Employee Relations Flashcards
Employee relations - define
Focus on collective employment relationships - interaction of organisation to staff as group rather than individually.
Focus on way that employment relationship is regulated within org.
Employee relations continuum
Total employer control to total employee control:
- Employer makes all decisions
- Employer makes decisions, but consults
- Employer involves staff in decision-making
- Employer and employees co-determine issues
- Employees make all decisions
Decline of trade union membership
- UK trend: younger workers are not joining
- Reached peak in 1979
- 2015: 25% of working pop
Why is there decline in trade union influence?
- Trade union leaders blame government between 1979-97: unfavourable legislation and gov not backing down on campaigns (reduced power)
- Industrial restructuring
- Ppl becoming less interest in unions (believe there’s no gain)
Criticism on trade union’s perspective
- Little legislation introduced that directly affect union membership
- Union-gov battles occurred mostly in public sector, which still keeps healthy membership
- Ignores the decline thanks to employee relations in industrialisation during 80s and 90s
- Blair gov (post-1997) introduced measures to enhance trade union position, but membership still declined
Impact of industrial restructuring
- Types of workplaces supported by unions are declining, new workplaces are not traditionally unionised
- Industries where union membership is a norm are replaced by service sector
- Size of workplace declined, lessens propensity of joining unions (small workplaces are more personal, higher trust and unified culture)
Criticism of industrial restructuring as a major reason
Metcalf (2005): only small portion of total loss of members in past 30 years is due to industrial restructuring, union density in manufacturing was low in first place, public sector jobs grew between 1997 and 2010
Studies that show how ppl are becoming less interested in unions
- Metcalf (2005): union wage premium, additional amount earned by union members vs non-members - 80s=10%, 2004=5%, now=3%
- Bryson (2007): ppl lost faith in unions making difference, 66% in non-union workplaces believe they make no difference, 14% say unions make matters worse, 40% in unionised workplaces say makes no positive impact
Why are ppl losing interest?
- increased idividualism in society
- tighter labour markets
- More effective HRM policies and practices
Criticisms of third explanation (ppl feeling that it makes no difference)
- Possible reversal of trends (in past unions decayed and recovered later)
- Kelly (1998): union membership declined in 20s and early 30s, but recovered afterwards - workers put up with so much exploitation/domination before uniting to fight back
Consequences of declined union membership
- TandC cannot be determined through collective bargaining
Contemporary trade union issues
- Trade Union Act 2016: may be restrictive for TUs
- Trade union leaders are prepared to break the law, which would lead to sequestration of union assets held in UK
- Rise of leverage strategies in place of traditional industrial action
Trade Unions Act (new trade union legislation through parliament)
- When trade union ballots for industrial action, this is legal if there is at least 50% turnout
- Essential public services - at least 40% of members have to vote in favour of action for it to be lawful
- Measures for striking workers who intimidate colleagues who don’t join - intimidatory picketing is criminal and civil offence, named union official has to be present in picket to liaise with the police, code of practice on picketing obliges unions to supervise
- Law of recruitment agencies changed to permit supply of agency workers to an org to cover work carried by employees who are on strike
- Cooling-off period: must occur between announcement of ballot…
Darlington and Dobson (2015) - TUA
Reviewed 158 strike ballots, only 85 cases was a 50% turnout achieved
Out of 90 ballots in public sector, only 55 were lawful
Half of all strikes and 40% of those organised by public sector in ‘essential services’ would not be possible to do lawfully
Leverage campaigns have 2 principle elements:
- Works to break reputations of employer: among (potential) customers, reputation as employer, in financial markets, reputation among partners in supply chain
- Strengthen union while weakening employer: demonstrations, lobbying, media campaigns and stunts that build support for union among organisational stakeholders, opinion-formers, political decision-makers and wider community while weakening support of employer
DBIS, 2015 - is the TUA affecting TUs?
