A clear and detailed explanation of chapter 1-7 of Industrial Psychology 314, Labour relations. Made from class notes and the textbook I achieved a Cum Laude mark.
,Theme 1 : Introduction and overview
Learning outcomes
After completing this theme you should be able to:
explain the different levels where labour relations take place
explain the term "labour relations"
explain the nature of labour relations
explain the contribution of the different labour relation's theories to the field of
study
explain the field of study of labour relations by using an open systems
framework
_____________________________
Labour relations :
o The mutual two-way relationship between employer and employee in the workplace
o It includes both formal and informal relations
o The relationship also involves a third and more silent partner: the state
Labour relations happens at many levels:
o Interpersonal level: between two people (supervisor and worker) and the state (labour laws) in the background
o More complex level: the relationship between organised groups at a workplace with the state providing rules of the
relationship and acting as an intermediary
o Industry level: broader interaction between employer organisation and trade unions, with the state playing a similar role
as the lower level
Therefore, labour relations doesn't just focus on the individual relationship between an employer and a single employee,
but is greatly concerned with collective relations between trade unions and employers and their organisations
Labour relations is a broad, interdisciplinary field of study that encompasses all aspects of the employment relationship
Labour relations also encompasses a stable, on-going activity at the workplace.
Nature of labour relations: The characteristics of labour relations are not mutually exclusive
• Confrontational
Confrontation can be visible direct physical and emotional - when workers lay down tools
• National debates
When confrontation is more political and wide-ranging (debates between trade unions and employer organisation.
regarding legislation)
• Subconscious societal dynamics
Such as racism, discrimination and sexism are covered by labour relations
• Interdisciplinary
Economics, politics, psychology and law are some disciplines that support the study of labour relations
• Orderly and Constructive / Disorderly and Destructive
Employers and employees have divergent interests and objectives, yet, they also have a strong interdependence
• Co-operation and conflict; power and interdependence
Understanding the dynamics of power between employers and employees is critical in labour relations:
,• How did it start?
o Labour relations developed out of the first industrial revolution due to the need for mass production
• Factories required people to operate machines - leading to the emergence of workers
o Employees were placed in hazardous situations for long hours
• This process was met with resistance due to the appalling working conditions
A brief description of the main influences in shaping the understanding of labour relations:
Labour Relations Theories:
1. Free Market Economists
• Emphasised natural laws of economics, which shaped the conditions under which labour and capital interacted in the
employment relationship
• Labour = commodity, subject to the laws of supply and demand
• No justification for special treatment for workers, intervention by government also criticised
• The "invisible hand" (Adam Smith) of the market was seen to be working in the best interests of workers and society
2. Marx, Capitalism and the Working Class
• Marx saw capitalism as leading to poverty and alienation through exploitation
• In order to make profit out of workers, capitalist forced workers to work long hours at low wages to produce goods whose
market value exceeded this value - this excess was termed "surplus value"
• Because surplus value could only be produced by labour, Marx believed it belonged to workers, not to capitalists
• During this process of exploitation, working conditions = intolerable. Workers became alienated from the product of their
labour and ultimately from themselves (stifling creativity)
• Because of this exploitation and alienation, Marx believed a class consciousness would develop to unify the working class
against the capitalist class
• He thus supported the formation of trade unions. Marx and Engels felt that trade unions would mobilise the masses and
pave the way for the revolutionary overthrow of the capitalist system by the working class
• Lenin felt trade unions ran the risk of being co-opted into capitalist institutions
3. The Webb's and Social Reform
• Beatrice and Sidney Webb from Britain (social reformers) criticised the free market economists' definition of labour as a
mere commodity
• They agreed with Marx on the necessity of improving living conditions and uplifting the working class, but believed this
would take place via a process of evolution instead of revolution
• They regarded trade unions as important vehicles for improving wages through collective bargaining
• They advocated that legislation be passed to protect men, women and children who were being exploited
The Webbs basically said, we agree with Marx, except we think
you need to be nicer about it and not revolutionise it, but
rather focus on evolution.
, 4. Institutional Economists
• Necessity for reforms emphasised in USA by people such as Richard Ely and John Commons
• They emphasised importance of negotiations in seeking compromises
• Advocated the protection of the right of workers to join unions & their right to protective labour legislation in areas such as
health and safety
• Believed capitalism was not the cause of the conflict
• Conflict was seen as arising from the fundamentally different objectives of employers and employees
• Primarily concerned with analvsing the role of trade unions in society in an attempt to persuade management of the
legitimacy of trade unions & the collective bargaining process
5. Scientific Management (Employee management approaches)
• Early 1900s: management became more concerned with theories that focused on management efficiency and
organisation than with the theories relating to trade unions proposed by social reformers
• Industrial psychologists (such as Frederick Taylor) promoted concepts of scientific management:
• Raise productivity by means of engineering techniques and incentive strategies directed at the individual worker
• Core idea: each job could be broken down into component parts - if each job part was managed to specific output
criteria, the overall work output would improve
• This resulted in long production lines where workers would repeat the same specific task
• Later, industrial sociologists stressed the importance of the work group in influencing working behaviour
• Mayo, on whose theories the human relations movement was founded, stressed the necessity of providing satisfactory
social environment as a basic requirement for a motivated workforce
• The human relations approach sought to encourage cooperation from workers and their acceptance of management
policies and actions
• Other management theorists, such as Fayol, Barnard and Weber, stressed the organisation's goals and the means by
which management could efficiently attain those goals
6. Dunlop's Systems Theory
• After WW2, there was a realisation of the necessity for an integrated approach to understanding "industrial relations"
• John Dunlop attempted to provide an integrated theory and focused his attention on the system of rules which governs
the workplace and work community
• His major work provided a theoretical framework which defined the industrial relations system as a subsystem of the
wider society
• The wider society was seen to provide certain external influences and constraints but not to dominate industrial
relations completely
• He proposed that an industrial relations system comprised the following components:
Actors: (Management labour state)
Managers, workers, government agencies who take part in the rule-making process
An environmental context:
Technological and economic factors, together with the locus of power distribution in the larger society. Impinges
upon the actors
A common ideology:
Each actor may have their own ideology. An industrial relations system requires that these ideologies must be
compatible and consistent to allow a common set of ideas and to recognise acceptable roles for each actor
A set of rules to regulate labour relations:
Rule-making, and the application of rules via agreed procedures, is seen as the central aim of the industrial relations
system
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