Human Resources And The Industrial Relation Business Essay

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Storey (2007) stated, "Human resource management (HRM) has two main forms of existence. One is in the form of academic discourse and activity - this finds expression in conferences, journals, courses in business schools and so on. The other is in the form of practice in organizations that employ people and thus have employment relationships. These

Two modes of existence at times intersect and trade off one another. At other times

They exist relatively independently each fuelled by their own interests, priorities, prejudices and logics (P: 3)". Some 20 years ago, as mentioned by Storey (2007), that word Human Resource Management was new at the work place as some other terms were used more frequently like personnel management, industrial relations, employment relations and etc. He also notes that at first, giant companies like Lucas, Massey Ferguson and British airways already started to have new HRM manager as well as the personnel managers.

Personnel versus Human Resource Management

As personnel manager are being mentioned above, it will be helpful to distinguish between a human resource and personnel management. Guest (1987) has taken some assumptions which can also be called as stereotypes to explain the difference between human resource and personnel management. By looking from time and planning perspective, one will say personnel management is short term and adhoc based whereas it is been dealt with long term planning when speaking from the perspective of human resource management.


Industrial relations deals with regulation control and governs the work and employment relationship (Buira, 2008). Buira (2008) further states:

" provides a multi-level understanding of relationships at work, analyzing the interconnections between the workplace, the company, the sector, the national regulatory framework and -increasing- the European and global levels. It views the employment relationship as one involving multiple stake-holders with contrasting and at times conflicting priorities and interests..... (Page 2)"

The "definition flows from the work of Dunlop in the United States and Flanders in the United Kingdom. They see industrial relations as a social system composed of actors-workers and their organizations, employer-managers and their organizations, and the state and certain of its agencies-interacting in a context composed of the labour and product markets and the work place and social environments. A major output of this system is the establishment and administration of a network or 'web of rules' which govern the process of job regulation (Bain and Clegg 1973, p 91).


There are some beliefs and assumptions on the basis of which some differences are being drawn by taking up some dimensions. Contract is one of the dimensions. In IR, a careful analysis will be done before writing it where as in HRM the basic idea will be to go beyond contract. One other dimension is guide to management action. When we speak of IR in conjunction with that particular dimension, the assumption will be on set rules and procedures. Whereas in HRM the main focus will be on factors like 'business need', flexibility at work and commitment values. One main dimension to consider is nature of relations. In HRM, it will be of singular nature whereas in IR will be of pluralist nature. By that, it means that in former, it is a relationship between a manager and employee whereas in latter, it means that trade unions will speak to employer association. Another related dimension while speaking of assumptions and beliefs will be a conflict, in which when we see it from IR perspective; it is institutionalized than de-emphasized in HRM (Storey in Story and Sisson, 1993). Important thing to note here is that there are often similarities in fact there is no harm in saying that the dimensions of both HRM and IR are no different at all whether it is about beliefs of assumptions, strategic aspects or in line management. One of the theories about the main factor of differences between HRM and IR, explained by Rigini in Niland, Lansbury and Verevis (1994), is that more the company is innovative in terms of technology in order to help produce new products the less it will depend upon labour relations (I.R). In contrast, if the organisation:

"....depends on its labour force (on its willingness to cooperate by taking on responsibilities, initiative, concern for deadlines and product quality etc.) for efficiently running the production process and for economic performance, the more the management will try to involve workers in such re-regulations... (p. 266)"

As seen by Schuler and Huber (1990), One of the main HRM function is paying salary to employees which can be done in regard to which they would perform at the work place ( Performance-Based pay system). One would argue that it is not a practice known to IR practitioners. Instead they will be looking at collective bargaining at national level (used to be in Germany at earlier times) or at industry and company level which is still a well known practices in countries like Germany and Japan respectively.

There is another critical dimension which needs to be discussed in both HRM and IR context. It is being witnessed that the introduction of HRM brings about a significant concentration of power in the hands of management from trade union (Niland, Lansbury and Verevis 1994). In support of that fact Kessler & Purcell in Niland, Lansbury and Verevis (1994) state that " all this begins with cutting the power of the trade unions in the traditional collective bargaining sense off at the knees (p. 209). On other hand, it is also been argued that the key levers such as social-psychological tests, performance pay, individual contracts, team work and other practices like huge emphasis on organizational cultures, we never involved in collective bargaining in the times when trade unions were the main actors of industrial relations. As a consequence some corporations still believe in what Storey calls Dualism. Where company can run the HRM efficiently and still be able to give some kind of power to unions in order to bargain (Niland, Lansbury and Verevis 1994).


One of the facts that have been established throughout the essay is that the dimensions are similar in both (HRM and IR) field of studies. As in IR, the trade unions make sure that the rights of employees and their circumstances are being looked after. On other hand HRM also looks into employee management. So the goal is obviously identical but the different lies in the way it is been practiced. Another fact which has been argued is the power (which UNIONS has at first and then been transferred or taken up by management) which allows management to control the work force and to manage other aspect of employee related management. Finally, one key difference would be the pluralism and individualism which separates IR and HRM respectively.