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From a point view of the people who are currently living in developed societies, the term Employment Relations is all about controlling the relation between employee demands and objectives/goals of an Organisation.
"The employment relationship is an exchange relationship whose distinguishing feature is that it involves both market and managerial relations. The basis of the relation is that the employees receive tangible rewards in return for selling their labour or/and knowledge power to be used largely at the employer's discretion."(Source- Sisson 2009)
Expectations and Interests in employment relation(Source- Budd and Bhave 2006):
1)Their first and most important interest in 'Survival and Income's. Without income, they can not survive, so in order to survive they must make sure that they have a steady income rate.
2)Secondly, the employees expect 'Equity and Voice'. In other words, it is recognition for their work and fulfilment of their needs through representation/voice.
3)The other interest of employees is 'Social Identity'. They want their own circle of friends and they want to be recognised by the society for who they are.
4)The fourth need of employees is about 'Power and Control'. They require control over the work they do. It can be in terms of working hours or how much work they are doing and power over their work means, ability to make their employers met their demands.
1)The first interest of employers is clear in all sectors of employment, it is 'Profit Maximization'. Any employer does business to make profit, so just like employees want income, same way employers require profit to run their business. The more profit they make, the more they develop their business.
2)This interest most of the time decides whether a business will be making maximum profit or not. 'Market Share' is the factor that controls how much profit an organisation can make. Any organisation which dominates their market sector are more likely to reach their desired profit.
3)Just like the employees, the employers also want 'Power and Control'. As they want profit, naturally they would like control over their workers and to do so, they need power over the workforce so that conflicts don't occur.
In a recent study by TUC(Trade Union Congress) on Employment Trends, they discovered that in a big city like Glasgow there are 23,758 claimants for 2,836 vacancies, which means that approximately 8.4 people are applying for the same job. So the options for the people looking jobs are very thin.(Source-Guardian.co.uk)
In the above discussions it was pointed out that an employee doesn't have as many options as an employer does, due to the high numbers claimants for each job vacancies. So, naturally once a worker gets a job and faces some problems or has some demands that he wants the employer to fulfil, he needs some kind of body to take that demand to the management. Its not physically possible for management to talk to all the employees(Specially in the big companies with large number of workers),so the only way workers can deliver their voice to the employer is through some kind of medium and since nineteenth-century the employees have been using Unions as that medium. From the year 1892,the number of unions started to vary, with the highest increase of unions during the period of 1917-1920(15% increase in union density, UK) and most diminution in numbers during 1920-1926(16.9% decrease in union density, UK).By the year 1979 Union membership had risen to 13,447,000 from 1,576,000 in 1892.(Source-Bain & Price, 1983)
Representation of workers at workplace:
There are few reasons behind, why employees need representation. They may feel the need of representation due to dissatisfaction with working environment or worker's might believe that with a voice in from of representative, that they will get higher wages and the employers will be forced to agree with demand of their workforce. Now, this kind of thinking can be only come to mind when there are differences between the two parties.
'A widespread criticism of management during the 1960s and 1970s, a point which still holds today, is that employees may not feel that everyone shares the same goal in their workplace and they may reject a unitary perspective. In many, if not most, employees in the workplace talk of "us" and described managers as "them", believing that there are two sides with partially conflicting interests'.(Source- Contemporary Human Resource Management-3rd edition by Tom Redman & Adrian Wilkinson)
The Reason employees give for joining unions
Support if I had a problem at work
Improved pay and condition
Because I believe in trade unions
Free legal advice
Most people at work are member
(Source- Waddington and Whitston, 1997, p.521)
Decline in union forms of representation:
Role of Representatives:
At one glace, what the survey conducted in 1998 suggest is that the 'job description' of the representatives has changed compared to earlier years. Now, they spend most of their time dealing with concerns raised by treatment of employees by management, employment security, health and safety issues and maintaining wage rate along with worker's benefits.(Source- Cully et al. 1999: 201-2)
However, the 1998 survey tried to uncover the effectiveness of the activities performed by the representative. The first time the employees were asked about whether unions make a difference or not, only 46% of the union members, 30% of the employees who have never been union members and 26% of employees who were union members agreed that they do.(Source- Cully et al. 1999: 212)
Strike Frequency Showing Decline in Union activity(Source: Industrial Relations-Theory & Practice by Paul Edwards)
During the period of 1980s and 1990s trade union members percentage came down to 30% only. Even of percentage of unions in workplace fell down to 38% in 2004 from 53% in 1980(Source- Kersley et al. 2006).In terms of number of union members in UK, the figure dropped to 7million in year 2000 from 12.5million.
