Industrial relations refers to processes and outcomes involving employment relationships. Importance of Industrial Relations for Employees and Employers. Frequently the term used in a narrower sense, for employment relationships involving the collective representation of employees in the form of a labor union or employee association, especially in the United States.

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At the other extreme, industrial relations has been defined by Thomas A. Kochan, in his book Collective Bargaining and Industrial Relations, as “all aspects of people at work,” but there are some aspects of people at work that entail highly technical subjects (e.g., industrial hygiene, ergonomics) which are not normally regarded as falling within the mainstream of industrial relations study. Also, learn the Importance of Employee Relations.

4 Importance of Industrial Relations:

The following industrial relations 4 importance below are;

  • Increased Productivity: With amicable industrial relations both the workers and managers continue to work on their respective position and contribute towards the overall productivity of the firm. Thus, IR ensures the continuity of production.
  • Reduced Industrial Disputes: An effective IR helps in the reduction of industrial disputes as both the management and the workers maintain harmonious relations with each other and work in unison towards the accomplishment of production objectives.
  • Increased Morale: The peaceful industrial relations boost the moral level of the employees as they feel that their interest coincides with that of the employer’s, and their efforts will result in the overall profitability of the firm.
  • Minimization of Wastage: A good IR ensures reduced wastage as the resources – Man, Machinery, Material are fully utilized and are effectively contributing towards the overall productivity of the firm.
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More importance;

The significance of good industrial relations in any country cannot ones emphasize. Good industrial relations are necessary for the following reasons.

  1. To help in the economic progress of a country. The problem of an increase in productivity is essentially the problem of maintaining good industrial relations. That is why they form an important part of the economic development plan of every civilized nation.
  2. To help in to establish and to maintain true industrial democracy this is a prerequisite for the establishment of a socialist society.
  3. They help the management both in the formulations of informed labor relations policies and in their translation into action.
  4. To encourage collective bargaining as a means of self-regulation. They consider the negotiation process as an educational opportunity a chance both to learn and to reach.
  5. To help the government making laws forbidding unfair practices of unions and employers. In climate good industrial relations every party works for the solidarity of worker’s movement. Unions gain more strength and vitality. There is no inter-union rivalry.
  6. Employees give unions their rightful recognition and encourage them to participate in all decisions. Unions divert their activities from fighting and belligerence to increase the size of the distribution and to make their members more informed (workers education) on vital issues concerning them.
  7. To boost the discipline and morale of workers. Maintenance of discipline ensures orderliness. Effectiveness and economy in the use of resources. On the other hand, lack of discipline means waste, loss, and confusion. It also means insubordination and non-co-operation.
  8. Industrial relations are eventually human relations, therefore, the same basis of human psychology prevails in the field of industrial relations, and the efficiency of an industry is directly related to the quality of the relationship, which is being built up amongst the individuals who work together.
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Importance of Industrial Relations for Employees and Employers:

Industrial relations usually imply good and positive relations between employees and employers. The good Industrial Relations help run an industry effectively and successfully, i.e., the desideratum of the day. Top 5 importance of Industrial Relations can imbue with the multiplicity of justifications.

To mention, good Industrial Relations help:

Foster Industrial Peace:

Under the mechanism of Industrial Relations, both employees and managers discuss the matter and consult each other before initiating any actions. Doubts, if any, in the minds of either party are removed. Thus, unilateral actions that prop confusion and misunderstanding disappear from the scene. In this way, Industrial Relations helps create a peaceful environment in the organization. Peace, in turn, breeds prosperity.

Promote Industrial Democracy:

Industrial democracy means the government-mandated worker participation at various levels of the organization about decisions that affect workers. It is mainly the joint consultations, that pave the way for industrial democracy and cement relationships between workers and management. This benefits them both. The motivated workers give their best and maximum to the organization, on the one hand, and share their share of the fruits of organizational progress jointly with management, on the other.

The benefit to Workers:

Industrial Relations benefits workers in several ways. For example, it protects workers against unethical practices on the part of management to exploit workers by putting them under inhuman working conditions and niggardly wages. It also provides a procedure to resolve workers’ grievances relating to work.

The benefit to Management:

Industrial Relations protects the rights of managers too. As and when workers create the problem of indiscipline, Industrial Relations provides managers with a system to handle employee indiscipline in the organization.

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Improve Productivity:

Experiences indicate that good industrial relations serve as the key to increased productivity in industrial organizations. Eicher Tractors, Alwar represents one such case. In this plant, productivity went up from 32 percent to 38 percent between 1994 and 1997. This increase attribute to the peaceful IR in the plant.

Similar other success stories abound in the country. As reported by V.S.P. Rao, Sundaram Fasteners (A TVS group company which begged the prestigious GM award for the fourth successive year in 1999 as a quality supplier of radiator caps) well knows for zero breakdowns, zero accidents, and zero defects. The company did not lose even a single day due to strike. The per-employee productivity is comparable to the best in the world. One study rates the company among the 20 most competitive companies in Asia.

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