But the maintenance of congenial industrial relations, particularly in a democratic society like ours is not only a significant task but also a complicated one. The employer in his turn must realise that the gains of industry are not for him along but they should be shared equally and generously with his workers. Industrial training, where a student undertakes a period of training with an organization usually during a semester break, act as an important part in preparing the student for a professional career. Industrial and organizational psychologists are oftentimes brought in to help achieve these goals. Good industrial relations increase the morale of the workers and motivate the workers to work more. The degree, to which these activities are effectively managed, is an indicator of the safety culture of the organization. The industrial organization model allows firms to get a better gauge on a competitor's actions with the use of game theory. A healthy industrial relation is essential for smooth functioning and success of the organization. This leads to increase in production in the organisation. Industrial unrests and conflicts foment class-hatred, embitter mutual relations, and put a hurdle in the development of the society and the nation. Basically IR stems from employment relation. Content Guidelines 2. Collective bargaining is the effective mechanism of shaping the pattern of industrial relations. Industrial Psychology is important in: 1. Satisfied workers are less inclined towards entering into conflict with the management on issues like low wages, long work hours, and unhealthy work environment. Interacting between management and workers and between worker and worker are regular features in industry and these constitute industrial relations. With the active involved preparation,the student learns about the industrial demands, skill set and work ethics. As S. C. Kuchhal rightly put it, “the larger the range they cover and the more fundamental the commodities or services they are associated with, the more marked is their influence and damage”. Optimum Utilization of Resources 4. The recognition of the human factor in production as the supreme one puts a premium on the importance of industrial relations. The two go together or can be merged together as one. From a historical standpoint, industrial psychology was introduced during World War I. Initially, I/O psychology focused on industrial activities, especially business management and human resource, rather than organizational aspects of improving workplace environments. When the entire world is striving for material well-being and when the nations of the world are moving in a planned way for industrial development; industrial relations are naturally drawing more and more attention. The concepts we learned in Industrial Organizational Psychology in industrial organizational psychology apply to different aspects of employment and management in the workplace. This has many long-term benefits for the employer, such as avoiding surcharges and lawsuits, remaining productive, retaining skilled workers and … It results in industrial peace which is essential for the countries, particularly for India, where the economy is being geared in a planned way to ameliorate the lot of the masses. The objectives of maintenance of industrial peace is not only to find out ways and means to solve conflicts or to settle differences but also to secure the unreserved co-operation of and goodwill among different groups in industry with a view to drive their energies and interest towards economically viable, commercially feasible, financially profitable and socially desirable channels. The per-employee productivity is comparable to the best in the world. It also aims at the development of a sense of mutual confidence, dependence and respect and at the same time encouraging them to come to closer to each other for removing misunderstandings, redressing grievances, if any, in a peaceful atmosphere and with open mind and fostering industrial pursuits for mutual benefits and social progress. Experiences indicate that good industrial relations serve as the key for increased productivity in industrial organisations. The concept of industrial relations has assumed more significance nowadays than in the past. Effective Administration 6. Thus, it is evident that good industrial relations is the basis of higher production with minimum cost and higher profits. International Labour Organization has stressed upon the relations between state, employers’ organizations and workers’ organization or the relationship between occupational organizations. Game theory, also known as interactive decision theory, consists of a finite amount of players (the competition) and a limited amount of decisions they can make. Hence it is broader in meaning and wider in scope. The majority of economists studying industrial organization (or industrial economics) and strategic management researchers have, over the years, mostly viewed each other with suspicion-if they knew each other existed. Industrial relations have moral dimensions too. Benefits to Management – Management gets benefit from strikeless environment, introduction of change, higher productivity, minimum absenteeism and turnover, disciplined work force, free flow of communication, higher profit and health maximization, high employee morale, etc. Importance of Industrial Relations: Increased Production, Uninterrupted Production, Improves Morale and a Few Others Importance of Industrial Relations – With 6 Reasons Why Good Industrial Relations are Necessary. It results in industrial peace which is essential for the countries, particularly for India, where the economy is being geared in a planned way to ameliorate the lot of the masses. An economy organised for planned production and distribution, aiming at the realisation of social justice and welfare of the masses can function effectively only in an atmosphere of industrial peace. Thus, IR ensures the continuity of production. For example, at the Alwar plant of Eicher Tractors, productivity went up from 32 per cent between 1994 and 1996 to 38 per cent in 1997. This changing process becomes a continuous feature in industrial system and makes IR concept a dynamic and evolving one. The investment in and the scope of industries in India have been growing plan after plan. Benefits of Specialization 2. Frederick W. Taylor: Taylor was a mechanical engineer who published an influential book on improving industrial efficiency. Perhaps the most important reason why industrial employers need to institute worker safety policies is that these policies and practices prevent accidents that can injure or kill workers. We find union of bank officers, pilots, engineers and so on. Several types of human needs (physical, mental, and social) can be satisfied through good Industrial Relations. The most important benefit of industrial relations is that