ch01

Part one
The nature and context of

industrial relations
CHAPTER ONE
THE STUDY OF
INDUSTRIAL RELATIONS
Copyright  2005 McGraw-Hill Australia Pty Ltd

PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 1–1
Overview
 What is industrial relations?
 Distinguishing different approaches to the study of the
employment relationship
 A pluralist perspective: Neo-institutionalism
 A unitarist perspective: HRM
 A radical perspective: The labour process
 Final observations
 Summary

What is industrial relations?
 Definition important—setting the scope of study.
 Many attempts at definition:
– from job regulation to social relations at work.
 Challenges to the discipline:
– rise of non-unionism
– growth of human resource management (HRM)
– revival of labour economics.
 A broad definition:
‘industrial relations is about the behaviours and interaction of
people at work’.

What is industrial relations?
(cont.)
 Industrial relations (IR) assumes the employment relationship
is conflictual:
– power relations at work.
 Traditionally, it focused on ‘collective’ aspects of
employment.
 It has expanded to incorporate ‘individual’ aspects.
 IR is interdisciplinary by nature.

Distinguishing different
approaches to the study of
employment relations
 There are three distinct ideological perspectives to origins
and nature of industrial relations, each leading to a distinct
approach/analytical tool to explain industrial relations:
1. a pluralist perspective, leading to ‘neo-institutional’
approaches
2. a unitarist perspective, which informs human resource
management (HRM)
3. a radical perspective, which enables a ‘labour process’
approach.

A pluralist perspective: neo-
institutionalism
Pluralism
 First, what is the pluralist perspective?
– Conflict is inevitable: competing interests between the
parties.
– Power is diffused among the main bargaining groups
within the employment relationship: no-one dominates.
– Trade unions are viewed as providing a mechanism that
legitimates employees’ rights to bargain within the
workplace.
– The state is regarded as an impartial entity, whose
primary function is to protect the ‘public interest’.

institutionalism (cont.)
Pluralism (cont.)
 What are the criticisms of pluralism?
– Theory of pluralism is unclear.
– Power is not evenly diffused:
 it is is typically weighted towards management in the
workplace.
– Emphasis upon rational approach to conflict
management:
 a form of managerialist thinking that obscures.
– The emphasis on rules and regulations neglects process.

Neo-institutionalism
 Neo-institutionalism is an extension of pluralist thinking
about the role of ‘rule-making’ in the employment
relationship.
 It sees that the employment relationship is governed by two
types of rules:
1. formal/informal rules
2. substantive/procedural rules.
These rules are made in a broader context: as a result of the
forces and imperatives of capitalist social relations, in society
and in the workplace.

Neo-institutionalism (cont.)
 Other features of the neo-institutionalist approach:

– the open-endedness of the employment relationship
– understands the present in terms of the past
– seeks to describe and understand the ‘real’ world
– is not concerned with developing grand theory—develops
theory through induction.

A unitarist perspective: HRM
Unitarism
 What is the unitarist perspective?
– Assumption of a common purpose and shared goals, with no
fundamental conflict of interest between labour and capital.
– Conflict is an aberration, the result of:
 poor communications
 poor management.
– Unions are seen as an unwelcome intrusion:
 complete loyalty of employees.
– Role for strong management.

(cont.)
Unitarism (cont.)
 Approaches within unitarism:
– scientific management (Taylorism/scientific management):
 work study/‘one best way’
 establishment of work rules.
– human relations (Mayo/the Hawthorne experiments):
 emphasis on work groups and social relations at work
 less importance given to economic incentives.

(cont.)
Unitarism (cont.)
 Approaches within unitarism (cont.):
– neo-human relations (McGregor/Likert/Herzberg):
 importance of individual needs of workers
 creating satisfaction from the nature of job.
– human resource management:
 emphasis on the management of commitment
 integration of employees into organisational strategy.

(cont.)
Unitarism (cont.)
 What are the criticisms of unitarism?
– A narrow approach that neglects causes of conflict.
– Fails to explain the prevalence of conflict within
organisations.
– Does not account for uneven distribution of power among
employees and employers in the decision-making
process.

(cont.)
The analytical tools of HRM
 HRM is the modern form that a unitarist approach to IR
typically takes, that is:
– the management of the employment relationship primarily
from the perspective of the employer.
 This can be seen in the main focuses of HRM:
– plan human-resource requirements
– recruit and select employees
– train and manage employee performance
– reward employees
– dismiss or retire employees.

