Royal Mail Employee Relations - Essay Example

?Employee Relations Table of Contents Employee Relations Table of Contents 2 Introduction 3 Analysis of Organisation 5 Basic Organisational Structure 5 Industrial Relation Theory 6 Current Management Style in Royal Mail 6 Employee Relations in Royal Mail 8 Findings 10 Privatisation of Royal Mail 10 Job Cut in Royal Mail 11 Proposal for Improving Employee Relation in Royal Mail 12 Recommendations 13 Negotiation 19 Framework for Employee Relation in Royal Mail 20 References 22 Introduction Employee relations can be stated as the relationship of employees with the organisation and with fellow employees. There are two parties in the employment relationship: one is labour and the other is management. They need to work mutually and cooperate with each other. It includes the process of implementing, managing, developing and evaluating the relationship between employer and employee. It also includes the ongoing evaluation of performance of employees, managing it, ensuring that ‘laws and regulations’ are followed and also to solve the employees disputes (Society for Human Resource Management, 2011). Good employee relations denote peaceful, pleasant, abundant relation between labour and management. Sound relation regulates the production by minimising conflicts. It improves the worker’s strength by resolving their problems through negotiation and consultation. It improves the status of employees, evades any kind of disputes and thus, preserves ‘industrial democracy’. Employee relation is the virtual balance of negotiating influence between the employees and management. In every organisation, an efficient ER executive provides instruction about how a company can manage with the grievances, penalising process and legislative recognition process of the Employment Relations Act (1999). For managing the employee relation the managers must act in a reasonable and logical manner towards the employees and labour unions. It is vital for personnel authorities to ascertain standards of activities which are rational (Gennard & Judge, 2005). In this context, the study will evaluate the employee relations related challenges as faced by Royal Mail. Analysis of Organisation Royal Mail is a public limited company controlled by the government of the UK. Their annual turnover is more than ?8 billion and it has almost 200,000 employees. In the UK, Royal Mail operates under its well-known brands: Royal Mail; Post office and Parcel force Worldwide. Royal Mail has gone through a restructuring process to reduce costs, improve effectiveness to compete with other rivalries in the postal sector. It ensures delivery of sustained high quality services effectively (CSR Case Study Series, 2005). Basic Organisational Structure Royal Mail Group serves mails and parcels throughout the UK. It has almost 168,000 employees in the UK. It has 11,905 Post Offices and manages almost 400 million parcels per year. The network of Royal Mail includes almost 11,500 branches throughout the UK. Royal Mail Group has five non–Executive Directors and three Executive Directors who take all the managerial decisions for Royal Mail. The CMU (Communication Workers Union) is the labour union of Royal Mail which stands for non–managerial employees. The company follows the bureaucratic organisational structure. The flow of communication goes through different layers of management which causes slow decision making. With respect to employee relation, organisation can adopt unitary or pluralistic approach (Royal Mail Holdings plc, 2010). Industrial Relation Theory There are three theories of industrial employees’ relations namely unitary, pluralist and radical. Unitary: In unitary system, the organisation is a harmonious system. There is no trade union. Mangers and workers both share similar interest, purpose and objective. Pluralistic: In pluralism, there are two parties in the organisation namely trade unions and the management. Any conflict is dealt with collective bargaining, mutual agreement or negotiation between trade union and management. Marxist Perspective: This theory focuses on the basic distribution of interest between capital and labour. It is concerned with the structure and nature of society. Conflict is inevitable and similar to pluralistic approach. Trade union is a natural response of employees (Articlebase, 2009). The Royal Mail follows the pluralist approach. Similar to any other organisation in Royal Mail too, there are management and labour union. The management wants to enforce coordination and persuasion and the trade union are deemed to be genuine spokesperson of employees. Current Management Style in Royal Mail There are no appropriate structures of the role of managers in Royal Mail. The management style in Royal Mail is ‘command and control’. The management can instantly fire any employee for any malpractices. The team of the managers does not possess much power. The collaboration among team members are not planned, it is default. The informal employees’ teams always become self–regulating quite rapidly. The employees systematise their task rate, task quality and individual connections without intrusion from the managers (Robinson Boddice LLP, n.d.). The management style is a vital determinant in identifying the employee relation. There are five types of styles in organisation which are: Authoritarian Paternalistic Consultative Constitutional Opportunist Source: (Gennard & Judge, 2005). According to