Employees are among the most important resources of the organization. They are the most valuable assets. The nature and quantity of work performed by them have a direct impact on the productivity of the organization. Hence, a healthy employee relations in the organization is a pre-requisite for the organization for achieving growth and success. Employee relations is a broad term which incorporates several aspects such as work-life balance, equal opportunities, and managing of diversity etc. It has a broader spectrum than industrial relations. In the past, employee relations practices were viewed as ambiguous. Competition forced employee relations to perform a strategic role in the organizational functioning.
Employee relations have replaced industrial relations as the term for defining the relationship between the management and the employees. Today, employee relations is seen as focusing on both individual and collective relationships in the workplace, with an increasing emphasis on helping line managers to establish trust-based relationships with the employees. A positive climate of employee relations with high levels of employee involvement, commitment, and engagement can improve organizational performance as well as contribute to employees’ well-being.
Employee relations has several positive effect in the organization which includes strengthening corporate communication and culture, improvements in the organizational products to the customers, providing opportunities for the training and development of the employees, and providing information to the employee based on their needs.
Today, employee relations are a broad concept which involves maintaining a working environment which satisfies the needs of the management and the employees. An effective employee relations programme involves creating and cultivating a productive workforce. It covers all the relations between employers and employees in industry. Employee relations also include defining the scope for employee participation in management decisions which relate to health and safety, collective bargaining, communication, and conflict resolution. In the current dynamic and competitive environment it is necessary for the organization to maintain suitable employee relations as a way of achieving sustainable competitive advantage.
Organization can perform better and achieve its objectives if there is a good relationship between the management and the employee. Hence it is very important for the management to create and maintain good employee relations in the organization. Effective employee relations is important to the workplace whether at the time of recruitment, during the employees’ tenure, or at the time of separation. Good employee relations is essential to the organization since it inspires employees to work better and produce more results. Factors such as job satisfaction is achieved when there is a great working relationship between the employees and the management.
Poor employee relations seriously affects the process of goal achievement and paves the way for conflicts, dishonesty, and withdrawal from active participation and involvement of employees and discourage team building and working in teams. It also hinders the overall workflow of the organization and damages the reputation of the organization. Employees cannot put up their best performances at workplace when they are not happy with the management or even with their colleagues. Hence, poor employee relations affect the employees’ performance and organizational productivity. Organizations normally actively seek good employee relations.
Competent, qualified, and motivated employees do not perform well if there is no peace and harmony at the workplace. Hence employee relations is very crucial. Also the management is required to pay attention to the employee relations so that the organization can achieve success and grow as well. Good and harmonious employee relations in the organization ensures employees to have peaceful work, avoids conflicts, and ensures an environment where the employees work together towards the achievement of the set objectives and goals.
Employee relations comprises organizational functions, practices, or initiatives which deals with the issues related to people in the organization. Employee relations ensure that employees are happy and are productive. It offers assistance in a variety of ways including employee recognition, policy development and interpretation, and all types of problem solving and dispute resolution. It involves handling issues arising from employment such as (i) wages, incentives and benefits, (ii) employment practices, terms and conditions of employment, (iii) work place safety and health, (iv) employees’ training and development, (v) providing employees with a voice, (vi) communicating with the employees, (vii) administration, and (viii) all those issues which affect the employees’ performance at work.
Employee relations is concerned with maintaining employee-management relation, which contributes to satisfactory productivity, and increase in employee morale and motivation. It can be seen primarily as a skill-set or a philosophy, rather than as a management function or well-defined area of activity. It emphasizes the relationship with individual employees. Present day organizational management accepts that the ideas of ’employee voice’ and the ‘psychological contract’ are important issues and these are reflected in the organizational employee relations policies and aspirations.
Employee relations skills and competencies are seen by management critical to achieving performance benefits through a focus on employee involvement, commitment and engagement. Employee relations is seen as strategic in terms of managing operational risk, both the downside risk of non-compliance with the ever changing employment related statutory regulations, and the upside risk of failing to deliver maximum organizational performance.
Employee relations is defined as the activities for managing relationship between organizational management and employees with ultimate objectivity of achieving maximum level of productivity in terms of goods and services, and employee motivation taking preventive measures to resolve issues which affect adversely the work environment.
Employee relations is a strategic and coherent approach to the management of the organizational most valued assets, which are the employees who work individually and collectively to contribute to the achievement of the organizational objectives. Employees are the most valuable resource of the organization. They are the active resource which also activates other resources and enables the organization to achieve corporate goals. Having the right employee at the right place and at the right time is of utmost importance to the survival and success of the organization.
Since employees give the best part of their lives to the organization, management has a moral obligation to let the employees know how they are performing. At the same time organizations have to measure the performance of all their employees. Employees have expectations and interests which are manifested in their behaviour which in turn impacts their performance. Improving the quality of working conditions, job enrichment, promotion, credits for work done, and job security can help create positive employee relations. Employee relations are key to the success of engagement initiatives or performance.
For a high level of the employee relations in the organization, it is necessary to provide guidelines to the employees for improving their performance and behaviour. Employee relations helps in resolving employee grievances, and disputes. The basic requirements of a healthy employee relations is to provide information to the employees about rules, regulations, policies, goals and targets of the organizations and to communicate vision and mission of the organization. Organizations which excel in these aspects have high level of employee retention. Retention of employees refers to satisfied employees which results into employee loyalty for the organization. Satisfied employees result into improvements in the performance of the organization.
The practices and procedures of the employee relations are normally known by the traditional titles but it is up to the management to choose the best fit practices and procedures to fulfill the requirements matching to the culture of the organization. Organization implements the practices and procedures of the employee relations to polish skills of its employees which ultimately lead to better organizational performance.
Employee relations practices and procedures impart a considerable role to improve performance of the organization indirectly. Performance of the employees depend upon job satisfaction, compensation and benefits structure, reward plans, promotions, motivation, environment, and training and succession planning etc. Along with this, modern tools, techniques and sophisticated technology used by the organization for the employee relations create competitive advantage over its competitors. Performance management of the employees is a complex and integrated process of setting up a common employees understanding about targets to be achieved in the organization and aligning the corporate objectives with the measures like skills, competencies needed for the job, employee development plans, and the final results delivered by them. The main focus of the performance management is on continuous improvement, learning advanced and new technologies and skill development to achieve set targets through overall corporate strategy and to construct a workforce which can perform with the highest standards.
The employee relations is an economic, social and political relationship in which employees provide manual and mental labour in exchange for wages and rewards by the management. Because of the increased global competition over the last three decades, organizations are to emphasize on its employees’ efficiency and cost control. This needs effective employee relations strategies which enable the employees to dedicate their energy to the achievement of organizational goals. Employee relations show the existence of psychological contracts which is different from any other relationships. There is a non-formalized kind of psychological contract which is based on what each party expects from the other and is different from the normal written and legal expectations of the parties from each other.
