The Collective Employment Relationship - Case Study Example

How should the collective employment relationship be managed in the context of the contemporary business environment? A great change is occurring in the United Kingdom for collective and individual representation at work. A silent workplace revolution is passing through. Trade unionism has changed or decreased over the years. The sectors of industry like coal, textiles, iron and steel and shipbuilding previously had the trade unions. Now that these have decreased, the significance of the unions has diminished (Taylor, ESRC). Individualisation of wages has reduced the bargaining capacity by unions. Employers now have a greater willingness to tolerate unions. However employers cannot exercise “unquestioned and unilateral power on the employees” (Taylor, ESRC). Employment relations are being influenced by a change in the employment laws. The nature of work is changing and this also naturally produces a change in employment relations. Restructuring of work and redesign of jobs are other reasons for the change. Part-time, temporary and contract work which are more commonly seen in present times influence employment relations. This paper is discussing the manner in which employment relations should be maintained in the changing scenario. An FSTE organisation has been selected for the discussion. Unilever an FSTE 100 company Unilever is the FSTE 100 organisation that is being discussed in this paper. Through the strengths of the research and development division, this company established good scientific capabilities with excellent facilities for innovative changes for improving the competitive advantage and the future of this world leader (Unilever 2008). The strength of the culture of the R&D in Unilever is focused on the customer, product and marketplace. Its products range through spray technology deodorants, ice-cream (product processing), hair technology, structured oils and emulsions and tea. Its ambition and vision incorporate science of an exceptional quality with a speedy delivery of breakthroughs, focusing on huge wins and showing up as a world class organisation (Unilever 2008). Growth of the company The prioritised portfolio includes the science and technology, big wins and consumer needs and trends. The highlights in 2009 showed an workplace companies. Expenditure for advertising and promotion was increased by 80bps. Volume efficiencies and savings of 1.4 billion Euros were present. Cash flow from operational activities increased by 1.4billion Euros with obvious improvement in working capital. The contribution to pension funds increased by 0.5 billion Euros (Unilever, 2009). Put simply, Unilever has had a strong growth momentum in 2009 even though competition is bursting at the seams. Paul Polman who is the CEO happily expressed satisfaction at the envious progress Unilever has made. “Our brands are stronger due to better quality innovation and a step-change in advertising and promotional expenditure” (Unilever 2009). Unilever strengthened its position as a world leader in the emerging markets. A stronger performance culture is being developed. Year 2010 will be faced with enterprising integrity, volume growth and sustainable progress in strong cash flow. HR Management in Unilever Fergus Balfour, the Chief Operating officer of Unilever FoodSolutions, has a lot to say about the HR management. He believes it is the leader’s responsibility to view people management strategies critically, instead of mere delegation. The human capital or resources constitute the greatest of assets of the company (Yaroshevsky-Glanville 2004). The person who maintains and balances the employee-administration relationship is the human resources manager who is a competent person. The HR manager uses his intelligence and efficiency to convert strategy into action (Yaroshevsky-Glanville 2004). This describes Balfour whose 34 years in Unilever has taught him various practical perspectives of HR management. Where he first looked upon it as perfunctory, he now considers that HRM in Unilever has progressed. (HR Summit 2010, HRM Asia). The changes have occurred due to changes in business demands and in the corporate sector. The graduate recruitment scheme still exists but Unilever uses other techniques of outside recruitment to fill vacancies. Where previously salary and sometimes bonus constituted the payment schemes, now it is salary, bonus, stock options and other perks for the employees. Ranking of the employees Balfour stood as the leader-to-follow in all the endeavours with HRM. Ranking the employees was another strategy that caused resentment to some but they understood that it was necessary in the hierarchy. This example of Unilever was criticised by other corporate organisations but they understood the power of it soon (HR Summit 2010, HRM Asia). Balfour still thinks that Unilever has far to go yet. The leadership of people like Balfour increases employee contribution and commitment to the maximum. This is asserted by Sinclair ; the HR manager is responsible for the attraction and retention of candidates and employees (Sinclair 2005). “Employee participation, system quality, communication quality, and benefit importance” are the various effective benefit systems which influence the employee behaviour (Sinclair 2005). Leadership Good leadership provides ample support to the employees and guides them in moments of conflict. Employees would learn to analyse processes objectively and with flexibility. Coordination of their work and talent development is being encouraged (Michie and West 2004). The reputation of the organization is protected and the growth ensured. The only criterion for recruitment is competency of the candidate (Zhu 2005). Training and development of employees is a strategy which makes the employee more employable (HR Summit 2010, HRM Asia). Most employees would have decided to remain once they reach this stage; few leave for greener pastures. The employees, who leave early before reaching the stage of increased employability, are doing so because of the tremendous opportunities available and not because of their increased employability (HR Summit 2010, HRM Asia). Moreover Balfour expects employees to find their own ways to develop themselves too. Management back-up, business buy-in and leadership would increase perfection for Unilever’s human capital. More opinions on HR practices The views of other authors are being added to compare with Balfour’s views. Effective communication would convey the