authoritarian approach the employee relation is insignificant and as a result the problems of employee are neglected. The paternalistic organisations are quite similar to the authoritarian style, but in this organisation the managers have comparatively more encouraging attitude towards the employees. The employee discussion happen in this type of organisation and employee retention or rewards is a major component in this management style. The Royal Mail follows the Paternalistic approach. It provides priority to the labour union and provides reward for employees (Gennard & Judge, 2005). Employee Relations in Royal Mail Royal Mail is under state control. In the past 20 years, it had been one of the most conflict prone organisations in the UK. The policies taken to tackle the changed environment were the causes for this conflict. In 2000–2001, almost half-working days had been wasted because of strikes by postal employees in the UK. The employees in the South East, walked-off from the jobs for protesting the management’s decision. The estimated cost of company is calculated to be around ?40 million. In the year 2006, there was another dispute of employees in the regional centre. The reason was to implement new machines. In the year 2007, there was a national stoppage and in the year 2009 there were local disputes for protesting the job cuts and services (Arrowsmith, 2007). In the end of 1990s, Royal Mail had become a bad employee relation organisation. It lost many working days because of bad employee relation. In the early 1990s, Royal Mail lost half of its working days because of disputes in the UK. Such problems and strikes occurred continuously. The ‘national’ and ‘semi national strikes’ occurred in the year ‘1988, 1996, 2001, and 2003’ and major strikes happened during 1994-2001. It made Royal Mail company, the most strike-prone organisation in the UK (Arrowsmith, 2007). Fig 1: Following Table Shows The Number Of Working Days Lost Due To Strikes From 1984–2004, Source: (Arrowsmith, 2007). Findings From the discussion related to the changes in economic structure and condition of employee relationship, the following impacts on the condition of Royal Mail have been reviewed. The following section of the paper depicts those impacts: Privatisation of Royal Mail The government started privatising or selling Royal Mail because of the risk of global service obligation. Royal Mail had faced potential threat because of decreasing mail volumes and low investment. As a result, in order to safeguard the future of the company, Royal Mail was determined to take this step. The Former ‘Deputy Chairman of Ofcom Richard Hooper’ said that “private sector capital must be introduced into Royal Mail either through a sale to a partner or trade investor, or by a flotation on the stock market” (Wearden, 2010). The Communication Workers Union (CWU) wished that Royal Mail to stay completely in government ownership. They wanted to talk further for its modernisation plan and for the government. They wanted to dispose entirely the strategic partnership. The Union’s postal executive rejected those negotiations. For several months, the CWU had refused to agree anything through the industrial relation structure. This was the reason for these strikes and boycotting in workplace (Sharpe, 2009). Royal Mail had come up with modernisation of the company which can lead to job loss. The harsh disagreement between Royal Mail and CWU had resulted in many strikes and loss of working days. Royal Mail had refused to negotiate for the modernisation plan with the CWU which can affect the job condition of employees. The CWU wanted the change in Royal Mail by proper negotiation and compensation system. The problem in employee relation had risen when Royal Mail had breached their agreement and developed their own modernisation plan without conversation with the CWU by claiming that modernisation is essential to survive in the competitive environment (International Business Times, 2009). Job Cut in Royal Mail Bad economic and financial condition forced Royal Mail to close their mail centres at several places. This effected the employee relations in Royal Mail and also destroyed jobs of several postal workers. For making big profits the company slashed jobs. This step of Royal Mail (RM) was the result of an agreement between RM and CWU. The agreement allowed for closing of mail offices at an exceptional rate. The company planed to close Doncaster and Hull and the work relocated to Sheffield. Darlington centre was closed and transferred to a new mail centre in Tyneside. The company closed Teesside mail centre in Middlesbrough. Bolton, Crewe and Liverpool centres were closed as well. In Kent, all four mail offices were fused into one. This caused the loss of jobs for 400 employees out of 3710 in the year 2010. In London, two out of three big mail offices were closed along with a major office. The Stevenage mail centre was also closed (Robson, 2010). From 2002, total 60,000 employees lost job in the course of voluntary redundancy and normal turnover and about 5000 jobs were cut in the period of 2006. According to Royal Mail’s report, the operating profit was increased by ?7 million to ?184 million, but the number of posting letters had decreased. This profit had been gouged out through cutting jobs and increasing exploration. It alone had cut 9000 jobs of employees (Hughes, 2010). Proposal for Improving Employee Relation in Royal Mail For making Royal Mail successful