this ensures continuity of production. One of its objectives is to protect workers’ interests and to improve their economic conditions. Promotion of Industrial Harmony – Industrial democracy is practised by various workers’ participation schemes like collective bargaining, works committee, quality circle, functional committee, board of directors scheme, joint consultation and employee stock option plans. Both should think themselves as partners of the industry and the role of workers in such a partnership should be recognised. Good industrial relation helps in effective utilization of man, money and material. The good IR help run an industry effectively and successfully, i.e., the desideratum of the day. Reduced industrial dispute, industrial unrest, strike, lock outs can be avoided through good industrial relation. The most important benefit of industrial relations is that it ensures uninterrupted production. Elements such as job satisfaction, performance and evaluation methods are measured. In this way, IR helps create a peaceful environment in the organisation. Methods of psychology are applied to issues of critical relevance to business, including, 4. i. The subject, therefore, includes individual relations and joint consultation between employers and workers at their places of work, collective relations between employers and trade unions; and the part played by the State in regulating these relations”. This makes the workers work with zeal, energy and efficiency. Image Guidelines 4. They increase labour efficiency also. The goal is to identify and solve problems, increase employee satisfaction, and improve workplace dynamics. In short, the term, ‘industrial relations’ means the relations between employees and management arising out of day to day work in industry. In this plant, productivity went up from 32 per cent to 38 per cent between 1994 and 1997. Importance of organizational behavior: It is very important to study organizational behavior because it provides an understanding of why people behave as they do in organizations.In any organization, the importance of organizational behavior has tremendous necessities. Increased Production 2. Human services is a vast sector that includes a broad range of disciplines, knowledge and skills focused toward enhancing human well … v. The relationship is based on economic, non-economic issues arising out of terms and conditions of employment as also practices not covered under the terms. 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. While its most often referred to as industrial-organizational psychology, other names for this field include IO Psychology, Work Psychology, Business Psychology, and Occupational Psychology. The good IR help run an industry effectively and successfully, i.e., the desideratum of the day. John T Dunlop (1958) has expressed his views on the concept of industrial relations as the relations between three actors-employer, employees and government. It analyzes determinants of firm and market organization and behavior on a continuum between competiti… They also clog the progress and development of the nation. Organizational Behavior helps us to study human being and their complex nature in organizations by identifying the … It motivates the workers to contribute their best towards attainment of organisational objectives. TOS 7. On the other hand, lack of discipline means waste, accidents, and confusion. There has been an acute necessity in India especially during the post-independence period, to industrialise her economy in order to tackle the multifarious socio-economic problems. Importance of Industrial Sector in Economic Development or Industrial Development Plays a Vital Role in the Economics Industrial Sector is of great importance for economic development of country. It also provides a procedure to resolve workers’ grievances relating to work. When parties think of mutual interests, it gives more changes of newer development. It helps in achieving the targets, goals, and objectives of the organization. Organizing is an important means of creating coordination and communication among the various departments of the organization. With few exceptions, industrial organization had little effect on the busi-ness policy concept of strategy, and business policy Industrial relations contrib­ute to world peace. Organization is a groupof people who workinterdependently towardssome purpose 3. Further, profile of workers have changed from uneducated to educated ones; from semi-skilled to skilled; from technical to executives in industrial sector more particularly in knowledge-based sector. There is uninterrupted flow of income for all. The work of an industrial-organizational psychologist could improve worker morale, boost efficiency, decrease absenteeism or lower the turnover rate. These mechanisms enable the workers to give their best to the organization. It is unethical on the part of any management to take advantage of the helplessness of workers and exploit them. Before publishing your articles on this site, please read the following pages: 1. To help government in making laws forbidding unfair practices of unions and employers. Industrial and organizational psychology, sometimes called ‘I/O psychology’ or ‘work psychology,’ is two-pronged: it is the study of both a workplace’s environment and the employees who work there. Dale Yoder views industrial relations, ‘as a whole field of relationship that exists because of the necessary collaboration of men and women in the employment process of an industry’. Good IR helps to run an industry effectively and successfully. Disclaimer 8. (h) Production and productivity improves. It naturally affects production because mighty cooperative efforts alone can produce great results. This has been possible only through fast industrial development which, in its turn, depends on industrial peace. Industrial and Organizational PSychology focuses on improving productivity in the workplace and creating the best possible working environment for employees. FreeDigitalPhotos.net - Image: FreeDigitalPhotos.net The World of Psychology The world of … Frequent industrial conflicts not only affect the management and labour but also tend to impoverish the community as a whole. In other words, personnel manager jump into fire-fighting when industrial conflict erupts. As such, there are many definitions of IR. Industrial organization applies the economic theory of price to industries. Industrial peace must be maintained at any cost to ensure better performance in industry. The industrial peace lies ultimately in a transformed outlook on the part of both. They affect production and national income in an adverse manner. Human Resource Management, Industrial Relations, Importance of Industrial Relations. Copyright 10. Organising helps in the smooth functioning of a business in accordance with the dynamic […] We can’t even retain our freedom without