Current Labour Trends in the UK - Case Study Example

?Organizational Effectiveness Amid the Labour Crisis Forecasts of the decline in labour supply seems to be mostly attributed to the entry of the baby-boom workers and the over qualification of younger workers especially those fresh from college (Cappelli, 2008). The motion, however true to a certain degree, was disputed by others who viewed such event from a different perspective. In this time when the economy is at an abysmal stage, people give less regard to preferences; occupation becomes a higher priority over specifications. Professor Peter Cappelli further argued that the problem arises because of the lack of competency to manage the welfare of employees. On the other hand, Blackler and Shimmin (1984) anticipated that the demands for cost savings and improved efficiency will raise many issues of conflict within the organization based on certain events that has been affecting the UK economy. The means to organizational effectiveness were proposed by management theories that were believed to have provided solutions to dilemmas faced by businesses in the past. “New and theoretical knowledge often becomes part of the repertoire of the science of organisational behaviour, functioning as technologies of regulation which are used to control and discipline employees” (Thompson and McHugh, 2002, p. 297) In addition, these were aimed at discovering the patters to employee behaviour, and the forces that define employee work morale. The scientific management theory concentrated decision making in the hands of the employers, while employees were regarded as no more than "manpower—the energy or force required to propel the organizational machine” (Morgan, 1986, p.29). Alternatively, the human relations movement was able to identify other key aspects to employee motivation, and extended the role of the manager. Many changes have occurred since the Industrial Revolution, and while monetary benefits are still the primary objectives in seeking for employment, some tendencies are no longer observed. The assumed patterns of behaviour by employees relevant to their personal and financial interest in the company is hard to prove these days. Current Labour Trends Developing countries are not the only ones to suffer the blows of recession. The United Kingdom, despite favourable performance in the stock market, is also faced with problems associated with the rise in costs of goods and services. The UK per capita income has declined tremendously owing to the trends in the labour market—to include unemployment, underemployment and part-time services. According to the Office for National Statistics (ONS), the unemployment rate increased to 8.1% in 2011, and jobless rate for 16 to 24 year olds totalled to 991,000 in the first quarter (BBC, 2011). Result of the survey by the EEF, a manufacturers’ organization in the UK, showed that the manufacturing sector, which is among the highest provider of jobs, averaged 2.2% in settlements for laid off employees. As a result, the number of people claiming jobseeker’s allowance rose by 19,600 in May, which was twice as expected (Peacock, 2011). The rationale behind the decisions of many companies in the United Kingdom to terminate services of a large portion of their workforce has been defined by economic professionals. The firms are inclined to regulate their internal costs to compensate for the drop in revenues. The government was first to take the move, “with the vocal support of the bankers who caused the recession, by deliberately creating unemployment with public sector cuts”, secretary general of the GMB union, Paul Kenny, said (as cited from Peacock, 2011). Similarly, manufacturers worry about the ever increasing cost of production, and tried to reduce allotment for salaries by retrenchment and insisting overtime on those not removed from the payroll. Others chose to outsource their operations, and resulted in reduced domestic employment. Underemployment is a different issue. Because there is not enough full-time jobs available, underemployed workers were compelled to work part-time (Peacock, 2011). However, this should not be blamed on the aftermath of economic volatility, but rather on educational circumstances and skills by employees. Tyler (2011) reports that “three out of four employers say they can’t find people with the right skills to fill the places they do have available”. Further, students who have finished college successfully usually seek for higher education and therefore, put off any plan to apply for work. The Labour Union: Management versus Employees History unfolds that unions materialized in response to the unfair practices by some industries during the old days. As an intermediary to both parties, the government enacted regulations, thus the birth of labour laws. These outline the position of the union members against the employers and vice versa, as well as the system to be observed when events affecting either party arise. However, some were not made in equal favour or by misconstrued demands and resulted to the plummeting numbers of union members. Moreover, the demand for labour decreased, and the growing structural unemployment created by plant relocations caused the decline of support for militant actions among union membership (Morgan, 1986). Consequently, “it has opened the way for management to more or less dictate the terms of labour-management negotiations and to obtain a reversal in basic conditions of employment that in the heyday of unionism would have been completely unthinkable” (Ibid. p. 281) The fact that labour and business do not hold healthy relationship with each other is not at all appalling, taking into consideration their conflicting priorities. Business exists for profit and everything that contributes to it. Wages and benefits do not form part of it thus holds little importance to the former. In an employer’s perspective, it is but justifiable to limit the support granted to trade unions. With their efforts focused not only on core competencies but also on challenges posed by competitors, businesses hardly find time to attend to the increasing demands of their employees. Most corporations voted in favour of anti-labour legislations and the “right to work laws”. This misleads unions