Industrial Relation - Essay Example

?Industrial Relation Table of Contents Industrial Relation Table of Contents 2 Introduction 3 Key Internal and External Influences Influencing Recruitment Policies 4 IR Issues and Challenges 5 Impact of Change in Industrial Relations 6 Critical Evaluation of the Roles of Management and the Union 10 Conclusion 11 References 12 Bibliography 13 Introduction The era of globalization has led to rise in the levels of competition in which organizations are breaching geo political boundaries to reach out to new markets. The extent of competition makes it very important to ensure organizational efficiency that would generate competitive advantage for an organization. In this regard it is very important that the company maintains a formidable employee base. The present report would analyze the Industrial Relations and labor polices of Qantas and the main issues involved in the restructuring of the organization from an HR point of view. Qantas is an Australian airline company that offers cargo and passenger services on domestic and international sectors. The company was founded in the year 1920 and since then has grown by leaps and bounds to emerge as one of the leading brands of the world. The airline has a fleet of a large number of aircrafts including the Airbus A380 super jumbo jet. The airline serves across all the major international destinations with hubs located across Australia (Qantas, n.d.). Figure 1: Organizational Structure at Qantas (Source: The Official Board, 2011) The figure above shows the organizational structure of Qantas. The company is led by the CEO Alan Joyce and supervised by the chairman and the board of Directors. The organization has a relatively flat hierarchy that enables smooth flow of communication across the organization and enables faster and efficient decision making leading to organizational efficiency. Key Internal and External Influences Influencing Recruitment Policies Recruitment and related human resource practices are largely influenced by internal as well as external factors. The internal factors affecting recruitment in Qantas include the recruitment polices of the company, its Human resource staffing plans, cost incurred in hiring an employee, the organizational culture, compensation packages, growth rate of a company, future plans and finally the size of operations of the organization (Geet & Deshpande, 2008, p.5.4). The internal factors assume considerable importance not only in recruitment policies but also in retaining the employees. Internal factors affecting employee retention include job satisfaction, effective compensation and reward system, benefits and a proper work culture. These aspects lead to job satisfaction and employee motivation thereby leading to organizational efficiency (Hennig-Thurau & Hansen, 2000, p.161). External factors affecting recruitment and employee retention involve governmental regulations and legislations including labor laws. In addition to this factor other important external factors include socio economic climate of a region, the job market and the nature of talent available in an area, aspect of demand and supply of skilled labor force, rate of unemployment in the society and finally the perceived image of the job seekers in the market (Geet & Deshpande, 2008, p.5.4). All these factors hold immense importance for ensuring long term organizational efficiency of an organization. In case of Qantas the company management is facing considerable internal as well as external issues. As per the extracts from the interview with the company’s CEO the firm is faced with a high competition and turbulence in the internal environment such as rising oil cots, advent of low cost carriers and the stiff competition on international routes by state sponsored carriers like Emirates. These external aspects in turn have affected internal factors as business profitability has declined. The summation of these effects has led to growing tensions between workers and the management with regards to human resource policies. IR Issues and Challenges Australia has a policy of generating equal opportunities for every employee. In other words it strives towards fair employment policies that lead to creation of equal opportunities and to ensure that workers and employees are not exploited. However the laws also allow both contractual and full time employment of individuals. As per the laws full time employees are generally required to work about 38 hours a week and also enjoy various privileges like holidays, leaves as well as bonus and other monetary benefits. Contractual employees are required to put in less work hours and are not entitled to same benefits. The company can without reason terminate the contact or chose to not renew the contract with the employee after the lapse of the contract period. These employees do not have the same benefits as those of full time employees (Fairwork Ombudsman, 2010). This aspect has sparked off a debate as employers are essentially trying to employ more contractual workers while employees stress for being employed as a full time employee. The same issue has been highlighted in the case of Qantas Airlines case in which the company management proposes to increase the percentage of contractual workers as a part of its corporate restructuring policy. Employees have largely opposed this move and have resorted to various means to register their protest against the decision of the management regarding the issue. According to a report published by the International Labor Organization, the aspect of increased flexibility of organizations by employing a greater percentage of contractual employees has given rise to a number of issues. The most prominent among them includes the aspect of job security among the employees. Contractual employment on one hand provides greater flexibility to business organizations as they can easily terminate the contacts at short notice unlike the case with full time employees. Moreover the advent of the contractual employment has also given greater instability to pay packages as contractual workers do not have a fixed salary level. This in turn has given rise to a feeling among employees that has led to loss of job satisfaction and motivation (Dasgupta, 2011, p.1). The need of the hour for Qantas airlines in this regard is to convince