Chapter 6 Flashcards
What is employee relations
Employee relations involves a level of interaction between employer and employees, or their representatives to achieve a set of working conditions that will meet the needs of employees as well as allowing the organisation to achieve it’s strategic, tactical and operational objectives
Define employee relations
refers to the total interaction that occurs between employers and employees (including their representatives) in regards to the establishment of conditions of employment.
Explain employee relations
Incorporates all issues included in relationship in workplace (i.e: recruitment, equal opportunity, training and development)
Industrial relations refer to the resolution of conflict between employees and employers (and their representatives).
It us accepted that legitimate differences exist in workplaces, but the aim is to reduce conflict through effective procedures and relationships
Organisations are continually examining ways to improve competiveness and profitability. Central to these objectives is the effectiveness and efficiency of employees –
a business strategy seeking to improve performance will use it’s employees relations processes to:
Encourage an effective workforce as a way of adding value to all areas of it’s Organisational performance
Focus on using specific strategies to retain, reward and motivate effective and skilled employees
Define employer
an employer for legal purposes: exercises control over employees, has a responsibility for payment of wages, holds the power to dismiss employees
Define employee
is a worker under an employer’s control. Control may involve: the location of the workplace, the way in which the work is performed, the degree of supervision involved. These criteria are critical in determining legal disputes over the employment contract
Explain the link between business objectives and strategies
Employees are the most valuable asset to the organisation and produce the good and service that the organisation sells to make a profit. Maintaining positive relationships is essential for the business to be successful as poor relationships can ruin productivity and therefore reduce profits. Managers involved in ER must meet employee expectations regarding agreements to optimize individual performance that will ultimately optimize individual performance, which will ultimately improve organisation wide performance and thus achieve objectives.
Another link is that employee relations aim to reduce conflict and the chance of escalation to an industrial dispute. Therefore, ER will reduce costs associated with conflict and industrial disputes, which will increase profits and therefore achieve business objectives.
Profit and profitability – wages that are too high will reduce profits but wages that are too low can reduce employee motivation. Most increases in wages are tied to improvements in productivity. Relating wages to productivity creates a strong link between employee relations processes and business objectives.
Customer and staff satisfaction – Customer satisfaction is related to the way customers are treated by staff. Staff satisfaction influences the way staff relate to customers. A positive workplace relations environment is likely to lead to greater staff satisfaction (and reduced STO) and which will influence the satisfaction of customers, which positively impacts profits and market share.
Improving quality – a positive workplace relations environment can contribute to the willingness of employees to participate in quality improvement activities such as TQM, quality circles or continuous improvements which requires a commitment from employees. Improved quality products and customer satisfaction can assist in improving profits and market share
Acting ethically – doing the right thing by its employees builds trust and assists in negotiations of difficult employee relations issues.
Social responsibility – workplace relations legislation requires large-scale organisations to include flexible working arrangements for workers. Recognition of work-life-balance issues in a positive manner contributes to enhancing the workplace relations environment.
What is the aim of employee relations
Focus on using specific strategies to retain, reward, and motivate effective and skilled employees.
The aim of Employee relations is to achieve an optimum working relationship between employees and management
Encourage workforce to add value to all areas of Organisational performance.
Achieve optimal relationship between employees and management.
Create optimal worker and Organisational productivity to increase business Competitiveness.
Strategies for establishing a positive work environment for employee relations
Participative or consultative management style.
Good open communication and employee relationships.
Mutual respect, enthusiasm rewarded, and motivational leadership.
Training and development.
Recognition and reward.
Effective performance management systems.
Generous remuneration.
Safe and comfortable working conditions.
Meeting higher order needs.
Positive role models.
Explain linking employee relations to business strategies and objectives (steps)
his model is not the relationship between business objectives and strategy and is only used to ensure ER is in line with business objectives and strategy.
This is not listed in the study design, however could appear in a SAC.