Proactive steps in anticipation of employee needs and expectations are hence characteristic of the employee relations. Organizations are to strive to satisfy their employees with good wages, good supervision and good stimulating work. Employee relations is related to employee satisfaction. It is believed that the productivity is linked to the employee loyalty which highly depends on the management’s interests in employee welfare. There are several characteristics which influence the way in which organizations are organized and managed. These include attitudes towards authority, norms of interpersonal relationships, social norms of individual or group behaviour, and professional standards. There is special emphasis on employee relations since it is central to the ability of the organization to improve and innovate.
Employee relations improve with the direct involvement of the employees in decisions which go beyond their immediate work tasks. Employee involvement is based on the fact that participation in goal setting has been found to be related to the acceptance and subsequent commitment to the established goals, leading to favourable outcomes in terms of performance and attitudes. Further, a managerial policy, where employees share goals with the management and agree on the means to achieve them, elicits employees’ commitment which in turn yields both better economic performance of the organization and greater employee development. Management which gives employees responsible autonomy, provides employees the opportunity to have control over their own work situations in a manner which benefits the organization. Management gives employees status, authority and responsibility, which is based on McGregor theory Y which assumes that employees are responsible people who seek responsibility and are creative. This helps to win employees loyalty and attempts to get employees to adopt the organizational goals.
Direct control has declined with the realization by the management that greater productivity can be achieved using a strategy of responsible autonomy. Related to employee relations is employee communication which helps in communicating the strategies of the organization to all the employees. In the era of increasing public accountability, it is imperative that organizations can communicate vision and strategy and demonstrate progress and outcomes in achieving that vision. Organizational management plays a role in communicating the strategy to the employees. Effective communication makes sure employees have the information they need and is the foundation for any good relationship. Being honest and open with employees is especially important at a time when they can be dealing with serious concerns outside of the organization.
When free communication of the tasks to be performed takes place with extensive employee involvement and in the context of both immediate positions and the whole organization, it lessens the stress which the employees face. Effective communication is absolutely critical to successful integration of employee. Performance expectations, if not properly communicated, are far more difficult to re-work afterwards. The openness of the management to the employees’ input, feedback, ideas, and suggestions is the cornerstone of good communications and strong employee relations. Everyone wins when they are all part of a supportive team.
Theories of employee relations
There are four employee relations theories. These are (i) unitary theory, (ii) human relation theory, (iii) system theory and (iv) social exchange theory.
Unitary theory – The basic assumption and view of unitary theory is that organization and its employees hold common, values, interests, and objective which define entities to be considered as large social system governed by certain group with authorized power to make decisions on behalf of others. The foundation of unitary theory is the large social system, which comprise other sub- system as integrated part of the whole system that share the characteristic and behaviour of the large unitary organization system. Hence, either management or employee who accept and hold such viewpoints and assumptions, consider the organization as a system which exist and operate as a team or family that emphasize on shared values, shared goals, and common destiny.
Human relations theory – The human relation theory enforces human work force to be treated as qualitatively different to other resources used in production. Hence, if employees are denied autonomy on the job, or are reduced to acting as mere extensions of the machinery, or are given work which prevents their capacity to create and think, it is argued that they invariably find ways to subvert the methods of control which enforce these conditions. Ultimate message of human relation theory is that the managerial approach needs to ensure availability of employee relations practice which, seeks to minimize internal tensions by developing the sense of workplace satisfaction felt by employees through techniques which involve them in the organization and regulation of work.
System theory – The most famous theory drawing on a pluralist frame of reference is the systems theory, which argues that employee relations are best regarded as a sub-system of the wider social system. The theory claim that work and interaction of employees including recruitment, holidays, performance, wages, hours, conflict resolution and other employee relations are governed by diversified formal and informal rules and regulations. According to the theory assertion, employee relations results from four major parties which make the wider system. First are industrial actors which consist of management, employees, their representatives and external agencies with an interest in the employee relations like the statutory agencies. Second is the environmental context which is made up of prevailing economic and technological conditions, markets, and distribution of power in wider society. Third is procedural and substantive rules which govern the employee relations between the actors. Fourth is binding ideology which is a set of common beliefs and understandings which serve to encourage compromises on the part of each actor for the sake of making the system operable.
Social exchange theory – According to this theory, individuals regulate their interactions with other individuals based on a self-interest analysis of the costs and benefits of such an interaction. This theory argues that when workplace relationships are effective, then the organization benefits. Hence, people calculate the overall worth of a particular relationship by subtracting its costs from the rewards it provides. The implication of social exchange theory is all about mutually agreed benefit which results from the loyal interaction between employees, management, and the organization.
Factors related to employee relations
Fig 1 shows factors related to employee relations. Good relations between the management and employees do not just happen. They are the result of a strategy and activities which are designed to improve communication between the management and employees hence employee relations. For this several employee relations practices are available, which include employee empowerment and involvement, employee suggestions, extensive discussions on important issues, conflict management, grievance redress measures, training and development, transparency in communication, encouraging group activities (teamwork), and work compensation etc.
Fig 1 Factors related to employee relations
Empowerment is a recent and advanced manifestation of employee involvement which improves employee relations and contributes directly to the organizational objectives by increasing skill sets and granting authority to the employees to make decisions which are traditionally made by the management. It can encourage employees to be creative and to take risks, which are key components that can give the organization a competitive edge in a fast-changing environment. Employee involvement is operationalized through a process of five essential steps like informing, consulting, sharing, delegating, and empowering.
Organizations are making efforts to involve employees to different degrees by which employees are encouraged, enabled, and empowered to contribute towards goal attainment. Employees with greater choice concerning how to do their own work have been found to have higher job satisfaction. Employee empowerment is more relevant in the present day competitive environment where knowledge workers are more prevalent. Hence, it is of vital importance for the management to understand that empowerment is really a necessary tool to increase employee satisfaction, which results into higher productivity and organizational effectiveness.
Employee suggestion scheme is another tool for the employee relations. It can be described as a formalized mechanism which encourages employees to contribute constructive ideas for improving the organization in which they work. Implemented ideas are rewarded by a monetary award or some other form of recognition which is normally proportionate to the benefits generated. It creates a climate of trust and confidence, job satisfaction and continuous improvement in the organization. Employee suggestion scheme can be defined as a formalized procedure to encourage the employees to think creatively about their jobs, job environment, and to come forward with ideas for which they are rewarded on a specific basis, if acceptable and to the advantage of the organization. Day to day employee suggestions is a useful way to obtain and utilize employees’ creative ideas especially when operating where innovation and constant improvement plays an increasingly vital part in economic success.
Collective discussion is a process of decision making. It implies the discussion and continuous application of an agreed set of rules which govern the substantive and procedural terms of the employee relations. During the discussion, the goal is to agree upon rules to facilitate compromises between conflicting interests. In replacing unilateral decision-making by the management, discussion introduces an element of democracy into the organization.
Employee productivity is a measure of the quantity and quality of work done, considering the cost of the resources used. The more productive an organization is, the better is its competitive advantage, since the costs to produce its goods and services are lower. Better productivity does not necessarily mean higher production. It is perhaps fewer employees (or less money or time) is used to produce the same quantity of products or services.
