To date, Industrial relations has become one of the most complicated issues in this rapid development society. It ‘encompasses a set of phenomena, both inside and outside the workplace, concerned with determining and regulating the employment relationship’. (Michael Salamon, 2001) ‘Industrial progress is impossible without cooperation of labours and harmonious relationships’. (Naukrihub. com, 2007) Hence, there is a need to create and maintain good relations between employers and employees.
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The existence of industrial relations is to maintain the industrial peace, and find out the ways to solve the conflicts and disagreements in order to preserve the company’s reputation. It could strongly influence the performance of a company in term of the productivity and the fulfillment to the company’s goals. It could even influence an economic growth of a country as according to Rozzaly (2009), a conducive industrial relations will engage unceasing investment from both local and foreign investors. It will create greater employment opportunities to the citizens and at the same time, help the country with its economic growth.
Furthermore, industrial relations also encourage employees and employers to come closer to each other to removing misunderstanding and redressing grievances by going through the negotiation process. The objective is to create a peaceful atmosphere with open mind to achieve equilibrium in the benefit of both parties. The importance of industrial relations has widely been discovered and it is one of the most important factors that lead a company to success. A successful company should be able to focus on both the internal and external environment where not only to satisfy the customers, but also benefits its own employees.
Factors that involved in shaping industrial relations There are numerous factors that involved in shaping industrial relations. First and foremost, the employee, human capital of a company, is one of the most important factors in shaping industrial relations. It is a valuable asset of a company as the ‘commitment of employees can be an important instrument for improving the performance of organizations’. (Nijhof et al. , 1998) The commitment of employees would maximize the productivity and output of a company. Nijhof et al. , (1998) stated that the most crucial relations are a well communication.
Hence, companies have the responsibility to maintain a good relationship with its employees by obtaining their feedbacks and suggestions. A harmony relation would also motivate the employees to work harder and it is a prior factor that uplifts a company’s performance. Trade union is another factor that has a great effect in shaping industrial relations. ‘It is any organization, whose membership consists of employees, which seeks to organize and represent their interests both in the workplace and society and, in particular, seeks to regulate the employment relationship through the direct process of collective bargaining with management’.
(Salamon, 2001) The existence of trade union ‘is to improve and promote the living standard of their members. (Allen, 1996; cited by Zammit and Rizzo 2001) A shop steward will be chosen and represent the union for collective bargaining. The shop steward will fully utilize the bargaining power brought by the union to negotiate with the management for a better working condition. Since trade union is formed by a group of employees, the power of collective strengths against the management is very strong.
Industrial actions such as picketing and strikes might be taken by the union if the management fails to manage the relationship well through bargaining process. As a result, it would tarnish the reputation of a company as well as affect the company’s day-to-day operations. Hence, the management should maintain a good relationship with its employees in order to achieve long term success in the future.