Importance of industrial relations
Importance of industrial relations

IMPORTANCE OF INDUSTRIAL RELATIONS Advantages of industrial relations:
Since time immemorial, Industrial relations has being one of the most delicate and complex problems of modern industrial society. The inability to cooperate labor and harmonious relationships has proved Industrial progress to be impossible. However to create and maintain good relations employees who in this case are labor and employers who in this case are management is an interest of all stake holders.

The relationship between management and Employees which comes the direct or indirect union and employers relationship best explain the term industrial relations. Basically industrial relations can be defined as the relationship between employees and management. It is imperative to note that Importance of industrial relations shows this relationship branches directly or indirectly from union-employer relationship.

This can be simplified by stating that industrial relations are the relationships between employees and employers within the organizational settings.

This field of industrial relations mostly looks at or explains the relationship between two particular groups which are management and workers, and to be specific these are workers who are represented by unions. In other words industrial relations are existing interactions between management, workers and the government, and the mediators of these interactions which are institutions and associations.

The term industrial relations has both a wide and narrow outlook. Originally, industrial relations are usually broadly defined this is because they try to include the relationships and interactions between employers and employees. According to this view industrial relations covers all perspectives of the employment relationship, human resource management, employee relations, and union-management (or labor) relations.

However, now this has become more specific and restricted. Industrial relations can be defined in a more scholarly manner as the study and practice of collective bargaining, trade unionism, and labor-management relations. And human resource management is a separate and largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers.


Advantages of industrial relations and importance of industrial relations is to promote Democracy in place of work, Economic growth and development, Boosts employee morale, Accountability and optimum use of scare resources, Avoids conflicts between management and unions, prompts depiction of sound labor legislation and initiates an environment for change. This is also referred to as importance of employee relations in HRM decision making and place of work or organization. It ensures continuity of production is the number one benefit of industrial relations.

By continuity of production it means continuous employment from manager to workers. However, there is uninterrupted flow of income and the resources are fully utilized, resulting in the maximum possible production.

Good industrial relations mostly guarantee increased efficiency which lead to prosperity, reduced turnover and other tangible benefits to the organization. The following is a summary of the significance of industrial relations:

Promotes democracy:

Industrial relations means using collective bargaining to settle problems faced by workers. This collective bargaining is usually achieved through mutual cooperation and mutual agreement amongst all the affected parties i.e., democracy, management and employees unions. This helps an organization to establish industrial democracy, which hence motivates the workers to contribute their best to the growth and prosperity of the organization.

Economic growth and development:

Economic growth and development can be improved through industrial relations. This refers to the economic conditions of workers in the existing state of industrial managements and political government. With the well known fact that Good industrial relations lead to increased efficiency and hence higher productivity and income, it also imperative to note that this also results in economic development of the country.

Boosts employee morale

It is important to note that Good industrial relations which is built-in mutual cooperation and common agreed approach motivate one to contribute one’s best, result in higher productivity and hence income, give more job satisfaction and help improve the morale of the workers.

Accountability and optimum use of scare resources:

Industrial relations which is Good and harmonious creates a sense of belongingness and group-cohesiveness among workers, and also a congenial environment resulting in less industrial unrest, grievances and disputes. This will ensure optimum use of resources, both human and materials, eliminating all types of wastage.

Avoids conflicts between management and unions:

Industrial relations results in reduced conflicts between unions and management. This is because industrial relations involves setting up a machinery to solve problems confronted by management and employees through mutual agreement to which both these parties are bound. This results in avoiding any unfair practices that could lead to major conflicts between employers and trade unions.

It prompts depiction of sound labor legislation:

Industrial relations necessitate passing of certain labor laws to protect and promote the welfare of labor and safeguard interests of all the parties against unfair means or practices.

Initiates an environment for change:

Good industrial relations help in improvement of cooperation, team work, performance and productivity and hence in taking full advantages of modern inventions, innovations and other scientific and technological advances. It helps the work force to adjust themselves to change easily and quickly.

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