Employment Relations in Non-Union Firms - Essay Example

Employment Relations in Non-Union Firms College: Employment Relations in Non-Union Firms The concept of employment relations within Non-Unions Firms is an issue that has garnered a lot of attention from different analysts as they seek to understand how such firms implement their employment plans. In UK, Unions are organizations that regulate the labour by instituting laws on minimum wages, working hours and the number of employees within an organization. Traditionally, the role of the unions has been to fight for the right of the employees in the labour sector and to ensure that the plight of workers was advocated. The notion that exists is that Union workers have high chances of receiving higher pay within the employment sector. However, it has dawned that non-unions firms have become more successful than unionized firms in terms of market competitiveness. While some authors argues that non-union firms profit by paying their employees minimum wages, it is clear that non-union firms enjoy flexibility in organizing their employment relations and benefit from high employee loyalty. Therefore, non-unions firms extensively use sophisticated human resource management practices to secure employee commitment, which is crucial for organizational success. A Critical assessment of the employment relations within successful non-Union firms will help to understand the human resource strategies within such organizations. Since the formation of Trade Unions, there has been a controversy on the way that Union and non-Union firms implement employment relations within their organizations. Notably, the labour unions increase harmony within work relations as they harmonise the workers voices and the employee aggressiveness within the work environment. Labour unions advocate for equal pay rights for their employees including setting up standard salaries as a way of motivating the employee (Frege & Kelly, 2003). The idea is that employee within Unionized firms have better pay and hence are committed in the long-term operation of their organizations. Besides, the union is responsible for limiting the number of employees that a company can employ as a way of avoiding overworking or underworking employees. They match the capacity of the organization with the number of employees that they can accommodate. However, it is clear that non-Union firms enjoy the highest employee commitment, low labour turnover and ultimately a higher competitive advantage. This is contrary to the notion that non-unionized firms pay their employees low wages and benefit from lower costs of labour and higher number of working hours. The success of non-unionized firms proves that the regulations of the labour unions do not necessarily contribute to the success of an organization. To a large extent, the idea that non-unionized firms use sophisticated human resource management strategies to win employee loyalty is truthful. Over the history of the organizational behaviour, great value has been placed on efficient motivation systems. Organization success depends on the ability of the management to develop an employee appraisal program that allows workers to remain loyal to the organization. Worker loyalty ensures that they have a long term association with the organization and hence allows organization to depend on their workers for both short and long term goals (Nickell & Quintini, 2002). Secondly, motivated workers work as a team and perform their worker more efficiently. Motivated groups know the business goals and work towards attaining them in the best way they can. They are able to give their best to the organization as they are able to associate the organizational success with their own success. On the other hand, employees that are not motivated are sluggish in work, have low work output and have not loyal to the organization. Such employees are always looking forward to exit from the organization and hence cannot have their long term goals aligned to those of the organization. Research shows that organizations that fail to motivate their workers, whether unionized or non-union, are bound to fail. On this note, ability to motivate employees is a necessary competence for the top level managers if the organizational goals are to be met and the organization has to perform optimally. Notably, non-unionized firms enjoy flexibility essential in implementing unique employment relations within their organizations. To begin with, they are free from salary and wage regulations which sometimes may limit the organization employee appraisal programs. Unionized firms have to comply with the minimum wage regulations even when the companies’ profits are not enough to fund high salaries. On the other hand, non-unionized firms are flexible and have the freedom to implement salary plans that match their profit levels (Shore, Barksdale & Shore, 1995). Therefore, such organizations can offer low salaries in time of low business turn over and much higher salaries when organizational profits go high. To ensure that there is high productivity within such organizations, the human resource managers reward the employees depending on the performance of the company at the end of the fiscal year. For instance, a company may decide to share 20 percent of the organizational profit to the employees, as way of recognizing their handwork. Since the employees will benefit depending on the amount of the annual profits, they will be motivated to work harder and to earn benefit more from higher organizational profits. Today, employees are looking for organizations that recognize their handwork, and ones that provide them with an opportunity to grow as they contribute to organizational growth. Therefore, flexibility within non-unionized firms helps them to apply effective human resource strategies to push their business to a competitive position. The employee welfare is a priority for non-unionized organizations within the work environment. The employee optimal performance depends on the ability of the human resource manager to develop a habitable work environment that motivates the employees to work. In the contemporary work environment, employee loyalty is a crucial factor that the management must achieve if their operations have to succeed. Research has shown that employees perform well if the organization provides them with a healthy working environment. In non-Union firms such as IBM, an employee welfare team collects employees complains and provides solution in the most effective manner. The employee welfare committee helps in creating effective communication channels through which employees can present their problems. The ability of the organization to create a two-way communication between the management and the employees has won the loyalty of employees. Resultantly, the company has witnessed very few cases of employee leaving the organization (Whitener, 2001). In addition, the organization has complied with all the conditions of the employee act ensuring that the employees are comfortable while working in this organization. This practice is different from one used within unionized firms. The human resource management feels that the Unions are the voices of the employee and ignore the employee communication. Therefore, such organizations fail to establish healthy relationships within their employees, which at the end reduce employee loyalty. Resultantly, such organizations experience higher labor turn-over as well as high rates of absenteeism. On this ground, the success of non-unionized firms can be attributed to their commitment to employee welfare and their ability to work hand in hand with their workers in pushing management goals. The most interesting perspective of non-Unionized firms is the compensation system that seeks to attract employee commitment. Analysis shows that successful non-Union firms have better compensation systems that those unionized firms. The organizations benefit