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ACHIEVING ORGANISATIONAL EFFECTIVENESS THROUGH EFFECTIVE INDUSTRIAL RELATIONS

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND TO THE STUDY

Industrial relations is a multidisciplinary field that studies the employment relationship. Industrial relations is increasingly being called employment relations because of the importance of non-industrial employment relationships. Many outsiders also equate industrial relations to labor relations and believe that industrial relations only studies unionized employment situations, but this is an oversimplification (Ackers, Peter, 2002). Industrial relations has its roots in the industrial revolution which created the modern employment relationship by spawning free labor markets and large-scale industrial organizations with thousands of wage workers. As society wrestled with these massive economic and social changes, labor problems arose. Low wages, long working hours, monotonous and dangerous work, and abusive supervisory practices led to high employee turnover, violent strikes and the threat of social instability. Intellectually, industrial relations was formed at the end of the 19th century as a middle ground between classical economics and Marxism, with Sidney Webb and Beatrice Webb’s Industrial Democracy (1897) being the key intellectual work. Industrial relations thus rejected the classical economics (www.wikipedia.org).

According to Englama (2001), industrial relations refers to the combination of interactions that take place between the employee and employer in an organization. He believed that the fundamental problem in all organization, whether business, educational, local or national, was in developing and maintaining a dynamic and harmonious relationship in the workplace. To achieve this, group dynamics, policy making by consultation, diffusion of authority, delegation, vertical and horizontal communication have to be ushered in. In more recent time industrial relations have been influenced by other social sciences such as organizational psychology and behavior. Traditionally, economics and law were two main influences on industrial relations, which led to a concentration on macro level industrials relations, and therefore on unions, government and collective bargaining. Paradoxically, industrial relations, though dealing with “relation” has until recently largely ignored the social science sciences relevant to behavior and human relations. While labor xii problems are the result of imperfections in the employment relationship, industrial relations should be seen as the theories and methods which have been developed over time to address and correct these problems, in both public and private sector of the economy. The essence of good industrial relation lies in the bringing up of good labour relations which gives a forum to understand each other (employer, employee) properly.

Economic reforms and the quest for efficiency in public administration call for the decentralization of collective bargaining and wages in the public sector in Nigeria. But the effort to decentralize has translated into both a protracted industrial relations crisis and intergovernmental conflict. This situation is traced to the failed effort at institutionalizing collective bargaining and the consolidation of the unified wage structure in the public sector by the resort to ad hoc wage commissions. The distorted fiscal federalism and intergovernmental relations under the military in Nigeria complicated the situation, such that resolving the federal question has become critical to returning stability to Nigeria’s industrial relations system (Aiyede, 2002). There has been a recurring battle between the various levels of Nigerian governments on the one hand, and between these governments and organized labour on the other, over the determination of public sector wages. Although this conflict became egregious with the adoption and decentralized collective bargaining by the national government in 1991, it reflects a critical industrial relations problem: the failure to institutionalized collective bargaining in the public sector. More than this, it also reflects the contradictions of federalism under the military. The effort to decentralize collective bargaining served to unveil these contradictions of federal practices under military rule and put their implication for public administration in bold relief. The machineries set up for collective bargaining in the public sector, such as the National Civil Services Negotiating Councils and the State Civil Service Negotiating Councils, were never allowed to work. Public sector wages have been set through government fiat or quasi-political wages commissions or tribunals largely set up by the government.

Industrial relations, thus, include both “industrial relations” and “collective relations” as well as the role of the state in regulating these relations. Such a relationship is therefore complex and multidimensional resting on economic, social psychological, ethnic, occupational, political and legal levels. There are mainly two set of factors that determine the state of industrial relations-whether good or poor in any country. The first set of factors, described as “institutional factors” include type of labor legislation, policy of state relating to labor and industry, extent and stage of development of trade unions and employers’ organization and the type of social institutions. The other set of factors, described as “economic factors” include the nature of economic organization capitalists, socialist technology, the sources of demand and supply in the labor market, the nature and composition of labor force etc. Creates cooperative thinking and working to achieve the goal of the organization. A good industrial relation increases the morale of employees and encourages them to give their maximum effort. Each thinks of their mutual interest which paves way for introduction of new methods, developments and leading to adoption of modern technology, thereby increasing the industry’s organizational effectiveness in the long run. Good industrial relations increases production, improves quality of work and product and efficiency of workers are increased. Organizational effectiveness is the measures of how successful organizations achieve their missions through their core strategies. Organizational effectiveness studies are concerned with the unique capabilities that organizations develop to assure that success (McCann, 2004). Industrial relations and organizational effectiveness share a common feature, which is that they are both internalized within the organization. The resulting correlation between the two is that, a good industrial relations system would invariably breed and improve organizational effectiveness, thereby making organizational effectiveness dependent on good industrial relations. Thus, the study focuses on achieving organizational effectiveness through sound industrial relations.

1.2     STATEMENT OF THE PROBLEM

One major reason for the incessant industrial actions in Nigeria today is due to lack of good salary review policy that would be in line with changes in some macroeconomic factors such as prices of goods and services, and inflation. Prices of goods and services continue to increase everyday while the review of public sector employee’s salaries are only considered years after negotiations and industrial actions. An application of effective industrial relation practices would ensure an established way of reviewing workers salaries in line with changes in the economy. Over the years, Nigeria has witnessed protests and industrial actions by the public employees through their various labour unions over the non-implementation of agreed policies. Such incidents could be avoided if the government sincerely applies effective industrial relation practices. Economic reforms and the quest for organizational effectiveness in the public administration, calls for collective bargaining of a good compensation plan/policy which includes better working conditions and motivational incentives in the public sector of Nigeria. Efforts to achieve this had led to protracted industrial actions and low morale of employees in the public sector today. Another issue affecting the organizational effectiveness of the public sector is governments’ continuous insensitivity and insincerity to policies directly or indirectly affecting the public employees and its lackadaisical approach towards addressing these issues. Thus, the study focuses on achieving organizational effectiveness through effective industrial relations.

1.3     OBJECTIVE OF THE STUDY

The main objective of this study is to find out role of industrial relations on the achievement of organizational effectiveness, specifically the study intends to:

1.     To identify the industrial relations process of the Nigerian public sector.

2.     To determine how to improve on the industrial relation’s process of the public sector.

3.     To find out the effect of industrial relation on organization goal achievement

4.     To identify the strategies that could be used to manage industrial relations conflicts.

1.4     RESEARCH QUESTIONS

The following questions will be addressed in this study;

1.     What are the industrial relations process of the Nigerian public sector?

2.      How can the industrial relation’s process of the Nigerian public sector be improved upon?

3.     What are the effect of industrial relation on organization goal achievement?

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