Results are normally the final and specific outputs desired from the employee. These are frequently expressed as products or services for an internal or external customer, but not always. These can be in terms of financial accomplishments, impact on a community, whose results are expressed in terms of cost, quality, quantity or time. Measuring of productivity involves determining the length of time which an average employee needs to generate a given level of production. It can also observe the quantity of time which a group of employees spends on certain activities. The method can determine whether the employees are spending too much time away from production on other aspects of the job which can be controlled by the organization.
Employee productivity can be hard to measure, but it has a direct bearing on the organizational performance. There are several factors at the workplace which help maximize the employee productivity. In fact, none of the resources used for productivity in the organizations are so closely scrutinized as the human resource. Several of the activities undertaken in the organization are designed to affect individual or organizational productivity. Wage, appraisal systems, training, selection, job design and compensation are some of the activities directly concerned with productivity. The increased concerns over productivity and meeting customer’s requirements have prompted renewed interest in methods designed to motivate employees to be more focused on meeting (or exceeding) customer requirements and increasing productivity. The best way is to improve productivity is by establishing a closer connection between the employee and the management.
A healthy employee relations ensures a positive environment at work and also helps the employees to achieve their targets at a much faster rate. Employees are more focused, can concentrate better in their assignments and hence the output increases. Employees are not engaged in constant fights, are eager to help each other and do not take work as a burden. They enjoy each and every moment at work and do not frequently take leaves. Communication is important activity which plays a crucial role at workplace. It is one of the most important factors which either improves or spoils the employee relations. Written modes of communication is more reliable as compared to verbal communication modes. Further, the written communication is to be self-explanatory and everyone is to be clear about the ideas and opinions conveyed in the communication.
Several managements fear that reducing employee stress means reducing productivity or creation of a relaxed work environment. This fear is ill founded. In fact, the opposite is true. When the management finds ways which bring out the best in the employees, it also reduces employee stress. Stress, coming from whichever source, can be a major setback in meeting the objectives of the organization directly or indirectly. This is since it manifests itself from the way employee relate to each other in the work environment. It affects the, negatively, the employee-employee relations. On the other hand, unhealthy employee-employee relations can be a source of stress among the employees. In either way, the work performance is affected greatly.
The key to maximizing productivity while minimizing stress is understanding the factors which influence whether someone working very hard is feeling stressed out and burnt out, or whether they feel motivated, excited, and committed. For maximizing employee productivity and performance, management can give employees as much control over their jobs as possible. Studies have shown that control is the biggest factor which the employees feel stressed out or rejuvenated when facing a challenge.
The more control employees have over their work, the greater is their job satisfaction, the higher is their work quality, and the lower is their stress level. Giving employees control includes giving them the power to make job-related decisions, the flexibility to organize their work in the way they find optimal, and the authority to find make improvements on how their job is done. Making this to happen needs providing employees with the training, coaching, and information they need to make intelligent decisions. Communicate clearly and frequently about everything is important since one of the greatest sources of employee stress is not knowing about the changes taking place in the organization, not knowing their job and performance expectations of the line manager, and not knowing if they are doing a good job. Communicating clearly in these areas not only reduces employee stress, it also helps them do a far better job and which also motivates them.
For good employee relations the management is required to interact with the employees about what makes the organization great, how it brings value to the customers, and how the employees make it feasible. Employees want to feel part of something great, and they want to feel that they are making a considerable contribution to that greatness. When they feel this way, they not only become energized by challenges, they are also more able to endure difficulties without becoming burnt out. The management can put this principle into action by making sure that they always deliver a high quality product or service, by talking with employees about the value the organizations provides to the customers, and explaining how their doing high quality work makes it possible.
Line managers play an important role in determining stress levels and employee relations in the organization. They play a big role in employee morale, performance, and stress level and ultimately determine job performance. Line managers who know how to provide guidance, support, and encouragement minimize employee stress. Line managers with poor management skills or with personal problems with employees cannot help employees deal with stress since they themselves are a tremendous source of stress.
The management is required to encourage the employees to talk freely and support one another – An ‘all work and no play’ environment burns out employees quickly. Having a workplace where co-employees can talk without worrying about getting into trouble, is especially important in the jobs involving high stress. Encouragement of interactions among co-employees also reduces stress, since having social support reduces the negative effects of stressful situations.
Employees are to be helped to design their jobs to be as rewarding as possible, although not all jobs are equally rewarding and satisfying, much can be done to make even the least rewarding and satisfying jobs enjoyable. The employees with high opportunity to make decisions, use their mind, and take responsibility, have high level of satisfaction. The employees need to be involved in the job enrichment process for high satisfaction. If changes are made without their input, this does not help. If employees have worked for years in an environment where they have been told what to do, it takes time for them to learn how to take a more responsible and active approach to their jobs.
The job orientation, as well as training and development of the employees makes the employees well prepared for their jobs and this improves employee relations. Making sure employees have the right resources and training to carry out their works well reduces unhealthy employee relations within the organization. In fact, when the employees feel inadequate, when they feel ill-equipped to handle a challenge, they are stressed. If employees do not have the tools, technology, time, support, or training to do their jobs well, they are stressed, and are not able to work at their true potential and hence poor performance. Management which invest in these areas improves employee relations and achieves increased employee productivity and performance.
Control has clear effects on job performance and work stress. The employees’ perception of control predictability determines their response to a situation, and such perceptions are affected by the characteristics of the job and work environment. Perceptions of control in the work place are also related to autonomy, the extent to which employees can perform their tasks. Overall interventions which improve perceptions of control on the job, such as participative decision making or flexible time schedules, are likely to reduce stress and subsequent strains. Negative reactions with co-employees, line managers, or customers or interpersonal conflicts can range from heated arguments to the incidences of unfriendly behaviour. Interpersonal conflicts can destroy employee relations and divert employees’ concentration from important job tasks with consequences of physical health issues and reduction in the employees output.
Employee relations improves when employees have open lines of communication with management. With effective work relationships with their line managers, employees increase their organizational identification and enhance their performance, and contribute to the organizational productivity. Such employees deal more effectively with job stressors.
There is strong evidence that different aspects of effective management communication, such as high frequency, openness and accuracy, performance feedback, and adequacy of information about organizational policies and procedures are positively related to employee relations and hence employees’ performance. When there is open communication from the management, employees feel obligated to respond through the increase of their task performance and voluntary actions to benefit the organization.
Factors leading to effective employee relations – For the organizational members to perceive practices and procedures of employee relations positively, the management is required to put emphasis on gaining support from the employees, having mutual trust and confidence building, allowing freedom of association, improving career and salary tracks, retirement benefits, and retaining measures. Management is to strive to satisfy the employees with good wages, supervision, and stimulating work.
