>ACHIEVING ORGANISATIONAL EFFECTIVENESS THROUGH EFFECTIVE INDUSTRIAL RELATIONS

CHAPTER TWO

REVIEW OF LITERATURE

INTRODUCTION

Our focus in this chapter is to critically examine relevant literature that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps.

Precisely, the chapter will be considered in three sub-headings:

 Conceptual Framework

 Theoretical Framework and

 Empirical Review of Related Literature

2.1 CONCEPTUAL FRAMEWORK

OVERVIEW OF INDUSTRIAL RELATIONS

Industrial relations have three faces: science building, problem solving and ethical. In the science building face, industrial relations is part of the social sciences and it seeks to understand the employment relationships and its institutions through high-quality, rigorous research. In this vein, industrial relations scholarship intersects with scholarship in labour economics, industrial sociology, labour and social history, human resources management, political sciences, law and other areas.

In the problem solving face, industrial relations seeks to design policies and institutions to help the employment relationship work better. In the ethical face, industrial relations contains strong normative principles about workers and the employment relationship, especially the rejection of treating labour as a commodity in favour of seeking workers as human beings in democratic communities entitled to human rights.

Industrial relations scholarship assumes that labour markets are not perfectly competitive and thus, in contrast to mainstream economic theory, employers typically have greater bargaining power than employees. Industrial relations scholarship also assumes that there are at least some inherent conflicts of interest between employers and employees (for example, higher wages versus highest profits) and thus, in contrast to scholarship in human resources management and organizational behaviour, conflicts is seen as a natural part of the employment relationship.

HISTORY OF INDUSTRIAL RELATIONS

Industrial relations have its roots in the industrial revolution which created the modern employment relationship by spawning free labour markets and large-scale industrial organizations with thousands of wage workers (Kaufman, 2004). As society wrestled with these massive economic and social changes, labour 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.

Institutionally, industrial relations were founded by John R. Commons when he created the first academic industrial relations programs at the University of Wisconsin in 1920. Early financial support for the field came from John D. Rockefeller, Jr. who supported progressive labour-management relations in the aftermath of the bloody strike at a Rockefeller-owned coal mine in Colorado.

Industrial relations was formed with a strong problem solving orientation that rejected both the classical economists’ laissez faire solutions to labour problems and the Marxist solution of class revolution. It is this approach that underlies the New Deal legislation in the United States, such as the National Labour Relations Act and the Fair Labour Standards Act.

DEFINITION AND SCOPE OF INDUSTRIAL RELATIONS

In the broad sense, industrial relations cover all such relationships that a business enterprise maintains with various sections of the society such as workers, state, customer and public who come into its contact.

In the narrow sense it refers to all types of relationships between employer and employees, trade union and management, works and union and between workers and workers. It also includes all sorts of relationship at both formal and informal levels in the organization. According to Englama (2001), industrial relation refers to the combination of interactions that take place between the employee and employer in an organization. Gospel and Palmer (2002) defined industrial relations as the process of control over the employment relationships, the organization of works and relations between employers and their employees.

Industrial relation is a relation between employer and employees, employees and employees, and employees and trade unions and the process by which people and their organizations interact at the place of work to establish the terms and conditions of employment- Industrial Dispute Act 1947. J. T. Dunlop defines industrial relations as “the complex interrelations among managers, workers and agencies of the government”. According to Dale Yoder “industrial relations is the process of management dealing with one or more unions with a view to negotiate and subsequently administer collective bargaining agreement or labour contract”.

In industrial relations therefore, one seeks to study how people get on together at their work, what difficulties arise between them, how their relations including wages and working conditions, etc are regulated.

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 labour legislation, policy of state relating to labour 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 labour market, the nature and composition of labour force etc.

The scope of industrial relations includes all aspects of relationships such as bringing cordial and healthy labour management relations, creating industrial peace and developing industrial democracy.

The cordial and healthy labour management relations could be brought in-

By safeguarding the interest of the workers;

By fixing reasonable wages;

By providing good working conditions;

By providing other social security measures;

By maintaining healthy trade unions;

By collective bargaining

The industrial peace could be attained-

By setting industrial disputes through mutual understanding and agreement

By evolving various legal measures and setting up various machineries such as works committee, Boards of Conciliation, Labour Courts etc.

The industrial democracy could be achieved-

By allowing workers to take part in management and

By recognition of human rights.

THEORETICAL PERSPECTIVES OF INDUSTRIAL RELATIONS

Industrial relations scholars have described three major theoretical perspectives or frame work, that contrast in their understanding and analysis of workplace relations. The three views are generally known as unitarism, pluralist and radical. Each offers a particular perception of workplace relations and will therefore interpret such events as workplace conflict, the role of unions and job regulations very differently. The radical perspective is sometimes referred to as the “conflict model”, although this is somewhat ambiguous as pluralism also tends to see conflict as inherent in work places. Radical theories are strongly identified with Marxist theories.