the employees by crafting strategies that would tend to reduce the fear of job loss among the employees. A free and transparent appraisal system can largely help ensure that even contractual employees can have a job security if they can deliver good performance. Boosting their morals would on one hand increase the motivation and reduce their uncertainties and would also provide greater flexibilities to the organization. Impact of Change in Industrial Relations The labor reform process also kick started in Australia after the 1980’s and marked certain significant changes in the labor policies. The first one involved decentralization of the structures of wage determination after the Accord policy that led to co-operation of the movement of trade unions. The second significant aspect was the slowing down of the bargaining system and the system of award becoming more intact. The changes in the industrial policy have led to greater transparency between the management and the unions that have considerably reduced the number of strikes in particular. The government’s policy of creating a system for equal opportunity for all employees and categorization of labor into categories like full time, casual and contractual with statutory legal obligations and definitions including benefits, compensation, work hours and nature of contact and termination have led to creation of greater transparency in organizations. According to the Accord policies the workers are required to exercise greater restraint with regards to seeking greater wage increments that are outside the realm of those provided by the national policies. In return the policies propose that the government would guarantee to the workers that the real wages would be maintained and the workers would increasingly get the benefits of social wage increments that would include improvements in emoluments regarding health care and other employee benefits. This has led to a growing confidence among the workers that they would not suffer from exploitation in the hands of the employees. This aspect has considerably reduced the number of strikes and other violent means of labor conflicts leading to a general improvement in the labor market in the nation (Wooden & Sloan, n.d., p.176, 177). The case of Qantas also shows a high degree of labor conflict between the management and the workers. Engineers have resorted to strikes demanding a wage increment of 5 percent. In this case the management should come up with a plan that would seek to provide greater benefits. Its corporate restructuring plans should be designed in a manner that employees do not feel de-motivated about their jobs. Adherence to the Accord policy guidelines should be done by both management and the workers so that undue strikes that cause harm to the company are stopped and the organization excels in its business. In addition to labor policies Qantas also faces organizational issues that include the corporate restructuring policy of the company that has attracted severe criticisms. As per the interview with the CEO of the company the organization is seeking a change management to cope up with the demands of the turbulent and competitive business environment. However as pointed out by the CEO individuals are resisting the change. According to a research report a change management must essentially include the aspects of finality, guidance, efficiency, availability, neutrality, reduction of conflicts and above all fairness in the policies (Getman, 1979, p.916). In case of Qantas the management has failed to maintain transparency in policies and has also not taken the employees into confidence. The company in a better manner could have communicated the issue in a better manner with the employees that would have made the employees realize the benefits of change. Absence of fairness and transparency has led to confusions among the employees and workers that have led to a speculative mindset of these individuals leading to conflicts within the organization. The management must realize that keeping a fairness and transparency through effective internal communication can help solve these issues amicable and would also instill confidence among the employees and workers. Corporate restructuring has a profound effect on the aspect of employee relationships. This is mainly because of the premise that employees are reluctant to change as they feel that the change could lead to layoffs that would affect their job security (Cappelli, 2008, p.31-32). The same issue was observed at Qantas airways with employees going all out in protesting against the company’s move to create overseas jobs rather than generating jobs in the nation. In this regard the aspect of outsourcing has assumed importance with firms trying to relocate some of their business processes to low cost nations. Qantas claims that it does not believe in outsourcing however the creation of new ventures and tie ups overseas has given rise to large scale apprehensions among the employees with regards to job security and continuity. This has also resulted in dip in satisfaction levels of the employees that in turn is affecting the business prospects of the company. The role of management in this regard is also questionable as they did not undertake proper organizational communication that has led to generation of speculations among the workers leading to critical issues for the organization. Figure 2: Employment Relationship (Source: Edwards, n.d., p.9) The figure above shows the relationship between the organization, government and the employees in the broad context of labor relations and employee welfare. Employee unions that often serve as the face of the workers before the management assume considerable importance in the maintenance of relationships. These employee unions largely take up the role of the representatives of the employees before the management. In case of Qantas it is observed that the top management failed to convince and communicate their intentions and objectives of the restructuring plan. This led to a conflict involving strikes and other protest measures that has generated considerable amounts of conflicts within the management. The level of internal communication was so bad that was evident from the fact that the CEO in an interview stated certain critical aspects if communicated directly to the