The following model may be used to ensure ER is linked to business strategy:
- Review of Current Practice
Acknowledge changes that need to be made in the internal and external environments
i.e – internal: hire more people; external: availability of resources.
E.g. availability of new technology - Setting the Agenda
Notify employees and representatives of details of strategic plan.
Identify and discuss issues that influence success the plan.
Explore changes in operations required to achieve objectives.
i.e – future workforce needs for business. - Implementing Changes
Likely to involve: redesign of job descriptions and job criteria, retraining of staff, changes in working hours to allow training time, fair and open retrenchment processes, changes in remuneration and rewards and recognition programs.
Setting performance indicators to measure success for changes. - Evaluation
Seek feedback from workforce on practicality of changes.
Regularly assess retraining and retrenchment processes.
Establish monitoring process to measure how well new employment
Conditions are meeting objective
Review current practice. If new production processes will be required to produce the new range of foods, do staff have the necessary skills to carry out these processes? Will retraining be necessary, and will the expected increase in production require changes in working hours? It must be possible to identify the ways in which the new strategic objective may cause new practices to be introduced.
- Set agenda. Include input from all parties. All issues which can affect the relationship between employer and employees should be identified and included in discussions. Potential changes in work practices, job descriptions, roles and duties, and their effect on employees must be identified, and possible changes to employee recognition and reward structures included in discussions.
- Implement changes. This is likely to involve some new job descriptions and job criteria; retraining and changes in working hours to allow for that retraining; changes in wages and other areas of recognition and reward to recognise improved skill levels of staff; and a retrenchment process for those unable to be accommodated in the new environment. These changes would be incorporated into a new workplace agreement.
- Evaluation. A set of KPIs should be established that relate to the strategic goal of achieving the increased market share within the next four years. These may be broken down into interim targets, but will ultimately measure the success of the changes to the conditions of employment in assisting the organisation to achieve its strategic objective.
Benefits of effective employee relations
Increased motivation – leading to increased productivity, lower staff turnover, lower absenteeism, and positive relationships.
Increased business performance and achievement of objectives – such as greater net profit, increased market share, increased sales, and increased business competitiveness.
Less conflict – between employees and employers that results in less strikes and better pathways to fast resolution of conflict.
Increased safety performance – reduced accidents and defects due to better conditions and motivation
Negatives of poor employee relations
Reduced business performance – lower productivity, net profit, sales.
Reduced motivation – increased staff turnover and absenteeism.
Increased conflict – more strikes, poor resolution of conflict.
Reduced safety performance – increased accidents.
Explain stakeholders in an organisation (internal)
Employers (management):
An employer exercises control over employees, controls pay and wages, and has the power to terminate employees.
LSOs often employ ER specialists to assist with complexity of legal responsibilities of businesses in relation to ER.
Includes HR who is responsible for all ER issues.
Requires more attention in decentralized system as negotiations occur at enterprise level.
Employees:
An employee is a worker under an employers control in terms of location of the workplace, the way work is performed, or the degree of supervision involved.
Demand higher order needs to be met, such as challenging and interesting work, or greater involvement in decision-making.
Demand better working conditions and pay.
Employees are engaged with ER matters through:
Workplace level negotiations for individual employment conditions.
Vote/approve a collective agreement negotiated y a representative.
Employers may require improved productivity and changes in work practices in order to offer greater conditions and wages.
The increasing practice of negotiating employment agreements at the workplace level means that employees will be more closely engaged in the process of developing new or changed agreements
External stakeholder in an organisation in OPERATING environment
Trade unions
Employee associations
External stakeholders of an organisation in the MACRO environment.
Peak Union bodies
Peak employee bodies
Government bodies (FWA)
Explain the external - operating environment stakeholders
Trade unions – are organisations formed by employees in an industry, trade or occupation to represent them in efforts to improve wages and the working conditions of their members
Represent employees in development of new or changed agreements to achieve the best possible conditions and wages.
Services provided by unions include:
Negotiating collective agreements.
