Industrial Relations Dimensions After Liberalisation Policy

Industrial Relations Dimensions  After Liberalisation Policy

  

The  term ‘Industrial Relations’ refers to an organized relationship between two organized parties representing employers and employees, regarding matters of collective interest. With the growth of professional  management, the industrial relations scene is represented   by the representatives of employers and representatives of the employees. IR  is a social concept because it deals with social relationships in different walks of life. It grows and flourishes or stagnates and decays in accordance with the economic social and political conditions prevailing in a society and the laws made by the State to regulate them. It is also influenced by the growth of science and technology. IR aim to facilitate production and productivity, to safeguard the rights and interests of both labour and management by enlisting their co-operation, to achieve a sound harmonious  and mutually  beneficial labour management relations, to avoid unhealthy atmosphere in the industry.

           Human Resource Management is viewed as a vehicle for nurturing the culture of higher productivity and industrial growth. The developed countries are also encouraging employers to enhance productivity by adopting HRM philosophy, which is becoming a key national concerned. In India HRM is developing fast for many reasons. Multi National Corporations (MNCs) are resorting to modern  human resource practices, and information technology. The pre-liberalisation  period in India (1947-1991) witnessed an economic policy which was inward  looking, regulated monopolistic and non-competitive. The movement   liberalization  started in India since July 1991 the country was thrown into a global system.

              Liberalisations aimed at freeing industry, business and trade from the clutches  of control, decontrolling macro economy of the country and its economic institutions and changing the structural infirmities. Liberalizations include liberalizing  industry, business and trade both domestic and foreign. Economic reforms are broader in scope. They include reforms of fiscal and monetary policies besides liberalization of industry, business and trade.  Liberalisation  of industrial policy, include delicensing  of industries and removal of restrictions on foreign investment, relaxation of Foreign Exchange Regulation Act (FERA)  and Monopolies and Restrictive Trade Practices Act (MRTP), curtailment  of the role of public sector and  application of commercial principles  to the public sector industries. Liberalization of trade policy includes liberalization  of imports, linking of  imports to exports and lowering of tariffs, introduction of new exchange rate system, encouragement  of exports and foreign investment.   

          India is still grappling with its experiments in liberalization. The developed countries  were growing through rapid changes which would continue to impact the management of human resource in India. The information technology in the new millennium created a whole new realm of virtual reality, which has changed many paradigms  of how business is conducted globally. An inevitable outcome of changes has been redundancy of jobs, consequently down sizing  of organizations is taking place, closely  linked to this are sensitive issues like Voluntary Retirement Scheme, National Renewal Fund and Exit Policy which needed to be handled with utmost care.         The liberalization programme has compelled Indian companies to look at themselves a fresh broader issues  like corporate restructuring human resource  policies and practices, employment generation, exit / entry policy, privatization, productivity, training and re-training and HRD are thus reevaluated in current context.

         Globalisation    has radically  changed the world. Many traditional socio-economic conceptions and practices have been turned up site down. After globalisation communalism has been faded away  in the world except in China and Cuba. At present  China  is also  changing, keeping in view its future in industrial growth and business. In sum countries IR issues are being redefined because  of changes in trade unions, collective bargaining, and modern human resource.

         The industrial relations system may not take much deviation but the actors of industrial relations may be required to play a more  co-ordinated  role in order to strengthen the competitive abilities  of the organization. Government would play the role of a facilitator, trade union plays a balanced role of satisfying the demands of managements too, management fulfils its role tending towards individual needs rather than generalising  them. Thus, the emphasis may shift from industrial relations to human relations. Economic liberalization and globalisation have their impact on all segments of economic activities including personnel management and industrial relations. They demand high skilled and committed personnel and provide the scope for high quality of worklife. Though,  they result in unemployment to less skilled personnel in short run, continuous development of human resources along with setting up of a number of new industries would provide better employment  opportunities. The salary and benefits  administration would tend towards the market factors.  

             

           The 10^th  world congress of the International Industrial Relations  Association which devoted a full session to a discussion on democracy, development and industrial relations (Towers 1996).  There is a  growing recognition was a basic human  rights and freedoms including freedom of association and collective bargaining. Several studies indicate that IR institutions  are taking contrasting  forms ( Egorov, 1996: Bamber and Peschanski, 1996; Venkata Ratnam,1991). Some of these studies point to the increased  role of employers’  and workers’ organizations as the State  gradually curtails its own role. Egorov (1996) has highlighted the need to establish effective labour relations machinery at the preliminary stage of economic transformation, and the need for a transformation of the parties’ attitudes to collective bargaining.  

       Trends in IR are influenced by history, culture and other contextual factors. These include not only the stage  (agriculture, industrial, services, high-tech technology, economies) nature inward or outward looking strategies and phase of development but also values, philosophy, institutes, and leadership. There is a growing thrust on IR activities of enterprises  and on decentralized systems and structures in IR.  The changes in the work place reflect a growing concerned for flexibility  and competitiveness. As a result the development of skills and contingent compensation are giving importance, with attendant effects in the form of increasing wage inequalities.

        Trade unions are also experiencing major challenges in all countries as the pace of restructuring intensifies, the workforce becomes more diverse, and the average size of the enterprise declines. They face difficulties in maintaining membership in traditional industries and in organizing unions in new industries. Trade unions also find it increasingly difficult to resist employer initiatives to wrest  job control. Worker representation and worker participation in decision making are under stress, with the focus shifting in several cases from union representation to direct participation and worker empowerment.    

