Effectiveness of industrial relations systems at the enterprise level

Abstract

Effectiveness of the industrial relations sub-system of an organization is crucial to its overall effectiveness. Organizational functioning can be seriously eroded by imbalance within the industrial relations subsystem. This fact is intuitively understood by all organizational analysts. Yet there is little conceptual underpinning of the phenomenon of effectiveness of industrial relations systems.

The starting point of this research was the development of a conceptual model for understanding this phenomenon. The model is based on the conceptualization of industrial relations as a system of relationships Between three parties or sets of actors, viz., (i) employers and managerial hierarchy, (ii) workers, and the trade union hierarchy, and (iii) various Governmental agencies, Effectiveness of such a system was defined as that state of the system where in the objectives or goals of all the parties to industrial relations are maximized while conflict between them is minimized. As it is difficult to postulate a state of absolute effectiveness, it was contended that effectiveness is essentially a relative concept; an industrial relations system can only be assessed more or less effective in comparison to other similar systems. The research task was to develop an understanding of the criteria and the determinants of effectiveness in industrial relations systems. The sample chosen for study consisted of banking organizational in the nationalized sector having head offices located in Bombay. The universe was narrowly defined to screen out the effects of environmental, technological, market and labour market variables. The research was conducted in three stages. Stage I involved the development of criteria of effectiveness relevant to nationalized banks. The method of research was detailed interviews with “significant” members of all parties for listing of goals. The goals were translated into criteria weight ages were assigned to each criterion linking it to the overall criterion of effectiveness. This was done by a set of judges or raters. Stage II was the assessment of effectiveness of the 6 banks on the basis of criteria and weightages developed in the previous stage. The data required were objective measures as well as subjective descriptions of phenomena. The data were collected from files, documents, and the structured interviews. The result was a positioning of the 6 banks on a continuum of effectiveness. Stage III was aimed at identification of some structural 'determinants' of effectiveness, The method of research was in-depth study and comparison of the two industrial relations systems falling at the extremes, of the effectiveness continuum. The findings of this research were supportive of the usefulness of the conceptual model for assessment of system effectiveness. The results of in-depth exploration of the two extreme systems suggest that centralization, formalization, standardization, specialization and professionalization of the industrial relations systems may be significantly related to the effectiveness of industrial relations systems in the banking industry.