benefits of the packages to the employees. The quality of communication is based on accuracy of information, clarity and comprehensibility transmitted in a timely manner. Though research has confirmed the efficacy of many of the HR practices, they have not materialized into actual practice (Muchinsky 2004). Researchers have also provided their opinion as to why this could have happened (Shapiro Kirkman & Courtney 2007). The greatest disparity was seen in the HR recruitment and selection. Scientific evidence is ignored in favour of general knowledge (Rousseau 2006). Unitarist and pluralist views The unitarist view states that an organization behaves like one integrated and harmonious whole family. The staff shares a common purpose and acts with mutual cooperation. Loyalty is expected and trade unions have no place here. The pluralist organization has powerful subgroups which have differing objectives and loyalties. The management and trade unions become subgroups. The management will depend on persuasion and coordination rather than controlling. The trade unions assume the role of legitimate representatives. Management of the Employment Relationship Unilever brings its employees from all over the world to build new companies or offices. Recently it had to start a regional office in Singapore. The multi-cultural diversity is preached by Unilever and practised wholeheartedly (Howell 2009). Changes are usually provided leadership and bonds between the managers and employees develop fast. Unilever has employees of 34 nationalities. Together they work towards goal setting and achievement of goals. Diversity is described as “a deliberate policy” of Unilever. A large reorganisation of about 250 members from around the world and others locally made a strong presence of manpower in Singapore. Employee motivation Employee motivation is a major job of the HR manager as indicated by Steven Gross, the Vice-President HR of Unilever South East Asia and Australasia (Howell 2009). A researcher Takeuchi (2009) confirms this and speaks of the high performance working systems (HPWS) which help to change the working environment to one with high competitive advantage. The employees are the main group which stabilises the relationship between the practices of the HR management and the performance of the firm. Social mechanisms including environment or climate, social relationship and employee attitudes and behaviours affect the performance outcomes of the organisation (Takeuchi 2009). Strategic HRM is defined as” the pattern of planned resource deployments and activities intended to enable an organization to achieve its goals” (Wright and McMahan 1998 as cited in Takeuchi 2009 p. 4). Language as facilitator Language has been a facilitator that allows the acquisition and transmission of information by social interaction (Tange and Lauring 2009). International managers have at some time in their career faced the prospects of using a language not their own. The use of a single language, preferably English, for corporate use helps the manager to coordinate and control the international activities (Tange and Lauring 2009). Internal and external communication becomes easier. English is the language adopted at Unilever in UK and most of its offices all over the world. Compensations Unilever has attractive compensation programs which form one method of motivating the employees. The employees need to be kept happy and maximally motivated in their work environment through incentive plans and payment schemes (Howell 2009). Their importance must be impressed upon them through developmental and performance-based appraisals and flexible work assignments. Exhaustive skills training is also important (Sun et al 2007). Growth in the organization As the organization was growing, Unilever always made sure it had many employees who would be used for expanding the organization. Though there was worry as to how many would move to Singapore, the employees reacted positively and made a transition on a war footing (Howell 2009). It was the glorious employee-employer relationship which helped the seamless transition. Every employee was met and welcomed on arrival. Arrangement was made by Unilever and its relocation partners for the children of the employees to attend school in Singapore which had to accommodate many expatriate children (Howell 2009). Internal survey feedback produced a positive response (Howell 2009). The enthusiasm of the relocation staff had worked wonders with the employees. Talent development Talent development strategy is strong in Unilever (Howell 2009). The international experience is a key part of talent development strategy as the broader needs of the company is better understood. A global graduate programme called the Unilever’s Future Leaders Programme is a key strategic tool for attracting new blood. This graduate recruitment scheme helps the sourcing, attracting and developing of new employees (Howell 2009). Candidates from developing and emerging economies are given priority to receive a cross –border flow of talented youth. The assessment centre and line managers perform the recruitment. Organisational justice Cropanzano et al (2001 as cited in Wiili-Peltola et al 2007) has defined organisational justice as a “virtue allowing for mutual consideration and involving both relationships with others and outcomes that affect others’ physical, psychological and social welfare” (Wiili-Peltola et al 2007 p 320). Organisational justice is divided into two types: distributive and procedural. Distributive justice is the fairness of the outcomes received in a given transaction (Byrne and Cropanzano, 2001). Procedural justice is the fairness of the procedures which lead to the outcomes. Interactional justice is also known as relational justice and different from procedural justice (Wiili-Peltola et al 2007). It deals with the cognitive, affective and behavioural aspects towards the person immediately superior. Procedural justice involves behaviour towards the whole organisation. Discrimination has not been a problem so far in Unilever. Women are safe in the organisation. Ethics issues are possible but the HR manager’s sense of responsibility has hindered real issues. An issue solved The Khanewal factory in Pakistan where the Unilever company owned a Lipton/Brooke Bond tea factory which had only 22 Unilever employees (Employment relations, 2009). All the others were local casual employees who were paid according to the work they did. Union rights for the employees were denied by this “no work, no pay” system. The workers were denied the basic rights of employees. A negotiated settlement solved the problem. 