Like any incident, this one also had some possible reason behind it. The possible factors/reasons causing this decline are as follows:
Decline in Union recognition since 1980s is mainly because of the failure of the workers to organise their fellow workers and achieve recognition of unions in new firm and workplaces(Machin 2000). With market pressure rising all the time, the managers were reluctant to recognise unions as they wanted to avoid higher wages. As the manufacturing plants and manual workers started to decrease in numbers, traditional collective bargaining through unions begin to disappear(Milward et al. 1992).
During 1990s, these factor caused three-quarter decline in collective bargaining.(Charlwood 2007)
As a result of this decline, the union wage premium comparing the wages of non-unionised workers during a period of union weakness has reduced over time(Blanchflower and Bryson, 2003). Unions had another important effect which was narrowing down the difference in pay distribution. So, normally with union activity eroded, the wage inequality started to rise and manager's and executive director's salary rapidly increased, as the managers were paying less wages to workers. Declining unionism also effected employee training levels. Trade unions always promote equality at workplace. For example in Britain 96% of unionised places have equality/fairness policies, compared to 63% of non-unionised workplaces.(Kersley et al. 2006, p.238)
So, according to the evidence here, Unions have some positive points in their activities but as time has progressed, the managers have become more and more unresponsive to union claims and demands. They are no longer able to shock employers into better practices to raise productivity.(Bryson et al. 2006)
Replacement of Unions With HRM:
With the continuous contracting numbers of unions, what would be a suitable replacement of it? That was the question that the business world had to face. The workers obviously wanted some voice in the organisation and managers were also looking for a way to control the workers. Since the 1980s the term 'Personnel Management' or 'Personnel Manager' has been increasingly replaced with the term 'Human Resource Management'.
Now there are two ways to interpret HRM, on one hand HRM is used for managing people in organisation and try to bring them under one umbrella where they are together. On the other hand , another way to interpret HRM is managing labour by engaging employees and by winning their commitment to the organisation, thus improving the performance of the company as a singular business body.
'So generally speaking the focus is no longer on trade unions, it is more about communication, managing changes, motivating the staff and increasing their involvement'(Emmot 2005: 3).
The HRM functions are as follows:
Job analysis is very important function of HRM. Every position/job in an organisation requires a set of skills and each worker has his own set of skills. So, as HR department, their job is to pick the right person for the right kind of job where skills required and skills available match. For example: if there is a place open in the IT department, than the HR department must choose someone with IT skills rather than someone who has no knowledge on IT. Human Resource Planning involves planning about how many employees to hire, their wage scale etc. Recruitment and Selection is about hiring or selecting an employee from a batch of other applicants. Here again, selecting or recruiting will the employee will depend on the skills required and skills possessed. Training and development depends on the organisational need. If the company needs its workers to acquire new skills, than they will provide them necessary training and develop their skills. Employee welfare include functions like working environment, pay, health & safety, equal opportunity, grievance management and culture management. Some other functions performed by HR department are knowledge management, disciplinary procedure, administration of employment contracts etc.
HRM is not about anti-union approach. It is more about managing employees and their interests in a way that there is no need for unions. 'Organisations appear to have adopted particular elements of the HRM approach. Rather than adopting all the approaches, they tend to adopt the specific approaches that are appropriate for their needs, specially direct methods of communication like team briefing ,in ad ad hoc and opportunistic way(Legge 2005).So HRM in a way is about commitment model, as high commitment from employees towards the organisation is equal to the improved organisational performance.
Downside of HRM(Source:Human Resource Management Journal-Vol 21 No 4 2011-Article of P.Thompson on 'The trouble with HRM')
Now like everything else, even HRM has some problems. There are many researchers around the world who believe that HRM is not the answer for the conflict of interests. It is said that HRM has major flaws practically and theoretically.
'The human resource management profession faces a crisis of trust and a loss of legitimacy in the eyes of its major stakeholders. The two-decade effort to develop a new 'strategic human resource management' (HR) role in organizations has failed to realize its promised potential of greater status, influence, and achievement'(Kochan, 2007: 599).
In a case study, Karreman and Alvesson(2004) argue that HRM works in firm not because it is an efficient way of managing people, but because of the functions which promote identity construction, which creates a feeling of competition, belonging etc.
