Managing Employment Relations - Case Study Example

Managing Employment Relations HRM and Employee Relations Human resource management refers to the overall management of employees and labour forces ofa company. The main objective of human resource management is to make sure that employees are working as per the pre-conceived plans and directions laid down by the company as well as tackle various employee related matters in the most efficient way. This involves recruiting, staffing, managing, appraising, remunerating and directing employees. Employee relations forms a part of HRM studies. Employee relations mainly involve an in-depth analysis of the relationship existing between an employer and employee. It incorporates analysing conduct of the employees. The relationship between an employee and the employer should be such that it helps to induce positive behaviour, high morale and increase productivity. This essay has been written to study the various aspects of employee relations and ways to develop healthy employee relations, thereby minimizing strikes and lockouts (Small business, 2014). Employee Relations and the PEST analysis PEST analysis refers to the intervention of political, economic, social and technological environment in which employees work. Depending on the type of environment, relationship between the employee and the employer may vary. For instance, the code of conduct followed in a firm operating in Germany may not be the same as that followed in Japan (Dicker, 2003). A summarized discussion regarding how employee relations vary on the basis of PEST is discussed below. Political- In USA, Japan and Germany, there is hardly any intervention by the government into matters of the companies. Yet, in UK, political intervention is observed to exist. As a result, employers need to manage matters relating to the employees as per set guidelines of the government. Economic- From the economic point of view, in UK and USA due to the recent meltdown, employers have been formulating stringent policies for their employees so as to enhance productivity. In Japan and Germany, this phenomenon is less observed as they were not much influenced by the economic crisis. Social - In UK and USA, individual performance is given more importance and the policy of enterprise system is seen to be followed. On the contrary, in Japan, collective or group efforts are given more importance. Work is generally done through collaborative efforts of the employees and performances of each individual in the group influence that of the group collectively. Technology - Since Japan and Germany are technically very advanced, they have a high intervention of technology in their daily lives and mode of conduct. This, however, is not the case in UK and USA, where technological intervention is medium. Although PEST is not the ultimate tool to assess the relationship between employee and employer, these factors still have a substantial effect. Effect of recession on employee relations Recession has caused a substantial increase in unemployment. This was due to the cost cutting scheme of various firms followed at large. Employers stringently analysed performance of employees and replaced those employees whose performance were below satisfactory. They also followed a policy of reducing labour as much as possible. This led to serious problems of unemployment across the globe. Employers were very particular about productivity and made sure that their workforce delivered best performance at a low cost. Many firms had increased their working hours. This period also showed a rise in outsourcing work and recruitment of agencies on a temporary basis. Japan and Germany were two of those countries who did not face this issue at large. Overall, it was also observed that work related stress and employee grievances had substantially aggravated in that period. Employers could deliver little justice on these matters as they had to follow rigid rules. Many trade unions had resorted to strikes in order to counter such measures of the management (BBC News, 2010). High commitment HRM These involve specialized HRM practices that aim at delivering better performance and improving employee relations. The main aspects of this theory are- Use of Personality tests- It aims at analyzing the dedication of an employee towards his or her work by judging the personalities. Sometimes, personality also helps to identify the kind of work that suits a particular employee. Equality- Employees must be provided with equal opportunities to grow and develop. Employee discrimination may create grievances and difficulties at work place. Proper system of pay- The remuneration system followed by the firm should be just and acceptable to the employees. Extra incentives should be provided to them as rewards for better performance. Team Management- While working in teams, it must be ensured that regular team meetings are held in order to discuss critical issues. Briefings on performance should also be done. Training- Employers should be able to effectively decide the type of training that suits best for the employees, on the job or off the job. Also, timely training should be given to improve performance of the employees so as to keep their skills updated with the changing need of work (Dicker, 2003). Trade Unions and collective bargaining Collective bargaining is a process by which trade unions negotiate with employees in order to reach to a mutual agreement. There are basically two types of collective bargaining; Conjunctive and Co-Operative (AFL-CIO, 2014). In Conjunctive bargaining, employees who are in dispute with the employers reach a final agreement by way of coercion. Coercion is a process through which one side of the parties in conflict show a dominant feature. They are indispensable to each other. In Co-operative bargaining, employees and employers resolve disputes through mutual agreements so as to bring in gains for both the parties. This aims to create a win-win situation for all. Even so, before entering into collective bargaining, it is important that a suitable presentation is prepared and discussed with the management. Once bargaining is over, an agreement should be signed by both the parties. Collective bargaining is practiced in many firms owing to reasons such as, abuse of power, discrimination, lack of proper decisions, incompatibility between the management and subordinate styles of working (Beardmore, 2006). National Minimum Wages Every nation has its own rules laid down in respect of minimum wages. These rules need to be strictly followed and acted upon. These are formed on the basis of age group of the workforce and the industry that they belong. The features included in National Minimum Wages are: proper system of wage rate such as, piece rate system, bonuses, profit related pay and productivity pay. Employers who do not follow these regulations are subject to facing prosecutions. These rules are updated by the government of respective countries based on the changing levels of economy and cost of living. Nonetheless, cases relating to breach of law in this respect are found to be low. This implies that employers are at large providing fair wages. Another aim of this system is to abolish child labour. Many people are also of the opinion that national minimum wages policies are quite discriminatory as they state that employees of a higher age need to be paid more; but many a times, young and aged employees are found to do the same kind of work (HM Revenue and Custom, n.d.). European Works Council (EWC) The main aim of EWC is to provide workers with better understanding of the organization and encourage them to be flexible towards changes. Their discussions are centred on employment issues and business environment. It focuses