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10224242

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Pluralist approach to Industrial Relations

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The field of
employment relations is mostly defined by the interactions and relations
between different elements of the labour market. To this end, the theory and
practice of industrial relations has received much attention, and is an area
with numerous components worth discussing. One of these is the pluralist
approach to industrial relations.

 

This paper
will discuss the advantages and disadvantages to interpreting industrial
relations exclusively in pluralist terms. First, a review comparing pluralism
and unitarism is presented, followed by a discussion of the dominance of the
pluralist theory.

 

In 1966,
Professor Alan Fox published his theory on Industrial Sociology and Industrial
Relations (Fox, 1966). In doing so, he introduced the different approaches to
industrial relations. Fox emphasizes the possibility of understanding Industrial
Relations in one of two ways. Either the pluralist view, where a relationship
based on negotiation and exists to please different independent groups who
might have different interests and values; or the unitarist view, where a
relationship based on social values exists to please individuals with united
interests and goals (Cradden, 2011). Later in 1974, Fox included in his book
Beyond Contract a third approach, the radical view, which highlights the
illegitimacy of the employment relationship between managers and workers. According
to this approach the employment relationship exists only to empower and please
the controlling group by taking advantage of imbalanced labour markets. The radical
approach highlights the need for strong trade unions that will bring change and
social justice to the labour markets and improve the workers position in a
capitalist system. However, and unlike the pluralist approach, the radical
approach consider legislation and state intervention actions might be for the
benefits of the employers and interests of management, and don’t necessarily
balance between competing groups, therefore, and taking the radicalist view
into considerations, the pluralist approach is seen as supporting capitalism.

 

The
differences between those approaches is stark. The pluralist sees the
relationship between managers and employees as a strategic contractual relationship
between parties with different interests and possibly competing values, which
can be the main barrier to create a common goal or one social group for all. Therefore,
employment relations are based on conflict, negotiation and bargaining, and any
cooperation that does occur is only when participants have a mutual need to
achieve a certain objective or to maintain coherent relationships. The unitarists
on the other hand consider employment relations to be the relationships between
members of a social group who share a common goals and objectives, and
cooperate to achieve these objectives (Cradden, 2011).

 

These
approaches to industrial relations cannot be considered simultaneously. That is
due to two serious dilemmas that need to be addressed. The first, using Cradden’s
(2011) terms, “the simple distinction between unitarist and pluralist frames of
reference does not adequately cover the variations in perspective that exist in
practice”. The radical approach on the other hand has the same perspective
regarding the urgent need to balance the power between owners/managers and
workers. However, those approaches differ when it comes to the pay of workers
and what is perceived to be a fair wage. Another challenge is the lack of coordinated
action and vagueness of ways of formal and informal interactions between the
frame of references to industrial relations.

 

Early
institutionalists like Sidney and Beatrice Webb agree with the pluralist
emphasis on the need for trade unions and the effects of collective bargaining.

After they noticed the labour challenges and problems of the early twentieth
century, they argued that the cause of the majority of these problems was due
to the imbalance of power between employers and employees (Kaufman, 1997). This
imbalance of powers was a result of market imperfection. Theoretically and from
this point of view, trade unions and government regulations are seen as a way
of bringing both employees and employer to a middle ground.

 

When comparing
classic and modern pluralist, we find the former approaches the issue within industrial
relations as a response to the increase in numbers of workers and therefore the
industrial working class. This in turn emphasized the need for institutional
development to allow and increase workers’ integration into sophisticated
economies and developed societies (Kaufman, 2004).

 

However, during
the past few decades, pluralist scholarship faced a number of challenges in the
neoliberalist era. For the sake of adaptation, classic pluralism as we know it was
substituted by a modern version better designed and fitted for the modern
day (Heery, 2016). One of the major changes between classical and modern
pluralism is modern pluralism deepened its focus on disturbed markets rather
than workers individually.

 

In the UK,
the pluralist approach was and remains the popular frame when analysing
employment relations in the academic field of industrial relations. Given the
popularity of this approach, this dominant frame of reference to industrial
relations invites critical questioning. The following section examines the
effects of adopting purely the pluralist approach to the theory and practice of
industrial relations in comparison to other approaches.

 

One of the
key features of the pluralist approach to industrial relations in the belief
that both employees and employers are two independent parties with different
interest and values. However, and as initially highlighted by Budd (2004), the employee’s
interests will revolve around equity and voice.

 

Equity is
the employment practices outcomes that are perceived as fair and applicable. For
example, personal treatment, safe working environment, non-discrimination
practices and material results such as income. This can be provided by the
employer or through the relevant regulations of the government. Voice is the
ability to participate and influence the decision-making processes and access
to relevant information and can only be achieved through work participation.