the proposed plan is described below: In order to improve the employee relation the following things need to be considered which can cause bad employee relation in the organisation: Lack of clear company goals and alignment with the company Inability to provide support from supervisors about how task to be performed well Poor leadership skill of managers or supervisors Inadequate feedback Organisational change with poor arrangement and implementation of changes Bad performance management method (RPC, n.d.) The reason for disputes and bad employee relations in Royal Mail was due to lack of clear job description, lack of reward system and lack of loyalty to the public service. In order to make a successful change there is need to develop leadership. There is need of loyalty from higher management at the primary stages of the change process. The manager must generate vision among employees to direct attention and focus the team’s efforts. The policies taken by Royal Mail to tackle the changed environment were the causes for the conflict between management and labour union. Recommendations To improve the employee relation the following strategies can be taken: First, a compensation planning is to be prepared which can help to motivate the employees and reduce the conflict. The compensation planning will be free from any bias and will be conducted without considering the colour, race, nationality, religion and age. Fig 2: Compensation Planning, Source: (Office of Human Resources, 2009). At first, the compensation philosophy will be determined for compensation planning. Compensation can affect the employees’ performance and increase the loyalty. The compensation philosophy can assist in deciding why the planning will be taken. The applicable laws, rules, regulations and policies of Royal Mail will be reviewed after deciding the need for compensation planning. For making pay assessment the performance of employees will be evaluated. In case the performance of employees is below expectations the pay increase will be overdue. The degree of past performance will determine the pay level of an employee. If the performance of employee is exceptional the management will ensure insistent compensation as a reward. Finally, the amount that will be increased will be decided. The compensation will be fair and reasonable for every employee. In rewarding employees, every situation will be examined based on the unique conditions. The compensation will be given as annual salary increase of employee (Office of Human Resources, 2009). After compensation planning, the second plan is retention of employees. In order to retain the employees a proper training will be provided which can increase their confidence. The training will help to develop a loyalty among employees. A better communication system will be introduced in Royal Mail which will help to link the employees with their works. The communication will be open communication that encourages good self-esteem and sense of involvement and belongingness among employees. The proper compensation will help to motivate employees towards great performance. The compensation can be provided by many ways such as promotion or increase of salary. Team work is a part of employee retention. Working together as a team can develop feelings of association by shared experience, duties and success. Developing a sense of team bonding among employees can result in durability. Developing the skills, capabilities and knowledge of employees is a continuous process and it can help to avoid obsolescence as well as job cut among employees. Fig 3: Plan for Retention of Employee, Source: (Workforce Planning for Wisconsin State Government, n.d.). There are certain aspects which will ensure a positive employee relationship in Royal Mail, and they are: Leadership: The managers and supervisors of Royal Mail will positively promote the employee relations in the persuit of beneficial employee relations. The beneficial employee relations need strong leadership behaviour which can provide practical and judicious resolution of employee relation problems in Royal Mail. Good Relationships: In Royal Mail, there is a need to generate a feeling of accomplishment of the common goals among employees and managers. This can be possible by maintaining effectual relationship by joint support and collaborated opinion. To develop an environment of beneficial employee relationship, there is a need to pledge to perform jointly with employees, managers, and unions and it is possible by taking all logical steps to resolve problems. Efficient relationship with government, stakeholders and industry can help in the improvement and implementation of employee relation plans. Every party has responsibility to actively cooperate with each other which can develop an understanding between each other. Royal Mail will attempt to find out fair outcome of the problems and will maintain a successful employee relationship. The basis of maintaining positive employee relationship lies in four major parts which are: Fig 4: Employee Relationship, Source: (Energex, 2007). Arrangement with Planned Way: Arrangement with planned way can ensure the impact of employee relation is constant with the above proposed plan. For successful arrangement with planned way, there is need to continuously review the nature of employee relation in Royal Mail. The process of arrangement consists of bargaining with employees and workplace concession. The reason for this