Unitary Perspective

In unitarism, the organization is perceived as an integrated and harmonious whole with the ideal of “one happy family”, where management and other members of the staff all share a common purpose, emphasizing mutual cooperation. Furthermore, unitarism has a paternalistic approach where it demands loyalty of all employees, being predominantly managerial in its emphasis and application.

Consequently, trade unions are deemed as unnecessary since the loyalty between employees and organizations are considered mutually exclusive, where there can’t be two sides of the industry. Conflict is perceived as disruptive and the pathological result of agitators, interpersonal friction and communication breakdown.

Pluralist Perspective

In pluralism the organization is perceived as being made up of powerful and divergent sub- groups, each with its own legitimate loyalties and with their own set of objectives and leaders. In particular, the two predominant sub-groups in the pluralistic perspective are the management and trade unions.

Consequently, the role of management would lean less towards enforcing and controlling and more towards persuasion and coordination. Trade unions are deemed as legitimate representatives of employees, conflict is dealt by collective bargaining and is viewed not necessarily as a bad thing and, if managed, could in fact be channeled towards evolution and positive change.

Radical Perspective

This view of industrial relations looks at the nature of the capitalist society, where there is fundamental division of interest between capital and labour, and sees workplace relations against this history. This perspective sees inequalities of power and economic wealth as having their roots in the capitalist economic system. Conflict is therefore seen as inevitable and trade unions are a natural response of workers to their exploitation by capital. Whilst there may be periods of acquiescence, the Marxist view would be that institutions of joint regulation would enhance rather than limit management’s position as they presume the continuation of capitalism rather than challenge it.

Industrial conflicts are the result of several socio-economic, psychological and political factors. Various lines of thoughts have been expressed and approaches used to explain this complex phenomenon.

Psychological Approach

According to Psychologists, problems of industrial relations have their origin in the perception of the management, unions and rank and file workers. These perceptions may be the perceptions of persons, of situations or of issues involved in the conflict. The perceptions of situations and issues differ because the same position may appear entirely different to different parties.

The reasons of strained industrial relations between the employers and the employees can be understood by studying differences in the perception of issues, situations and persons between the management groups and labour groups.

Sociological Approach

Industry is a social world in miniature. The management goals, workers’ attitudes, perception of change in industry, are all, in turn, decided by broad social factors like the culture of the institutions, customs, structural changes, status-symbols, rationality acceptance or resistance to change, tolerance, etc. Industry is, thus inseparable from the society in which it functions. As industries develop, a new industrial-cum social pattern emerges, which provide general new relationships, institutions and behavioural pattern and new techniques of handling human resources. These do influence the development of industrial relations.

Human Relations Approach

Human resources are made up of living human beings. They want freedom of speech, of thought of expression, of movement etc. When employers treat them as inanimate objects, encroach on their expectations, throat-cuts conflicts and tensions arise.

Though tension is more direct in work place, gradually it extends to the whole industry and sometimes affects the entire economy of the country. Therefore, the management must realize that efforts are made to set right the situation. Services of specialists in behavioural sciences are used to deal with such related problems. It has now been increasingly recognized that much can be gained by the manager and the worker, if they understand and apply the technique of human relations approaches to industrial relations.

ELEMENTS OF A SOUND INDUSTRIAL RELATIONS SYSTEM

According to the International Labour Organization (ILO), it is generally agreed that elements of a sound industrial relations system, both at the national and industry level, comprises the following elements.

Freedom of Association

The fundamental premise of a sound industrial relations system is the recognition and existence of the freedom of association accorded to both employers and workers. This freedom should include recognition of organizations of workers and employers as autonomous, independent bodies, subject neither to their domination by each other or by the government. Observance of states of the basic principles of the International Labour Organization convention relating to Freedom of Association and Protection of the Right to organize No. 87 (1948) is often regarded as the yardstick by which a country’s recognition of this freedom is measured.

In essence, the convention postulates that workers and employers without distinction whatsoever have the right to establish and join organizations of their own choosing with a view to defending their respective interests, subject to national legislation which determines the extent to which the guarantees in the convention will apply to the armed forces and the police.

Tripartism and Labour Policy Formulation

Tripartism is the process through which the foundation for a sound industrial relations system can be laid at the national level. Ideally, tripartism is the process whereby the government, the most representative workers’ and employer’s organizations as independent and equal partners, consult with each other on labour market and related issues which are within their spheres of competence, and jointly formulate and implement national policies on such issues.

The Role of the Law

Industrial relations systems are founded on a framework of labour laws which exerts an influence on the nature of the industrial relations system. However, resources to the law and its potential to influence the resulting industrial relations system may sometimes be over-emphasized. It is useful therefore, to examine from three points of view, the role of the law in influencing an industrial relations system-what its objectives should be and the areas it should cover as well as what the law cannot achieve.