The best practices and procedures of employee relations incorporate statutory regulations, resourcefulness, and human resource expertise in developing practices which improve working relationships. There need for the existence of a distinctive set of written guiding principles which set parameters to and signposts for management action regarding the way employees are treated and how particular events are handled. It is good to directly involve employees in decisions which go beyond their immediate work tasks and given opportunity to control their work situation in a manner which benefits the organization also to have a managerial policy where management and employees share goals and agree on the means to achieve them. Employees’ involvement is very important since participation in goal setting has been found relating to the acceptance and subsequent commitment to the established goals which leads to favourable outcomes in terms of performance and attitudes.
Factors which lead to good employee relations in the organization include employee empowerment and involvement, initiating employee suggestions, conflict management and grievance redress measures, facilitating collective discussions, training and development, encouraging teamwork, and transparency in communicating. Employee empowerment improves employee relations since it contributes directly to the organizational objectives by increasing skill sets and granting authority to the employees to make a decision which traditionally be made by the managers. There is need of effective communication since it is one of the most important factors which either improves or spoils the employee relations. Employees with open lines of communication with managers are more likely to build effective work relationships with the managers, increase their organizational identification and enhance their performance which at last contributes to the organization productivity.
The perception of employee relations – The employee relations is a framework of organizational justice consisting of organizational culture and management styles as well as rules and procedural sequence for grievance and conflict management. It is set of the rules, regulations and agreements by which employees are managed both as individuals and as a collective group. It suggests a wider canvas being covered with equal importance attached to all types of the employees.
Employee relations is to manage the relationship between management and employees with the ultimate objectivity of achieving the optimum level of productivity in terms of goods and services, and employee motivation taking preventive measures to resolve problems which adversely affect the working environment. The unitary viewpoint of the employee relations is the belief that management and employees share the same concerns and hence it is in interest of both to cooperate.
Employee relations is concerned with the social economic relationship which forms and revolves around a contract between the parties to perform work in return for employment benefits. The effective employee relations needs cooperation between management and employees, and good relations between the management and the employee do not just happen but they are the result of a strategy and activities which are designed to improve communication between the management and the employees. Employee relations involve the communication and relationships which contribute to satisfactory productivity, job satisfaction, motivation and morale of the employees.
Employee relations is to control the work performance, integrate employee in the organizational structure and management system and create a mutual trust environment, confidence and supply of enough and reasonable work while employees obey official and reasonable orders, maintain loyalty and work with due diligence and care.
Good relationship with peers and leaders impact positively on employee performance. Hence, employee relations imply the creation of a working environment which motivates employees towards the goals of the organization. The objective is to achieve harmonious employee relations and minimize conflicts. Employee relations are known to play considerable roles in nurturing organizational performance. Good employee relations can be created by motivating the employees and having good working conditions and effective communication systems. Organizational effectiveness depends on constantly improving the performance of organization members and maintaining the human potential which serves as the backbone of the organization. This creates a necessity of employee relations, which is good for the growth of the organization.
At the heart of the employee relations is the desire of both management and employees to create an efficient and effective organization. When this happens, management is planning, organizing, and directing work such that employees understand their roles and responsibilities in a way so that they can produce the desired outcomes. There is a healthy work environment and strong working relationships amongst everyone.
The employees have an opportunity to contribute and each feels valued as part of the collective effort of the organization. A mutual respect exists between the management and the employees. Life is good and everyone is happy. Achieving and sustaining this ideal state does not always occur, and some can argue, never fully happens. Employees do not always meet expectations, conflict and other factors challenge group dynamics, regulations and other compliance issues exist, and sometimes managers do not lead or address a given situation well. The domain of employee relations exists in a dynamic environment. While the preference of managers is to lead emphasizing the upside, they also need to understand their responsibilities and be able to address the downside.
The term ‘employee relations’ refers to relationships which exist in both unionized and nonunionized workplaces. Management hope to manage employee relations successfully with each respective individual, as a means to raise morale and productivity. Employee relations is a concept which is being preferred over the older industrial relations because of the realization that there is much more at the workplace than industrial relations can look or cover.
In general, employee relations can be considered to be a study of relations between employees as well as between management and employees so as to find ways of resolving conflicts and to help in improving productivity of the organization by increasing motivation and morale of the employees. The field is concerned with providing information to employees regarding the goals of the organization so that they have a better understanding of the aims and policies of the management. Employees are also informed about their poor performances and ways and means to correct performance. Employee relations also take care of grievances and the problems of the employees and let them know all about their rights and what to do in case of discrimination. Hence, employee relations go beyond the collective bargaining level to include non-union organizations where dialogue can be between the management and the employees, although with alternative bargaining structures.
It is human beings (employees) which form the backbone of all operations in the organization and hence employee relations is more important than the statutory regulations and institutions which govern relations at the workplace. Though it was industrial relations which came into existence earlier, it is employee relations which is increasingly being used to refer to workplace relations these days. Falling union membership around the world has made people realize that employs relations are more important than the focus given to these relations by industrial relations.
The differences between industrial relations and employee relations assume (i) industrial relations focuses on employees regarded as a collective body while employee relations put a strong emphasis on employees regarded as individual, and (ii) employee relations are based on greater cooperation between management and employee with the employees being motivated to add value to the organization. Hence, employee relations is considered as being based on management practices based on trust, fairness, knowledge and understanding of employee aspirations, and attention to the ‘employee voice’ obtained through a variety of channels.
The employee relations and the interaction between the parties can be seen to produce a number of different employee relations outcomes within the organization. At one level, these outcomes can be perceived purely in terms of whether they are processes, procedures or practices but, at another, they can be seen to be mechanisms for securing the objectives of the parties such as the resolution of conflict between them, employee participation and involvement in decision making or control of the work process, the handling of grievances and management of discipline, or the pursuit and achievement of equal opportunities.
Employee relations framework
Fig 2 shows employee relations framework. The relationship occurs within several different contexts and is variously constrained and influenced by them. These contexts can be differentiated on a number of different grounds. It can be differentiated between international, national and organizational contexts. Throughout the framework there are two-way interactions between the various layers of context such as the international context exerts influence upon the national context and thereby upon the organizational context and the employee relations itself, yet the interactions within the employee relations produce outcomes which become part of the organizational context, which itself can then impact upon the national context.
Fig 2 Employee relations framework
Reasonably one can expect the strength or intensity of the outwardly directed influences to be less than those having an inward direction. At the organizational level influences include the values and beliefs of the parties, which are likely to influence the parties’ expectations and their perceptions of the interests and the nature of the relationship. These are likely to influence management style and approach, for example, such as the attitude towards sharing of power and control, the attitude towards having mechanisms for the joint determination of issues and the resolution of conflict, and preferences for human resource management (HRM). For employees, they are likely to determine the approach to collective organization, the nature of the attachment, having a right to participate in decision making and the perceptions of being treated fairly, consistently and with dignity.
At the level of the organization, decisions are to be taken about the production and competitive strategies to be pursued, about the way in which work is organized, the work force needed and the distribution of work between primary and secondary employee markets. All of these have implications for the parties to the employee relations and the interactions between them. Outside the organization, there are two levels of context which are international and national.