from providing excellent compensation to the employees to win the loyalty of the employees. While they feel that this is an expensive strategy for the organization, they uphold that employee loyalty has greater value for the organization (McLoughlin & Gourlay, 2012). Paying the employees a fair wage ensures that they maintain their experienced employees and do not lose them to better paying organizations. Unlike in Unionized firms, the organizations have the opportunity to review the employee compensation every two years to adjust to the changing economic scales in the global arena. For instance, the employees’ compensation increases each year as part of the human resources plan to reward employees’ loyalty. Resultantly, employees in such organizations work for many years and remain motivated by the regular salary increases. However, the human resource managers within unionized firms stick around the standard salaries and do not implement a salary increase until when the union puts such a regulation. Therefore, employee salaries remain fixed over a long time, which puts off many workers who would wish to have their salaries increased often. The context of individual worker is a popular context on the modern working environment that human resource managers need to understand. The diversity of the employee group is a matter of concern for a manager who intends to streamline team behavior. In a typical work environment, all employees are unique and have different individual characteristics that influence their relationship with the work environment. This makes it a big challenge for the organizational manager to form cohesive groups that produce optimally (Frick & Drucker, 2011). For instance, while some employees place value of material benefits, others value respect more than monetary rewards. While others feel satisfied within the organization, other may feel disoriented and this may affect the way they relate within the work environment. Sophisticated human resource management strategies require that the business manager understand the characteristics of every employee, so that they are able to win the employee loyalty. Diversities of culture, race, color, and even age can affect the way individual employees work within an organization (Freeman & Pelletier, 2010). The role of the manager is to ensure that every employee contributes optimally within the organization. In non-union firms, most companies pay attention to non-monetary motivation strategies, unlike in unionized firms where they perceive paying high wages as an end to employee motivation. For instance, companies such as Hewlett-Packard hold social functions to promote employee-manager interaction which helps in understand the worker characteristics. Resultantly, the organization is able to treat each employee differently depending on their personal characteristics. Therefore, non-unionized firms succeed by focusing on non-monetary rewards that play a crucial role in winning employee commitment. Another focus non-union firms’ motivation plan is strategies motivating the minimum wage workers. The minimum wage workers within an organization are the most sensitive people within the organization. This is because they have low salaries and have little potential to rise within the organization. Often, this group suffers from isolation as they are considered as part of the organization that does not understand the management goals. This may affect their contribution to the organization whereas their role is crucial in the organization (Hee & Ling, 2011). To motivate them, human resource managers in non-union firms provide opportunities for them to advance their careers by providing internal workshops and training that can help them get to rise in the organizational hierarchy. Secondly, they recognize them in all the organizational activities, making sure that they are aware of all organizational plans. For instance, they should participate in annual general meetings and get rewards just like others. Recognizing them as an important part of the organization motivates them to contribute optimally in their respective positions. Lastly, such organizations use participative leadership by sharing in their challenges and difficulties in times of work. They are particularly concerned about their individual problems that may be affecting them. For instance, helping those that have challenges in paying school fees would win their loyalty and encourage them to work for the organization. This is contrary in unionized firms where the organizations depend on the Union laws while designing their motivation plans (Guest & Conway, 2009). This explains the reason why such organizations have received resistance to change due to their inability to exercises sophisticated human resource strategies. From another angle, non-union organizations are capable of providing employment security during harsh times in the market. For instance, during economic depressions, organizations often find themselves in a dilemma to reduce their salaries or lay down some of their employees. For unionized firms, the former option is the preferable as they have little control on their salary plans while complying with the minimum wage laws. However, non-union firms have an option to retain all their employees with a slight pay cut. Evidently, employees are committed to organizations that assure them of job security even during the harsh times (Kalleberg, 2000). A good example is the Hewlett-Packered company that during the 1970 economic recession resorted to a salary slash to assure job security to its employees. The human resource managers implemented a 10% salary slash for six months for all employees including the top level manager. This way, the company avoided laying-off the employee during a period when many employees within unionized companies lost their jobs. On this ground, non-union firms are better suited to implement strong management decisions that are friendly to both the organization and its employees. In conclusion, non-union firms succeed in business by implementing sophisticated management strategies that seek to win employee loyalty. Since, these companies have few rules to comply with, they enjoy the flexibility of designing unique employment relations whose priority is to win the employee loyalty. Unlike unionized firms that feel that paying employees fair wages is enough in motivating them, non-union firms embed their strategies in non-monetary motivation plans that are more effective in aligning the workers goals to the organizational goals. For instance, such companies provide employees with an opportunity to benefit from their loyalty and from their hand work by sharing in the organizational profits. Moreover, such companies provide better flexible compensation plans that reflect their income levels. Consequently, employees in such organizations are assured of job security, direct communication with the management and a more sociable relationship. Employee commitment contributes to both the short and long-term performance of non-union firms. Such companies enjoy low labor turn-over, few cases of absenteeism and higher labor output, hence their success. References Freeman, R., & Pelletier, J. (2010). The impact of industrial relations legislation on British union density. British Journal of Industrial Relations, 28(2), 141-164. Frege, C. M., & Kelly, J. (2003). Union revitalization strategies in comparative perspective. European Journal of Industrial Relations, 9(1), 7-24. Frick, D. E., & Drucker, P. F. (2011). Motivating the Knowledge Worker. (Cover story). Defense Acquisition Research Journal: A Publication Of The Defense Acquisition University, 18(4), 368-387 Guest, D., & Conway, N. (2009). Peering into the black hole: the downside of the new employment relations in the UK. 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A cross-level analysis using hierarchical linear modeling. Journal of management, 27(5), 515-535. Read More