Collective Bargaining

Collective bargaining may take place at the national, industry or enterprise level. It could be said that collective bargaining is a means of settling issues relating to terms and conditions of employment and has little to do with labour management relations policy formulation. Nevertheless, collective bargaining may reflect-sometimes explicitly and at other times implicitly –labour management relations policy e.g. on wage guidelines, termination of employment procedure. It can also be a means of developing policy formulation at the industry level.

Labour Courts

The agents of change in industrial relations are usually trade unions, employers and their organizations, governments through legislation and administrative action, and the system of courts which may be a combination of the normal courts and special courts or tribunals set up to deal with matters pertaining to labour. Labour courts have been established in several countries because the normal system of courts and the system of law they administer, cannot adequately deal with labour relations issues, which require an equitable rather than a purely legal approach. Therefore, labour courts are often empowered to decide industrial relation issues on a mixture of equitable and legal principles.

Human Resources Management Polices and Practices

The elements of a sound industrial relations system are closely linked to a progressive human resource management policy translated into practice. Harmonious industrial relations are more likely to exist in an enterprise where human resource management policies and practices are geared to proper recruitment and training, motivational systems, two-way communication, career development, a people-oriented leadership and management style, etc. Many of these human resources management activities have an impact in the overall industrial relations climate in an enterprise.

Worker Participation and Employee Involvement

It is important at the outset to separate several issues relating to participation, communication and consultation: the principle of communication; the methods or means to give effect to this principle; and whether the principles and/or means should be enshrined in legislation, or should be the subject of bipartite negotiation, or should be at the employer’s initiative.

Communication

The starting point for any effective enterprise policy to install procedures and mechanisms to promote sound labour relations is communication, because it is relevant to a whole range of issues and matters such as productivity, small group activities, joint consultation, performance appraisals, and motivation, as well as organizational performance.

The performance of an organization is affected by the manner in which the organization communicates with its employees. This involves information exchange, and not merely one-way communication. The performance of employees in an organization is conditioned by the performance of others in the organization. Changes in an organization can be brought about in an effective way where there is sufficient understanding between management and employees.

Quality of Working Life Programmes

Quality of Work life (QWL) programmes aim at combating workers alienation, integrating workers and encouraging workers involvement in the enterprises. They also aim at increasing worker motivation and instilling a sense of responsibility as well as at changing work organization so as reduce costs and increase flexibility. Quality of work-life programmes and autonomous work groups, which emerged in the USA during the 1970s and 1980s, initially concentrated on improving the workplace environment and motivating workers, and subsequently on enhancing productivity and quality.

Training

The importance of human resources development in dispute prevention and settlement is often overlooked. Many workplace problems and issues are the result of unsatisfactory supervisory management and the lack of awareness on the part of employees about the workings of the enterprises. Well managed enterprises see supervisors as critical to labour relations because it is they who interact most often with employees, and are the first to identify problems and it is their attitudes towards employees which condition the latter’s view about the management. Supervisory development and training is therefore an important aspect of developing sound labour relations at the enterprise level.

TRADE UNIONS

The term “trade union” has been defined in various ways because of wide differences in the use of these terms in different countries. Of all the definition of a trade union, the classic definition of the Webbs has been most popular. According to them a trade union is “a continuous association of wage-earners for the purpose of maintaining or improving the condition of their working lives”. Since this definition does not cover all the extensions of trade union activities in modern time, a trade union with some modification may be redefined as “a continuous association of wage-earners or salaries employees for maintaining the conditions of their working lives and ensuring them a better and healthier status in industry as well as in the society”.

Functions of Trade Unions

i. Functions relating to members

ii. Functions relating to organization

iii. Functions relating to the union, and

iv. Functions relating to the society

Functions Relating to Trade Union Members

(1)To safeguard workers against all sorts of exploitation by the employers, by union leaders and by political parties.

(2)To protect workers from the atrocities and unfair practices of the management

(3)To ensure healthy, safe and conducive working conditions, and adequate conditions of work.

(4)To exert pressure for enhancement of rewards associated with the work only after making a realistic assessment of its practical implications.

(5)To ensure a desirable standard of living by providing various types of social services and by widening and consolidating the social security measures.

(6)To encourage worker’s participation in the management of industrial organization and trade union, and to foster labour-management cooperation.

Functions Relating to Industrial Organization

(1)To highlight industrial organization as a joint enterprise between workers and management and to promote identity of interests.

(2)To increase production quantitatively and qualitatively by laying down the norms principles and ensuring their adequate observance.

(3)To create opportunities for worker’s participation in management and to strengthen labour- management cooperation.

(4)To help in the maintenance of discipline.

(5)To help in the removal of dissatisfaction and redress of grievances and complaints.

Functions Relating to Trade Unions Organization

(1)To formulate policies and plans consistent with those of the industrial organization and society at large.

(2)To improve financial position by fixing higher subscription, by realizing the union dues and by organizing special fund-raising campaigns.