At the national level, there is the influence of the values, beliefs and attitudes which can be perceived as constituting the national culture. At this level, the issues are the nature of the dominant form of economic activity, government and its ideology, and the policies and priorities pursued by government in its role as economic regulator. The government also has an influential role in the determination of the statutory regulations. Additionally, at this level of context it is necessary to consider the structure of industrial and economic activity, the composition and structure of the work force, demographic circumstances and trends, the distribution of power in society and the history and traditions of the country. The supply of employees are influenced by the nature of the dominant education and training regimes. Managements and trade unions also function at this level, pursuing their own objectives but also engaging with statutory authorities in order to exert influence and achieve certain specific outcomes.
Outside the level of the nation, there are several influential international contexts. Most important of these are shown in the outer rectangle of Fig 2. Fig 2 is not comprehensive but reflect some perceptions of relative importance. Choices also have to be made on where to include some of the material and it has to be acknowledged that there are alternative approaches to structuring a text such as this.
In other words, the employee relations is hence a creation of markets, but also distinct from them for the simple reason that it is a market of people which operates very differently from the idealized markets of economic theory. The statutory structures built around the employee relations concern themselves both with ensuring people markets operate smoothly and with the need to protect employees from unfair practices. Of course, the leading organization do not normally see the employees as ‘commodities’ and frequently invest considerable effort and resources in avoiding that impression. Indeed, the language of ‘a relationship’ is awkward. Employees differ widely in their needs and wants from work with some preferring a less involved form of work than can be implied by the term.
The term ’employee relations’ refers to the efforts of the organization to manage relationships between the management and the employees. The organization with a good employee relations programme provides fair and consistent treatment to all employees so that the employees are committed to their jobs and loyal to the organization. Such programmes also aim to prevent and resolve problems arising from situations at work.
Employee relations mean the relationships between management and employees in the organization. The term refers to the whole field of relationship among people, human relationship which exist because of the necessary collaboration of the people in the employment process of the present day industry. Employee relations has become one of the most delicate and complex issue of the present day industrial society. Industrial progress is impossible without employee cooperation and industrial harmony. Hence, it is in the interest of all to create and maintain good employee relations.
Employee relations models
The dimensions of the employee relations comprise four basic components. The dimensions have defined employee relations as integration of structure, substance, operation, and parties. The parties are managers, employees and employee representatives. The ‘substance’ incorporates the job, reward and career of individuals and the communications and culture of the organization as it affects them. It can also include collective agreements and the employee relations machinery. The formal dimensions include rules and procedures, and the informal aspect covers understanding, expectations, and assumptions. Finally, the employee relations exists at different levels in the organization (management to employees normally, managers to individual employees and their representatives or groups of people, and employee to employee). The operation of the employee relations is also affected by the processes such as communications and consultation, and by the management style prevailing throughout the organization or adopted by individual managers.
The model was basically postulated by Carstens and Barnes, with the objective of investigating the existing relationship between leader / employee relationship effects on the organizational performance. The model takes concepts such as vision, trust, empowerment, servant hood and links them to the quality of the relationship between the leader and the employee. The premise is that the quality of the relationships has an influence on issues like teamwork, group accountability, performance standards, subordinate growth, or role interchangeability which, in turn, influence organizational performance. Fig 3 shows the model of employee relations.
Fig 3 Model of employee relations
Nature of employee relations
Management employee relations are the outcome of the employee relations in the industry. These relations cannot exist without the two parties i.e. the management and the employees. It is the industry which provides the setting for the employee relations. Relations include both individual relations as well as collective relations. Individual relations imply relations between the management and the employees. Collective relations mean, relations between the industry associations and trade unions as well as the role of the regulatory authorities in regulating these relations.
The concept of employee relations is complex and multi-dimensional. The concept extends to the general web of relationships between management, employees, and the statutory agencies. It covers regulated as well as unregulated, institutionalized as well as individual relations. These multi-pronged relations can be in organized or unorganized sector.
Employee relations is a dynamic and developing concept. It undergoes change with the changing structure and environment of industry. It is not a static concept. It flourishes or stagnates or decays along with the economic and social institutions which exist in a society. The institutional forces give content and shape to the employee relations.
Strictly speaking a distinction can be made between HRM and employee relations. HRM deals mainly with executive policies and activities regarding the human relation aspects of the organization while employee relations are mainly concerned with the management-employee relationship. HRM refers to that part of employee relations which is concerned with employees as individuals, collective, or group. Relationship of the management and employees constitutes the subject matter of the employee relations.
Employee relations does not function in a vacuum. It is rather the composite result of the attitudes and approaches of the employees towards each other. Employee relations is an integral part of social relations. It is conditioned by economic and institutional factors. Economic factors include economic organizations (individual, public, or government ownership), capital structure and technology, nature and composition of the work force, demand and availability of the working personnel. Institutional factors refer to statutory policies and regulations, organizational policies, employee associations, social institutions (community, caste, joint family, and religions), attitudes to work, power and status systems, motivation and influence, etc.
Several parties are involved in the employee relations system. The main parties are management, employees and their associations, industry associations, and the statutory authorities. These groups interact within the economic and social environment to shape the employee relations.
The main purpose of the employee relations is to maintain harmonious relationships between the management and the employees. The focus in these relationships is on accommodation. The parties involved develop skills and methods of adjusting to or cooperating with each other. They also attempt to solve their problems through collective discussions. Employee relations creates a complex set of rules, regulations, and procedures to govern the workplace.
The employee relations constitutes interactions, behaviours and outcomes based in and around the workplace. It involves employees, managers, and those who have an impact on their workplace relationships such as regulatory agencies. It is concerned with the regulation of the determinants and outcomes of the employee relations, and sometimes with the breakdown of such regulation.
Since workplaces do not exist alone, the economies in which they are based, together with the cultures, philosophies, styles and norms of those working within them, and the desires, wishes and expectations of those reliant on them, all have a bearing on what goes on in the workplace, as indeed does the type of work, the technology used and the levels of competition. But the employee relations is not always straightforward since each party involved has a different set of needs and requirements. Also, not everyone in the organization is a direct employee. There can be contract employees or employees of the contractors or sub-contractors. How they work, why they work and their attitudes to one another are crucial. For example, if someone is treated well they are more likely to perform well and stay with the organization than if they perceive their treatment to be unjust or unfair in some way.
If the balance of power is in favour of the employee, there is a lower likelihood that they are being subjected to adverse treatment, since the costs to the organization of treating employees in a way which reduces their productivity or causes them to seek alternative employment is high. Equally, where the balance of power favours the management, there can be less incentive for them to protect the employees against adverse treatment. The inherent imbalance of power is such that employees frequently find it necessary to act collectively, sometimes using external parties to represent their views, and in turn the management can use the agency of others, such as industry associations.