employees could have a completely different effect. Better organizational communication explaining the real objectives and the current issues would not have led to violent protests by the worker that has ultimately hampered the operational and organizational ability of the company. In case of Qantas the management could have adopted the Unitarist Social Partnership model that would have involved HR personnel directly communicating the course of corporate restructuring with the employees and the workers. In addition to this system would have required greater managerial roles and consultations with the employees in the process of framing the strategy of corporate restructuring strategy. Involvement of employees would have generated greater confidence and would have created greater trust and confidence among the employees. Using this strategy would also have generated a slot of positive opinions and would have included issues that are being faced at the grassroots of the company. This would have made the process of corporate restructuring more practical and would also have met little resistance thus helping in achievement of truly making Qantas a world class brand in the market (Edwards, n.d., p.32). Critical Evaluation of the Roles of Management and the Union The development of human resource management has largely involved a change in the pattern of relationship and roles of the unions and the management over the years since the industrial revolution in Australia. The unions are now expected to act in a more responsible manner while the management is also expected to follow a set of ethical practices in dealing with the labors and workers. The Workplace Regulations Act 1996 is a milestone in this regard as the legislation clearly defines the roles and responsibilities of the management and the unions. The act lays down minimum wages and classification of different categories of employment that is expected to be followed by every organization operating in the nation. The creation of bargaining agent has been another step towards redefining the relationship between the management and the trade unions (Singh & Kumar, 2011, p.55). In case of Qantas the management has adopted a unilateral approach and has single handedly created the restructuring policy without seeking involvement of the employees or an effective communication between the employees and the management. This has disturbed the delicate balance in the relationship between the two crucial stakeholders namely the management and the unions leading to conflicts. Qantas could have adopted the best practice formula of using the prevailing best practices in the globe regarding corporate restructuring to arrive a much better scenario that would have involved better understanding and relationship among the employees and the management and reducing the conflicts (Hunt, 1995, p.83). Conclusion The analysis of the study reveals considerable issues in the organization with regards to the aspect of organizational communication in the context of industrial relations. The analysis reveals startling errors on the part of the company’s top management with regards to management of relationships between the employees and the management. The need of the hour for the company is to engage in a much wider comprehensive plan of action that would essentially include the employees in the process of strategy formulation. Incorporating best practices would have also led to greater effectiveness of the strategies while generating greater motivation for the employees. These steps are very crucial because the ultimate success of any strategy is largely dependent on the human resource base of the organization that are invariably the most valuable assets for any company., Adoption of these steps by the Qantas management would help make the brand stronger and generate sustainable competitive advantage in the long run. References Cappelli, P. (2008). Employment relationships: new models of white-collar work. Cambridge University Press. Dasgupta, S. (2011). Employment Security: Conceptual and Statistical Issues. [Pdf]. Available at: http://ilo-mirror.library.cornell.edu/public/english/protection/ses/download/docs/employ.pdf. [Accessed on September 23, 2011]. International Labor Organization, 2001. Edwards, P. (No date). The Employment Relationship and the Field Of Industrial Relations. [Pdf]. Available at: http://www.blackwellpublishing.com/content/BPL_Images/Content_store/Sample_chapter/9780631222576/Edwards_C01.pdf. [Accessed on September 23, 2011]. Fairwork Ombudsman. (2010). Conditions of Employment. [Online]. Available at: http://www.fairwork.gov.au/employment/conditions-of-employment/pages/the-difference-between-full-time-part-time-and-casual.aspx. [Accessed on September 23, 2011]. Geet, S.D. & Deshpande, A.A. (2008). Elements of Human Resource Management. Nirali Prakashan. Getman, J.G. (1979). Labor Arbitration and Dispute Resolution. [Online]. Available at: http://www.jstor.org/pss/795823. [Accessed on September 24, 2011]. The Yale Law Journal, Vol. 88, No. 5, Apr., 1979. Hennig-Thurau, T. & Hansen, U. (2000). Relationship marketing: gaining competitive advantage through customer satisfaction and customer retention. Springer. Hunt, I. (1995). The new industrial relations in Australia. Federation Press. Singh, P.N. & Kumar, N. (2011). Employee Relations Management. Pearson Education India. The Official Board. (2011). Qantas Airways. [Online]. Available at: http://www.theofficialboard.com/org-chart/qantas-airways. [Accessed on September 23, 2011]. Qantas. (No date). History. [Online]. Available at: http://www.qantas.com.au/travel/airlines/history/global/en. [Accessed on September 23, 2011]. Wooden, M & Sloan, J. (No date). Industrial Relations Reform and Labour Market Outcomes: A Comparison of Australia, New Zealand and the United Kingdom. [Pdf]. Available at: http://homepage.ntu.edu.tw/~lbh/ref/new2/30.pdf. [Accessed on September 23, 2011]. Bibliography Business & Legal Reports, Inc. (2006). Managing an HR Department of One. Business & Legal Reports, Inc. Tayeb, M. H. (2005). International human resource management: a multinational company perspective. Oxford University Press Word, J. (2009). Business Network Transformation: Strategies to Reconfigure Your Business Relationships for Competitive Advantage. John Wiley and Sons. Read More