industrial growth”. All of these activities can result in a business that is better for workers and more profitable. Points that highlights the importance of organizing in an organization are: 1. Founded in 1920, the NBER is a private, non-profit, non-partisan organization dedicated to conducting economic research and to disseminating research findings among academics, public policy makers, and business professionals. So, there is the impact of industrial relations not only on the economy of a country but also on its society and culture. In other words, complete unity of thought and action is the main achievement of industrial peace. In narrow sense, the term ‘industrial relations’ means relations between parties in industrial establishments. To help in the economic progress of a country. They affect production and national income in an adverse manner. Good industrial relation boosts the morale of the employees. To boost the discipline and morale of workers. Privacy Policy 8. ; healthy work relationships must exist for the development and promotion of harmonious labour-management relations which has become very important in the modern industrial society. 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. From all these we can conclude that good industrial relations certainly boost up the production and improves the quality and quantity both. Hence, one of the major objectives of industrial relations is to change the traditional and contradictory views of labour and management towards each other, so that they may develop mutual understanding and cooperation and both may work in the best interests of enterprise. Industrial relations usually imply good and positive relations between the employees and employers. The majority of economists studying industrial organization (or industrial economics) and strategic management researchers have, over the years, mostly viewed each other with suspicion-if they knew each other existed. Better management of industrial relations in an industry is a sine qua non for the success of the industrial concern. 4. ; Hugo Münsterberg: Munsterberg was an applied psychologist who wrote an early text on how psychology could be used for industrial, occupational, and organizational purposes.His work had an important impact on the early development of the field. To mention, good IR help: It has been rightly emphasised that “in the heat of the daily conflict, workers and em­ployers are apt to forget that they are only two limbs of the body politic and that there is always a third partner, in fact, the most dominant part­ner, namely, the community at large, to be reck­oned with”. If an organization lacks good Industrial Relationsthen it will not be possible for you to achieve its objectives and targets successfully. Thus, the relationship starting with cooperation soon changes into conflict and after its resolution again changes into cooperation. The importance of the human factor in an industrial organisation is beyond question. Further, it is not an exaggeration to say that if we are successful in industry the answer to class-antagonisms and world conflicts becomes easier. The concept of union is no longer confined to the relationship between shop floor level worker and management due to increasing unionization of other classes of employees. Plagiarism Prevention 5. Workplace psychology refers to the practice of applying psychological principles and practices to a work environment. The Importance Of Organizational Performance And Human Resource Management. The field of industrial relations needs a new looks which is free from suspicion, prejudice and ill-will towards workers. 3. Adequate financial and non-financial benefits, provision of employee participation in sharing of profits and of management and decision making, improved bargaining capacity through mutual negotiations and consultation with the management provides satisfaction to the workers. The importance of communication in an organization can be summarized as follows: Communication promotes motivation by informing and clarifying the employees about the task to be done, the manner they are performing the task, and how to improve their performance if it is not up to the mark. 2. There has been a phenomenal growth in employment, wages, benefits, working conditions, status of the worker, educational facilities etc. 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) is well known for zero breakdowns, zero accidents and zero defects. 5. Smooth running of an industry is of vital importance for several other industries; to other industries if the products are intermediaries or inputs; to exporters if these are export goods; to consumers and workers, if these are goods of mass consumption. The main reason why the organization theory is considered very important in this age of globalization and the modern age of running businesses, simply lies on the fact that organization theory is application-based and that this tool is very practical when it comes to achieving organizational goals. When the entire world is striving for material well-being and when the nations of the world are moving in a planned way for industrial development; industrial relations are naturally drawing more and more attention. 1. The increase in industrial labour led to the formation and development of trade unions and various social groups. Disputes are reflections of the failure of basic human urges or motivations to secure adequate satisfaction or expression which are fully cured by good industrial relations. In economics, industrial organization is a field that builds on the theory of the firm by examining the structure of (and, therefore, the boundaries between) firms and markets. These dynamics require more different IR strategy than the conventional one. Maintenance of discipline ensures orderliness, effectiveness, and economy in the use of resources. Hence, one of the main goals of the Five Year Plans in India has been rapid industrialization and more employment in secondary and tertiary industries. Applications of Industrial-organizational Psychology Research Industrial disputes disrupt the flow of production; bring strikes, gheraoes and lockouts, organized demonstration, picketing, etc. vii. In a conflict between the workers and the em­ployer, it is not the fact that only one of the par­ties suffer, usually the workers. To help management both in the formulation of informed labour relations policies and in their translation into action. Good industrial relations improve the morale of the employees. Peace in industry is a powerful factor for good international relations. New and new projects may be introduced for the welfare of the workers and to promote the morale of the people at work. Creates Transparency Families of workers are likely to suffer which must have repercussion on the society as a whole. Adaptation to Changes 5. 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