(3)To preserve and strengthen trade union democracy.

(4)To train members to assume leadership position.

(5)To improve the network of communication between trade union and its members.

Functions Relating to Society

(1)To render all sorts of constructive cooperation in the formulation and implementation of plans and policies relating to national development.

(2)To launch special campaigns against the social evils of corruption, nepotism, tribalism, etc.

(3)To create public opinion favourable to government’s policies and plans, and to mobilize people’s participation for their effective implementation.

(4)To create public opinion favourable to trade unions and thereby to raise their status.

TRIPARTISM AND SOCIAL DIALOGUE

In ILO’s terminology “social dialogue” has a more concrete and precise meaning. It is synonymous with the term “tripartism”, which characterizes not only the unique three-party structure of the organization, that is employers, workers and governments, but also the interaction between these three groups which the International Labour Organization seeks to promote as being fundamental for the enhancement of social and economic development. It refers mainly to industrial dialogue where tripartite cooperation between government, industry and labour, usually at the national level, is accepted as a strategy to achieve balanced economic and social progress.

Social dialogue may also include direct dealings between the workers and the employers, otherwise referred to as collective bargaining at the national, sectoral or enterprise level, depending on the levels at which bargaining takes place in the labour market in the country. In 1944 in Philadelphia, the International Labour Conference adopted a declaration which defined the aims and purposes of social dialogue in industrial relations, which include the following.

•That labour is not a commodity

•The freedom of expression and of association are essential to sustained progress

•That poverty anywhere is a threat to prosperity everywhere

•The effective recognition of the right of collective bargaining

•The cooperation of labour and management in the continuous improvement of productive efficiency.

•The collaboration of workers and employers in the preparation and application of social and economic measures.

There are certain conditions that facilitate effective social dialogue, these includes

•Freedom of association

•Democratic foundations

•Legitimacy through representative, transparent, accountable and cohesive workers’ and employers’ organizations

•Political will and commitment to engage in social dialogue by all parties

•Social acceptance of triapartite social dialogue

•Technical competence

•Capacity to deliver

ROLE OF GOVERNMENT IN INDUSTRIAL RELATIONS

Governments play a critical role in the advancement and sustainability of industrial relations in the country. Where the government has confidence in the tripartite consultation process and encourages the pro-active participation of all stakeholders in policy-making processes, successful social dialogue is more likely to be attained. Government is responsible for promoting and enforcing the appropriate legal framework by ensuring social partner’s independence and fundamental rights, such as freedom of association and the right to bargain collectively as stipulated in the Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87) and the Right to organize and Collective Bargaining Convention, 1949 (No. 98).

Lecuyer (2001) sums up the role of Governments as that of a promoter or protagonist. As a promoter, in addition to the protection of the fundamental rights described above under ILO’s international labour standards, governments are responsible for promoting consultation with social partners by taking appropriate measures for regular and effective consultations.

As a protagonist, the Government should engage in active social dialogue with its own employees, i.e. public sector worker, by respecting the principles of Labour Relation (Public Service) Convention, 1978 (No. 151). By doing so it not only promotes bipartite social dialogue in the public sector but also helps establish a culture of social dialogue. In response to increasing demand for transparency and efficient delivery of public services, the internal organization of many government departments and services has been restructured and their management style has been changed. There has been a trend towards decentralization and more thorough measurement of the performance of public sector workers. In education and health, in particular, elements of market competition have been introduced. Social dialogue has a key role to role to play in managing such public sector reforms.

Government involvement/roles in the Nigerian Industrial relations systems are based on certain functions, methods and instruments of interventions, which includes, legislative and regulatory; adjudicatory; leadership, investigatory and advisory and education and training. According to Yesufu (1984) the role of the Nigeria government as regards legislative and regulatory, is mainly in the area of enactment and enforcement of labour and industrial relations legislations laws which ensures minimum basic and acceptable standards of employment conditions of work, welfare and security and the institutional framework for the conduct of industrial relations.

The Nigerian government through its adjudicatory role helps to provide machinery for intervention and settlement of industrial disputes, through the use of compulsory arbitrations. The leadership role of the Nigerian government was based on the fact that the state was the custodian of the development of the economy and the largest employer of labour. The investigatory and advisory role of the Nigerian government is directly being undertaken by the Federal Ministry of Labour, Employment and Productivity.

IMPORTANCE OF SOUND INDUSTRIAL RELATIONS

A sound industrial relations system is not capable of precise definition. Every industrial relations system has to take into account, and reflect, cultural factors. Systems cannot change culture but only behaviour within a cultural environment. As such, one can only describe some of the elements which have generally come to be recognized as contributing to a sound industrial relations system. These elements would constitute a sort of “check- list”. A relatively sound industrial relations system will exhibit some of these elements.

