Impacts of Different Management Approaches to Employment Relations - Case Study Example

University

Report on the Impacts of Different Management Approaches to Employment Relations

Introduction

The nature of management and leadership styles adopted by senior managers in an organization has significant impacts on the employer-employee relationships. Also referred to as employment relationship, employee relations involves the communications between the employees and the management concerning their conflicts, working conditions, labor unions and issues pertaining to collective bargaining (William & William 2014, p. 67). The report evaluates the management approach used by managers at Oxford Health Care International (OHCI), which manufactures medical gas equipment. The company started almost fifty years ago on the outskirts of the City of Oxford. OHCI has two subsidiaries; one in Oxford known as Oxford Health Care (OHC) and Dijon Health Care (DHC) in Paris, France (OHCI 2015, p. 1). A review of the management styles at OHCI shows that it has adopted the unitary perspective in management without involving the labor unions.

Employment Relations at OHCI

From a unitary perspective, organizations are viewed as a harmonious and integrated system that survives as one happy family. The unitary approach perceives that the staff members and the management share the same interests and objectives and thus work together to achieved common goals (Kaufman 2010, p. 78). OHCI is has its roots as a “family-like” company and recognizes the importance of every employee by treating them equally (OHCI 2015, p. 2). This is an aspect of a unitary system depicted by the organizational culture and history of the company. The fact that the subsidiary company based in Paris is managed by Stefan Borcieu, a cousin of other company, Keith Harrison shows that OHCI is family controlled organization. It, therefore, means that the management approach at OHIC aims at creating an organization that shares the same beliefs, cultures and traditions, and operates as a unitary system with its own rules and regulations.

As stated earlier, OHCI does not involve labor unions in negotiating on matters related to pay or workplace conditions raised by the employees. Instead, OHCI strongly believes that it can achieve harmony between the management the workers, and has made sure that few or no workers join the unions. For example, when the company recruited a Personnel Officer twelve months ago (in 2015), he reported that only three employees are union members of all the 100 employees (OHCI 2015, p. 1). OHCI operates as single unit with minimal interactions with other sub-groups comprising of the unions, business partners and the government, and this is an aspect of unitarism, which is based on the belief that unions are unnecessary to any organization. Also, the management styles at OHCI borrow the unitarist’s view that harmony can be achieved by treating the employees fairly without having conflicts, which are disruptive in nature (Williams & Adam-Smith 2009, p. 34).

From an employer’s point of view, the unitary approach suggests that the organizational goals and objectives should be communicated and discussed with the members of staff. When the Managing Director says that the employees should be told what they need to know to execute their tasks and no more, he means that OHCI emphasizes on clarity of information passed on to the employees without unnecessary negotiations concerning the rules and regulation (OHCI 2015, p. 1). The management team comprising of the Associate Directors are involved in directing and coordinating the workforce to realize the organization’s goals, and so far the team exercises the authority of making rules.The authoritarian and autocratic styles of management adopted by these senior managers depict the strong unitary approach that regulates the employment relations at OHCI.

For the last two months, OHCI has been developing the Company Handbook for all members of staff that highlights the disciplinary procedure, holiday policy, sickness policy and grievance procedure among others (OHCI 2015, p. 2). Additionally, the company has drafted the Contract of employment for the first time in more than twenty years aiming at having an organization that operates under a system of written rules. In the past, employees have not been referring to written policies and hence it is their first time to review the procedures governing holidays, absenteeism and conflict resolutions among other. However, the recent moves made by the company should be viewed from aunitary perspective, whereby the conditions of employment and sound terms governing the welfare services are aimed at establishing good employer-employee relationships. In other words, the documents were drafted with an aim of winning the employees’ loyalty and commitment to the organization.

Impacts of the Unitary Perspective in Management on Employment Relations

With the use of the unitary approach at OHCI, the company ensures that the organizational goals and objectives are clear to the employees and this has increased the overall financial performance of the company. OHCI’s employees are expected to accept their place and roles within the unitary system and this has seem some of the workers been there for more than twenty years.The board of directors meets every month to discuss the company’s progress regarding financial performance. After, the senior management team’s meeting, the manger disseminate the information to the Dijon and Oxford subsidiaries and their respective departments (OHCI 2015, p. 2). The recent documents were approved for preparation in such meetings and then the employees were briefed on their contents. OHCI seems to have everything done “in-house” through sharing information to achieve a common goal (Aylott 2014, p. 100).

The Performance Related Pay (PRP) scheme details, which were included in the three personal letters sent to the employees by the Managing Director were received and treated with a lot of suspicion (OHCI 2015, p. 3). For example, the first letter was informing the employees to continue performing their duties but, they thought that the shopping voucher included in that letter was a sweetener of the PRP scheme. In other words, the scheme will only be effective if the staff members work harder. From an employer’s perspective using the unitary approach the PRP scheme was a reward system designed to secure the loyalty and commitment of the employees. Unfortunately, the scheme affected the morale of the worker because they feared that it would have led to the replacement of the annual pay increase with other forms of payment. The reward system was rejected by the employees and even the Managing Director threatened to withdraw the money allocated to the scheme to be used elsewhere.

