Employees who feel their organization has a whole sense of shared purpose are significantly more likely to state their organization involves them from the outset in contributing to and shaping big decisions; those with no sense of shared purpose are more about decisions 'behind closed doors'." (CIPD 2010 Shared purpose: the golden thread?)
If a shared purpose is to be achieved, it would seem to be logical that employee voice will be heard and recognized. Using an organization known to you (see assignment 1), evaluate the effectiveness of employee voice processes and the likelihood of the processes leading to a shared purpose in this organization.
Your script should be between 2,500 and 3,500 words. Your script should incorporate both theoretical and relevant up-to-date empirical sources. Sources used need to be appropriately acknowledged using the Harvard system of referencing.
In the present paper the employment relations theory will be examined together with its application in a big company such as Sainsbury's. The effectiveness of employee voice processes at Sainsbury's and the extent to which these processes lead to a share purpose in the business are also going to be examined.
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Employment relations as a discipline and as a matter of everyday reality, are an integral part of modern life. The most famous public event of the operation of an industrial relations system is the event of strikes, i.e. the temporary suspension of work required by trade unions to promote the interests of their members. The modern man is accustomed to living with the strikes that are aptly reported to be "the breakfast of democracy".
Employment relations deal with humans. The human factor in comparison to the other production factors (capital, land) is the most difficult one to be handled and its effective management is crucial for the success of the business.
The theories of modern management philosophy try to analyze how the "participation" of employees in decision making leads to improved efficiency.
The influence and importance of human resources management in
the behavior of individuals within the company, i.e. how the management can use various means (such as recruitment, training, rewards, evaluation, etc.) to increase the efficient conduct of employees is undoubtedly effective and its success determines the course of the business.
The new theories in the field of employment relations - participatory management, rational management of human resources, establishment of quality circles - have resulted in the direct participation of employees without the mediation of the trade union and elected representatives. This, of course does not mean the gradual elimination of trade unionism.
Parties involved in Employment Relations
The parties involved are mainly three and these are:
Workers: Organized groups (eg trade unions)
Employers: Professional organizations.
The State which acts as:
A Referee: the state expresses the interests of the organized society
An Employer: it identifies the employment relations of a number of employees.
A negotiator: when it forms and determine the employment relations' content.
Sainsbury's has a trade union (USDAW) and as an employer is a member of NES (National Employer Service).
Participatory Management - General comments
It could be said that the participation of employees in the management of the business is a philosophy, a technique of management which tries to appeal to employees and to motivate them for efficient behavior.
The phenomenon of participatory management is known either as Industrial Democracy, as co-administration as a self-management, as participation in key decisions, etc.
The meaning of these terms expresses a different degree of involvement and cooperation between management and staff and is different from country to country.
It is accepted that an employee by participating in the decision-making process feel more responsible, meets the highest levels of needs and most important, acquires a sense of participating in a collective effort, the success or failure of which depends on his behavior. Then, it is natural for employees to pursue with much more zealous the implementation of a decision for which they participated themselves, as opposed to a decision imposed on them "from above" and where they were not asked whether they agree or not and why. This was the case in 2004 Sainsbury's strike when workers demonstrated against the hourly pay rates which were lower than those of workers in similar firms.
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An element that could also be added in the benefits is that the institution of participation serves as a means to develop managers, enables decision makers to rely on more information, on specific knowledge and opinions and generally improves the climate of human relations within the company. The three basic forms in which participation occurs will be briefly analyzed:
Employee participation in decision making.
The participation of employees in the capital and profits, and
Self - management.
A1) Employee participation in decision making
Employee participation in the process of decision making is distinguished into direct and indirect:
a) Direct participation
Direct is the form of involvement in which employees participate personally by expressing their opinions and by taking responsible decisions themselves.
b) Indirect Participation
Indirect participation is the form of participation in which employees are represented on a board or the management of the company.Participation in decision making can be distinguished according to the hierarchical level, in which it appears as follows:
b1) Participation in decisions relating to the low rank levels of a business.
This form of participation refers to decisions about how to perform a specific task, the way in which tasks will be allocated tasks and how the work is planned in general.
b2) Participation in decisions relating to the middle rank levels of a business.
