CONSTRUCTIVE PHASE OF INDUSTRIAL RELATIONS Since about 1910 a movement has developed to introduce into management scientific and professional principles. One of the first points was the importance of a highly co-operative em ployee morale. It is true that many aspects of personnel man agement may have been introduced as a defence against unionism and to this extent may be involved in the controversial phase of industrial relations; but its main impulse has been constructive. This new conception of labour relations as part of manage ment has introduced a constructive attitude towards the labour problem and prevented it being regarded inherently as a matter purely of unionism, legalism, conciliation and arbitration or legis lation. The way has thus been made clear for the adoption of a broader perspective, in which the items mentioned above are given a place, but in which other aspects, previously neglected, are accorded their due prominence. These aspects are those ing with the proper organization of work relations in each plant.
Differences in morale and in satisfaction with their daily job between the employees in two organizations may have no relation to the wages paid. There are examples of factories existing side by side in the same vicinity paying the same wages in one of which there is a contented working force and in the other a dissatisfied, restless group. Sometimes, where there is a disparity in wages, the concern paying the higher wage has the dissatisfied workers. The difference is one in technique,—the degree to which system and practical common sense have been applied to the every-day problems of living and working together.
Present day interpretation of the labour problem adds to the old-time conception of "the economic man," invented by the economists, and described as one struggling for his share of what is provided, the conception of "the administrative man," who has his place in industry as a unit in a complicated organization. In other words, we now recognize that in any private business plant there is, in addition to the economic side of industrial rela tions, a purely administrative problem of organization and func tions. This problem in an industrial concern is not very different from that which arises in a Red Cross or consumers' co-operative organization, in the post office, and in other agencies which also are trying to provide services, and in which no question of capital or labour is involved. There are laws of sound administration as well as "economic laws." Realistic analysis has, furthermore, taken out some of the mis placed conflict allocated to the factory. It has been recognized that the determination of real wages takes place chiefly not within but without the factory walls in the competition between indus tries and in taxation, and that often the contest for the economic surplus is not solely, or even for the most part, between capital and labour but between various other groups. Agricultural work ers are pitched against industrial workers, employers and em ployees in one industry against those in another. Sometimes the inequalities between groups are due to the vagaries of credit and monetary systems. Though the economic struggle has been drama tized as taking place in the factory, only a very small part of that struggle in fact takes place there.
Thus, the modern United States emphasis in the treatment of the difficulties of industrial relations is upon the improvement of the more routine problems in the individual factory.
Attention to the administrative aspects has developed a "tech nique of good will," with an extensive literature going under the general title of personnel administration. The problem has been to satisfy the desires of workmen within the limits of the require ments of productive efficiency and to see how productive efficiency could be furthered by this satisfaction of workmen's aspirations.
Modern behaviouristic psychology has been invoked to satisfy these desires. They may perhaps be roughly classified as the de sire for justice, the desire for status and the desire for oppor tunity. The first, "justice," is the elemental desire for fair play ; "status" is the desire of the workman for some recognition of his dignity as a participant in the industrial activities, and "oppor tunity" is the desire of a certain proportion of the employees to forge ahead. As a step in the effort to satisfy the desire for jus tice might be included the pension systems and provision for health and group life insurance which have been set up particularly by the larger companies. At times these are established on a basis under which the employees contribute to the fund and at times on a non-contributory basis. To satisfy the desire for status the technique that has been developed has been that of works councils and employee representation, employee stock ownership and similar plans.
Employee representation is probably one of the most interest ing aspects of the new personnel movement. Feeling the need of providing some form of group expression to the workers, execu tives have introduced employee representation having no con nection with trade unionism as such but in a way as a substitute for unionism. Over 1,500,00o individuals are employed in con cerns operating such plans.
In some plans the function of the employees' representatives is purely advisory. No vote may be taken and the advice is not necessarily followed, but the employees realize that at least their viewpoint has not been entirely ignored. On the other hand, there are types in which preliminary legislative power is given to em ployees' committees on matters of employee interest ; this may be subject to the veto of the management or may provide for outside arbitration of issues.
The method of satisfying the desire of the workman for "op portunity" is to recognize that what the more energetic workman particularly desires is a successful career. In order to satisfy this desire, elaborate systems for detecting, training and promoting workers have been established in many plants. Much effort has been made to evolve systems of training and methods of making promotion available to able employees. These are particularly necessary in America because of the decline of the apprentice sys tem. It has been estimated that only a minority of employees are really ambitious for advancement, but it is recognized that it is important to train and advance this group, however large it may happen to be.
In connection with this desire of the workman for opportunity can be included the large question of security of employment, as an essential aspect of making the worker's job a career. The in dividual employer cannot do much to prevent the effects of cycli cal unemployment, but he can temper its effect. Much attention has been given to seasonal unemployment, particularly by some large corporations. Here the subject of industrial relations be comes involved in the larger problems of management, for to do away with seasonal unemployment the production manager must plan skilfully and the financial and sales executives of the com pany must co-operate in stabilizing operations.
In the dispensation of justice and in the more general problem of carrying out a personnel programme it has been recognized that specialized machinery is necessary. As a result progressive companies have established "employment" or "personnel" depart ments. This is particularly important because new groups of employees are constantly being marshalled into new industries. Formerly the theory in certain plants was that any worker could see the general manager or the employer. Now it is recognized that it is impossible for the able manager to give time to these matters, and that injustice was often done to the workman be cause of inadequate provision for the specialization of this func tion. Hence the necessity of such departments has been accepted as particularly important in large companies.
Among other things the purpose of such a personnel depart ment is to make certain that the employees are treated fairly and grievances adjusted at the source. Complaints are handled in such departments with a works council acting mainly as a court of appeal. In some cases the right of "firing," as well as the right of hiring, has been taken away from the foreman, and though there were misgivings at first, this system has worked fairly success fully. The trend is not to have these matters settled in a juridical fashion but as matters of adjustment.
Personnel administration and the larger movement for thorough and systematic management have become fused, and tend towards the fading of class distinctions, the existence of which has been known to interfere considerably with efficient organization.
This new attitude of employers to their labour problems as a part of good management has served as a challenge to trade unionism. This has been particularly true of the employee repre sentation movement where there have been some interesting at tempts on the part of the union to join with management in "union-management co-operation." The most notable example is on the Baltimore and Ohio railroad in which the shop crafts and the railroad company have been working out methods of fur thering their mutual responsibility for successful production. Another example of unionism in a constructive relation may be found in the men's clothing industry. In this industry the trade union has assumed a very real responsibility for securing pro duction, and an elaborate plan of unemployment insurance and production standards has been worked out. There have been ether examples of what may be called industry-wide co-operation between unions and employers. It must be confessed, however, that the greatest progress in industrial relations has been made in the better adjustment that has been worked out as a part of good management in the individual plant in abolishing any differ ence in the treatment of the rank and file of workers and other members of the organization.