The maintenance of the significance of industrial relations is of vital importance for the survival and growth of the industrials enterprise. Good industrial relations result in increased efficiency and hence prosperity, reduced turnover and other tangible benefits to the organization.

The significance of industrial relations can be summarized as below:

1. It establishes industrial democracy: Industrial relations means settling employee problems through collective bargaining, mutual cooperation and mutual agreement amongst the parties i.e., management and employees’ unions. This helps in establishing industrial democracy in the organization which motivates them to contribute their best to the growth and prosperity of the organization. If contributes to economic growth and development: Good industrial Relations lead to increased efficiency and hence higher productivity and income. This will result in the economic development of the economy.
2. If improves the morale of the workforce: Good industrial relations, built-in mutual cooperation and commonly agreed approach motivate one to contribute one’s best, result in higher productivity and hence income, give more job satisfaction and help improve the morale of the workers.
3. It ensures optimum use of scarce resources: Good and harmonious industrial relations create a sense of belongingness and group-cohesiveness among workers, and also a congenial environment resulting in less industrial unrest, grievances and disputes. This will ensure optimum use of resources, both human and materials, eliminating all types of wastage.
4. It discourages unfair practices on the part of both management and unions: Industrial relations involve setting up machinery to solve problems confronted by management and employees through mutual agreement to which both these parties are bound. This results in the banning of unfair practices being used by employers or trade unions.
5. It prompts the enactment of sound labour legislation: Industrial relations necessitate the passing of certain labour laws to protect and promote the welfare of labour and safeguard the interests of all the parties against unfair means or practices.
6. It facilitates change: Good industrial relations help in the improvement of cooperation, teamwork, performance and productivity and hence in taking full advantage of modern inventions, innovations and other scientific and technological advances. It helps the workforce to adjust themselves to change easily and quickly.

OBJECTIVES OF INDUSTRIAL RELATIONS

1. To bring better understanding and cooperation between employers and workers.
2. To establish a proper channel of communication between workers and management.
3. To ensure constructive contribution of trade unions.
4. To avoid industrial conflicts and to maintain harmonious relations.
5. To safeguard the interest of workers and the management.
6. To work in the direction of establishing and maintaining industrial democracy.
7. To ensure workers’ participation in decision-making.
8. To increase the morale and discipline of workers.
9. To ensure better working conditions, living conditions and reasonable wages.
10. To develop employees to adapt themselves for technological, social and economic changes.
11. To make positive contributions for the economic development of the country.

SCOPE OF INDUSTRIAL RELATIONS

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