These decisions generally cover the structure of an entire department or sector. They are related to issues of personnel selection, training, promotion, procurement of equipment and materials, etc.
b3) Participation in decisions concerning higher rank executives.
These decisions are related to the development and expansion of the organization and generally the policy to be followed by the organization.
They consist of employee representatives and representatives of the owners, as well as of a neutral member, elected by delegates. This body deals with investment issues, control and approves the annual statement, and from its consent important decisions by the Board may depend on.
This type is found in Germany. Supervisory boards, in a somewhat different composition, exist in England, which monitor the implementation of collective agreements.
2. Labour Councils
Employees are represented in these councils with a number of members, which varies depending on the size of the company. The purpose of these councils is the social control of the company,the proposals to the management of the company on the improvement of working conditions, information about the company's accounts and general information regarding the status of the company. Two members of this board participate in the board of the company, but without voting rights.
Labor councils are applied in France.
A similar council was set up by Sainsburry. Sainsburry has work councils that inform the management of all the issues concerning staff. The councils discuss store performance, local competition, new technology and equal opportunities.
A2) Participation of employees in the capital and profits.
The trend to involve workers in the capital and profits, is too old, older than the involvement of employees in decision making. The first profit participation schemes appeared in France in 1820, in Great Britain in 1865 and in U.S. in 1887. Sainsburry follows a share save scheme.
Indicatively, below there are some questions the company must answer before moving on to the implementation of such a participation system.
Business profits are the profits that are shown in the account "income statement" and that may be limited or the reserves should be counted?
The participation of each member of the personnel will be commensurate with his/her salary or will it be equal for all members?
Assuming that the contribution is equal for all, will the number of years of service of each member of staff be taken into account when calculating his/her share?The distribution of profits will be made immediately after the closure of accounts, which will help to create a stable income for each member of staff, rather than an annuity that will vary with the amount of profits of each year?
These disagreements have resulted in the creation of various forms of participation, which are often regulated at least in countries where this institution is quite widespread.
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The main types are:
1. The additional reward
All employees or only certain members are given a percentage of profits or a small lump sum once a year.
2. Rate of pay
Each member of the staff gets a percentage from the profits equal to the percentage that his/her salary represents in the total amount of salaries.
3. Depending on experience
Each employee is given a certain amount of profits. The amount is calculated on years of service and annual salary.
4. Depending on the percentage of contribution of the participants
It is considered the most objective method of evaluating the contribution of every employee in profits. The total remuneration of staff for a year is considered to be funds deposited in bank or invested in bonds. The interest rate of this capital is deducted from the company's profits and is distributed to employees depending on the salary they get.
5. Participation in stocks
Many times, employees buy shares in better prices. This is the kind of scheme that Sainsburry follows.
Following the above findings it is concluded that the involvement of employees is necessary since with this the following are achieved:
a) The protection and promotion of employees' interests. The industry should be organized in such a way so as to ensure and safeguard the interests of employees.
b) Democracy within the company. In other words, the distribution of the power at work and the solution of conflicts in a democratic manner.
c) The emergence of the personality of the employee. Participation in management is
a means of improving working conditions with the humanization of work.
d) The effective use of human forces at work. Employees accept better decisions in
which they participate and thus they perform better.
e) Encouragement of the spirit of cooperation between employers and employees aiming at reducing conflicts.
f) Solution of some social problems in the business.
g) Improving the performance and motivation of employees for vocational training.
h) The restriction of privileges of the management. This results in the expansion of democracy in the workplace, and
i) Contribution to corporate social responsibility. Participation is a measure of reform of the Enterprise to represent not only shareholders but all those whose interests depend on the good functioning of the business.
The practical application of participatory systems of cooperation requires a radical change of attitude and behavior of employees and of the parties involved in employment relations, both in individuals and in organizations and procedures. It also requires an improvement in the intellectual level of employees and a continuing effort to inform the reproductive forces of developments and new systems implemented in Europe and Legislative reforms tailored to the requirements. Unfortunately, the legislative rule is itself unable to give life to a system that the community does not really believe. Even the most perfect institution or mechanism of collective bargaining and participation could not function normally, if the mistrust that characterizes the current labor relations is not eliminated, if the legitimacy of the interests of the is not accepted, if in other words, there is no real acceptance by the "partners" of their differences and common interests that impose a solidarity approach.
