Introduction
The world of trade and commerce has changed a lot in relation to labour and employee interaction with firms since the 1700s when the concept of work became more advanced. The purpose of this essay is to analyse the concept of employee relations and how it has evolved over the years. In order to attain this end, the following objectives will be explored:
A critical evaluation of the concept and theory of employee relations in various forms of organisations – large, indigenous, multinational, private and public entities;
An assessment of the concept of employee relations as it evolved in the second half of the 20th Century in relation to the organisations under review;
An analysis of the modern context of employee relations.
Theory of Employee Relations
The basic axiom of the concept of work is that people make rational choices and bring together factors of production to achieve economic ends. This involves the combination of four main factors of production:
Land
Labour
Capital
Entrepreneurship
This basic concept forms the fundamental premise and parameters within which modern economies are built and modern business is conducted. Land and capital are managed under various contexts and concepts. Entrepreneurship relates to the combination of these factors of production in the form of management and corporate governance in order to optimise the resources of an organisation or company.
Labour, as a factor of production refers to the situation whereby human beings are hired and made to work to achieve organisational goals. This has to do with the Industrial Revolution which refers to a period where the concept of work took centre-stage and production increased because there was a situation where people combined factors of production to provide mechanised means of production.
Taylorism refers to a conception of work in the 18th Century where the Industrial Revolution caused mass production to take a different shape and form whereby work was broken down to different components. This work was delegated to people who were encouraged to complete specific tasks. These workers became viewed as employees whose duty was to complete specific tasks in return for wages.
Naturally, there was a way through which workers who were hired were expected to connect or relate to the managers or supervisors who represented these managers. This formed a system through which the concept of Employee Relations evolved.
According to Leat (2012), the contracts between employees and employers after the Industrial Revolution involved more than just a financial relationship. It involved a psychological contract where the employer’s interest was to be met in the best way and possible. This is because reducing the contract between employer and employee is simplistic and does not give a true picture of the relationship that existed between employers and their employees.
Gennard and Judge (2010) argue that there was a psychological aspect that defined the scope of the contract between employers and employees’ interest. There were intrinsic and extrinsic elements that defined the relationship between employees and their employers. This include the fact that employees had expectations like job security, social welfare, career advancement, training and development, job satisfaction, a family-friendly environment, empowerment, fair and consistent remuneration and a work-life balance as well as the need to ensure a consistent and empirical system of assessment, evaluation and remuneration.
The scientific approach and method to Employee Relations mean that there is the need for the proper and scientific division of tasks and obligations and this must be flexible and realistic. Also, there was the need to set minimum standards of competency to ensure that the right people were employed. Also, the need to embrace change and modify systems created the space for taking Employee Relations serious. Teamwork, commitment to organisational objectives and giving room for innovation amongst others laid the foundation for the creation of an important aspect of the work environment after the Industrial Revolution and this laid the impetus for Employee Relations.
Employee Relations is defined by Gennard and Judge as “the study of the rules, regulations and agreements by which employees are managed both as individuals and as a collective group, the priority given to the individual as opposed to the collective relationship vary from company to company depending upon the values of management”
Employee Relations covers all employee management functions and have changed over different timelines. This means it involves a high degree of structuring and laying the foundation for organisational affairs to ensure that the workers in it are treated fair and justly to bring in the required results in order to attain organisational objectives and goals.
Keynesian and Adversarial systems – The Basis for Industrial Relations after 1945
Blyton and Turnbull (2004) go great lengths to identify that Employee Relations evolved from Industrial Relations. They set the timeline of Industrial Relations to be a structured system of managing employees that evolved from 1945. This was a period where the Second World War had ended and the post-war UK economy and most economies around the world were struggling. Thus, there was the need to lay the foundation for full-employment and the respect of employee rights as a means of compensating the British public and the traumatised population. Thus, there were policies by the government meant to ensure full-employment amongst British nationals.
The system of ensuring full employment became part of the Keynesian macroeconomic policies or welfare-based employment systems and processes. Here, the objective of government was to attain full-employment and ensure that the needs and interests of employees was respected. This was a seismic shift from the situation that existed before the First World War, where workers were seen as people rural dwellers who were given a favour by employment in sprouting cities. This was a period of elitism and the conditions of workers and commoners was not taken seriously. However, after the Second World War where human rights was taken seriously, a welfare-based system was instituted, where collectivist models of employment and guiding employee-relations evolved.