 

Equity and
voice can have competing objectives in industrial relations. For example,
collective bargaining may be successful with establishing minimum wage
standards, but on the account of professional status and rank. According to the
findings of Card and Krueger (1995) this action can prove disadvantageous for employees
and can place employers in a overly strong position. They argue minimum wage laws
can skew the labour market by creating imperfect competition, developing in the
process a combination of time-consuming and expensive job searches, decreasing mobility
and erecting informational limitations that place employers in a more powerful
position. This suggests these opposing interests between employer and employees
will be the fuel for ongoing conflict in an imbalanced labour market where both
sides do not possess the same access to information or power.

 

Pluralists respond
by arguing that both managers and workers will be also interested in a
sustainable and continuous relationship. Furthermore, with the independence of
both parties, there will be mutual ground for negotiating and resolving arising
conflicts (Budd et al, 2004). This is because according to pluralists, it is the
very absence of equity and voice that generates the need for industrial
tensions. The existence of imperfect markets and workers generates a need almost
immediately for equity and voice to create a perception of fairness between
employees. Workers who do not have access to information of the decision-making
process are more likely to perceive the whole system as unfair and inapplicable.

If workers noticed a lack of effort in addressing these imbalances, they will
lose their trust in the system, which can consequently lead to a drop in
performance. These findings are not unprecedented. In fact, there is extensive research
regarding equity and voice in the employment relations. One of the aims of pluralist
industrial relations is to balance the interests of workers and managers by
applying the analytical findings of such research (Budd et al, 2004).

 

The pluralist approach emphasizes the entitlement of workers
as individuals and as citizens in a democratic community. They demonstrate the
basic right of workers to better treatment in the working place, where their
dignity is being respected and regarded. For example, granting a fair living
wage as well as autonomy (Bowie, 1999). As citizens living and working in a developed
and democratic society, employees should be eligible to have a voice, in which
they can participate in the decisions that might have an effect on their lives
(Adams, 1995). However, pluralists also respect capitalism and support the
desire of managers to make profits. As a result, it can be challenging to build
a stable bridge addressing the varying competing interests.

 

Pluralists
recognize the imbalance of powers in industrial relations. They see workers
placed in a disadvantaged position in their relationship with management, which
is the reason behind pluralism’s emphasis on collective bargaining and call for
regulation, to ensure workers are protected and practising their right to
negotiate, especially in the case of different interest between managers and workers
(Heery, 2016). Another key feature of the pluralist approach to
industrial relations is “balancing competing interest in the employment
relationships” (Budd et al, 2004). A democratic industrial relation requires
consideration and protection of all interests, whether it was the employer, the
employee or even the consumers (Webb and Webb, 1897).

 

By evaluating
employment relations as a set of competing interests we can come to the
conclusion that the effects of human resources practices on worker and
organizational performance are equal. Especially when the workers are the first
to receive directly the effect of the changes in human resources practices and
policies. Therefore, profits and productivity cannot be the only indicators to
determine how successful such practices are. This framework of competing
interests in the research on high performance practices predicts that performance
practices that balances the interests of the employers and employees will tend
to be more successful and reflect better results, while those objectives who do
not balance both interests will be more likely to fail (Delaney and Godard
2001).

 

One
of the fundamentals of the pluralist approach is that regulating and
representing employment relationship can be serving both the interests of employers
and employees. Pluralist argue that in cases where either is missing, all
parties will be affected by negative results and unpleasant outcomes. If
employees perceive management practises and decision making to be unfair and
inapplicable, especially when those decisions are not regulated by law or a prior
collective agreement, and if at the same time those employees did not have a
collective representation to deliver their voice, it could lead to a drop in
employee performance and therefore, the overall performance of the institution (Heery,
2016). Streeck (1997) sees regulation as a positive practice in employment
relations. He argues that it requires managers to improve their management
skills and widen the area of shared interests.

 

Pluralist industrial
relations can also make a meaningful contribution to a better understanding of
how to enhance and improve individual and institutional performance by
harmonizing interests (Osteman 2000), which can result in a higher productivity
and profits. Moreover, pluralists have identified two different forms of
efficiency: allocative and real (Meltz, 1989). Allocative efficiency is defined
as the technical knowledge and procedures required to improve and maximize results.

Therefore, in order to improve real efficiency, pluralists argue that
allocative efficiency can be enhanced by supporting employee’s interests, instilling
a sense of fairness, voice and security and maximizing the real efficiency as
an outcome (Olson, 2000).

 

According
to classical pluralists, the more advanced and industrialized a state becomes,
the more likely that industrial relations will be based around trade unions and
relations with them (Kaufman, 2004). This general understanding of industrial
relations continues to show in the modern pluralist approach. In this statement,
we find three key assumptions which deserve critical review. The first is the
link between the rise of industrial relations and the economic development of
the associated society, which suggests that progress is slow and measured by defined
periods. The second assumption is that change is initiated and based purely on an
economic basis. Last, there is an assumption that these factors exist and
operate identically across all developed societies (Heery, 2016).

 

When
reviewing the theory, in comparison to critical industrial relations, pluralist
industrial relation research views workplace conflict as caused by external factors
(Dunlop, 1993). Class-based conflict is not recognized. This is different from the
Marxist view of industrial relations, and because pluralists embrace conflict
arising from different and mixed motives, suggesting class is actually not a
critical concept in pluralist industrial relations (Levine 1995).