It is evident that the nature of the employee relations is complex, involving different influences and ideologies. Also, the relations, which can be both formal and informal, is changeable, frequently exploitative, and at times contradictory with the potential for cooperation and conflict ever present. In essence then, this is what the employee relations encompasses. It seeks to make sense of the formal and informal relationships found at work. It concerns the ways in which people interact both with one another and with the jobs they undertake; specifically, it concerns individuals who voluntarily subordinate themselves to the demands of the organization by exchanging their time, effort, and possibly experience and knowledge, for monetary and non-monetary rewards within a regulated environment.
Employee relations establishes a set of reciprocal rights and obligations between the primary parties within the relationship. This relationship is ‘the main vehicle through which employees gain access to the rights and benefits associated with employment. It is the key point of reference for determining the nature and extent of management’s rights and obligations towards the employees. Such rights are underpinned by an informal infrastructure of cultural and ethical values linked to fairness and the subsequent trust, or lack of it, between parties. Individual employees have a specific relationship with others in the workplace and with the work itself. This relationship is not static. It has a past and a future both of which affect how the relationship develops. The longer an employee is with the organization the more they become socialized to the norms and culture of that organization, and this affects their perceptions of their treatment and their subsequent workplace behaviours.
The primary parties are not the only participants to have influence on the relationship, others too are involved. These are secondary parties. These individuals can be primary parties in their own right but they have an additional role to respectively represent the views of the employees, or of the management. A further feature of the employee relations is the influence of third parties. These are frequently the regulatory agencies. Other external third parties which can become involved in the employee relationship can be advisors, mediators, conciliators or arbiters or the agencies involved in a lobbying capacity.
Within the context of the employee relations, ‘management’ refers to the activities of the managers. The management can also be used as a general term describing the body of people undertaking these activities. Management activity is the result of interaction between a number of constraints such as economic conditions, national policy and statutory regulation, and of choices such as the ways in which activity is undertaken, promoted and communicated. Choices of course can be based on the interests of the organization, or the interests of individual managers or on ethical / moral values. These three are not mutually exclusive, although in certain circumstances they can be. The role of managers has, over the years, become subject to financial pressures, resulting in managerial choices which have resulted in increased pressure to provide short-term results satisfying shareholders and the market, frequently with unintended consequences, distorting managerial activities and leading to inconsistent decision making and lack of trust from the employees.
Financial pressure is not the only influence on managerial choices. Increased quantity of statutory regulations have effects, constraints, and impacts. These also affects the ways in which management operates. Further, the ethical decision making is complicated, sometimes presenting managers with difficult dilemmas such as whether they act in the interest of the organization or in the interests of those whom they manage. To a certain extent managers are the squeezed middle. One of the studies highlights this dilemma for middle managers, explaining how, particularly now that many personnel functions are undertaken by line managers and not by human relation specialists. This group find themselves acting as the buffer zone between organizational demands and employee performance. Middle level managers are fulfilling a vital purpose. They are like shock absorbers in any complex mechanism or the flex in elaborate structures in balancing tensions and mediating potential conflict. The added burden of devolved HRM functions both highlight and exaggerate a problem which has been previously dissipated by the presence of specialist practitioners.
Within the workplace, job demarcation has diminished and team work and matrix working increased. The rise of technology has changed the ways in which several organizations operate with some moving to longer operating hours, frequently with an associated increase in demand for workplace flexibility, with employees needed to frequently update and utilize new skills. Such changes in the nature of work have led to decreased job security and increased insecurity / redundancy. More people are working part-time than previously. These changes have had an impact on both the management and the employees, in particular on their expectations and needs within the workplace.
The impact of these changes has resulted in a drop in the number of people working in organizations. There is a corresponding rise in individualism. This is a style of management which deploys policies based around the belief in the value of the individuals and their right to fulfilment, development, and advancement at work. Here there is an emphasis on enabling and managing performance whereby the management communicates directly with the employee, designs individual contracts and offers financial incentives based on levels of performance and regular training in order to gain an acceptance of the personalized performance targets and individual flexibility. Such individuality, it is claimed, encourages high levels of commitment to the organization and sustained productivity.
Individuals are assumed to have interests which are in line with those of the organization. Hence there is no need for them to combine and act together and no requirement for employee associations. This has an obvious appeal to managers and is a move away from the more adversarial system of collectivism. This approach, defined as ‘the recognition by management of the collective interests of groups of employees in the decision making process’, is useful for employees who find that joining with others increases their levels of power with regards to the management, protects the interests of the group and improves terms and conditions in ways which cannot have been possible had they been acting alone. The two systems, collectivism and individualism, are not, however, mutually exclusive. Management frequently categorize certain employees as members of a specific group and treat them collectively but with individual differences.
Alongside the rise in individualism there has been an increase in HRM. HRM refers to an approach to managing an organization which aligns the resources, human and otherwise, with the organizational strategy. It is seen as a holistic way of using thee organizational resources to cost-effectively respond to changes in the economic and technical environments. The doctrines of quality management and flexibility are key to the operational effectiveness deployed by HRM strategists. Since everything is geared towards effective use of resources, one of the managerial aims is to ensure that the employees are not just compliant with organizational demands but are also committed to achieving them. Part of this involves use of performance management techniques to align employee performance with the organizational goals coupled with a management strategy utilizing psychological rewards, such as participating in decision making, to encourage employee motivation, engagement, commitment and loyalty.
In terms of its relationship with employee relations, HRM is frequently used as an umbrella term for a set of management practices within the employee relations, including an increased emphasis on high commitment and greater employee task discretion. Its emphasis on deploying the skills of each employee in the most effective way is individual rather than collective and unitary rather than pluralist, although in circumstances where the prevailing culture is pluralist, HRM techniques are still deployed.
One of the consequences of the adoption of HRM policies is that several traditional personnel functions have been devolved to line managers, allowing HR managers to concentrate on the strategic aspects of the organizational management. This has resulted into employees increasingly losing day to day contact with HR managers and relying on line managers who have neither the time nor the training to give HR work the priority it needs.
Two different forms of HRM have been defined. These are (i) hard, driven by strategic objectives where employees are perceived as just another resource to be treated in a depersonalized manner, and (ii) soft, where employees are regarded as a valued asset and a source of innovation and competitive advantage and individuals within the organization are nurtured, well looked after and developed. Whether the organization delivers hard or soft HRM, whether or not the line managers are trained in people management and whether the intended delivery of the strategy is the actual strategy which is implemented, all impact on the parties to the employee relations.
There are problems in analysis if the workforce is regarded as if it is a homogenous group since employees within the organization have different interests, needs, and perceptions and hence respond differently to the HRM practices they experience. Hence, a workplace strategy which assumes one set of policies consistently delivers and receives in identical ways which suit everyone is unrealistic. Further, intended policies are not always corresponding with actual practices and that such practices can be experienced and acted on differently by the employees in the same organization. Employee commitment which is a key pillar of the HRM way of managing, cannot actually be as high as intended if employees do not perceive their interests to be the same as those put forward by the organization that they work for;. Also, there can be inconsistencies within the organization if individualistic targets are advocated simultaneously with those associated with team work.
