Ways And Dimensions Of Employee Relations Business Essay

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Work determines what we do for much of our lives and it preoccupies much of what we think about. It allows us to engage with other people and it helps us to define our sense of identity. It provides us with access to the material necessities of life, as well as to the advantages and achievements of civilization. Its allocation, organization, management and reward are therefore of no small importance. For the purpose of the present discussion it needs only be stated that our views and opinions towards work and its management have undergone significant change over the past couple of decades, with much of it being the product of national contexts being increasingly subject to global economic influences. Managers, as a consequence, are being asked to think in new and more sophisticated ways about how to better organize and allocate work, and how to better direct and utilize those in their charge. The approach managers take to formal relationships at work is crucial because their success in this field depends upon their own values, their deep-set beliefs about the legitimacy of managerial authority, and the distribution of power in organizations. Fox (1966) has suggested that the 'frame of reference' that managers adopt, conditions their response to the problems they face. The 'frame of reference' is a term coined to describe the typifications and tacit understandings people use to make sense of their everyday world.

2.0 Defining Employment Relations

It is first useful to look at what constitutes the definitional characteristics of the term 'industrial relations'. In this discussion, it is used in a general sense to describe the formal relationships between employers and trade unions or other collective groupings of employees, together with the institutional arrangements that arise from these relationships. Used in this way it is typically held to describe something quite different to older forms of personnel management and industrial relations.

Some literature, however, tends to apply a wider meaning that goes beyond the workplace, covering in its most extreme manifestation the type of interactions that can take place between the state, employer associations and organized labor.

In such cases, the employment relationship can again be taken to include all the functional activities and associated interactions of HRM, but under such circumstances the outcome of such activities and the behavior of those involved are regarded as being reliant upon the influences and constraints imposed by internal and external institutions set up to regulate the relationship. Seen in this way, it can be suggested that because the terms and conditions of employment for many workers are regulated through the agency of trade unions, industrial tribunals, industrial courts, and the like, that it is a pluralist frame of reference and meaning of the term employment relations that is most appropriate.

Early chapters of this work deals with the functional activities of HRM invariably portraying the position of the employee voice and social relationship characteristics with the employer, whilst later chapters typically devoted to how trade union movement have been acknowledged and accommodated over time and the seeming paradox any such recognition would seem at the present.

3.0 Five values of employee relation

Employee relation has had absolute value to companies (banks) fortune; companies are treating this as worth investment as its effect can be felt to the entire organization. Employee relation (ER) gives the organization the following value to reach its desired objectives,

Organization of works

The way the works are organized can have a profound effect on company's objectives as the works give the organization direction. The company with good employee relation will give task to workers who are skilled and able to complete the work as instructed. Banks worker have shown that they are able to follow the routine that have been put into place.

Acquisition skills and development of workers

Also organization (banks) can be able to attract skills by paying their worker well. Employee relation management is able collect information on where the organization has some sign of weakness and able to rectify before disaster. Similarly, as customer needs keep on changing and worker cannot cope with such pressure if they are not developed. Employee relation management in collaboration with human resources management they should be able to identify the workers need for development and take appropriate measure to develop their workers accordingly hence understanding the value that is brought by employee relation.

Compensation and pay processes and structures

Organization such as bank should have paying process that suits both the company and better yet the employees who are so crucial to the company's success. Employee relation management with collaboration with human resource management should set mutual interest for employees and employer (bank) on ways to compensate their employees thus everyone is left satisfied. Lastly, the structure of payment should not be ambiguous that it can bring discomfort to employees. After working for a month or week depending on employer and employee contracts a reward should be given at the right time, as it is employee right to get his wage or salary.

Security arrangements on employment and staffing

Organization can receive load of success if there is security arrangements on employees' job and position. Employees can be very effective to the benefit of the organization if there are assurances of job security. If at all, there are no guarantees if employees' position will be durable, then employees will find it difficult to give their all efforts and such. With human resource also in place organization will be able to secure employees position or jobs and act ration if there is need to do so, hence making the organization to effectively perform its objectives.

Labor management issues

Management faces different labor issues that hinder or benefit the organization. Negative issues are suppose to be handle careful, if economic issues fall on employer then there is high chance of negative consequences on organization as a result of organization negotiating with employees and unions. Organization can see value on its operations if labor management issues are observed keenly as this concept requires mutual trust between management and employees. The main concept of mutual trust between employees and management is improvement of employees lives in the job are achieved via company's prosperity, and management and labor hence have the same objective as common value.