Making submissions to Fair Work Australia (FWA) when determining Awards. o Providing support to individual members in relation to disputes with
employers (i.e – lawyer for unfair dismissal claim).
Supporting shop stewards who are the union official at each individual
workplace, as elected by the members.
Employer associations – Are organisations that represent and assist employer groups
Services include submissions to FWA when determining awards, such as:
Industrial Association – (industry) such as Mining Council of Australia of Professional Association – (profession) such as Australian Medical
Represent employers in the making through the centralized employee relations system
Since the late 1980’s legislative changes decentralizing employee relations have placed grater emphasis on the negotiation of working conditions at the individual workplace level
Log of claims - Logs of claims are a list of demands by workers (often made through unions) against employees covering wages and conditions. Assist employers in formulating policies and processing logs of claims.
Define trade unions
are organisations formed by employees in an industry, trade or occupation to represent them in efforts to improve wages and the working conditions of their members
Define employer associations
Are organisations that represent and assist employer groups
Define log of claims
Logs of claims are a list of demands by workers (often made through unions) against employees covering wages and conditions. Assist employers in formulating policies and processing logs of claims
Explain employer associations
Services include submissions to FWA when determining awards, such as:
Industrial Association – (industry) such as Mining Council of Australia of Professional Association – (profession) such as Australian Medical
Represent employers in the making through the centralized employee relations system
Since the late 1980’s legislative changes decentralizing employee relations have placed grater emphasis on the negotiation of working conditions at the individual workplace level
Explain trade unions
Represent employees in development of new or changed agreements to achieve the best possible conditions and wages.
Services provided by unions include:
Negotiating collective agreements.
Making submissions to Fair Work Australia (FWA) when determining Awards. o Providing support to individual members in relation to disputes with
employers (i.e – lawyer for unfair dismissal claim).
Supporting shop stewards who are the union official at each individual
workplace, as elected by the members.
Explain the stakeholders of the macro environment
Peak union bodies:
Peak Union Bodies represent trade unions in dealings with the media, government, or Fair Work Commission (FWC).
Formulates and coordinates national union policies, and represents unions in dealing with government and other organisations, as well as settlement of disputes.
Campaigns politically on behalf of other unions and members.
E.g – Australian Council of Trade Unions (ACTU)
Peak employer bodies:
Peak Employer Bodies represents business interests in dealings with other large organisations, the media, the community, and regulatory authorities to influence the natural economic trade, employment and workplace policy.
Australia’s peak council of business organisations.
E.g – Australian Chamber of Commerce and Industry (ACCI)
Explain government organisations - macro environment
Established Fair Work Australia (FWA), which deals with resolution of industrial disputes and makes decisions regarding minimum wages and conditions of employment.
Approves agreements established at enterprise level.
Resolves employee/employer disputes when a resolution cannot be reached.
Explain the 5 key roles of government
- Legislator
State + federal passes laws that provide legal framework for employee relations.
Areas such as tax, OH&S, Equal Opportunity, Pay and Conditions - Employer
Public sector employs one third of all Australian workers.
Federal + state government employee almost 1/3 of Australian workers e.g. teachers, nurses - Economic Manager
Ensures cost of wages do not lead to inflationary pressures. - Administrator of Government Policies on ER
Government’s implements legislation by publishing information and guidelines. Provides advice to employees, employers and their representatives. - International Representative
Represents Australia in worldwide organisations concerned with betterment of workplace conditions and wages.
Define an award
is a legally binding agreement that sets out minimum wages and conditions for a groups of employees
Define collective bargaining
involves determining the terms and conditions of employment through direct negotiation between unions and employers
Define wage indexation
is the process whereby wage increases are given by a tribunal in national wage cases, in the line with increases in the cost of living (prices)
Define enterprise bargaining
is the process of directly negotiating wages and employment conditions between employers and employees at the enterprise level
Explain similarities between centralised and decentralised systems
A centralized system of employee relations is one in which central tribunals decide the ages and employment conditions of all employees. Decentralized is one in which direct negotiation occur between an individual an employer and either individual employees, groups of employees or the representatives
The centralized system:
In place from 1904 to early 1990s.