arrangement is to ensure effective completion of proposed plan. Authority and Conformity: The authority consists of improving and managing the system and procedures to ensure compliance with industrial relations structure which comprises of legislation, industrial mechanisms and the policies of Royal Mail. Conformity is known as mutual responsibility which lies with both employees and managers who are responsible for authorisation and approval of paying salary and enforcing conditions. For good employee relation, it is vital for every employee to be aware of the condition of employment and importance of their duties in the Royal Mail. The strategy for authority and conformity is to encourage agreement with the governmental and policy structure of Royal Mail. This part of employee relationship ensures reliability in understanding of the conditions and privileges. Proper authority and conformity in Royal Mail will result in timely and efficient accomplishment of bargaining and workplace negotiation and any changes in legislation or policy. Focus on Outcome of Organisation: Royal Mail must focus on the outcomes of any strategy or bargaining because it can make sure that the employee relation in that organisation is reliable with the business performance. The policy must be developed to match with the Royal Mail’s vision as well as the business requirements. The managers and supervisors must provide timely and accurate advice on any kind of employee relation problems. By proper utilisation of encouragement and demonstration in industrial way will result in effective employee relation in every level of Royal Mail. It can facilitate the progress of improvement of Royal Mail. Beneficial Employee Relationship: A good employee relationship can assist in the accomplishment of joint goals such as productivity, job satisfaction and career opportunities. A practical approach can help to reduce the employee disputes and encourage innovative way towards problem resolution. The participative negotiation can provide an atmosphere for assisting resolution of conflict and provide balanced outcomes. In this condition each party (management, employee and union) has more power over the results of negotiation. Negotiation For successful negotiation, Royal Mail needs to encourage positive workplace relationship between CWU and management at every level. The CWU must know their responsibility in problem resolution. Royal Mail can encourage collaborative and productive employee relationship and good teamwork. A practical, positive and polite dispute resolution that encourages timely decision regarding any dispute through consultation can lead to good employee relation. There is need to use flexible approach to negotiation with unions and address any problem as soon as it occurs. The negotiation arrangements in and maintaining productive relationship with unions and employees depend on: Frank and honest communication Professionalism and treating everyone with respect Fair play in organisation Searching for diverse ideas for resolving conflict Indisputable participation of all parties in the negotiation procedure Giving value to the other people’s ideas and point of views with an eagerness to compromise when the idea is appropriate for resolving any conflict Framework for Employee Relation in Royal Mail To promote positive relation between Royal Mail and CWU by effective communication there must be meeting between these parties. The meeting will take place in three forms: Meeting of Chief Executives This meeting will facilitate the improvement of good relationship between the officer-in-charge and the senior representatives of CWU. This meeting will be held two times in a year. The purpose of this meeting will be to deal with the strategic problems which are affecting the performance of Royal Mail. It can guarantee an opportunity to discuss any problem in workplace. Industrial Relation Meeting This meeting will be held once in every month between the IR (Industrial Relation) authorities and CWU representatives. The purpose of this meeting is to initiate a positive relationship between Royal Mail by the means of efficient communication and discussion. It can help to resolve disputes on industrial matters by ensuring a healthy employee relation atmosphere. Royal Mail needs to arrange a standard meeting condition for exchanging knowledge, beliefs and opinions of others. It can obtain feedback from unions on problems which are affecting Royal Mail’s performance and the employees. In this way, Royal Mail can facilitate the accomplishment of job satisfaction of its employees and its business objectives. Consultative Group Meeting A consultative group meeting will be held on every four months of a year with a purpose of making discussion in every level of Royal Mail. It can address communication between CWU representatives, human resource authorities and industrial relation authorities, and provide an environment to resolve any problem. Modernisation of organisation is essential for Royal Mail to compete with other substitute services. However, at the same time Royal Mail must not forget that employees are the important part of an organisation. Thus, Royal Mail must improve their relation with employees for better productivity. Employees should be treated as individuals. They must be motivated to increase their productivity. References Arrowsmith, J., 2007. Employee Relations. Hodder Education. 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