"Management of the employment relationship is structured around the promotion of 'brand essence' in which the powerful HR department is tasked with the implementation of the appropriate practices to achieve this, focused on an 'employment deal', with accompanying communication narrative and intensive socialisation processes. It did not work. Employees not only did not live the brand, they were sceptical and often downright
contemptuous of it. They were quick to spot the discrepancy between the brand narrative and their experience of reward constraint and work insecurity. Moreover, they blamed HR for operating as a cheerleader for the board and brand, rather than an honest and fair regulator of the employment relationship."(Source:P.Thompson,Human Resource Management Journal,2011)
So it can be stated that HRM can be more of tool for management, rather than a voice of employees. Now, the question that remains is, 'What should be the solution for the declining form of union representation, if HRM is in sufficient?'
The 1997 election of 'New Labour' in UK produced a new public policy environment, with the Employment Relation Act 1999 and Fairness at Work programme introduced new rights for trade unions and individual employees(Dickens et al. 2005). The main intention of this legislative programme was to 'replace the notion of conflict between the employers and employees with the promotion of partnership in the longer term'(HMSO 1998).
The Institute of Personnel and development described 'partnership' as relation between employers and employees, individually and in groups, but it has nothing to do with unions(IPD 1997, p.8). Unsurprisingly, the definition supported by TUC emphasised on giving importance to union influence. Despite this polar opposite views, the Involvement and Participation Association(IPA), which is an independent pressure group developed a new definition of partnership which was accepted and endorsed by leading companies and trade union leaders. This definition requires managers to make several commitments, declare job security, share success with employees, recognise employee rights, employee's right to information regarding any topic of organisation. In return the unions have to promote flexible working along with employee involvement methods and give sympathetic consideration to the continental model of representation of a whole workforce by election of representatives.
Employers and unions surprisingly signed more partnership agreements than expected. In fact, 248 partnership agreements were signed during the time period of 1997-2007(Bacon and Samuel 2007). Employers and unions signing the agreement have to deal with two crucial issues. First, both parties have to fully commit to a single strategy of cooperative industrial relations throughout the organisation and avoid behaving in a short-term, contradictory or opportunistic manner. Second critical issue for the future of partnership agreement is whether they deliver greater returns for managers and trade unions. If neither of the party get any return than the partnership approach with naturally fade away.
It all comes down to 'Efficacy' of Unions and HRM.Is the declining number of unions going to be a problem? If it is thought from a rational point of view, then the contracting union numbers is definitely a problem, because a HR manager can not understand the problems and demands of employees as well as another employee would. So the part/role of the employee representative/steward is crucial for the sake of employee's interests. A HR manager may be considerate about the workers of his organisation, but as a human being he will always have his own needs and can't possibly always think or work like a worker representative. For example, if the workers of a company have two demands, like better wage rate and improvement in the quality of meal the canteen provides then the manager might just mention the problem with the meal, as most of the company owners are rigid about increasing wage rates. For this reason, existence of a representative who is a worker himself is very important for the well-being of the workers. That way, the representative can understand which topic is more important for the workforce to put forward to the higher authority.
To sum up, it is clear that union form of representation is essential for effective employee representation, but the management has interests as well and after all they are running a business to make profits. So, the only possible solution which may meet the interest of both sides with less conflicts is, combining union form with HR department or 'partnership'. That way both parties can mention their point which may make it easier for the organisation to be encompassed as one team with better performance.
Example in support of Partnership being the solution(Source-Contemporary Human Resource Management, Text and Cases by, Tom Redman & Adrian Wilkinson:
During 1990, from a background of very poor employee relation, NatBank, which is one of the major bank in UK introduced partnership agreement to their organisation. With the rising competition in the market, its essential to improve employee relations. The formal agreement signing took place on year 2000, based on six principles of partnership, which are:
1)To ensure and promote long-term success of NatBank.2)To promote the interest of employees, customers and shareholders.3)To ensure that NatBank meet customer expectations by having right people, in the right place and at right cost.4)To facilitate the management of change.5)To ensure employees are managed fairly and professoinally.6)To promote quality of treatment, opportunity for all by valuing diversity.
In comparison to the 1990s, relation between the senior managers and union officials started to improve. There was believe that prior to partnership, the relation between management and union was best described as 'arms-length legislative compliance'. After the partnership agreement there was a great degree of trust and mutual respect between the two parties. This did not mean that they didn't have any sort of problem or disagreements, because these are part of every relationship and a relation can not last without any sort of disagreement. A final concern was sustainability of partnership. Nevertheless, it is reasonable to conclude that despite of these challenges, a partnership approach seem well rooted enough, demonstrating success and delivering variety of benefits to the actors of the employee relation.