About IRC

In the wake of the Ludlow Massacre in the Colorado minefields of 1917, John D. Rockefeller, Jr., created an organization to foster improved employer/employee relations. Today, it is known as Industrial Relations Counselors, Inc. (IRC).

IRC advocated the establishment of employee representation plans, which involved employee-elected representatives and regular meetings with management to discuss matters of mutual interest. The idea was greeted with less than enthusiasm by many of Rockefeller’s fellow industrialists, but it led to his conviction that there could be a “unity of interest” between labor and management—it was not always necessary for one party to lose in order for the other to win; win-win arrangements and agreements were possible.

After several decades, IRC spun off its for-profit component, which is today known as ORC Worldwide.

IRC’s mission was and still is “to advance the knowledge and practice of human relationships in industry, commerce, education, and government.” With no comparable organizations in the 1920s, IRC was highly influential in the establishment of social security, pensions, and unemployment compensation in the 1930s. In 1934, Commissioner Lubin of the Bureau of Labor Statistics characterized IRC’s research work as having “surpassed in quality anything that has been done in the United States”(Kaufman et al., 2003, p. 87).

IRC worked with a number of the more progressive employers in the 1920s and 1930s, fostering what became known as the “welfare capitalism” movement. Although many, many other employers continued to adhere to older beliefs and practices, the leadership of Standard Oil of New Jersey, Bethlehem and U.S. Steel, International Harvester, U.S. Rubber, General Motors, DuPont, Goodyear, General Electric, Westinghouse, Irving Trust, and AT&T gave considerable weight to the notion that there is a “unity of interest” between employers and employees.

The Great Depression of 1929 and resulting industrial unrest contributed to the passage of the National Labor Relations Act (NLRA), then popularly known as the Wagner Act, in the 1930s. Section 8(a)(2) of the NLRA prohibited “company unions,” and the representation plans advocated by IRC were interpreted as falling within the prohibition. In the ensuing turmoil, welfare capitalism was perceived as a form of anti-unionism and lost considerable momentum, but a thorough examination of IRC documents of the time revealed a preference for representation plans over collective bargaining, but not anti-union advocacy (Kaufman in Kaufman et al., 2003, pp. 95–100).

An examination of the ideas in IRC’s first (1926) consulting report for the Ohio Oil Company reveals, “in at least embryonic form,” many themes that remain current today (Kaufman in Kaufman et al., 2003, p. 76); they include:

• The importance of human resources to organizational effectiveness and competitive advantage.
• The need to position the HR function to have clout comparable to that of other functions.
• The need to mesh and balance technical and social/psychological factors.
• The difficulty and importance of managing change.
• Recognition that employee cost is only one dimension of employee relations.
• Recognition that shareholders are not the only stakeholders in a business, that intelligent management requires taking appropriate cognizance of the interests of employees, suppliers, the community, etc., as well.
• Recognition that there is no one-size-fits-all approach to employee relations, that different approaches are appropriate for different organizations at different times and entail learning and adjustment.

Sources:

Elliot J. Gorn, Mother Jones: The Most Dangerous Woman in America, New York: Hill and Wang, 2001.

Kaufman, Beaumont, and Helfgott, Industrial Relations to Human Resources and Beyond, Armonk, NY: M.E. Sharpe, 2003.

Page Smith, America Enters the World, Volume 7 of A People’s History of the Progressive Era and World War I, New York: McGraw-Hill, 1985.