into thinking that their welfare is put in limbo and fair treatment is taken for granted. One motion of the labour, though still not validated, is that the decrease in their numbers is “due to the fact the private employers retaliate against workers who are trying to form unions” (Stewart, 2010). With the corporations being in this position against labour unions, support for the latter is now associated with anxiety over termination and unemployment. In addition, employers cannot afford the increase in wages and benefits asked for by unions due to market and competition. They have to fund studies and improvements that will make them as competitive as the rest of the world. They instead hire employees that are up to the challenge and can contribute more for the company. Globalization is also at a fast pace. Investment in foreign lands, not to mention outsourcing that employed workforce from outside the country, saves business groups the trouble of having to deal with trade unions. As a matter of fact, many UK companies nowadays are doing business with countries like India, Philippines and Canada. Labourers in manufacturing firms used to occupy the largest fraction of union members. Unfortunately, with the advent of technology, labour force was replaced by machines and more companies are considering that a better option. Depression in the economy also proliferated unemployment rate. From the 1950’s until recently several companies suffered from the blows of economic crises that not only did not result in loss of revenues but also of employees. The relationship of the management and trade union described above substantiate the fact that the two are separate in many aspects. Their interests, for one, are on some occasions contradictory to each other, and lead to unrest on the part of the workers. The mere presence of trade unions already indicate the incapacity, or rather refusal of some companies to address issues of their employees. Many trade unions still exist today and to whom employees turn to when they feel that their rights are violated. Their disagreements also suggest that employees will not get satisfied at fair compensation and security of tenure alone, and that managers on the other hand, are not prone to making decisions that will not benefit the company. Management Theories According to the late Peter Drucker, business enterprises do not run by themselves, and cannot continue without good management (as cited from Witzel, 2009). The term ‘managers’ have been used since the time of our forefathers, and used to refer to owners of the land. To become a manager involves reaching the goals of the business and dealing with people. In this case, two interests are subject to managerial discretion—that of the company and of the employees. Before the Industrial Revolution, however, employees were regarded as mere assets of the business. Close to the category of slaves, they are believed to be under absolute power by the managers, and monetary benefits alone can stimulate their performance. Over time, perceptions toward employees changed for the better, and managers started to consider employee needs and sentiments. Organization theory introduced the idea that employees are “people with complex needs that must be satisfied if they are to lead full and healthy lives and to perform effectively in the workplace” (Morgan, 1986, p.37). Several organization theories were introduced during the early 1900s. As modernization took its course, developments in terms of management become evident. Machines increased production by tenfold, and managers were given time to address employee concerns that fortified their work morale. As more of those theories came into the picture, one undermining the other, many became inclined to believe in the significance of management in the business setting. Nevertheless, in this present time, issues are more complex, and it seems that neither Taylor’s scientific management nor the Human Relations Movement’s needs theories are of any relevance to employers and managers in relation to organizational efficiency in the current UK labour crisis. Scientific Management The scientific management theory maintains that the real interests of managers and employees are one and the same; that “prosperity for the employer cannot exist through a long term of years unless it is accompanied by prosperity for the employee, and vice versa; and that is possible to give the workman what he most wants—high wages—and the employer what he wants—a low labour cost—or his manufactures” (as cited from Dewey and Sigler,1997). At first glance, the theory appeared conclusive. The contention that management and employees depend upon each other for growth is true to a certain degree; however they have separate interests. When the company is at an affluent condition, tendency is to expand the business and hire more workers to fill in the positions that will become available. Promotions will also be necessary to supplement managerial support. Still, the primary goals of the business is to increase profit and minimize cost, and the welfare of the employees only comes next. The unemployment rate in the United Kingdom is an obvious verification that the progress of a company does not always coincide with that of its employees. As mentioned earlier, to save on costs was top priority, and retrenchment of employees will not be given second thought if the interest of the company is at stake. Outsourcing could also be an indication of a growing business, yet has paralysed the local labour market. The Needs Management Theory The theory on human needs, as published by Abraham Maslow states that “people can be motivated by both economic and noneconomic incentives; that human needs are arranged in terms of lesser to greater potency (strength), and distinguished between lower order (basic survival) and higher order (psychological) needs” (as cited from Werner and DeSimone, 2009, p. 7). The human relations movement maintains that employees are motivated to work not just for pay but also for other factors that are not financially valuable. Compared to other theories, this got the least number of disapproval; but when the present economic situation in the United Kingdom is concerned, the needs theory does not hold much