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Employee relations are critical to the success of the organisation. Good communication channels need to be in place for information flow between employers and employees. This holds true for both small and large organisations. In large organisations, there are legal rules in place to engage employee representatives. Employee representation could be in the form of trade unions, works councils, joint working groups and ad-hoc groups. In small companies, the emphasis is on direct communication between employer and employees. Small firms do not require elaborate representational systems and the legal framework excludes them from laws to consult with worker representatives in some cases. However, regardless of the size of the organisation, it is advisable for employers to have effective systems for providing information and consultations with employees on a periodic basis (ACAS, 2005). This is particularly critical for small companies that are growing at a fast rate and need to have systems in place for employee engagement as is the case with the company under consideration.
Employee representation and trade unions
One form of employee representation is trade unions. Trade unions are associations of employees. Trade union is "an organization of workers that aims to protect and advance the interests of its members" (BIS, 2009). Their objective is to sustain and enhance the terms and conditions of work for their members. This is done through collective bargaining with employers. Recognition of the trade union by the company is very important for collective bargaining. Collective bargaining takes place when the trade union negotiates with the employer on behalf of the employees on matters regarding pay and other terms and conditions of employment. Trade unions are of four types: company union, general/industrial union, craft union and white collar union (Cole, 2003). Company union represent the employees in a single company. General or Industrial union represents employees from several companies belonging to the same industry. Craft union represents skilled workers in a specific field. White collar union represent white collar employees e.g., teachers and professors.
Trade unions are set up to protect and promote the interests of employees. The existence of a trade union reduces the possibilities of industrial conflict (Dillon, 2009). Trade unions play a vital role in effective communication between management and employees. They provide the support system to ensure that the differences of opinion do not turn into major conflicts. Trade unions play an active role in negotiations between management and workers in times of disagreement. Trade unions not only represent employees to discuss their pay and benefits, but also provide a voice for the employees to be heard on various other aspects of personnel policies. These include selecting employees for lay offs, retrenchment, promotion and transfer. The personnel selection criterion within an organization may not be fair and transparent. The existence of trade unions ensures that workers have a say in the proceedings and their interests are safeguarded (ILO, 1992).
From the management perspective, it is beneficial to deal with trade union members who represent all the employees rather than deal with employees individually. This saves time and is cost efficient as conflicts can be resolved in a timely manner. This ensures there is no stoppage of work, thus preventing adverse effects on employee productivity and efficiency. Management will get to know from the trade union about the views of employees on various important aspects of the company polices. They can use this information to make important decisions that affect employees (Gennard & Judge, 2005).
Becoming a member of a trade union gives employees the confidence that their needs and interests are being protected. This is a source of motivation for workers reducing absenteeism, lower productivity and labour turnover. This ensures that there is optimum utilization of human resources in the organisation.
Role of trade unions
The role played by trade unions in uniting, protecting and improving the employees has a positive impact on the business. They help management in the recruitment of employees. Trade unions have also started to conduct various training and development activities for the employees. They help in unifying employees coming from diverse social and economic backgrounds by helping them get used to the work conditions in the company. As a result, workers are more aware of the rules and policies in the company. This gives the employees the requisite tools to succeed in their job. With efficient employees, companies can achieve their goals and grow at a faster rate. This will positively impact the economic development of the economy.
At times of disagreement and conflict between employers and employees, trade unions play a vital role. They represent all the employees in total. This is called collective bargaining. This makes it easy for management to deal with the trade union members. This helps in building trust and co-operation. The trade union helps in resolving the conflict in a rational manner that is beneficial to both the company and its employees. In such a scenario, the acceptability of the management's decisions by the employees is greater. They have a sense of ownership for the decision-making and therefore will be more committed to achieve the company's objectives. The quality of the decisions may also improve as opinions of employees with the required skills are well represented. The focus is on mutual agreement between management, employees and their representatives for improving employee relations. Trade unions help in fostering co-operation and building industrial relations.
HRM practices and trade unions
The disadvantages of trade unions to management are they could lead to increase in wages at an indiscriminate rate. This means higher costs for the company. Also, trade unions consider only the requirements of its members. It gives no importance to the views and needs of employees who are not members. When trade unions impose strikes and lock-outs in the company, it causes decrease in productivity and profitability levels.