A sound industrial relations system is important as it ensure that relationships between management and employees on the one hand and between them and the state on the others, are more harmonious and cooperative than conflictual, and creates an environment conducive to economic efficiency and the motivation, productivity and development of the employee and generates employee loyalty and mutual trust.

Industrial relations is important as it seek to balance the economic efficiency of organizations with equity, justice and the development of the individual, to fund ways of avoiding, minimizing and resolving disputes and conflicts and to promote harmonious relation between and among the actors directly involved, and society as a whole. Sound industrial relations are also important as it often takes the form of collective bargaining between employer’s organizations and unions. This process may result in determining wages and other terms and conditions of employment for an industry or sector. It may also result in arrangements on issues which are of mutual concern such as training, ways of avoiding or settling disputes, etc.

Sound industrial relations build trust and confidence between representatives of workers and employers, which is the point at which the system must ultimately be effective. The efficient production of goods and services depends to an extent on the existence of a harmonious industrial relations climate. Efficiency and quality depends on a motivated workforce, for which a sound industrial relations climate is necessary.

DISPUTE RESOLUTION

Conflict resolution is an essential part of any well-functioning labour market and industrial relations system. Where there are labour relations one inevitably finds labour disputes and the need to resolve them efficiently, effectively and equitably for the benefit of all parties involved and the economy at large. According to section 2(k) of the Industrial Disputes Act, 1947, an industrial dispute means any dispute or difference between employers and employees or between employers and workmen or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person.

Essentially, therefore, the differences of opinions between employers and workmen in regard to employment, non-employment, terms of employment or the conditions of labour where the contesting parties are directly and substantially interested in maintaining their respective contentious issues constitute the subject matter of the an industrial dispute.

Generally, speaking, employment disputes are divided into two sub-categories: individual disputes and collective disputes. As the terms implies individual disputes are those involving a single worker whereas collective disputes involve groups of workers usually represented by a trade union.

Collective disputes can further be divided into two sub-categories: rights disputes and interests’ disputes. A rights dispute arises where there is disagreement over the implementation or interpretation of statutory rights, or the rights set out in an existing collective agreement. By contrast, a disagreement over the determination of rights and obligations, or the modification of those already in existence. Interest disputes typically arise in the context of collective bargaining where a collective agreement does not exist or is being renegotiated International Labour Office, (2007).

In terms of collective disputes, the kind of dispute often has important legal and strategic consequences for determining the method for resolving it. In the case of a rights dispute where there is a valid collective agreement in force, this same agreement might include provisions setting out the mechanism the parties must follow in the event of a dispute. And depending on the country, there may be legal provisions requiring certain collective disputes to proceed in a specified manner to arrive at a solution.

With respect to resolving these different types of disputes (leaving aside litigation and other kinds of judicial action), there are essentially three options, Conciliation, Mediation and Arbitration. All three of these alternatives involve the intervention of a third party and it is rather the degree of intervention that differentiates one from the other.

LABOUR REFORM AND INDUSTRIAL CONFLICTS IN NIGERIA

Labour reform refers to amendments of aspects of the labour law. The Nigerian labour law includes different Acts including the Labour/Employment Act, workmen’s compensation Act, factories Act, Trade Disputes Act and the Trade Union Act. A typical model of labour reform is the 2005 Trade Union Act, which includes new orders. For instance, in the 2005 Trade Union Act, the Nigerian government ordered that in collective bargaining all registered trade unions must constitute an electoral college to elect members who will represent them in negotiations. Labour reform has been criticized in this regard. The modalities for constituting an electoral college were not specified (Okene, 2007). This gap may generate more industrial conflicts and open up opportunities for the state or employers to manipulate criteria for the selection of representatives for negotiations.

Also, contrary to the automatically compulsory membership clause in the earlier Acts, the 2005 Act provides for voluntary trade union membership though not without restriction on number of persons (50) required for constituting a union. Putting restriction on trade union membership contravenes Convention 87 of the International Labour Organization (ILO), but it can be attributed to government desire to regulate activities in the Nigerian industries.

Thus, the question of dichotomy between international solidarity and national interest can be raised in the emerging industrial relations in Nigeria. Basically, during negotiations for each of the machineries for industrial conflicts management in Nigeria different issues such as state power, problem of representation, social relations of production and labour resistance are critical. The Nigerian government has renewed the state interest in criminalizing strikes, which attract N10,000 naira fine or six months imprisonment for each striker. Unfortunately, the Nigerian government regulation against strikes negates the global recognition of strike as an essential tool in trade unionism.

The contradictions between the International Labour Organization standards and the operations of state machineries in Nigeria provides an opportunity for the discourse on industrial conflict management within different levels of governance-international, regional, and national that constitute dilemma for labour (Stevis and Boswell, 2008). The organized labour, which bears the large chunk of the consequences of industrial conflicts, has been trapped in this context.