4.0 Employee Voice and Social Partnership

Every industrial relations system involves three groups of actors: (1) Workers and their organizations, (2) Managers and their organizations, and (3) Government agencies concerned with the workplace and the work community. Every industrial relations system creates a complex of rules to govern the workplace and work community. These rules may take a variety of forms in different systems - agreements, statutes, orders, decrees, policies, practices, customs. The form of the rule does not alter its essential character: to define the status of the actors and to govern the conduct of all the actors at the workplace and work community Dulop (1970).

Employee voice

This term refers to employees' involvement in persuading corporate management in decision making. Employees are getting formal and informal means of raising their voice so that the top management can work out their problems regarding the operation of the company. An organization uses this form of mechanisms as way of empowering employees and gets them motivated therefore increase organization productivity. Their voice will encourage good communication between them and staff retention which will be sufficient for organization to maintain its best personnel and employees voice help to eradicate conflict between employee to and employees and employees to management. (http://en.wikipedia.org/wiki/Employee_voice )

Social partnership

This is a process of which concerns of social policy are discussed between the government and social partners. These social partners include trade unions, environment organization, voluntary sector and the community in other words organization (Banks) stakeholders. Social partnership gives direction on employees' payment and other employment rights so that the economy of the country can improve as per government standards. So the goal of social policy is to make agreement on economic development, infrastructure and social policy. Example of social partnership agreements include;

Partnership 2000 for Inclusion, Employment and Competitiveness (1997-1999)

Programme for Prosperity and Fairness in 1987


5.0 From Industrial Democracy to Employee Involvement

There are different ways organization such as banks use to get employees attention in good sustainable manner for the "betterment" of the organization. By understanding the impact of industrial democracy organization can get full satisfaction from its employees.

Industrial democracy

This term is regarded as an arrangement which bring together different stakeholder of the organization such as employees/workers and management making decision, giving out responsibility and authority. It is said that, industrial democracy will increase organization productivity and improve the general operation of the business due to rejuvenated and motivate workforce. The term generally refers to the model of which workplaces are coordinated by employees to bring about change in the organization.

Employee Involvement

A successful organization regard every employee is unique in and has very major role to play in helping the organization meeting its goals/objectives. Employees' input should be valued with his or her management, so employees and management are needed to recognized that employees are also involved in the running of the business. Employee involvement leads to employee involvement concept which state that, management and employees need to identify many obstacles and problems that the organization is facing can also be resolved by employees themselves. If management recognizes this aptitude on employees they should provide necessary tools and authority so that they can continuously improve organization performance.

In order to perform employee involvement and employee empowerment an organization has to consider the following aspect:

Giving out employees responsibility

By giving responsibility to employees the organization (Banks) will be able to show trust to its employee hence employees get motivated and perform the task efficiently and effectively. Employees will also be able to answer to the management if the responsibility has not been successful reached.

Training of employees for responsibility

For employees to accept responsibility that organization has entrusted them with, training has to be carried on those employees to make clear what is expected of them and what it means for organization to get something achieved in time. Training should be carried more often as new responsibilities will continue coming and unless the employees are prepared well the task entrusted will not be successfully achieved. Specific responsibility should be identified and given to those employees who seem to have the ability to handle those responsibilities that other can't.

Communicating and giving feedback

This should be the culture in workplace whereby employees are comfortable about giving and receiving feedback on how they have performed, which, as result construct staff morale. Also employees who accept feedback they are able to rediscover they own improvement or increase business performance. Receiving or giving feedback starts from the top management going downwards. This is because top managers actions can inspire lower level staff in achieving or realizing their goals. A good leader should give positive negative feedback in proper manner hence building communication culture while encouraging growth of the business. Feedback should be about giving good news.


Employees should receive Rewards and recognition

This is a way that organization is able to continue motivating its staff to perform at high level. Banks can make their employees feel special after what they have accomplished has been recognized. One way employees can feel recognized, is when they have a chat with CEO or top management or the manager giving undivided attention to the employee. On the other hand, to reward or recognize employees during testing times like economic recession, its hard to make employees feel recognized due to the pressure organization such as banks are experiecing.http://www.urenio.org/tools/en/employee_involvement.pdf

6.0 McGregor Theory X and Theory Y

This is a theory that was brought forward by Douglas McGregor in the 1960s. he came up with two different models about workforce motivation and referred to them as theory X and Y. This two models view employees in and the way they think about work.

Theory X

The average employee does not like work and he can avoid if he can;

Due to their dislike of work, most of the employees need to be controlled and threaten before they can work hard enough.

