Importance of Collective Bargaining in Industrial Relations

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Collective bargaining is an important element in industrial relations. Collective bargaining helps to make the relationship between employees and employers smooth. A strong bond between the employers and employees contributes to the successful working of the company.

When management people and employees communicate with each other for reaching an agreement it can be said as an outcome of collective bargaining. Most people think of collective bargaining as the process in which union members of the employees talk with employers for getting benefits. However collective bargaining is the process through which a conclusion is reached regarding wages of employees, working hours of employees, and working conditions at the company.

Trade Unions have been regularly criticized for creating strife within the workplace environment fighting workmen compensation as the concept of Collective Bargaining has been termed as a continuous strategic process in determining terms and conditions of employment where management and employees participate at a workplace to oversee establishing stable relationships and was primarily developed as an alternative to ad-hoc on the basis of an agreement with the employees related to managing discipline and employee claims.

Let’s break down the word ‘collective bargaining’,  wherein the term ‘collective’ is owing to the involvement of two parties [employer and employees], who take positions as ‘groups’ as opposed to individuals, while ‘bargaining’ involves negotiations prior to reaching an agreement and shall involve proposals and counter-proposals when striking an offer or counter-offer.

Types of Collective Bargaining

There are mainly 4 type of collective bargaining

1. Distributive Bargaining

In this type of bargaining, one party’s gain will be another party’s loss. It uses a competitive bargaining strategy.
For example, a used bike sale involves two different parties, one is a buyer and the other is a seller. In this case, each person has different interests and thoughts. while the seller wants to sell the bike at a profitable cost, but the buyer seeks to pay the least amount of money possible.

2. Integrative Bargaining

Integrative Bargaining is also called interest-based bargaining, a negotiation strategy is there for finding a win-win solution to their dispute. Here both the parties may gain or at least neither party loses. It can boost the professional relationship
eg. Better training programs

3. Attitudinal Structuring

When there is a backlog of bitterness between both parties, then attitudinal structuring is required to make smooth industrial relations. It can shape/reshape attitudes to positive and cooperative manner
eg: Shaping the attitude from non-cooperative to cooperative / un-trust to trust

4. Intra-Organisational Bargaining

This bargaining refers to the internal negotiation that occurs within respective organizations. It takes place away from the bargaining table. There can be conflicting groups in both management & union. So there is a need to achieve consensus in these groups

Industrial relations is an essential component of labor administration and involves procedures, attitudes, and behavior which underpins how employers, unions, employees interact with each other at the workplace to affect the eventual outcomes and therefore remains a critical driver of organizational success, which when reviewed against numerous published research studies argues that  ‘good industrial relations’ shall translate into delivering robust organizational performance, reduced absenteeism, increased efficiency, higher productivity and creates an environment of innovation to motivate employees by generating employee loyalty and trust.

While in the event of an industrial conflict between employers and employees, shall demand collective consultation, negotiation, and a framework that creates mutual respect and understanding in dealing with industrial issues such as strikes and lockouts. It is fair to state that a legal process would stimulate collective bargaining to bring harmony, peace, discipline as stable industrial relations are the key to the economic growth and social development of nations.

Globally managing human resources involves promoting a better understanding to acknowledge viewpoints, disagreements through dialogue, discussions, and interactions, as collective bargaining is often used to build bridges by resolving minor or major differences with any outsider influence or interventions.

Westford University College offers an MBA in Human Resource Management and Organizational Psychology. That will give you a better understanding of managing human resources and industrial relational structure. This program will help to increase your global ability and managerial skills.

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