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In general, employee relation is very important part of human resource management and employees is the heart of any organization. Mainly, 'employee relation' known as 'from Employees are the resource of the organization and they are act as the company's creator to make successful in the competitive business world. On the other hand demotivated people become the tragedy for the company. According to Banfield and Kay (2008), '' Demotivated employees have an impact on the organization, but in different and more negative ways, This can include individual and less visible expressions of dissatisfaction, such as high absenteeism, poor timekeeping and low productivity, as well as collective action such as strikes and working to rule, all of which undermine the organizations ability to ensure its financial health and long-term competitiveness''.
In the words of Armstrong (2006), the components of employee relations as follow:
Formal and informal policies and practices of the organisation.
The development, negotiation and application of formal systems, rules and procedures for collective bargaining, handling disputes and regulating employment.
Policies and practices for employee communications.
Informal and formal process regulating the interactions between managers and employees.
Policies of the government, management and trade unions.
A number of parties including state, management, organisations, trade unions, employees, etc.
The legal framework.
Institutions (e.g. ACAS) and the employment tribunals.
The bargaining structures, recognition and procedural agreements enabling the formal system to operate.
Setting an employment relations policy requires work under a number of headings as suggested by
From the above component, it is clear that principle of management, employer-employee relation, terms and condition, company's recruitment, training, performance appraisal and procedures are main factors for an organization to make sure the employee relations. In the employee relation, collective bargaining is very important in modern business world. The following figure shows the exact procedure of employee- employer relation through collective bargaining.
Figure - Reconciliation of interests between employers and employees
Source: Resource Development International Ltd. (RDI), 2009
Originally, the 'employee relation' known as an 'industrial relation'. According to Armstrong (1994),'' industrial relations "are conducted within the external context of the national
Political environment, the international context and the internal context of the organisation".
On the other hand, Collective bargaining is defined as the process of turning disagreements into agreements in an orderly fashion. Collective bargaining is the process followed to establish a mutually agreed set of rules and decisions between unions and employers for matters relating to employment. This is a regulating process dealing with the regulation of management and conditions of employment. Collective bargaining is used as the negotiation process between employees and employers with unions acting as the representatives of employees.
What may McDonald's have considered in order to establish their approaches to collective bargaining in both Germany and the UK?
According to Allan, C and et al (2006), '' Fast food is an important area of employment - particularly for young people. McDonald's, the largest restaurant chain, has more than 30,000 restaurants around the world. A large proportion of its employees are young people. There is an international debate about the quality of jobs in fast food''.
McDonald's is the top brand name in the world and in the research work of Royle, T (1999), discuss about the fast food industries labour relation by referencing the McDonald's. McDonald's not only the world largest MNC but also the leading the sales system and growing up the employee relation. McDonald's follows the limited menus and highly standardized product and proper utilization of low skilled labour by proper training and guideline.
UK is always following the US developing system from Second World War. They tried to develop the economic system like US, though as a part of Europe. At the beginning of 1980's, in UK there was rapidly de-industrializing because of rapid growing up of service sector like United State and becoming the real life British features. On the basis of that development they tried to follow American HRM system. According to Royle, T (2002), 'Until the 1980, the regulation of UK union activities had been minimal and they enjoyed reasonable statutory immunity from the strictures of common law, a system applies described as 'collective laissez fire'. He also discuss about employee relation in Germany compare to UK employee relation. Compared with the UK industrial relations systems, the German system is more organized. German system is totally different from UK and the German system is highly justified and represents a clear structure of rights and responsibilities for both management and employees. Collective bargaining is normally carried out at advanced level of management and link between employer's federation and trade union.
McDonald's is not interested operating any trade union in their company. They are trying to mutual through their management. The main reason behind this is, the employees are part-time, temporary, low skilled. The company giving the facility and training-up as they need. If they got any problem, they solve by in-store management.
There was problem with that employees are staying longer and majority of the employees are under 21. So, it is so quite impossible to involve with union and carryout the union fees.
According to collecting bargaining approaches there are two forms of collective bargaining, conjunctive bargaining and cooperative bargaining.
Conjunctive bargaining: This form of bargaining requires an agreement so operations to which both parties are dependent can continue. The agreement defines certain responsibilities for each party.
Cooperative bargaining: This form of bargaining recognises that both parties are dependent on each other and it is in their best interest to obtain the support of each other.
There are also two views on the relationship of management with trade unions, the unitary view and the pluralist view.
Unitary view: According to this view, management regards its function as directing and controlling the workforce in order to achieve growth.
Pluralist view: This view sees the organisation and its workforce as two forces in balance with mutual trust for their respected relationship supporting their efforts towards different objectives.
In general, on basis of those above forms, McDonald's is mainly is not operating proper trade union relation. Both UK and Germany, they are operating their business by franchisee and more profit is coming from them. If their employees feel any problem, they negotiate with the employee by the management. They are not interested to involve with the trade union. But, the franchisee company, for their safety they are keeping small room for the union.