significance. United Kingdom is amongst countries that are reputable for quality education system. Despite espousal of a monarchical government, the rights to education are not constrained. But what concerns many economists is the fact that, the rate of white collar employment does not compare to the rate of college graduates. Statistics reveal an appalling figures related to underemployment. This is because many workers would rather settle with jobs they are overqualified with than not have a job at all. Apart from receiving wages lower than they would normally agree to, employment issues impede in their opportunity for career development. Apparently, this real scenario negates the view of the human relations movement of the implications of economic and noneconomic gains to employee motivation. It seems that, with the critical condition of the economy today, the labour market is likely to respond to basic necessities and accept offers that are far beyond their value. Managerial Roles and Leadership Henry Minztburg, author of The Successful Managers, defines ten managerial roles; all embracing interpersonal, social, and decisional aspects. They include figurehead, leader, liaison, monitor, disseminator, spokesperson, entrepreneur, disturbance handler, resource allocator and negotiator. A manager is someone whose job is to directly support the work efforts of others, and with responsibilities that are directly associated to organizational behaviour, and helps people achieve both high performance and job satisfaction (Schemerhorn, 1997). In this case, it is safe to assume the work of a manager is not limited to making certain that employees perform their duties in accordance with the company policies and standards. With all other roles taken into account, they are responsible for addressing employee concerns for remuneration, affiliation, and growth in ways that do not hamper in the objectives of the business. A manager is also a leader, and unless it incorporates the qualities of ethical leadership, it is also becomes ineffective in functions as a manager. Renowned author Stephen Covey (2007) suggests that there are four ingredients to a good leader: inspire trust, clarify purpose, align system, and unleashed talent. He expounds that fine leadership is a product of combined character and competence demonstrated towards the benefit of not just the organization but also the people; that, an open communication is a conduit to an objective best identified. Trust is the foundation of every relationship (Matthews, 1990) ; and should a leader be merited trust for the display of outstanding qualities, it is equally imperative that he extend the same to his subordinates and believe in what they can contribute to the pursuit of their goal. McClelland and Boyatzis found an empirical connection between “success in managerial positions and a moderately high need for power, high self-control, and a low need for affiliation manifest in a warm relationship with others and an ability to empathise with them” (as cited from McKenna, 2006, p. 96) Employee Motivation Most of us are inclined to believe that monetary benefits are the primary motivation of an employee to loyalty and productivity. But as basic compensations, bonus or commissions are powerful forces to boost work morale, so does human resources management. Employees work best when “motivated by the tasks they have to perform and that the process of motivation hinges on allowing people to achieve rewards that satisfy their personal needs” (Morgan, 1986, p.38). Assessments provided by leaders belonging to the executive positions in certain companies state that the three top reasons employees leave a company include poor supervision, less opportunity for growth, and pay issues (Clawson & Newburg, 2009). This is rather an indication that employees are less likely to stay in a company where their needs for career and personal development are not addressed. In order to establish long-term relationship with employees, it is imperative that the human resources department incorporate their best interest when setting goals for the organization. Workforce, much like the capital, is an essential ingredient to the conduct of a business, and must therefore be provided with a working environment that respects individuality, provides for success, and promotes fair treatment (Clawson & Newburg, 2009). Summary and Conclusion Of all company resources, the workforce is the most difficult to manage. This is attributable to the fact that human beings think and feel. Budget will not protest if it has exceeded the limit, products marketed will not cry out “exploitation” after being subjected to free taste or free samples, and machines will not strike back with continuous operation, but human resources will if not treated accordingly. Management theories were developed to advocate appropriate managerial performance, and while they have been proven effective during the earlier times, some no longer applies today. The United Kingdom has not escaped the fangs of recession, and the labour market was among the first to feel the pain. The rate of unemployment, underemployment, and part-time work has increased much, to the dismay of certain economists who expected far less. The issue was blamed on the government that sought to cut cost within the public sectors, the manufacturing industries that outsourced production, and limited jobs that forced professionals to accept part-time employment. The scientific management theory was criticized for its tendency to leave decision making in the hands of the managers, and the view that employees are driven to work by monetary remuneration. The presence of trade unions is an implication that employees should also take part in the decision making process, more so when it concerns the welfare of employees. On the other hand, for the purpose of reducing operating costs, companies decided to lay off workers, and resulted in high unemployment rate in the United Kingdom. The needs theory had the same issue—it does not apply to the current dilemma faced by employees. Employees are willing to get less than their worth, in order not to get included in the unemployment list, thus educational background lost its weight. 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