The governments moved to do things to safeguard the interest of employees against their employers. And due to the fact that there was a universal adult suffrage in elections, workers, who constituted a high percentage of voters had the affront to make demands and require the government to integrate into its laws. This led to a system of full employment and employee agitation through trade unions.
The most central feature of the post-1945 world was the formation of workers’ groups and trade unions as a means of agitating for better work conditions in Post-War Britain. This led to the creation of groups and labour agencies that had the fundamental obligation of forming a tripartite system of negotiations and bargaining whereby three key stakeholders could meet to set the standards for Employee remuneration, workplace conditions and other aspects of the work environment. These stakeholders were the:
Government
Employers &
Trade Unions representing Employees
The tripartite system of negotiations and bargaining was based on a system whereby trade unions were formed on the basis of different industries. This became known as the period of Industrial Relations. Thus, Employee Relations between 1945 and 1979 were fundamentally based on collective bargaining processes based on Industrial Relations.
Another element of Employee Relations at this period was that it was fundamentally influenced by the relative power wielded by the three parties – employers, government and trade unions (representing employees). Each group had various levels of powers. Employers provided the means through which production could occur and the economy could grow through their operations. Without them, there was virtually no macroeconomic activities and they had the rights to hire and fire employees. Employees on the other hand had power over the government by means of voting for specific candidates and parties. Also, with the trade unions and workers’ unions, they could threaten employers with strikes which were backed by law at that time. Government as a sovereign had the power to make regulations that could influence employers and employees alike. So each made demands and concessions to keep Employee Relations thriving.
The Aspiration Grid is a tool to check the position and interest of all parties in a negotiations in that era. This helped to regulate discussions and made it more engaging and fruitful in order to define the status quo in Employee Relations. This system was very common in large, indigenous and public entities. This is because the government had a strong stake in them and they were too big and could be affected by strikes.
The Industrial Relations Act 1971 gave employees the right to complain and demand fairer conditions and this formalised the traditions that existed in relation to Employee Relations. The Industrial Relations Act regulated the relationship between employers and the employed and set the tone for Employee Relations.
Unitarist perspective to pluralist – After Thatcherism
The conflict presented by the workers’ unions got tense because workers were able to stretch the limits with the right to unlimited strikes guaranteed by the Industrial Relations Act in the 1970s. This led to the Winter of Despair which refers to the period of 1978 and 1979 where Britain had so many strikes that productivity fell sharply and threatened to crush the British Economy. This led to concerns about the adversarial nature of Industrial Relations and this laid the foundation of contemporary Employee Relations.
Employee Relations is presented by Blyton and Turnbull as the disintegration of the old Industrial Relations to make way for a new system of managing employees and engaging them in a transformational leadership context. This refers to the evolution of strategic and integrated frameworks to get workers to share workplace interests and avoid managerial control of everything – evolution from unitary to pluralist system of employee relations.
Therefore, instead of an adversarial, collectivist, industry-based system whereby workers could come together to threaten employers with strikes, the new system guaranteed a process whereby the interest of workers could be integrated within the organisational context. Thus, negotiations had to be done between employees of a firm and the management of the firm. This is because corporate strategy integrated employees as an integral part of the organisation.
Employee Relations as it is known in today’s context is based on the fact that human resource or labour had to be viewed as human capital and a tool for competitive advantage. This caused the philosophy of management from the 1980s to move from one where workers are used as a disposable tool to one where they were an integral part of the organisation.
Therefore, workers were seen as an end in itself, rather than a means to an end. The system of the 19th Century Fordism was based on a process whereby workers were just people who exchanged their skills for money. So they came, worked, and were paid off. This in many ways could be considered as something similar to prostitution, whereby a client hired a prostitute for a few hours or for a night. The Employee Relations moved the relationship between employees and employers to a different level. Employees were seen as a part of an organisation and their interests – job security, career development amongst others were tied to the long-term vision and strategy of the firm.
Thus, Employee Relations goes hand in hand with transformational leadership . Transformational leadership refers to linking the interest of workers to the growth of company. Thus, a worker is viewed as a spouse and his or her future is tied to the employee contract (just like a marriage contract). Hence, the old system of transactional leadership became obsolete and Employee Relations took the form of empowering employees and seeking their long-term indulgence in return for contributing to the competitive positioning and realisation of the strategic goal.