65% of strikes in public services over 5 years would not have reached 50% and 40% balloting thresholds that the new Act will impose
Implications for HRM
- Power has shifted towards mgmt, high level of unemployment and low levels of employment security reduce ability and willingness of employees to resist
- HR managers were constrained in how they approached the people-related aspects of their activities. Trade union decline gave them opportunity to control and shape approaches that help organisations
- HR strategies can be developed without resistance from trade unions
- Employers also take opportunity to employ flexibly (part-time, outsourcing non-core activities)
Disadvantages for HR managers (contemporary trade union issues)
- New methods of relating to workers have to be established to replace union consultation/negotiation. Unions provided means for ‘upward communication’, which means that new and costly mechanisms have to be established for managers to understand how staff responds to decisions
- Helpful to have single representative body that speaks for whole workforce, negotiations may be tough but once agreement is reached it is approved by everyone. With no unions, managers have to talk to representatives elected by staff, negotiate individually or introduce changes without communication
Benefits of employee involvement
Sustained success, objectives are efficient/effective if employees have a say in decision making, especially if it affects their own areas of work
3 reasons for employee involvement
- managers don’t always know best, decisions are enhanced if they listen to constructive criticism
- allows managers to tap in to ideas and suggestions of staff (best ideas originate from lower hierarchy, closer to operations and customers)
- employees like involvement, appreciate being listened/considered, positive satisfaction
Employee involvement comes in many extents/forms…
Formal, informal, direct, indirect, one-off, sustained over time, central to core business relatively peripheral
Information sharing
Extent to which disclosure of info by managers can be regarded as employee involvement (revise)
Two-way communication
Formal exercise considered employee involvement - staff asked to respond to new decisions (opinions, suggestions, point out flaws)…if staff views are give serious consideration, influence is gained
Methods of info sharing
- team briefing
- quality circles
- news letters
- attitude surveys
- suggestion schemes
Consultation
Next step to employee involvement, employees asked directly (or through representatives) to express views which mgmt take account when making decisions
Employee cynicism
Mgmt not perceived as genuinely interested to hear views or taking them on board. Pseudo-consultation can harm more than no consultation
EU law on consultation
Employers have to consult formally with representatives about areas of employment practice to reach an agreement. No obligation to conclude on formal deal, but an attempt must be made in good faith
- redundancy
- transfers or undertakings
- health and safety
- pensions
- workplace agreements
- European works councils
- the information and consultation regulations
Co-determination - trends
Thanks to the increase in team-working, de-layering and reduced number of managers/levels in hierarchy, there is higher degree of informal co-determination at an individual team level
Co-determination - results
Employees and team leaders are empowered to take decisions that was once manager’s problem, manager still determines actions, but there is greater flexibility about how/when it gets done
Co-determination - 2 mechanisms
- Legal empowerment of works councils or enterprise committees
- Reserving places on executive boards for worker directors
Example: Germany
Both mechanisms are used in Germany, managers cannot impose decisions to changing workplace rules, disciplinary procedures, working hours, holidays, bonuses, overtime arrangement, health and safety, training…without agreeing with works council
- Changes: first consult works council and take objections and suggestions into account
- Law requires managers to share financial and planning info with works council that goes beyond employment sphere
- Seats reserved on supervisory boards for workforce representatives
Psychological contracts - origins
Coined by American psychologist Chris Argyris (1950s) to apply in employment relationship
Uses of PC within employment relationship
Means of:
- analysing changes in nature of employment relationship over time
- Providing most useful means for managers to think about way they manage ppl in practice
Idea behind psychological contracts
Managing people’s expectations effectively
Legal contract vs psychological contract
- Legal contract: expectations and obligations each side has toward the other in terms of pay and T&C of employment
- Psychological: expectation and obligations that two sides have of one another and their relationship above and beyond what is formally agreed/written in legal contract
Edgar Schein (1960s) - PC
Set of unvoiced expectations and obligations that employees have of employers and viceversa
Denise Rousseau (1989) - PC
Idea of reciprocity, we all have in our minds an understanding of the deal we struck with our employers, there is a possibility that either side breaches the psychological contract
When is psychological contract breached?
When employer is perceived as having reneged on deal or broken promises, inaction of mgmt also leads to perception of breach over time as action does
Different ‘levels’ of breach to the PC
- Minor breaches lead to minor temporary reductions in morale and have no long-term consequences in employment relationship
- series of minor breaches in short time (or single major) violates employment relationship by provoking damaging emotional reactions on part of employees, bigger breaches leads to stronger sense of violation
Consequences of PC breaches
- reduced trust
- feelings of inequality
- greater cynicism
- reduced psychological well-being/depression
- dissatisfaction with job/employer/manager
- Reduced effort/commitment
- Increased staff turnover
- Damaged reputation in labour market
- Increased absence
- Reduced willingness to work beyond contract
- Employees trying to ‘get even’ - sabotage
Criticism of PC
Questioning the extent to which complex/vague concept can be managed directly, as it consists of employee expectations which vary among different people and over time
why care about PC?
- possible to achieve positive PC
- reduce perception of breach and emotional impact generated by breaches
- unpredictable/volatile business environment & org change increases frequency of possible breaches and danger of violation
- Knowing about concept and making sure that idea is embedded in mgmt thinking about employment relationship makes reducing breaches easier
- Organisations that take care of PC consistently outperform those who don’t
Conway and Briner (2005) - approaches to managing PC
- lower expectations: don’t make promises you can’t keep
- Make explicit promises: avoid implicit promises that may be misunderstood
- Involve employees in mgmt of change
- Communicate clearly and repeatedly the employer’s view of the PC
- Negotiate changes i PC rather than imposing
- Monitor workforce opinion for early signs of breach
- Redress breaches with compensation and better equitable treatment in future
Adams (2007) - ways of strengthening PC and maintaining positive PC
- reward employees when surpassing contract
- Ensure equity of treatment
- maximise extent of control employees enjoy over work
- Maximise individual developmental opportunities
- Design jobs to maximise extent of challenge and stimulation
- Maximise extent of employee involvement, info sharing and communication
- Embrace work-life balance initiatives