The International Economy, the internationalization of economic relations, technological revolution, changes in the composition and structure of the workforce (an increase of women employees - a relative decline in the number of employees in the industry - growing number of workers in all kinds of services), the development of new forms of temporary employment (fixed-term employment - part time - smuggled Work - working at home) signal new developments in employment relations.
So under the light of these changes, the modern enterprise must be based on the intelligence, initiative, entrepreneurial spirit and the involvement of employees.
The profound changes touched the thinking and actions of trade unionism. The strength of trade unions, which failed to be revised and adapted to the new facts is reduced. Employees are represented directly in the boards of management of the business.
On the other hand from the side of the employers the following are required:
a)Integrated Planning and Scheduling: A clear definition of objectives, of the standards for measuring employee productivity, of qualitative and quantitative goals that should be at the same time flexible and adaptable so as their differentiation can be easy depending on the changing circumstances. Sainsburry's has introduced an innovative assessment scheme that allows to measure employee productivity. In addition, policies and strategies of the firm should be set as well as the selection of appropriate programs and modes of action.
b)Organization: delegation of authority and responsibility to top management and coordination of activities and power relationships horizontally and vertically within the company, aiming at decentralizing rather than centralizing power, as it happens today in most public enterprises. In these enterprises, the word initiative and therefore responsibility for decision making is known only to the Executive Director.
Such an organization where power and responsibility for decision making and the initiative to increase the productivity are spread to more people, makes the company more flexible to the various changes and greatly reduces the time to resolve problems. Along with the decentralization of power there should be sufficiently defined the position of each employee within the company so that everyone knows his/her scope of responsibilities.
Another key issue is the communication of information. The management of an effective information system makes the business more agile and accelerates the adaptation and decision making.
c) Staffing: The staffing function begins with an inventory, assessment and selection of candidates through interviews and competitions and continues with ongoing training on contemporary issues. Sainsburry's with the cooperation of NES trains its personnel. At the same time it has introduced a unique and innovative assessment methodology where store managers assess their personnel and they do not need anymore external assessors coming into their stores.
d) Good management: The important role of senior management, the need for decentralization of power and precise
determine the position of each operation are briefly address.
However, particular importance is the provision of adequate incentives to workers to increase their performance. The function then the stimulation is directly related to increasing productivity and improving the position of the company .. incentives should be given after a detailed analysis of behavior, performance and needs of workers to raise their interest to work. San inciting factors we could mention enrichment work, creating a pleasant, healthy environment.
Linking Compensation - productivity - is also a very important incentive for increased efficiency.
The most basic and perhaps most effective factor stimulating the participation of workers in various decisions and business operations. It is rare if not satisfy the workers when they are consulted. There is also no doubt that most people dealing with a particular object knows the problems and their solutions.
So the right kind of motivation and participation provides valuable knowledge for business success. So for decisions on the part of the existing issues that meet their potential, encouraging participation and antepidraseon each other, creating workers a sense of personal responsibility for their duties, all these are important incentives to increase productivity through participation.
e) Control: As a last operation, control measures the achievement of results to ensure the achievement of objectives in accordance with the plans.
It is therefore necessary for the operation of the control to have predefined objectives and criteria that measure the influence of workers and the enterprise as whole.The managers will be based on the results of this measurement so as to correct mistakes.
Regarding Sainsburry's, it could be said that the company has made significant efforts regarding employee participation. It has increased the hourly pay rate, although somewhat lower to the competitors', it has introduced training schemes and innovative employee assessment. In addition, Sainsburry's has work councils that express the opinion of the personnel to the senior management. Furthermore, it has a share save scheme that allows employees to participate to the profits of the company.
Therefore, it could be said that Sainsburry's has followed all the ways of the indirect participation of employees i.e. participation in profits, work councils, trade union, thus it has significantly improved the employee voice processes and it could be supported that shared purpose will be achieved.