How may McDonald's have considered individual bargaining as an alternative or additional approach in both Germany and the UK? What benefits and/or problems may this have brought in both countries?
In employee relation collective bargaining is very important. According to Armstrong, for managing collective bargaining it should be consider the following factors
Collective arrangements which may be practical (the framework) or basic (the outcome) of collective bargaining.
The level at which bargaining should take place - these days multi-employer bargaining is not common.
Single-table bargaining where a number of unions are recognised in one workplace - seems the most favourable option for organisations.
Dispute resolution - typically involving third parties as mediators.
To follow the collective bargaining, there should be some mutual agreement and if there any problem with the agreement, they can make solution by procedure.
In these agreements the responsibilities of managers and employees are defined as well as the
Procedure followed to make decisions.
Definition of the agreement objectives
Recognition of the union's negotiation rights
Statement of facilities granted to unions
Provision for joint negotiation committees
Provision for terminating the agreement
Substantive agreements: These are not legally enforceable and focus on agreed terms regarding pay, working hours, holidays, overtime, regulations, etc.
Partnership agreements: In partnership agreement both parties agree to work together for their mutual advantage. Reilly defines the common features of partnership as:
a. Mutuality - parties recognise common interest.
b. Plurality - areas of differences and common interest are recognised.
c. Trust and respect - for the intention
d. Agreement without coercion - solving problems through consensus.
e. Involvement and voice - opportunities for employees to shape their environment and express their views.
f. Individualist and collectivist dimensions of the other side.
Individual bargaining: It refers to the participation of single bargaining units. Organisations prefer these, due to:
Inefficiency of multi-unit bargaining.
Desire to achieve major changes.
Necessity to introduce single status conditions.
In individual collective bargaining some critical issues include:
Commitment of management to the concept.
Maintain negotiation levels.
Ensure that managers will have flexibility when responding to employee demands.
Willingness of management to discuss with representatives.
The need to overcome previous rivalries.
The need to guarantee representation rights to unions.
Third party dispute resolution: There are three such processes:
Conciliation - third party facilitates the process to reach a decision.
Arbitration - issue is determined by the third party.
Mediation - providing formal but non-binding proposals.
By seeing the all kind of collective bargaining, the individual collective bargaining looks very appropriate for the McDonald's in both Germany and UK and it is very helpful for considering as an alternative approach. Because of economic changes, deindustrialization and political factors are led to union to decline industrial relation. Also the both country, McDonald's is leading company and important for the economy. In the time individual bargaining become very popular for the small business and for McDonald's, especially when it's coming under franchisee.
There are so many benefits and problems are by following the individual bargaining in UK and Germany.
The benefits are as follows:
To meet the employees requirements
Its giving the individual solution of the employee
It contains the low administrative cost
It giving the flexibility of employer-employee relation
There are some problems with the individual bargaining. It increase the high dismissal rates, accidents and high labour turn-over and so on.This approach sometimes cannot fulfil the requirement of the employee. In time of negotiation it can be problem. The employee cannot individually bargain with all times with the employers for their wages and other facilities.
How may the approach to collective bargaining in Germany and the UK influence employee relations for McDonald's internationally?
At present global business world, McDonald's is dominating the fast food industry. The company in both UK and Germany don't prefer to the trade union. They are making the employee relation by their internal management system. Actually this is individual bargaining system. To recover this system is the best approaches for a company. In UK and Germany, the fast food industry are expanding rapidly and making good example for employment in the competitive business world.
The unique feature of the chained fast-food sector is a combination of generally low skilled work and high labour turnover, combined with what we have termed elsewhere an 'acquiescent' workforce. (Royle, 2000)
In general in McDonald's corporation is not interested in unionization and there is no great success of trade union. In UK and Germany, there is some problem with non-union activity. The management company fast food company remain strongly grounded in anti-unionism. But to what extent are these assumptions transmitted and internalized by senior-level and restaurant management at McDonald's? (Royle, 2000)
The employee relation is influence by the collective bargaining but this maintaining with the trade union not only in UK and Germany but also all over the world. From above the discussion for the following reason the approach like collective bargaining in Germany and the UK influence employee relations for McDonald's internationally:
Employee relations are regarded as better.
Strikes are rare.
Labour turnover is high.
Payment levels are set by management.
Higher dispersion of pay.
No alternative representation methods exist.
Employee relations are handled informally.
Managers feel free.
More flexibility to use labour.
Higher dismissal probability
Though there is some problem in the approach collective bargaining, but the in all over the world make a history for employee relation. Their employees are almost 90 per cent are student, under 21 and unskilled but they are doing good business by their proper strategic plan and create great employee relation. So, in this way collective bargaining is very influencing for employee relation.
What additional or alternative methods could support good employee relations for McDonald's? Consider the role an HR function could take.
For a good employee relations in McDonald's, there are some methods are very useful. In general, McDonald's is practicing the individual bargaining.