on developing a European level industrial relations system as well as new channels for employee communication. The EWC should meet twice a year. Their representatives are selected based on the national law and practice. The council offers to resolve conflicts and helps in better decision making. Transparency and fairness in management lead towards a positive organizational climate. This is the motto upheld by this council (Department Of Business Innovation and skills, 2012). Working time as an employment relations issue This has long been a factor of conflict between the employers and employees. Some of the generally accepted rules regarding working hours are that employees should be given a minimum of eleven constructive rest hours in a 24 hour day period. They must be granted 28 days paid work leaves. However, there are separate rules laid down for those workers who work in excess of 24 hours or 48; such as, in transport industry. Then again, these rules may differ for part-time and contractual workers. Also, every country has its own generally accepted policy relating to working hours. Yet, many employers do not adhere to these rules because of reasons such as, high pressure of business competition. Employers should make sure that if workers are required to work beyond normal limits of the timing, adequate facilities must be available at the workplace in respect to safety and security. It has also been observed that different nations follow dissimilar patterns of total working hours. Western countries have lesser work hours in comparison with the East (Gall, 2013). Employee relations in multinationals Multinational companies face a significant problem of employee relations as they spread globally. Even so, this aspect has been analyzed on four parameters that are discussed below (Drinkwater and Ingram, 2005). Power distance- The distance between the employer and employees pose to be a serious issue in most multinationals as they cannot directly monitor work of the latter. Technical assistance has reduced this problem to a significant level. Uncertainty avoidance- Multinationals work in a very uncertain environment as they are globally spread and conditions of each nation varies. The work culture helps to determine their degree of tolerance towards the same. Individualism and collectivism- Most multinationals work in a collective or group based work culture. This means that group effort in a particular project plays a significant role. The whole work is disintegrated into a number of parts and each part needs to be effectively performed by the employees. Converging policies- It is known that every nation has its own set of HR related policies. In case of multinationals, it is important that policies are developed keeping in mind the HR policies of respective nations, where the sub-units are located. Recruitment and selection Recruitment is the process by which potential candidates are identified for a particular job and selection refers to screening candidates and their final appointment. Recruitment systems and policies are dependent on availability of labour and skills. The entire process of recruitment and selection includes the following aspects (Billsberry, 2008). Job description- A detailed job description must be provided to the candidates so that they can analyze whether they are fit for the job or not. Modes of recruiting- Application for jobs can be sent out through local newspapers, online job portals, campus selection, job consultancies and internal sources of recruitment. Interview process- Normally, this process includes tests and face-to-face interviews. Candidates are tested on various levels of competencies. Background verification- Background verification is done on the selected candidates so as to verify the information given by them. Appointment- After screening the potential candidates, they are informed about the selection and are finally recruited if all terms and conditions of the company are accepted by them. Recruitment and selection have been a cause of conflict between superiors and employees. The prime reason for this being discrimination on the part of employers. However, in most cases, a just and legal approach is developed towards recruitment in order to avoid disputes. Employer Branding It is a process by which employers render their organizations attractive to work for. They promote certain features, which are often intangible, so as to promise a better work experience. This motivates potential job seekers to join the firm. The main reason for employer branding to be in vogue in the present scenario is the lack of trust and belief from the employee’s point of view. People want to work in places that are highly reputed and have a good brand image. Employer branding is an effective way to tempt employees to work even in those situations that are perceived to be risky. Employer branding also gets influenced by financial holding of a firm (Peyron, 2013). Appraisal systems The main function of employee appraisal is to judge employee performance against set standards. Employers are required to clarify job responsibilities to employees so that they can work more efficiently. This improves productivity and helps to avoid conflict, which may arise out of lack of knowledge regarding the work. It also aids improvement in communication between the employer and the employee. Appraisal systems help to enhance morale of the employees as they are guided well by their superiors. A good appraisal system links organizational and individual goals together. Since employees are quite familiar with what employers expect from them, the chances of mistakes are seen to reduce. As a result, a lot of valuable time gets saved. Conflicts in respect of appraisal systems have been common. Employees at times feel that their performance has not been judged correctly; this leads to tension between employees and their superiors (Gall, 1999). On the basis of the above discussion, it is clear that by taking ethical measures, discrepancies between the management and employees can be avoided to a large extent. Also, in case of grievances from the employee’s side, proper measures must be taken to prevent these issues from aggravating. Through effective management, strikes and lockouts can be avoided (Godard, 2011). This involves a good system of rewards, proper advice and guidance, a good network of communication between employees and employers as well as protection of employee rights. Reference List AFL-CIO, 2014. Collective bargaining. Available at: [Accessed 10 March 2014]. BBC News, 2010. Recession has deep impact on jobs. Available at: [Accessed 10 March 2014]. Beardmore, R., 2006. International Comparisons of Labour Disputes in 2004. Available at: [Accessed 10 March 2014]. Billsberry, J., 2008. Experiencing recruitment and selection. West Sussex: John Wiley and Sons. Department Of Business Innovation and skills, 2012. European Works Council Directive. Available at: [Accessed 10 March 2014]. Dicker. L., 2003. Employee relations. New South Wales: Allen and Unwin. Drinkwater, S. J. and Ingram, P., 2005. Have industrial relations in the UK really improved. Econ Papers, 19(2), pp. 373-398. Gall, G., 1999. Employee Relations. Labour and employment relations association series, 21(4), pp. 357 – 377. Gall, G., 2013. Economic and industrial Democracy. Sage Journals, 34(4), pp.667-691. Godard, J., 2011. What Has Happened to Strikes? British Journal of Industrial Relations, 49(2), pp. 282-305. HM Revenue and Custom, n.d. The National Minimum Wages. Available at: [Accessed 10 March 2014]. Peyron, C., 2013. Why should I Work Here? Available at: [Accessed March 10 2014]. Small business, 2014. Factors influencing strategic employee relation. Available at: [Accessed 10 March 2014]. Read More