Theory X manager do not give their employee a chance, in order for the employees to behave in an expected way.

The average employee prefers security over and above everything, they also like to be directed and such employees dislike responsibility.

The assumption can be found in many organization principles, of which shed light on soft management with management and tight control.

6.2.0 Theory Y

This is a participative model, whereby employees are participating in improving the organization as they get themselves motivated.

6.2.1 Employee effort comes naturally, manager will not ask employees to put more effort on a task but employees will feel its their duty to finish task on time.

6.2.2 Employees are able to self control and direct in pursuit of organization goals and

objectives without any threat of punishment from top management.

6.2.3 Staffs are able to use their imagination and creativity in unraveling problems facing the organization. Staffs come up with new ways to face problems that are troubling the organization hence they do not have to follow procedure as long as the job will be done accordingly

6.2.4 In theory, employee usually does not turn away from responsibility, instead they engage in themselves in other difficult responsibility than before.

7.0 Collective Bargaining

Employment processes and interest should be handled with care to bring about optimal performance as all stakeholders interests are taken care of, company can be able to reach these goals by looking at collective bargaining. Collective bargaining is said to be the process of charitable negotiation between employers and trade unions. A collective agreement is then set on things that would benefit all parties without biasness. Negotiations can be done by the company representatives and trade union representative. Collective bargaining comes to effect if the company has experience disinterest on one part that is involved. Collective agreements try to make clear terms and conditions between the employer and employees on the following issues.

Wage scale

Most of the times employees are the ones who are much affected with the initial terms and condition that have been set by management especially on their wages. The banking industry is having its up and downs on this issues of wage scale on its employees. Banks can set their wage at questionable scale, collective bargaining between banks and could halt the exploitation of employees.


Another aspect that trade union would initiate collective bargaining is the working hours of employees exceed the set standard. In every country there are laws concerning working hours in banks that govern the whole banking process. This factor can also affect the country culture as not everyday people work but there are religious days that trade union can put pressure on for banks to respect them.

Health and safety

The most important element in any company is the working condition the employees are experiencing. In recently years banks have been able to create a very conducive working atmosphere for their employees. Arguably, health and safety has not been of much concern thus less collective agreements have been made between employers (banks) and trade union on behalf of employees.

Economic theory that explains about collective bargaining

Monopoly Union Model

This model states that monopoly union has the responsible to maximize wage scale; the company then can decide on employment level. This model will definitely affect the labor market, specifically in the banking industry where the industry has witness a big increase of employment.

The right-to-manage model

This model was brought forward by British school during (1980s), this model views labor union and the company or bank bargaining power in relation to the wage rate according to Nash bargaining maximum written as ('Ω=Uβп1-β where U is the utility function of labor union, п is the profit of the firm and β represent the labor union bargaining power).

The efficient bargaining model (McDonald and Solow 1981) sees the labor union and the company bargaining over both wages and employment or more realistically hours of work)

These models help all the parties' interest that are involved in employee relation and remove any tension that would jeopardize the progress of the company. The unions acts as middle-men but they mostly assist the employee interest rather than the company.

http://en.wikipedia.org/wiki/Collective_bargaining accessed on 20/12/2010

8.0 Management Role in Employee Relations

Any management in company should protect interest of both the company and employees so that the organization can achieve its ultimate goals. Employee relation manages are thought to be link between the company's management and employees. Employee relation manager play a very significant role in communicating the company objectives to the trade union. He gets information from both parties for collective bargaining, which helps him to weigh labor laws and economic condition that can affect both the employees and entity.

Evidently, the role of management in employees can be seen plainly in banks, whereby employee relation managers are able to collect information to the management that can be used to set for instance wage rate.

Factor affecting employee relation

9.1 Globalization

This is also known as industrial relations, changes in employee relation have led to high bargaining power of employees making them able to dictate terms. Management is then supposed to see the skills possessed by employees are compatible with the organization objectives. Due to globalization consumer are becoming more aware of their suppliers and market in general.

Political factor

Companies are put under pressure from external factors. The government rules and regulation can limit management effort to thrive through its employee relation. Most banks are able to realign with political factors that are affecting the company employee relation management. These laws that are affecting the banks include the way employees should be treated and banks code of conduct regarding employees.

10. 0 Conclusion

Employee relation has been evolving to more convincing view that company can rely on. New measures have dealt with as result to the coming of employee relation. Looking at the value of employee relation we can so realize the significant of it in today banking industry success. One would be able to know the organization works which in most of the times assist employee to perform at the highest level.