For achieving goals within the workplace, the work itself and the processes for achieving and coordinating output are to be organized. This, of course, results in divisions of accountability, responsibility, and of work. Such arrangements affect and impact upon the employee relations In order to achieve results. The management directs the employees who, in return for the wages, consents to obey directions, hence entering into a relationship of subordination. This inequality is aggravated by unequal access to resources. The splitting-up of tasks and responsibility means that some employees have more control and others less either formally or informally, over others. The primary purpose of control is to coordinate different organizational activities in order to achieve the goals for the organization. The exercise of control affects not just the economic relationship but also social and ethical aspects of the employee relations. This means that ‘the right to manage’ is to be exercised in a reasonable manner.
Control over others can be seen in terms of power. Power with the workplace is a reflection of power in the wider society, but this does not account for differences in individual workplaces within the same society. Indeed different types of power can be simultaneously wielded in different parts of the same organization. Power enables a few individuals to minimize the discretion of several of the employee by making decisions deemed by the few to be important for their purposes and the benefit of the organization. It enables the few to display distrust of the many by imposing upon them work roles and work rules which leave little scope for the important choices.
The related concepts of ‘power’ and ‘control’ are central to the understanding of how the work process is ‘managed’. Yet although the management has a degree of power, which it can choose or not choose to exert, employees are not necessarily powerless since the workplace relationship dictates that the management is dependent upon the services of the employees. The relationship is hence reciprocal and interdependent, despite the fact that the management has more power than the employees. The power of the employees is dependent on how much management needs their effort. Such power is unlike any other commodity since it is part of a continuous relationship which is, in itself, affected by external forces not within its control. A shortage of skilled manpower can influence against the power of the management.
The consequences of the imbalance of power have resulted in the formation of groups, such as employee associations, which act as countervailing forces. Statutory agencies also have frequently intervened, in the form of implementing new legislation, to redress real or perceived power imbalances in the workplace. Although inequalities of power do result in conflict, compromise is more frequently the outcome since it is not simply a matter of management control against employee resistance, but more a mixture of dissent and accommodation, conflict, and cooperation. Indeed, the management frequently maintains control by sharing it. In the present day environment, a reliance on procedures is used to influence the operation of the employee relations.
Power can be regarded in terms of either the power to do something, or in terms of the power over someone / something. Both are important within the employee relations. The power ‘to do’ can be the result of technical competence / skill, or can involve the power to facilitate and enable. Used properly, it can produce respect, loyalty, and commitment. The power ‘over’ refers to the ability of a person or a group to dictate what others are or are not be doing and how and when they are be doing it. It relates to the ability to get someone to do something which they do not do otherwise, maybe including doing so against their will. This can be categorized into (i) power in terms of dominance, (ii) the concept of power in terms of decision making, and (iii) the concept of a more manipulative power, one which controls the ideology or culture of the organization.
The very actions that management take form part of a pervasive ideology, so for example, if certain behaviours are rewarded, this provides powerful messages about what is, and is not, acceptable behaviour. There are five distinct sources of power. Two of these sources, expert and referent power, derive from the holder’s individual characteristics. The other three sources, legitimate, reward, and coercive power, derive from the holder’s position within their organization.
Legitimate power is that power which people have due to their position within the organization. It gives people the authority to make decisions and control the activities of others. Hence, line managers have the authority to control the work processes of their subordinates merely because of their position in the organization. Perceptions, too, are important here. If some people are not perceived as being worthy of the position they hold, their power can be diminished. So, for example, if some persons with little experience are brought in to manage an existing team, the perception of the team members can be that the person’s inexperience renders them unfit for the job and hence non-cooperation, conflict and a breakdown in the employee relations can be the result.
The interests of statutory authorities, of the management, and of the employees, do not always coincide. It is, of course, normal for the statutory authorities to want the organization to perform effectively following regulations. Similarly, both the management and the employees want their organization to succeed. Job security is, after all, associated with the success of the organization and employees are aware that a failing organization frequently leads to unwelcome measures, such as wage freezes and / or redundancies. The relationship between the management and employees is interdependent, that is, each needs the other in order to function. However, the interests of these parties do differ. Employees do not just want security of employment, they want the best available in terms of wage, benefits, and adequate leaves as well as healthy, safe, and reasonable working conditions.
Several employees also want good promotion prospects and adequate training and development, as well as a say in what they are doing and how they are to do it. Management, of course, does not want to match these demands. Employees in the workplace want to be treated fairly and equitably. The key employee interests at work are equity and voice, where equity means fair employment practices in terms not only of how employees are treated but also in terms of what employees are expected to do, how much reward they receive, and the conditions under which employees are expected to work, and where voice is the capacity to have meaningful input into decisions. Management, on the other hand, have an interest in efficiency frequently to the detriment of equity and voice.
Linked to employee interests is the extent to which employees have a degree of autonomy in the ways in which they work. Employees like the sense of being trusted to work without supervision, although at the same time they do not want to feel abandoned. This is especially so when they are sufficiently qualified and competent to make decisions about how they undertake their work. Such empowerment does not mean that employees are abandoned to work alone, but instead are offered an environment in which to work where they can be trusted since they are competent to undertake tasks without constant supervision and direction.
Five different types of empowerments namely (i) information sharing, (ii) upward problem solving, (iii) task autonomy, (iv) attitudinal shaping, and (v) self-management have been identified which are all relevant here. Management have different interests as unlike employees they prefer not to pay their workforce more than is necessary to achieve and maintain consistent and sustained productivity. They want the organization and those in it to perform efficiently and effectively and they like the freedom to take and implement organizational decisions. Also, they like compliance from the employees for management decisions and commitment to workplace rules.
Statutory agencies have a wider responsibility. Obviously they want to ensure that the organization is contributing to the economy, providing employment, and operating with the minimum quantity of conflict. The very nature of employment means that it is incumbent upon the statutory agencies to oversee and regulate the employee relations, balancing the rights between the skate holders and employees. Statutory agencies lay down standards for health and safety, provide standards for the minimum wages and so on. Crucially they lay down the corporate governance framework, either by legislation or procedure, within which the employee relations is conducted. This helps in the fair treatment of the employees while the management retaining a degree of flexibility.
A ‘frame of reference’ is how people see the world. The idea of a frame of reference, in terms of the employee relations, was first mooted by Fox in 1966. He argued that attitudes and subsequent behaviours within workplace relationships can be divided into two mutually exclusive categories. These are either it is a unitarist relationship, which is the one that exists to solely satisfy common interests, or it is a pluralist relationship which exists to satisfy the different interests of separate but interdependent groups. The frame of reference with which an individual views the workplace affect the ways in which they make assumptions and reach conclusions about events, and this affects their subsequent behaviour. Later, in 1974, Fox enlarged the theory to incorporate a third frame of reference, radicalist, where the employee relations is perceived as one merely there to satisfy the interests of the dominant party (class).
Frames of reference are useful analytical devices for defining and categorizing the attitudes, perceptions and values behind the management of the organization. Of cours,e within a workplace it is possible to have different groups / individuals with different frames of reference, so for example it is possible for a unitarist management to be working alongside employees who hold pluralist perspectives, and vice versa.