200 additional permanent jobs were created. Job selection was based on seniority and priority according to the Khanewal Workers Action Committee (Employment relations, 2009). The labour contracting agencies were not true to their words and many a time, Unilever had to shell out lumps sums of money to the workers. Court cases were withdrawn and Unilever agreed to continue their operations in Khanewal. Managing perceived unfairness Perceived unfair management practice describes five integrative frames which indicate the problems areas: problems arising from the safe guarding of employees’ equal treatment, and well-being, absent professional respect, poor behavioural qualities and incompetence in administration and inadequate employee participation (Wiili-Peltola et al 2007). Employees, who are proud to be part of the organisation, are well-controlled in behaviour, have sufficient self-esteem and believe in a meaningful existence to guide their emotional and cognitive processes into reflecting the high quality of the organisation. Justice is multi-faceted and involved with cognitive and individual processing (Wiili-Peltola et al 2007). Unilever has no current organisational justice issues; experience has reduced the conflicts. Health issues of employees are attended to with the backing of the company. Fairness issues Fairness issues have been affecting corporate life since the 1990s (McFarlin and Sweeney 2001). The issues are understood through distributive, procedural and interactive justice. Perceived unfairness may start with the hiring process and go on to “decisions of unfairness in grievances, performance appraisals, promotions and reward allocations” (McFarlin and Sweeney 2001, p 67). Employee morale, commitment and job performance may be affected by the perceived unfairness. Retaliatory behaviours and theft too can be expected if the employee is unhappy. Researchers have found that employee relationships with supervisors could be affected alongside (Sashkin and Williams 1990 as cited in McFarlin and Sweeney 2001). Others have found that behaviour in work groups is disturbed. Multi-national corporations need to remember justice issues when planning international strategies. Hofstede’s cultural dimensions Hofstede speaks of four cultural dimensions which could affect organisational justice: individualism/collectivism, masculinity/femininity, power distance and uncertainty avoidance. Individualistic cultures where the people see themselves as individuals are evident of US and UK. Collectivistic cultures exist in Mexico and Japan where people believe in working in groups. Cultures which are masculinity-prone are those which believe in money power (McFarlin and Sweeney 2001). Femininity is ascribed to the cultures which believe in the people, quality of life and good relationships. Power distance describes the nation which believes in large distances between people in the form of class; some are destined to be in power while others are not. US is of low power distance where each person fears the concentration of power. Legislation is the means to iron out issues. Uncertainty avoidance if weak as in Denmark, the people accept that uncertainties can occur and they face them when they occur (McFarlin and Sweeney 2001). Organisational justice is well practised in Unilever. Employee Voice and employment partnerships Employee participation in assessments regarding their performance is essential. Performance appraisal is an ongoing process in organisations. Designing an appraisal tool, which is more acceptable to the employee, produces best results. This designing needs to be done at the behest of the employees with their participation (Thomas and Bretz 1994). The results of the appraisal would appear to be better accepted by them. Managers too would have less difficulty in transferring negative messages. The employees also would have less difficulty in accepting corrective action if taken. They would also attempt to get better ratings the next time. The understanding of the requirements of the organisation would be better. Unilever has employment partnerships. Employment partnerships are usually set up between government organisations and private ones to address social problems (Wallace 2009). Two or more organisations work together to achieve a goal which they could not alone. The sharing of information and knowledge would make the partnership strong. They share their best practices and identify policies and practice issues which they solve together. Partnerships are formed horizontally between similar organisations which then develop new policies and objectives using the skills and resources available (Wallace 2009). The partnership enables the organisations in the partnership to “have joint value creation, mutual capacity development, and collective engagement of decision makers” (Wallace 2009 p 197). Vertical partnerships also are possible. The horizontal partnerships are supported and facilitated by the vertical links. Networks allow the relationship to further improve. Cohesion of partnership companies streamlines their structures to reduce overlapping costs, duplication or administrative costs. Transparency is brought into the funding and operations of local and community development. The vertical links help in the influencing of government policies. Changes I would like to make as HR Director I would ensure that Unilever will continue to be well-prepared to spread its wings to newer regions. Providing more to the employees on the lines of the Shell company which believes in pampering its employees with benefit packages like a family tour twice a year is on my list of innovative changes. My employees would be allowed one tour per year and other fringe benefits like a 100% loan for purchasing houses. Their health insurance would be paid by the company. Drawing them close and providing opportunities for career growth and participation in decision-making at higher levels, I hope to prevent their attrition. Keeping the human capital satisfied, the competitive advantage would grow. The Research Department will be given maximum support for innovative changes. References: Byrne, Z.S. and Cropanzano, R. (2001) The History of Organisational Justice: The founders speak in Justice in the Workplace: Approaching Fairness in Human Resource Management (Ed.) Russell Cropanzano, Applied Psychology series. 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