         In modern welfare States, job creation is seen as the State’s responsibility. In several countries, it is also seen as the employers’ responsibility. Employers, however, seem to differ in their perception on whether job creation is incidental to or the raison deter  for  all economic activity. Unemployment is seen in some countries as a political an not a socio-economic problem. In such countries  job creation – indeed, the right to work- figures prominently in election manifestos. When the manifestos are not translated into reality, which is more often than not, cynicism and frustration against  the government  start  mounting. The  World Bank (1995)  argues that the demand for labour, not the supply of it, makes the difference for job and wage growth.  Improving employees’ real wages, elevating enterprises’ profits, giving consumers real  worth for their money, and achieving sustainable growth should guide public policies.

             In matters such as job  search, job skills training, placement and outplacement, tripartite initiatives that include the neighbourhood communities  at local  enterprise level, are  more likely  to produce substantial  results. Active labour market policies including  vocational  and skills training are better planned and implemented  at local  levels. This seems to be the experience of Japan and Norway. Employment  related issues have always dominated IR and will continue to dominate.

Impact of the Liberalization on IR

Impact on Employment

The new trade policy which aims at reducing industrial protection and seeks balance of payments management mainly through manipulation of exchange rate, results in increased mechanization. Though the globlisation policies  had visualized  that the small-scale industry and service sector employment would grow, no signs of this nature are clear yet. In fact the small-scale sector  is the victim of the liberalizations compared to that of large-scale sector. The tight credit squeeze added the fuel to the sickness of small industry. This situation badly affects the employment situation in the country.  Now the organised industry should be highly quality and productivity oriented and as such adopt most latest technology. These strategies would  normally demand for most skilled people with high degree of dedication and commitment which would  normally be a thin proportion of the existing human resources of the present  organizations. The rest of the human resources would be deployed  or retrenched as the organized sector would no longer afford to retain such employees. The magnitude of this problem is more in public sector which has been referred to as ‘employment sinks’. The government of India introduced the exit policy / voluntary retirement scheme /golden handshake to get rid of the unwanted segment of the manpower.

Impact on Trade Unions

Trade unions in India resisted the implementation of economic liberalization as they do not generally  favour  multination  getting free access into the Indian industrial  field, do favour  the growth  of small-scale sector, oppose privatization of public enterprises and do not want to close the sick industrial units. Though the trade unions voice their argument against new economic policy on various platforms and the through different means, have, in fact, not responded adequately to the possible fall out in employment and salaries.     

Impact on Human Resource Development

Liberalisation has positive impact on HRD. HRD strategies of industries  of liberalized India would be performance planning and development, encouraging  innovative and creative orientation, motivation building, providing training  and retraining developing the aptitude towards different jobs and encouraging job rotation.

Impact on Wages and Benefits 

Liberalisation  results in higher salaries and benefits  for highly skilled, talented and committed people, and low salaries and benefits for those whose skills and talents are in less demand.

Impact on Collective Bargaining

The socialistic pattern of society  and dominance of trade unionism  have attributed importance to collective   bargaining in deciding various issues relating to labour problems and personnel policies.

Impact on Participative Management

           The outcome of participative management is making use of human resources to the maximum extent through satisfying their social and psychological needs. Hence, the significance of participative management would be magnified under liberalized economy.   

Impact on Quality circles 

Quality improvement, upgradation and maintenance are the central plan of the new economic policy.

Managing Diversified Cultures 

        The increasing globalisation of workforce has contributed to the need for managing different cultures and subcultures effectively. The ethnic mix of workforce due to entrance of multinationals  and foreign companies with their people into India posed a challenge to manage the diversified international cultures.          

Conclusion 

               So far India is concerned it is suffering with the political fever and high growth population, political leaders involvement in the  representation of  trade unions.  The political leaders are giving promises against the liberalization and giving more government jobs. Where by the educated youth  are misguided and misdirected. The present liberalization policy will be successful  100 per cent if population is controlled well, and political parties should work voluntarily for the development of the country.

Success is not an avalanche

             It is the result of many smile things

        Currently done over many years.

Reference

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2. Debi S.Saini, Sami A.Khan(2000), Human Resource Management, Sage Publications, New Delhi.
3. Arun Monappa, Mahrikh Engineer (1999), Liberalisation and Human Resource Management, Sage publications, New Delhi.
4. A.M.Sarma(1996), Industrial Relations- Conceptual and Legal Framework, Himalaya Publishing House, Mumbai.
5. K.Aswathappa(1999), Human Resource and Personnel  Management,Tata McGraw-Hill Publishing Company Limited, New Delhi.
6. R.P.Billimoria(2003), “Hidden IR Dimensions of a Liberalised Economy”, Journal of Personnel Today, Vol.XXIV, No:1.
7. Egoren,G (1996), “Privatization and Labour Relations in the Countries of Central and Eastern Europe”, Industrial Relations Journal, 27(1).
8. Venkata Ratnam, C.S.(1991), Unusual Collective Agreements,  Global Business Press, New Delhi.    
9. World Bank (1995), World Development Report 1995: Workers in an Integrated World, Oxford University Press, New York.
10. Towers,B(1996),”Report and Commentary to the Special Issue from Track 5 of the IIRA 10^th World Congress”, Industrial Relations Journal,27(1).