The state and labour have been battling in the management of industrial conflicts in Nigeria since the colonial era. The enormity of industrial conflicts and state attempt to quell them resulted in the 1976 Trade Dispute Act, which was amended in 1977 and 1990. The Act provides internal and external dispute settlement machineries including voluntary and compulsory procedures.

Conflict management systems have been described as providing for workplace justice (McCabe and Rabil, 2001). Good conflict management procedures, provides the opportunity to systematically redress an injustice without litigation, strikes or other forms of industrial actions (Mesch and Dalton, 1992). Conflict management procedure, perceived to be fair will be used and regarded as effective and result in greater perception of fair treatment and enhanced job satisfaction (Peterson and Lewin, 2000; McCabe, 1997).

Mismanagement of industrial conflicts in Nigeria is a key outcome of the weakness of the state machineries. The state usually conceptualizes industrial conflict negatively while labour employs it as negotiation instruments in a bid to obtain benefits. A major means of achieving industrial peace is mediation. However, the neutrality of a mediator can translate into perpetuation of power in equality between disputant parties especially if the mediator plays the role of advocacy in mediation (Cook and Hale, 1994).

The procedures of conflict management in Nigeria are characterized by preventable delay before and after mediation, conciliation and arbitration. These procedures can be merged to industrial conflicts. This kind of merger has yielded result in China (the most populous country and a leading industrialized country in the world). Fundamentally, all the aspects that contradict the international standards in the Nigerian Labour law should be reversed and replaced with comprehensive social security, policies that can facilitate rapid management of industrial conflicts thereby ensuring industrial harmony which breeds organizational effectiveness.

UNDERSTANDING INDUSTRIAL CONFLICT

Karl Marx once observed that conflict rather than peaceful is the engine of progress. Although, industrial conflict may portend negative signal for economic and political development, it nevertheless could be a necessary catalyst for growth and development, especially in the area of improvement in the standard of living of the working class people (Adebisi, 2004).

We all are of two minds about conflict. We say that conflict is natural, inevitable, necessary, and normal, and that the problem is not the existence of conflict but how we handle it. But we are also loath to admit that we are in the midst of conflict. How we view conflict will largely determine our attitude and approach to dealing with it. Conflict may be viewed as a feeling, a disagreement, a real or perceived incompatibility of interests, inconsistent worldviews, or a set of behaviors. If we are to be effective in handling conflict, we must start with an understanding of its nature. We need tools that help us separate out the many complex interactions that make up a conflict, that help us understand the roots of conflict, and that give us a reasonable handle on the forces that motivate the behavior of all participants, including ourselves.

Conflict may be viewed as occurring along cognitive (perception), emotional (feeling), and behavioral (action) dimensions. This three-dimensional perspective can help us understand the complexities of conflict and why a conflict sometimes seems to proceed in contradictory directions (Bernard Mayer, 2001).

Conflict Resolution Model

Thompson suggested five styles such as competiting, avoiding, accommodating, collaborating and compromising to resolve conflicts.

If two parties experience conflicts, each one could be more concerned above their own self or could be more concerned for the other.

When the concern for ‘self’ is very low they could be very unassertive. If the concern for him is very high, they could be very assertive.

If their concern for the other is low, they would tend to be non-cooperative. If the concern for the other is high, they could be co-operative.

In a conflicting situation:

If an individual’s concern for self and others is low, he will avoid the conflict;

If he has high concern for himself and low concern for others he will compete;

If he has high concern for himself and for others, he will collaborate;

If he has high concern for other but low concern for himself, he will accommodate;

If he has medium level of concern for both himself and the other, he will go for compromise.

PROCESS FOR RESOLVING INDUSTRIAL DISPUTES

Collective Bargaining, Negotiation, Conciliation and Mediation, Arbitration and Adjudication are well known methods for settlement of industrial disputes, and would be discussed briefly.

Collective Bargaining: Collective Bargaining is a technique by which dispute as to conditions of employment, are resolved amicably, by agreement, rather than by coercion. The dispute is settled peacefully and voluntarily, although reluctantly, between labour and management. In the context of present day egalitarian society, with its fast changing social norms, a concept like ‘collective bargaining’ is not a capable of a precise definition. The content and Scope collective bargaining also varies from country to country. Broadly Speaking Collective bargaining is a process of bargaining between employers and workers, by which they settle their disputes relating to employment or non-employment , terms of employment or conditions of the labour of the workman, among themselves, on the strength of the sanctions available to each side (Malhotra, 2004). Occasionally, such bargaining results in an amicable settlement arrived at voluntarily and peacefully, between the parties. But quite often, the workers and employers have to apply sanctions by resorting to weapons of strike and lockouts, to pressurize one another, which makes both the sides aware of the strength of one another and that finally forces each of them to arrive at a settlement in mutual interest.

Negotiation: Negotiation is one of the principal means of settling labour disputes. However, due to lack of trust between the employers and workmen or their trade unions or inter-rivalry of the trade unions and the employers being in a commanding position, many a time negotiations fail.