Over the years, the focus in human resource management (HRM) has changed from collectivism to individualism. This means more importance given to engaging employees individually for consultation, communication and resolving conflict. In the individualism management style, the focus is on the views, opinions and needs of each employee. It seeks to bring out the best in every employee in performing their job. In collectivism management style, the company recognizes the importance of having employees' views and opinions represented in management decision-making on personnel matters. The HRM approach that strikes a balance between these two management styles will give importance in building and caring for human resources in the organisation.
Human resource management is a style of management for managing employee relations in a way that enables employees to perform at their best in the new era of technological changes and globalisation. There are two versions in defining HRM. The hard version adopts a rational method of dealing with employees and aims at aligning organisation strategy and human resource strategy (Bratton & Gold, 2001). It views employees as a cost component that needs to be controlled. The soft version views employees as resources. Its emphasis is on grooming, training and developing employees. It works on increasing employee commitment. It looks upon a skilled and committed workforce as an important competitive advantage.
Human resource management is a key function in a company, which focuses on selecting, recruiting, training and developing employees, and provide a sense of direction to them. Its main aim is to manage the human resources in an organisation effectively and contribute in achieving its goals. Functions of HRM include planning, selection, recruitment, compensation and benefits, training, performance appraisal and feedback, communication and motivation of human resources in the company. When a company is established and starts operating in a small scale, usually the owner/manager performs the HR functions. As the company grows steadily, a human resource personnel needs to be appointed, who primarily takes care of payroll processing, benefits and HR record-keeping. For the other major HR functions like recruitment and training, managers may need to participate and take the ownership. When a company crosses the 80-100 employees' level, a person specializing in HRM needs to come onboard (Mathis & Jackson, 2007).
The role of HRM in a company can be split into three: administrative, operational and strategic. The administrative role is to do with clerical responsibilities like paper work and record keeping. If the role of HR in a company is restricted to only the administrative function, then it serves no purpose both for the employers and employees. In the operational role, HR implements the strategies laid out by the management. It ensures that the plans, policies and strategies of the organisation as laid out by the management are carried out by the employees. In this role, HR acts as a liaison between the employer and employees. In the strategic role, HR plays a key role in formulating policies relating to human resources along with the management. HR contributes to organisational effectiveness and success by ensuring employees is well equipped to perform at their best and contribute significantly to the company (Mathis & Jackson, 2007).
For the human resource function to be effective in an organisation, the operational and strategic role must be given importance in decision-making. This ensures there is adequate communication between employers and employees. It recognises human resource as a vital component that needs to be groomed and developed for the success of the company. By ensuring employees' opinions are voiced and heard on matters affecting them, HRM ensures that employees feel motivated, have a sense of purpose and ownership and contribute to the organisation.
Managing employee relations within the organization
Organizations today are increasingly exposed to the challenges of managing employee relations and adopt practices that promote a positive work culture. Global competitive pressures have added to the stress levels at workplace and employee satisfaction becomes a critical issue in such conditions. Large organizations with more than 100 employees often find it difficult to address employee issues and concerns. Employee representation through collectivism in the form of trade unions, joint consultation committees or individualistic approach that emphasizes on strategies like personal development plans, performance appraisals and career progression are some of the alternatives available to the organization. Changes in managerial approach are a requirement for organizations to adapt to changing operating and business environment conditions. "In traditional organizations, directing involves giving assignments, explaining routines, clarifying policies, and providing feedback on performance" (Nickels, 2008). This style of management has been replaced by a more encouraging approach that involves increased participation of the workforce in the decision making process. Employee empowerment strategies and a participative leadership approach are increasingly finding their acceptance within organizations since it promotes organizational efficiency in terms of productivity and performance. Flexible organizational structures that are distinguished by reduced layers of hierarchy are much favoured for their role in improving existing work culture and employee commitment levels.
Employee participation and consultative practices within an organization faces distinct challenges from lack of supporting infrastructure that encourage the process of open communication. Potterfield (1999) states that empowerment strategies can be effective only when the organization provides the following four essential ingredients to its staff and that includes - information about the organization's performance, rewards based on organization's performance, knowledge that enables the workforce to contribute to organization's performance, and power to make decisions that influence organizational performance.
Bargaining with trade unions reflect the need to recognize their existence and this relationship can be fostered in many ways for mutual benefit. Organizations can effectively integrate their strategies to gain advantage from the existence of trade unions through the implementation of employee participation and promoting a healthy work culture that focuses on increased productivity.