The Centralised system was where Awards setting out pay and working conditions
were determined by a central body relating to an industry, trade or occupation.
Awards set out the minimum wages and conditions to which an employee is entitled.
Where possible agreement between the parties was reached through a process of conciliation. When agreement could not be reached, a process of arbitration would result in the commission making a ruling which was legally binding by all parties
Define conciliation
occurs when a third party participates in the resolution of a dispute and attempts to help resolve the differences through discussion
Define arbitration
occurs when a judge (such as the commissioner of fair work Australia) or a panel of judges hears both arguments in a dispute in a more formal court like setting and determines the outcome
Explain the role of the government in the centralised approach to employee relations
Government determines pay and conditions of employees.
Government makes awards that set out pay and conditions for employees in an
Industry, trade or occupation.
Awards are determined based on submissions from unions and peak bodies.
Awards are the same for all employees, regardless of the size of the organisation that
They work for or the skill level and experience of employees.
Disputes are resolved through centralized bodies, such as FWA, through formal
Resolution methods such as arbitration and conciliation.
Advantages of the centralised system
Centralised wage fixing provides greater fairness and equality - workers employed by different employers and those in weaker bargaining conditions in the same industry are paid the same.
Greater government control over wage outcomes allowing greater control over the economy. E.g policies such as wage indexation
Greater efficiency – industrial disputes within individual businesses can be reduced because awards can cover entire industries
Stability and predictability are enhanced because of one set of rules and procedures applies to all industries and organisations
Disadvantages of the centralised system
Less flexibility – same wages for employees regardless of output, effort, or individual characteristics of each workplace e.g. lso / country town
A centralized system does not provide enough opportunities for individual businesses to provide improvements in employment conditions in return for productivity gains
Large unions favored – unions with money and resources to be able to launch expensive legal campaigns are favored over unions in smaller industries.
Less incentive for management style allowing more employee input – participative and consultative styles have less benefits because negotiations for wages and conditions are not made within the organisation.
Explain a decentralised system
decentralized system exists when employers and employees at each workplace determine pay and conditions without outside interference.
The Keating Labour Government moved to a decentralized system because the inflexibility of the Centralised system reduced the ability of businesses to compete in an extremely competitive international environment.
Management negotiates with trade unions/employee representatives when establishing conditions of employment.
Government only approves the agreement and are not involved in negotiations.
Third parties only involved in dispute resolution as last resort.
Enterprise bargaining allows businesses to change workplace practices to suit and link productivity improvements to wage increases, and empower parties to resolve disputes themselves(enterprise bargaining represents a more decentralized system)
workplace needs:
Employers can link pay to productivity.
Parties are empowered to resolve disputes themselves.
Inconsistent but flexible to needs of workplace.
Explain the importance of workplace needs
workplace needs:
Employers can link pay to productivity.
Parties are empowered to resolve disputes themselves.
Inconsistent but flexible to needs of workplace.
Advantages of the decentralised system
Greater flexibility – to introduce employment conditions that take into account of individual characteristics of each workplace.
Greater communication – between employees and employers allowing for greater staff motivation and cooperation spirit.
Improved productivity – as productivity can be linked to employees pay providing incentive to be more productive, leading to productivity gains.
(output/input)
Explain the disadvantages of the decentralised approach
Greater inequality – between wages of skilled and unskilled workers due to less bargaining power of unskilled workers.
Reduced government of control – of wages, which makes management of economy more difficult.
Longer industrial disputes – due to less involvement of centralized tribunals, which could result in resolution, taking longer.
Reduced union influence – which could lead to increased vulnerability of workers due to less representation.
Similarities of centralised and decentralised
Both deal with establishing terms and conditions of employment
Both use awards as minimum terms and conditions of employment
Both governed by fair work commission
Both must meet 10 national employment standards
Both have conflict resolution methods
Both accept the role of the trade union