Conciliation and Mediation: Through conciliation and mediation a third party provides assistance with a view to help the parties to reach an agreement. The conciliator brings the rival parties together discuss with them their differences and assist them in finding out solution to their problems. Mediator on the other hand is more actively involved while assisting the parties to find an amicable settlement. Sometimes he submits his own proposals for settlement of their disputes. Conciliation may be voluntary or compulsory. It is voluntary if the parties are free to make use of the same, while it is compulsory when the parties have to participate irrespective of whether they desire to do so or not.

ACHIEVING ORGANISATIONAL EFFECTIVENESS THROUGH EFFECTIVE INDUSTRIAL RELATIONS

Management and organizational theory scholars like Schein (1970), Duncan (1973), Webb (1974), Child (1969) and Goodman and Whittingham (1969) have remarked that the literature on organizational effectiveness is large and growing. As a result, there seems to be little consensus on how to conceptualize, measure and explain effectiveness. In spite of this intractability, the field of organization theory in particular and management in general offers some insight into the conceptualization, measurement and explanation of organizational effectiveness. Cunningham (1977) maintained that “the concept of organizational effectiveness is an elusive one and there is no single adequate way of defining it”. However, Imosilli (1978) remarked that most practicing managers agree that organizational effectiveness incorporates both economic and non-economic behaviour and dimensions.

Delays in conciliation are attributed partly to the excessive work-load on officers and partly to the procedural defects. Since conciliation officer has no powers of coercion over labour and management, he can only persuade them to climb down and meet each other. The settlements that are claimed to result from conciliation are increasingly the result of political intervention. Success of conciliation depends upon the appearances and their sincere participation in conciliation proceedings of the parties before the conciliation officers. Non-appearance and non- participation of the parties in conciliation proceedings poses a serious hindrance in this direction.

Arbitration: The resort to arbitration procedure may be compulsory or arbitrary. Compulsory arbitration is the submission of disputes to arbitration without consent or agreement of the parties involved in the dispute and the award given by the arbitrator being binding on the parties to the dispute. On the other hand in case of voluntary arbitration, the dispute can be referred for arbitration only if the parties agree to the same. This system, however, has not been widely practiced so far. One of the main reasons for not gaining popularly of this procedure is lack of arbitrators who are able to command respect and confidence of the parties to the dispute. Inter Union rivalry also sometimes makes it difficult in arriving at an agreement on settlement of an arbitrator who is acceptable to all the trade unions in the industry.

Adjudication: If despite efforts of the conciliation officer, no settlement is arrived at between employer and the workman, the industrial dispute is referred to the courts, which could be the regular court or industrial court. Industrial courts have been empowered to decide disputes relating to matters specified in the country’s labour laws. These matters are concerned with the rights of workers, such as propriety of legality of an order passed by an employer under the standing orders, application and interpretation of standing orders, discharge or dismissal of workman including reinstatement of grant of relief to workman wrongfully discharged or dismissed, withdrawal of any customary concession or privilege and illegality or otherwise of a strike or lockout.

Conversely, Veldsman (1980) defined organizational effectiveness as a qualification and value attached to an organization resulting from the comparison of the actual state of the entity against its ideal state. He maintained that an organization is effective if the actual state is congruent with the ideal and ineffective if the actual state is incongruent with the latter state. To him:

“The value ascribed to an organization depends on the evaluator’s conception of the state of that organization. For example, whether an organization is described as effective or ineffective depends on the evaluator’s ideal state. This ideal state, in turn, prescribes the aspects of the actual state of the organization, which the evaluator will use to make his comparison”.

Viewing organizational effectiveness in Veldsman’s perception gives the evaluator freedom to decide on what should constitute the ideal state. Thus, a lot of individual judgment is required. But for the judgment to be realistic, it must be based on defined criteria. Among other criteria, the individual must consider the type of enterprise under study and the various environmental stakeholders of the organization. Nonetheless, giving each evaluator the chance to decide on the criteria by which to measure and compare organizational effectiveness will provide various criteria and thereby widen and worsen the management theory jungle. In contrast, the varied conceptualization of organizational effectiveness that may arise from different individuals may be a means of expanding the body of knowledge on the concept of organizational effectiveness. In another dimension, Cameron et al. (1978) posits that:

“Organizational effectiveness may be typified as being mutable (composed of different life stages), comprehensive (including a multiplicity of dimensions), divergent (relating to different constituencies), trans-positive (altering relevant criteria when different levels of analysis are used) and complex (having non-parsimonious relationship among dimensions)”

Similarly, Maheshwari (1980) maintained that organizational effectiveness is a multi- dimensional concept, which has no agreement as to which dimensions are significant and should be used as the basis of analysis. He however, remarked that several variables must be used for measuring organizational effectiveness. Further, he warned that selection of appropriate variables should depend on the nature of the organization being studied. Categorically, he remarked that organizational effectiveness measures for business organizations are expected to be different from those for social services or research organizations even though similarities can be observed.