In the research work of Dau-Schmidt (1993) stated that among the three primary means of addressing the needs of workers--individual bargaining, collective bargaining and protective legislation--each have its own advantages and disadvantages. Individual bargaining can provide the most individualized solution of meeting the needs of the parties. It also enjoys relatively low administrative costs. Unfortunately, market failures and lack of bargaining power mean that individual bargaining often results in an impoverished solution for many workers that fails to address many of their basic needs.
Before making the decision of right choice of additional methods, it is better to know about the HR function properly. The HR function contains the advice and services that enable organisations to get things done through people there are some listed a number of typical HR management tasks.
Human resource planning.
Recruitment and selection
Learning and development
Health and safety
On the basis of HR function and as a part of HR practice of employee relation in McDonald's collective bargaining doing the solution which is created by the individual solution. Collective bargaining is solving the problem created by the individualization and creating employee need, which is addressing the employee relation and there are some problem with this approach. In this time, protective legislation provide the at least one employee needs which is very helpful for employee relation. In overall McDonald's trying to practice of mixed culture of individual bargaining, collective bargaining and protective legislation.
By considering overall discussion, the changes in HR function can be developing the good employee relations which are as follows:
â€¢ Employees see the reason for change for a good employee relation.
â€¢ Employees understand why change is important for employee relation and see how it will help them and the business in the long and short term.
â€¢ The people who need to be committed to the change to make it happen are recognised.
â€¢ A coalition of support is built for change and creates a good employee relation.
â€¢ The support of key individuals in the organisation is enlisted that is a good example of employee relation.
â€¢ The link between the change and other HR systems such as staffing, training, appraisal, rewards, structure and communication is understood.
â€¢ The systems implications of the change are recognised.
â€¢ A means of measuring the success of change is identified for the successful employee relation.
â€¢ Plans are made to monitor progress of employee relation in the implementation of change.
â€¢ The first steps in getting change started are recognised.
â€¢ Plans are made to keep attention focused on the change.
â€¢ The likely need to adapt the change over time is recognised and plans can readily be made and implemented for such adaptations.
Conclude by taking the key elements of your observations in steps a-d regarding McDonald's approach to employee relations in order to make a short recommendation for similar countries or organisations with regard to developing and/or improving their employee relations.
From the above discussion, it is clear that McDonald's can operate most of the area independently in employee relation. After long time, McDonald's started the collective bargaining with the union in Germany. But, in UK, they don't like to operate the collective bargaining with union. Because, the change in the method was improving their corporate image. In that time McDonald's follows the pluralist principles though they are resisting of union at restaurants level. McDonald's leading the MNCs in the world and they are successfully handled the corporate level work council and they established it in a small number of restaurants. After that, by this system the unemployment increased and they are confused with their system.
However, the adaptability of the system may be a double-edged sword for workers. On the hand it provides workers with rights to representation, but on the other hand its 'flexibility' may in part be dependent on undermining workers terms and condition. (Royale and Tower, 2002)
Royle (2000) said that, on the basis of German collective bargaining system which is represent the other countries in the Europe as well. As a MNC company McDonald's is likely to adopt the non-union strategies. As for McDonald's, looks like to continue to dominate and set the agenda for the fast-food sector in the short and medium term. In the meantime, they drive for more efficiencies and more standardized procedures looks set to continue, placing pay and conditions under increasing pressure. In this time they tried to utilize a new approach like individual bargaining and tried improve employee relation between employee and management. They also tried to try some changes in the HR function to improvise the employee relation strategies.
By taking the different step for developing the employee relation like UK and Germany, other countries McDonald's corporate body and similar organization can follow their strategies. The other fact is that, which procedure a company following, there should be good negotiation with the employee and then the employee relation will be good. For any bargaining there should be the some steps like-
Setting the objectives, define the strategic plan and assembling data
Like UK and Germany, other country follows the above procedure that will be good for making a good employee relation. Besides that they should keep in mind the following things for developing their employee relation.
The bargaining process is used in the hope of coming to a settlement.
Legitimate tactics during negotiations should not shake the basic belief in each other's integrity.
Off the record discussions are mutually beneficial.
Both sides should be prepared to move from their original positions.
A series of offers and counter offers should be expected.
Concessions cannot be withdrawn.
Conditional offers, unlike firm offers can be withdrawn.
Third parties should not be involved while there is still chance for agreement.
The final agreement should be clear and accurate
Besides the above factors to build up a good employee relation there should be skilled negotiation and bargaining management.
Bargaining skills: Bargaining skills are as follows:
Sense what the opposition wants to achieve.
Being able to withhold own objectives.
Flexible realism seeking a reasonable settlement.
Respect for the opposition views.
Sensitivity for mood changes.
Negotiating skills: Negotiating skills are as follows:
Analytical ability - assessing factors affecting the negotiation process.
Empathy - being able to view the situation from the opposition's perspective.
Planning ability - developing and implementing a strategy.
Interactive skills - relating with other people.
Communicating skills - convey information and arguments.
From all of the discussion, it can be said that for good employee relation the management strategies and all the development should go through in a right way.