 

Another theoretical element of the pluralist approach to
industrial relations is looking at individuals from a human or behavioral perspective,
instead of a purely commodity-based economic perspective (Budd, 2004). Pluralists
recognize the difference in individual traits, emotions, needs and interests. This
approach therefore suggests that employees’ interests may vary and can be complicated,
and satisfying all these desires and interests can be challenging. For example,
according to Hodson (2001) employees could desire to be respected at work,
working in a positive environment, and avoiding insults. It can be the ability
to participate and influence the decision-making process (Freeman and Rogers,
1999), or improving performance through access to self-development
opportunities, leading to professional satisfaction and self-actualization
(Kaufman 1993). This also raises questions as to the nature of the code of
conduct between management and staff, and how workers should be treated (Webb
and Webb, 1897). Hence the emphasis behind granting employees better working
conditions and practicing their right to participate in the decision-making
process (Budd, 2004).

 

Some researchers criticize some of the features of the
pluralist approach. Wheeler (1985) for example argues that when decisions are usually
made by employees and employers, there is a chance that not all these decisions
are being considered on a rational and reasonable basis. As an example, disappointment
and frustration can lead to strikes, which can change the course of certain
decisions. Compulsory comparisons can play a role in changing wage outcomes in
an unpredictable way (Ross 1948), and complexity might cause the creation of
domestic labor market conflicting with competitive forces (Lester, 1988).

 

Fox later came
to the conclusion that with employment conflicts, the pluralist approach can be
sometimes more of a problem than a solution. He questioned the values adopted
in the pluralist approach to industrial relations and the purpose it serves (Fox
1974, 272). This was in agreement with Gomez and his co-authors arguing why balance
is best, where they also questioned the rules of interaction between managers
and workers, and allocation of resources (Budd et al, 2004).

 

The
pluralist approach to industrial relations produced a theory of negotiations
and competing values and interests between employers whose interests can be
cost reductions related (Barbash, 1984) and the employees whose interests  revolve around ‘equity, efficiency, and voice’
(Budd, 2004). Those competing interests are addressed by collective bargaining
and negations under the mutual interest of both the workers and managers in a continuous
constructive relationship.

 

While
the pluralist approach to industrial relations is only a theory, it provides a
testable and verifiable assumptions regarding the relationship between two
opposing parties, behaviours and outcomes. Realistic experimental analysis is a
core part of the pluralist approach to industrial relations paradigm, and such
analysis is needed (Manning, 2003). This is because employment relations
outcomes cannot be fully determined only by counting solely on economic inputs
in a competitive market.

 

Ackers
(2002) argues that modern pluralism offers a refreshing perspective to renew
the classical industrial relations society. According to him modern pluralism
is able to do so by trying to link the old pluralist frame of reference to the concerns
and questions raised by modern developed society. Pluralists call for ethical
foundations of institutional policies. Moreover, modern pluralism can provide
an initial vision and guide of how society, work and employment should be
carried forward, and can also provide a critical social philosophy which can
serve as a base for arising questions that needs to be addressed regarding
current practices in businesses and labour markets. And finally modern pluralism
can rationalize industrial relations’ desire and call for trade unions and
legislations.

 

 

 

 

References

 

Ackers P (2002) Reframing employment relations: The
case for neo-pluralism. Industrial

Relations Journal 33(1): 2–19.

 

Adams, Roy
J. 1995. Industrial Relations Under Liberal Democracy: North America in

Comparative
Perspective. Columbia: University of South Carolina Press.

 

Barbash,
Jack. 1984. The Elements of Industrial Relations. Madison: University of
Wisconsin

Press.

 

Bowie, Norman E. 1999. Business Ethics: A
Kantian Perspective. Malden, MA: Blackwell.

 

Budd J
(2004) Employment with a Human Face: Balancing Efficiency, Equity, and Voice.

Ithaca, NY
and London.

 

Budd J,
Gomez R and Metz NM (2004) Why a balance is best: The pluralist industrial

relations
paradigm of balancing interests, Industrial Relations Research Association, pp.

195–227.

 

Card,
David, and Alan B. Krueger. 1995. Myth and Measurement: The New Economics of
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Minimum
Wage. Princeton, NJ: Princeton University Press.

 

Cradden, C.

(2011). Unitarism, Pluralism, Radicalism… and the rest?. Université De
Genève, 36(8), pp.1-22.

 

Delaney,
John T., and John Godard. 2001. “An Industrial Relations Perspective on the
High-

Performance
Paradigm.” Human Resource Management Review, Vol. 11, no. 4 (Winter),

pp.

395-429.

 

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School
Press.

 

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Fox, A. (1966) Industrial Sociology and Industrial
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Fox, A. (1974) Beyond Contract: Work, Power and Trust
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Heery, E.

(2015). British industrial relations pluralism in the era of
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