A unitarist frame of reference is one where the management views the workplace from a perspective which assumes that everyone within the organization agrees with its common purpose i.e. the success of the organization and, importantly, everyone agrees with the ways in which management sets about achieving this success. Management is the only source of authority and has the right to manage. As such the management prerogative is not questioned because everyone is part of a team, all pulling in the same direction, all with the same aspirations. This similarity, according to the unitarist perspective, means that there is no conflicts of interests and hence no need to have any mechanisms for dealing with conflict.
Conflict is regarded as irrational, and even pathological. Certainly, so this view goes, since the workforce is harmonious, unified and behaves as a whole, there is no need for any outside interference. Hence, employee association is regarded as unnecessary intrusions into a ‘happy family’. Where conflict does occur, it is rationalized in one of two ways. Either it happens since communication has failed in some way or because the dissenter is some sort of nonconformist, perhaps a rebellious, maverick employee who is best dealt with by dismissal. Such a philosophy has an obvious appeal to managers. It legitimizes their decision making and implies that any dissent is not their fault. Here then the employee relations is perceived as consensual and cooperation is regarded as the norm.
There are a number of criticisms which can be made about the unitarist perspective, not least the fact that it does not take into account the actual interests of the employees, merely presuming that these coincide with those of management, while the assumption that management decision making is always rational, and in the best interests of everyone, is questionable. By discounting alternative viewpoints as pathological, and not seeing the need for an infrastructure containing mechanisms to deal with conflict, the unitary philosophy can actually produce discontent.
The pluralist perspective, on the other hand, is a framework which assumes workplaces consist of a number of individuals and groups, each with different sets of values, needs, beliefs and loyalties. Such a mixture is unlikely to be homogenous and as a result there are differing expectations and allegiances. Hence conflict is to be expected, and the organization is required to find ways of accommodating different viewpoints and managing any potential disagreements by consultation, negotiation, or shared decision making.
Management’s function is hence to manage by resolving differences and emphasizing consensus and consent. Part of this is to take account of alternative viewpoints and have systems in place to listen to representations from the various interested parties. The result is a joint approach to problem solving where employee association representation is not anathema. Indeed to have a system where employee interests are formally represented is a rational response to an awareness of the imbalance of power where employees can, without a voice, be exploited. There is a recognition that paradoxically management maintains control by sharing decision making. The paradox whose truth the management has found it difficult to accept, is that they can only regain control by sharing it.
There are a number of criticisms which can be made about the pluralist perspective, partly since it is a frame of reference which is not relevant for every managerial decision. Managers can seek consensus on a number of fronts but they do not cede authority for everything. For example, strategic, financial, or marketing decisions which can have an impact on future and hence on the employee relations is rarely shared. Also the interaction between those groups of differing interests is not equal. Management controls the agendas for discussion and, more frequently than not, the other interest groups react to management activity and ideas. There is an assumption that for pluralism to work the groups is needed to actually share a set of social norms and if they are widely different, the pluralist frame of reference is untenable.
The radical perspective is a frame of reference which accepts that economic inequalities are expressed in social conflict and at work this is manifested by unrest and conflict within the employee relations. Under a radicalist perspective such conflict is inescapable; it is class-based and the result of an unequal distribution of power. This Marxist way of understanding the employee relations regards conflict as inevitable. There is an alternative, non-Marxist yet radical perspective. This perspective is that the management need to give discretion to employees in order to make best use of their skills and talents. Simultaneously, they have to control the same employees in order to ensure that their work output is maximized. Implicit in the job of managing people is the requirement to instruct subordinates about how to achieve tasks while at the same time allowing them sufficient freedom to choose how they undertake such tasks. The contradiction between these two methods of operation, discretion, and control creates a tension which is called structural antagonism.
Unlike unitarism, it recognizes that employees have different interests to those of the management, and unlike pluralism this perspective on the employee relations permits concurrent conflict and consensus. The key point about the indeterminacy of the working contract and strategies of working control is that managers and employees are locked into a relationship which is contradictory and hostile. It is contradictory, not in the sense of logical incompatibility, but since the management has to pursue the objectives of control and releasing creativity, both of which are inherent in the relationship with the employees, and which call for different approaches. The relationship is hostile since the managerial strategies are about the deployment of employees’ working power in ways which permit the generation of a surplus. Employees are the only people who produce a surplus in the production process but they do not determine how their working power is deployed to meet the objective.
The employee relations occurs within the management’s chosen frame of reference, yet within these frames different managerial approaches are deployed. Such alternative ways of doing something are known as ‘managerial styles’. Fox has described six different styles, which were later refined into five which are (i) traditionalists, (ii) sophisticated paternalists, (iii) standard moderns, (iv) sophisticated modern consulters, and (v) sophisticated modern constitutionalists.
The traditionalist style is one where managers with unitarist perspectives have a strong belief in management’s right to manage without any interference from other parties. Employee associations are hence regarded negatively and with distrust, the workforce is treated in an authoritarian, hard, sometimes exploitative way. Management is the sole source of authority and the managerial prerogative is regarded as a legitimate right. The perception that the organization comprises of people with common aims means that conflict is not recognized and, if it does occur, this is thought to be either the result of a misunderstanding due to poor communication or the result of a dissident employee.
The sophisticated paternalists, on the other hand, are also unitarists but have a soft managerial approach. The key to this approach is the belief that if employees are treated well they perform well. The managerial prerogative is still regarded as a right, and the employee association is still seen as an unwelcome intrusion, but employees are treated in an enlightened way with high levels of involvement designed to produce trust, lots of communication, and good terms and conditions which are designed to create loyalty and, in part, to eliminate the need for the involvement of employee association. In some organizations, the fear of external influence from associations leads to the setting up of internal employee association. Here the employees have representatives, but these are not independent entities. In this way everything is kept ‘in house’.
Those organizations with a standard modern style are pluralist, accepting that there are groups with different interests within the organization and that conflict is likely to occur. Hence employee associations are recognized, but not warmly embraced. The representatives of employee associations are dealt with ‘as and when’ necessary, on an adversarial ‘fire-fighting’ basis. Adversarial bargaining takes place around a fairly narrow range of issues on a win–lose basis and statutory regulation is frequently used in order to enforce compliance with procedures and / or to disrupt actions of association.
The remaining two groups of sophisticated modern managers, the consulters and constitutionalists, have strategies, policies and procedures acknowledging that employees have different perspectives from management and that the processes of employee representation help contain those differences, maintain stability and reduce / contain conflict. The constitutionalists accept the inevitability of workplace representation but contain it with rules and regulations, and there is a strong emphasis on managerial control and relationships with employee associations, although cordial, are bounded by procedural regulations. This is found frequently in the manufacturing sectors where competition is high, and in some public sector organizations.
The consulters, on the other hand, have a much less proscribed relationship with workplace representatives. There is fuller information disclosure, joint problem solving and more of a partnership approach. Employee associations and management work together using problem-solving approaches, and there is a very positive employee relations atmosphere.