Integrated Perspective of Employee Relations
Employee relations therefore merges the interests of employers with that of employees through the creation of a Strategic Human Resource Management unit of a firm. Thus, the old administrative oriented Personnel Department was abolished in favour of a strategic business unit that focused on “attracting, retaining and motivating the best and most talented people in the labour market in order to use them to advance the strategic objectives of a firm”.
The old personnel department was inward oriented. It worked only for the employer. All the employer needed was information of workers and ensuring that the workers were meeting rigid targets that were given to them. This was impersonal and work was only based on targets. The Personnel Department only took instructions from the directors and implemented it without questioning it. They took data and records and did almost nothing to link personal matters with the company’s affairs.
The integrated strategic human resource management on the other hand took detailed information about the company’s strategic and operational plans and translated it into the human resource context. This way, the genuine needs of the workers could be taken and then balanced with the corporate needs. This is known as Employee Involvement and it remains a fundamental part of Employee Relations.
Employee involvement is “informing and consulting employees about, or associating them with, one or more aspects of running the organisation”. Thus, instead of treating employees as outsiders and their concerns as nothing but rants, these demands are taken seriously and integrated into the company’s strategy in an emergent manner.
The current system of employee relations involve non-union interaction of workers where the demands of staff members were integrated into the firm in itself. Large and public entities that still have unions have a bargaining system that is less adversarial and more focused on consensus building in today’s world. Charitable and private entities often work through the non-union system. The same applies to multinational entities who can often threaten to move their operations overseas.
The integrated system of employee relations which operates to-date cuts out the role of workers’ unions and the government. These are distant entities who only interrupt the core strategies and plans of an organisation. Also, their involvement only makes employers hostile. Rather, the integrated strategic approach to employee relations mean that employee voice is localised. And instead of getting the employee to look outside to a union to make demands, s/he can walk to HR, ask for changes and get her or his voice heard and changes made and institutionalised in the organisation.
The fact that this was pervasive meant that an employer who was following the best patterns and processes of employee relations which respect the goals and aspirations of workers got workers who were dedicated. Such an employer attracted the best talents on the labour markets. Thus, other employers had to follow suit to meet their strategic goals in an effective and efficient manner through a more motivated and included workforce.
The Future of Employee Relations
Employee Relations is therefore synonymous with a pluralist perspectives of employment where the role of workers are deemed a strategic part of organisations. And this leads to the treatment of employees as relevant stakeholders. Their interests is integrated into the corporate governance framework and this causes a company to grow and thrive in the most significant manner.
Today’s goal of employee relations involve amongst other things:
Making work meaningful
Fostering greater management of workers
Establishing flexible and inclusive practice
Creating ample opportunity for growth
Establishing strategy and leadership in the company and
Simplifying these processes in order to ensure continuous improvement in an organisation and its management of employees.
These pointers and variables have and continue to be improved and modified by contemporary and emerging matters. One of the most significant aspects are regional laws which include European Union Law in the UK, North American Free Trade Association rules in the case of the United States amongst others. Also, the globalisation of the markets indicate that employee relations have to be improved regularly to reflect these different pointers and changes in order to achieve results and protect the best interests of corporate entities who act as employers.
It is predicted that the adversarial nature of employee relations will soon disappear and there will be standardised systems whereby all employees will be treated with dignity and their concerns in all forms will be respected and integrated in corporate affairs. This is possible because of the improvement of corporate governance standards and structures and the integration of standards of best practice in an effective and strong manner
Conclusion
Employee relations can be viewed in the broader context or a narrower context. In the broad sense, it refers to the way through which employers relate to their workers. In this context, the old system of transactional relations where workers were seen as nothing but labour that is bought by the employers marks one phase of employee relations in the 19th Century. The broader context of the 20th Century can be viewed as a period of Industrial Relations and collective bargaining. Whilst the last two decades of the 20th Century can be seen as a period where employee relations became organisation-based. In the narrow sense though, employee relations refers to the contemporary system of integrated strategic human resource management which seeks to view employees as a base for human capital and this include a system of transformational leadership where the economic and social needs of an employee is tied to the long-term goals of a company. This is done in return for stronger dedication and commitment to the organisation’s long term goals through employee engagement and involvement. This is reflected through better and more appropriate methods of management and control listening to and integrating employees’ voice to the firm’s activities at the strategic level.
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