Organizations are run by various disciplinary standards and frameworks that guide employee behaviour at workplace, frame regulations for disciplinary actions against misbehaviour, and frame the basic rules that should be followed by people within the organization to ensure the smooth functioning and create a healthy work environment. The management is to a large extent responsible for drawing the guidelines and laying the protocols to ensure a proper code of conduct among the employees. "People need to know what is expected of them in terms of standards of performance and behaviour" (ACAS, 2009). It is not an effective practice to define employee code of conduct and performance levels while imposing restrictions on employee conduct as and when required by employers. The organization must have a pre-defined set of expected behaviour protocols handed out to the employees that conveys a uniform standard of conduct to all employees across all levels and departments within an organization. This is extremely helpful in directing the employees on what actions or steps should be taken next in response to a specific case or situation at the workplace. Such rules and protocols will leave no place for ambiguity or misunderstandings once the company expectations are defined and explained to the workforce. Many companies define a set of procedures for employee grievances and feedback. Such practices are useful in providing assurance to the employees that their problems will be dealt with confidentially and in uniformity with the company procedures. This ensures fair resolution of problems and guides the managers in dealing with conflicts within teams and individuals.
The success of any business enterprise in today's operating environment is to a large extent dependent on the human capital resources available. In view of the present economic perspective employee relations play a critical role in deciding the business strategies and profitability position of the company. There are numerous instances when organizational conflicts can create problems with the effectiveness of operations. However, it must be understood that conflicts are an inevitable part of the business environment and organizations adopt different strategies to resolve conflicts arising at workplace. According to the conventional way of doing business conflicts were viewed as a negative and threatening action working against the organizational interests. There has been a radical change in perspectives with changing business dynamics where organizations feel that conflicts can be used to leverage organizational goals and objectives through the use of effective leadership and managerial strategies.
The individual conflict arising in workplace is more evident in the form of personal goals and objectives that clash with the goals of other individuals (Weijun, 2006). A competitive work environment promotes individuals to prove their abilities and go that extra mile to achieve higher goals. Managers and leaders instigate a competitive environment to achieve organizational goals and targets and motivate the employees to perform better. The consequences are realized in the form of increased productivity, market share and profitability. The stakeholders gain from this kind of conflicts arising at workplace.
Any changes to the current and existing work procedures are met with stiff resistance from the people involved. Managing conflicts and implementing changes in an organization is a complex task that requires an able leadership that has the capacity to visualize and identify possible barriers or resistance to the planned changes. Ensuring high levels of performance within the organization requires active participation of both management and individuals in the workforce in implementing tasks and objectives (Roberts, 2004). "Managers can unlock an individual's ability and willingness to perform at high levels in many ways - for instance, by translating long-term goals into step by step plans, clearly stating expectations and holding people accountable" (Holbeche, 2005). Training the employees is an effective conflict management strategy. It provides the employees with increased information and knowledge on the impact of organizational policies or programs and thinks in a pre-defined manner to accept such changes.
There are numerous other employee management strategies that can be implemented by the organization to ensure increased performance levels and adherence to quality standards. This includes performance appraisals, team meetings, one-to-one discussion forums, personal development plans and feedback sessions that encourage a healthy exchange of views and suggestions. The organization should outline and explain the step-by-step procedure that needs to be followed by the employees and the managers in fulfilling the objectives of performance appraisals and personal development plans. The managers should be provided with adequate guidelines on the way the system should work, how often the plans need to be reviewed and trained in the ways of conducting effective appraisal sessions. Documentation of each phase of these plans is necessary to provide the managers and employees with improved clarity on the goals decided, action plans drawn, review period and feedback of the session.
Improved communication can help in motivating employees, increasing productivity and result in improved customer service. But it needs to be understood that the communication process is not simply conveying the message. It is a two-way process that needs interaction between the two parties. The management and the employees need to interact on how the managerial strategies are going to take shape and what are best possible ways to minimize risks and hurdles in the process. Giving the employees a chance to participate in management decisions not only makes them feel valuable but also ensures their support and enthusiasm in the whole process. Another vital ingredient for successful communication process is consistency. The management policies need to be consistent in their approach to instil trust and confidence in the employees.
The increase in market competitiveness has resulted in the adoption of strategic plans that focus on employee welfare and development schemes. "Collective relationships are now based on relatively more cooperation in which both parties are motivated to add value to the organization" (Gennard & Judge, 2005, p11). The evolving employment relationships emphasize the success of the enterprise through developing employee trust and commitment, enhancing job satisfaction, employee participation in decision making process, and increasing organizational productivity, profitability and efficiency (Gennard & Judge, 2005).