(cont.)
The analytical tools of HRM (cont.)
 HRM as a scholarly concept is relatively imprecise.
 What is its scope?
– Is it a study of employer labour-management practices, or
– is it concerned with the optimal allocation of labour to
achieve management’s goals?

(cont.)
 The two main schools within the HRM approach are:
1. ‘soft’ HRM—‘developmental humanism’
2. ‘hard’ HRM—instrumental integration of employees into
firm objectives.
 ‘Best practice’ approach vs ‘contingency’ approach.

(cont.)
 ‘Soft’ HRM:
– focuses on individual employees and the management
strategies needed to increase employee satisfaction,
organisational commitment, motivation and work
performance
– employees have universal needs, best identified and met
using techniques drawn from psychology and
organisational behaviour
– the techniques of management, aimed at achieving these
goals, are considered to be ‘best practice’, the ‘best’ ways
to develop employees towards organisational goals.

(cont.)
 ‘Hard’ HRM:
– focuses on the better integration of HR strategies into
business strategy
– employees are seen as a commodity to be better
allocated, in order to assist the achievement of business
strategies
– decisions about the adoption of specific HRM policy
becomes increasingly about cost–benefit analysis.
 Management’s aims are to achieve ‘best fit’ between HR
strategy and business strategy.

(cont.)
 Criticisms of HRM approaches:
– both ‘hard’ and ‘soft’ HRM lack empirical evidence
confirming prescriptions.
– ‘soft’ HRM has fundamental contradictions:
 individual performance and development, and team-
based cooperation
 implementing organisational flexibility can undermine
the stability, trust and long-term development needed
to achieve organisational goals
 HR’s championing of organisational culture can
conflict with the desire for flexibility.

A radical perspective:
The labour process
Radicalism
 What are the common features of radical perspectives?

– Fundamental and inherent conflicting interests between
management and workers.
– Uneven distribution of power between bargaining
groups, within the workplace and society.
– The role of trade unions—to challenge managerial
control.
– The state protects the interests of capitalists.

The labour process (cont.)
Radicalism (cont.)
 What are the criticisms of a radical perspective?
– Preoccupied with conflict:
 obscures any cooperation or shared goals between
management and workers.
– Class struggle not part of modern capitalism.
– Capital is not homogenous:
 competition among capitalists.
– Under-estimates the independence of the state.

Class struggle and control in the
labour process
 Marx argued that capital social relations are based on a
fundamental divide between the bourgeoisie and the
proletariat.
 Labour possesses labour power—the potential effort that
each employee offers.
 Potential labour does not always equal actual labour.
 Management’s task is to convert this labour power into actual
work and effort, in order to make a profit.

labour process (cont.)
 This gives rise to the central theme within the labour-process
approach: How does management maximise the conversion
of ‘potential’ labour into ‘actual’ labour?
– Labour is not always compliant in this process, resulting
in conflict between management and labour.
– As this relationship is open-ended, management seeks to
establish methods for ensuring control, to maximise
‘actual’ labour effort.

labour process (cont.)
 The labour-process argument: How does management
maximise the conversion of labour power into actual labour?
– Braverman (1974) argued that management seeks
control and improved performance through deskilling
labour.
– Friedman (1977) argued that management could use
either:
 direct control or
 ‘responsible autonomy’ based approaches.

Final observations
 Chapter has highlighted three perspectives to the
employment relationship:
– unitarist
– pluralist
– Marxist.
 Each of these approaches are competitors in seeking to
explain the nature of the employment relationship:
– each approach is based on different value judgments.
– each approach emphasises different aspects of the
employment relationship.
 This text adopts a pluralism/neo-institutionalist approach.

Summary
 The ‘commonsense’ approach to industrial relations
highlights conflict between trade unions and employers:
– Need to move beyond this limited view.
– Theory provides a guide to understanding the relationship
between the parties in the employment relationship.
 Three types of theories are introduced in this chapter:
– pluralist/neo-institutionalist
– unitarist/HRM
– radical/labour-process theory.


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Part one

The nature and context of

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

 Other features of the neo-institutionalist approach:

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

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 What are the common features of radical perspectives?

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

Copyright  2005 McGraw-Hill Australia Pty Ltd

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