Causes & Effects of Poor Industrial Relations



Perhaps the main cause or source of poor industrial relations resulting in inefficiency and labour unrest is mental laziness on the part of both management and labour. Management is not sufficiently concerned to ascertain the causes of inefficiency and unrest following the laissez-faire policy, until it is faced with strikes and more serious unrest. Even with regard to methods of work, management does not bother to devise the best method but leaves it mainly to the subordinates to work it out for themselves. Contempt on the part of the employers towards the workers is another major cause. However, the following are briefly the causes of poor industrial relations:

  • Mental inertia on the part of management and labour;
  • An intolerant attitude of contempt of contempt towards the workers on the part of management.
  • Inadequate fixation of wage or wage structure;
  • Unhealthy working conditions;
  • Indiscipline;
  • Lack of human relations skill on the part of supervisors and other managers;
  • Desire on the part of the workers for higher bonus or DA and the corresponding desire of the employers to give as little as possible;
  • Inappropriate introduction of automation without providing the right climate;
  • Unduly heavy workloads;
  • Inadequate welfare facilities;
  • Dispute on sharing the gains of productivity;
  • Unfair labour practices, like victimization and undue dismissal;
  • Retrenchment, dismissals and lock-outs on the part of management and strikes on the part of the workers;
  • Inter-union rivalries; and
  • General economic and political environment, such as rising prices, strikes by others, and general indiscipline having their effect on the employees’ attitudes.

Facts [+]

In USA there is no federal law or mandate that requires an employer to give workers lunch breaks or rest periods, although most companies allow and encourage them. Studies have found up to 58% of American workers skip their lunch break. Health and workplace experts suggest that this practice ultimately leads to worker burnout and diminished productivity.

Effects of Bad Industrial Relations

Industrial relations are of great importance in industrial life. These relations have great bearing on the economic, social and political spheres of our society. If in an organisation, relations between labour and management are cordial, there will be industrial peace and interests of both the parties will be automatically safeguarded. However, organisations where industrial relations are strained, the organisations have to face lot of problems. The atmosphere of such organisations is always surcharged with industrial unrest leading either to strikes or lockouts. Organisations which ignore the importance of industrial relations face high cost of production. Adverse effect on efficiency, low-grade production, negligence in the execution of work, absenteeism among the workers, high rate of labour turn-over etc. are the evils that result from poor industrial relations.

Lack of cordiality in industrial relations not only adversely affects the interests of the labourers and employers but also cause harm to different sections of society. They are faced with lot of difficulties and problems.

Demerits of bad industrial relations can be expressed as under:

  • Effect on Workers: (i) Loss of wages, (ii) Physical injury or death on account of violence during labour unrest, (iii) Excesses by employers, (iv) Economic losses, (v) Bitterness in relations, (vi) Adverse affect on career.
  • Effect on Employers / Industrialists: (i) Less production, (ii) Less Profit, (iii) Bad affect on organisation, (iv) Bad effect on human relations, (v) Damage to machines and equipments, (vi) Adverse effect on development of companies, (vii) Burden of fixed expenses.
  • Effect on Government: (i) Loss of revenue (less recovery of income tax. sales tax, etc.) (ii) Lack of order in society, (iii) Blame by different parties.
  • Effect on Consumers: (i) Rise in prices, (ii) Scarcity of goods, (iii) Bad affect on quality of goods.
  • Other Effects: (i) Adverse affect on International Trade (Fall in exports and rise in imports), (ii) Hindrance in Economic Development of the country, (iii) Uncertainty in economy.
To conclude, it can be said that almost all sections of the society suffer loss in one way or the other due to bad industrial relations. In order to maintain peace in industrial units it is of utmost importance that employers and workers should make constant endeavour to establish cordial human relations.