procedures to be used during negotiations. Bargainingrights must be clearly defined for both management and for workers.
(ii) List and prioritize issues for discussion and set up a meeting schedule.
(iii) Submit, analyze and resolve proposals put forward by each side.
(iv) In order to reach an agreement, proposals must be resolved. Theymay be withdrawn, accepted by the other side in its entirety, oraccepted in some compromise form. However all decisions must bemade by consensus of both sides.
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Steps in Collective Bargaining Process
5. Communication the outcome of collective
bargaining:
(i) Collective bargaining agreements must be put in
writing in language that is acceptable to all parties.(ii) Copies of the agreement should be distributed to
all supervisors, managers and workers and
explained at a meeting (or series of meetings).
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Failure to Reach Agreement
When the union and the employee are
unable to agree, worker have the right to
strike.
Economic strike
Unfair labour practice
Wildcat strike
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Conclusion
Unions have a long and deep history in the
world.
Traditional approaches to negotiation
usually involved the union trying to gain
concessions from management and winning
the negotiation.
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Conclusion
However, to be successful in the futureunions must:
Develop partnerships with employers
Seek win-win outcomes to collective bargaining Enhance the performance of the organization
Unions need to consider that the jobs oftoday and those of the future are quitedifferent from the jobs of the past
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Conclusion
Countries such as Japan and Germany haveextensive unionization and produce some ofthe highest quality, most technologically
advanced products. Although employees clearly need to
consider labor relations from a strategicperspective, union representatives must doso even more if they are to keep their unionsviable for tomorrows organizations.
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Case study
In July, 1994, United Airlines, the worlds largest airline,
announced an employee stock ownership plan (ESOP) that
would allow its unionized employees to acquire 55 percent of
the companys stock in exchange for reduction in pay and
benefit. The plan was immediately hailed as a breakthroughin labor relations in the airlines industry and applauded
among investors, customers, employees, and management.
Along the union members, united pilots were the biggest
beneficiaries of the plan, receiving 25 percent of the companystock despite the fact that they constituted 10 percent of the
workforce. However, the pilots had made the greatest
financial concessions.
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The initial result of the ESOP were overwhelmingly
successful. Team were set up to analyze every aspect of the
company operation, from fuel utilization to free-passpolicies to employee family members. The team developed
numerous cost-saving and morale-boosting measures that
significantly impact probability. In following three years the
price of the United stock nearly quadrupled in response toits enhanced financial performance.
CASE STUDY
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CASE STUDY
The positive result, however, were short lived. Flight attendants, whowere not included in the ESOP, became irritated at not
being able to share in the companies success. As the employees with
the greatest amount of public contract, their dissatisfaction and
damaged morale affected customer service. In addition, the plan was
only scheduled to operate for five year and nine months. Therefore, in2000, employees stopped receiving United stock, and pay level return
to pre-ESOP levels. Consequently, empolees no longer had as
significant a personal stake in the companys ongoing financial
performance. New employees were also not able to participate in the
plan. perhaps the biggest problem with the plan for employees is thatthey are not allowed to cash in their stock until they retired from the
airlines.
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United management, seeing the ESOP as an unqualified success,
reports that it allowed the company to reduce its cost structure
and strengthen its competitive position. However , since United
stocks hit its peak in 1997,its value has declined by close to 50
percent. Labor unrest with the pilots, who refused to flyovertime during contract negotiations, severely curtailed
operations during the summer of 2000. United lost millions of
dollars in revenue and the business of many loyal customers.
Customers complaints about in-flight service rave skyrocketed.What initially appeared to be a strategic win-win approach to
labor relations on the part of united has evolved into a longer
term problem with no remedy in sight.
CASE STUDY
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What is ESOP? Its company shares given to employees for their service to
organization. Employees are made owner of the company.
ITS PROCESSAccording to SEBI(securities exchange board of India) the
norms of ESOP are1. Shares issued must be from the stock already issued to
investors in share markets.
2. The company should have not made losses in previous 3years.
3. It must be approved by shareholders in the AGM(Annualgeneral meeting) by passing special resolution.
4. The shares must be given for consideration other thancash.
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Why ESOP was chosen as a strategy by
the United airlines?
Reduction in pay and salary by making employees
the owner of organization. Employees work for profit in organization.
To have an competitive advantage in the market.
The United airline had cost-saving by reducing
pay and salaries. The employees were motivated which made
company have more profits.
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Limitation of the strategy
Shares were not allotted equally. Pilots had
25% out of 55% of company stock.
Flight attendants were not included, theirdissatisfaction affected customer services.
New employees were not included in plan.
The employees were not allowed to cash in
their stock until they retired from the airline.
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Failure of strategy
The shares were not allotted equally.
It focus on the major player(pilots)of the
organization.
Organization politics.
The strategy was implemented without any
research.
Non-flexibility of ESOP.
Focus was made on short-term goal rather thanlong-term goal.
Labor relations
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