In addition, he advised that the specific environment, traditions, internal processes, resources, technology and goals should be considered in selecting organizational effectiveness dimensions. Here again, Caplow (1976) and Duncan (1973) maintained that research on effectiveness should include appropriate universal indicators of effective organizations. To them, the universal indicators of effective organizations are typified largely by adaptivity, flexibility, sense of identity, absence of strain and capacity of reality testing.

However organizational effectiveness is been defined is a subject on its own, what matters here is how to achieve organizational effectiveness in the public sector. Effective industrial relations provides a good strategy in achieving organizational effectiveness in the public sector since the term ‘industrial relations’ is used in a general sense to describe the formal relationships between employers and trade unions or other collective groupings of employees, together with the institutional arrangements that arise from these relationships. Organizational effectiveness depends on the relationship between people in the organization and how these people are effectively managed. Industrial relations and organizational effectiveness are both related, since their successes both depends on how well you manage the relationships within and outside the organization. So to ensure organizational effectiveness in the public sector, we also have to guarantee effective industrial relations first in the public sector.

2.2 THEORETICAL FRAMEWORK

The domain of agency theory are relationships that mirror the basic agency structure of a principal and an agent who are engaged in cooperative behavior, but have differing goals and attitudes toward risk. An agency relationship is defined as one in which one or more persons (the principal(s), firm) engages another person (the agent, employees) to perform some service on their behalf (Jensen and Meckling, 1976; Ross, 1973). The essence of agency theory rests on two important assumptions, a) the desires or goals of the principal and agent conflict and (b) It is difficult and expensive for the principal to verify what the agent is doing and to measure his exact output (Eisenhardt, 1989). This situation is known as the agency problem. The cornerstone of agency theory is the assumption that the interests of principles and agents diverge (Hill Charles and Jones Thomas 1992). It should also be noted that the utility function of both principal and agent change over time, and there is a variance of utility function (Shankman Neil 1999) (Hill and Jones, 1992).

Agency theory & Goal conflict

Agency theory focuses on the divergence of interests between owners and employees. This theorizes that owners are wealth maximizers, while managers maximize a utility function that includes incentives and remuneration, power, interesting work, job security, free time, and status as its central elements (Hill Charles and Jones Thomas 1992). Principal and agent’s relationship change overtime, reflecting a shift of interest alignment or divergence (Baumol, 1959; Marris, 1964; Williamson, 1964). The situation of goal conflict between firm (owners) and employees is best described in the principal agent theory, also called agency theory. The most common form of the agency relationship is described in the principal-agent view of the firm in which employees (Managers and labor) of firms are seen as agents of the owners (principals) who invest their efforts in firms primarily to increase their wealth (Quinn and Jones, 1995). In this study, the senior managers and owners of the firm will be considered as principals of the firm and a single entity, although top managers are technically employees, but their unique role suggests that they can be seen as the principals. Also their roles in this case imitate the behavior of owners and truly represent them. The middle managers and supervisors of the firm are acting and considered as agents, also they are representing the large number of rest of the employees (labor) of the firm. In this case two senior managers and owners (principals) perform the work of contracting on behalf of the firm (directly or indirectly) with agents. The normative condition here is that employees as agents must act only in such a way as to maximize the NPV (profit and value) of the firm, since that is what is presumed to be the goal of the owners (principals). Although under efficient markets, this will lead to the most desirable social outcome (Shankman Neil 1999).

A study by Uwaebuka (2009) on “Achieving Organisational Effectiveness Through Effective Industrial Relations” the study focused on achieving organizational effectiveness through effective industrial relations. The objectives of the study are: to identify the industrial relations process of the Nigerian public sector; to determine how to improve on the industrial relation’s process of the public sector; to identify the benefits derived from effective industrial relations; and to identify the strategies that could be used to manage industrial relation’s conflicts. The research methodology is descriptive; data were generated through primary and secondary sources. The study approach is based on research questions which have influenced the data generated and pattern of descriptive analysis presented. The researcher analyzed the data collected based on the responses from the distributed questionnaire. The chi-square test and T-test was used to test the hypotheses. The findings from this study revealed that industrial relations process of the Nigerian public sector includes collective bargaining, negotiations, mediation and arbitration; decentralizing collective bargaining and practicing true federalism will improve industrial relations process of the public sector; industrial harmony and organizational effectiveness are attributed to effective industrial relations; and collaboration and compromise can be used to manage industrial relations conflicts.

Based on the findings, the study recommended that the federal legislators should institutionalize a decentralized collective bargaining as a bid to solving the conflicts arising from the national minimum wage; efforts should be made by federal legislators to compel the government to regularly publish its accounts publicly; more industrial courts should be established; the labour laws in Nigeria should be reviewed and updated.