The unitary approach to management has also destroyed in the employer-employee relationship due to the breakdown in communication, recently. OHCI has been watchful in making sure the workers get all the information they need to know but, the recent breakdown in communication in the company’s operations is linked to labor turnover of over 30% in 2013 and 2014 (OHCI 2015, p. 7). For instance, when the staff was contacted by a supplier asking the location of the new company’s warehouse, it turned out they didn’t know either. Another recent event is when the press indicated in the papers that a large export order was being transported to Morocco and the production staff was not aware of its destination. Due to the authoritarian management style at OHCI, it seems that the people coordinating the day-to-day issues of human resource sometimes deny availing some information to serve their interests. As a result, they demoralize the employees who lose confident and trust in the management of the company.

Another impact of the unitary approach to management linked to the staff turnover is the denial of collective bargaining power (Kaufman 2010, p. 78). When the MD confidentially said that he can withdraw the PRP scheme he implied that as long as the employees are not working harder they are not entitled to pay rises. At OHCI, employees are urged by the management to keep their personal salary or wage their own business. The company does not tolerate collective bargaining and whoever is not comfortable with the level of annual pay increase should discuss that with their director (OHCI 2015, p. 4). The percentage figure is calculated on the basis of the company’s profits and individual performance. It seems that the motivation behind any reward system at OHCI targets at coercing the workers indirectly since their collective bargaining power is negated by the management. This can be linked to the growing trend of ex-employees staring competing business, as well as, the staff turnover of 30% in the last two years.

Recommendations

The negative impacts of the unitary approach to management including high rate of labor turnover and absenteeism among the workers can be resolved by adopting the pluralistic approach to management. From a pluralistic perspective, organizations are viewed to be made-up of various subgroups such as the trade unions and the management team (Green 2001, p. 55). With a pluralistic approach the strife between the employees and the managers can be resolved because it encourages collective bargaining, unlike, the unitary approach, which does not tolerate collective thinking in solving problems.

Recently, the employment relations have seen a series of scandals, for example, the manager told a female employee who works at the factory floor that her job is different and requires less skill when she complained that she performing similar tasks as men. In another incident, the Line manager dismissed an employee despite the company’s policy, which authorizes the senior manager only to dismiss an employee. The conflicts emerging from the company can be resolving by allowing collective bargaining among employees through the use of the pluralist approach to management (Abbott 2006, p. 191). The approach sees the disagreements and conflicts of interest between workers and managers as normal and inevitable. The fact that the core business of a company is to maximize profits through optimizing the use of resources, the management should recognize the uniqueness of human resources and treat them as people who are bound to make mistakes.

The incorporation of pluralistic perspectives in management will result in reduced labor turnover because the conflicts will be managed and channeled towards positive change with help of collective bargaining (Edwards 2005, p. 15). With realist managers who can accept that conflicts can also arise when searching for harmony, OHCI can revolutionize its employment relations to reach the top-notch excellence. Currently, the company is performing well in terms of technological innovations and even the human resource management programs applied by the company have resulted to rapid growth in the past. It, therefore, means that it needs to encourage negotiations and to strike a balance between allowing collective bargaining and regulating the employees’ relationships, and this can be achieved by incorporating the pluralistic perspectives in management.

As indicated earlier, the Personnel Officer was involved in creating the Contracts of Employment, Confidentiality Agreement and the Company Handbook for all staff for the last few months. During the exercise, the employees were not consulted and most importantly, the Personnel Officer was denied permission by the management to include an arbitration service in the documents. The main aim of the conditions of employment was to regulate the growing trend of former employees of OHCI establishing competing business and thus they included several restrictive covenants and confidentiality clauses. Based on the employees’ opinions, these documents might ruin their relationship with the management if OHCI does not stick to those procedures.

The recommended course of action in such a scenario is to incorporate the pluralistic perspectives, which recognizes the importance of the trade unions and arbitration.Thepluralistic approach suggests that personnel specialists should advise the managers on matters relating to the employees and negotiations but, it is evident that OHCI turned its own Personnel Officer when he requested for the inclusion of the arbitration service. With a pluralistic approach, the managers can mitigate the potential conflicts between the managers and workers because allowing the unions to oversee or review the Contracts of Employment can prevent harassment of employees authorized in these rules. In this way, the company can boost the employees’ morale and secure their trust, loyalty and commitment to the organization (Wilikinson, Wood & Degg 2014, p. 90).

Another recommended management approach is the incorporation of the psychological perspectives in human resource management programs. The psychological approach suggests that conflicts and misunderstandings in an organization usually occurs due to the fact every group, the management or the workforce, negatively perceives the actions and behavior of the other (Aswathappa 2013, p. 119). In other words, each side views the other with suspicion, for example, when the workers received the notification of the PRP scheme in a letter accompanied with shopping voucher. The treated the scheme with a lot of suspicion and when the MD realized that he threatened to terminate the program. These emotions and perceptions should be evaluated properly by the HR department to make sure they do not develop to result into conflicts, dismissal and resignations among others.

Conclusion

The report evaluates the management approach adopted by the Oxford Health Care International (OHCI) in regulating the employment relations. OHCI uses a unitary approach in management depicted by the authoritarian management styles by the directors, the treatment of employees in a “family-like” manner and the proper communication of the organizational goals and objectives to the employees. The incorporation of the unitaristic perspective in the management of OHCI has resulted to strong employer-employee relationship and at the same time increased the labor turnover and breakdown in communication. The recommended management approaches include the pluralist and psychological management perspective which help in resolving the active and potential conflicts, for example, through collective bargaining.