What Are the Concepts in Industrial Relations?

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Industrial relations describes the complex relationship between employers, such as management, and employees, such as a union or other organization. To understand the fundamentals of industrial relations, you must first be familiar with the responsibilities and right of all sides of the business equation.


Employers are individuals or businesses that compensate an employee for services provided via wages or a fixed payment. Employers invest money in hiring employees with the intention of generating profit from ensuing transactions.


Employees seek an employer in their respective labor market to exchange services for compensation. This term only applies to transactions between a business and individual or between two individuals. It does not apply to a business-to-business transaction, even if there is an exchange of services and compensation.


The term "industry" refers to the collaborative effort and results of the employer and employees. An industry often specializes in a particular product or service.

Labor Market

Employers and employees seek one another in a labor market, which is created by the collective needs of job providers and job seekers. This market is in constant fluctuation depending on the industry and physical location (labor markets are often restricted to a particular geographical area, such as New York City).


"Relations" describes the interactions and communications between two representative bodies, which could include employers as management and employees as unions. The relationship between these two groups is sometimes strained, and poor relations can eventually destroy the profitability or success of an industry.

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