The Issue of Equality and Fairness between Employees - Research Paper Example

Most employees are concerned about more than just having their needs satisfied; they also want their opportunities and rewards to be fair. This issue of equality and fairness applies to all types of rewards – psychological, social and economic – and it makes the job of the management complex. J. Stacy Adams’s equity theory states that employees tend to judge fairness by comparing the outcomes they receive with their relevant inputs and also by comparing this ratio (not always absolute level of rewards) with the ratios of other people. Inputs include all the rich and diverse elements that employees believe they bring, or contribute, to the job – seniority, prior work experiences and job performance. Outcomes are the rewards they perceive they get from their jobs and employers; outcomes include direct pay and bonuses, fringe benefits, job security and economic rewards. Employees analyze the fairness of their own outcome/input “contract”, and then compare their contract with contracts of other workers in similar jobs and even with those outside their job. Fairness of rewards (equity) may even be judged in comparison with relative criteria such as gender. Pay was a symbolic scorecard by which an employee may compare his/her outcomes with his/her inputs. An employees’ reaction may be one of the three combinations that can occur from social and pay comparisons – equity, overreward and underreward. If employees perceive equity, they will be motivated to continue to contribute at about the same level. Otherwise, under conditions of inequity, they will experience tension that will create the motivation to reduce the inequity. The UK labor sector is still composed mostly of direct hire workers and employees although there is no doubt that there is constant increase in the emergence of agency workers who mostly gets affected with the ongoing issue of inequality. With this situation, the agency workers are susceptible to inequality or abuse in the employment sector. It is apparent that the legal framework and constitution should be reviewed and understood in reference to the rights that these agency workers have and if they are indeed fully covered and sheltered from any maltreatments of any kind. The labour market is seemingly facing a conflict between the agency workers and direct hires although they perform similar duties and responsibilities in a certain company they work for. There is a growing insecurity proven by the comments and reactions of agency workers when they come into comparison with the direct hires and this may have the basis of compensation, insurance and job stability. This has to be looked into for the employers are not the only ones affected but also the consumers of the goods and services. The dispute between two opposing forces may lead to hidden costs of labour. Statistics show that nowadays UK workforce is still mostly comprised of 93% permanent workers while the temporary or contractual workers rank second with a minimal 6%. The temporary agency work completes the remaining 1% of the workforce. The presence of temporary or contractual workers did not increase in time for it has decreased during the latter part of 1980’s. With the decline in the number of temporary agency workers, the agency workers rose into the labour market as a replacement for the temporary or contractual workers. The permanent workers were able to stand the test of time for it continues to outnumber the temporary and agency workers. As a result, the legislative body tends to protect the permanent workers for they comprise most the jobs necessary in the labour market while the agency workers were overlooked by the body due to their small number. The introduction of new laws and regulations pertain mostly for the welfare of the permanent workers while the agency workers were overlooked. Aside from the governing laws protecting more of the permanent workers, the agency workers often get employed with jobs related to production, manufacturing and other businesses which are very prone to exploitation. Temporary agency workers tend to be young, are more likely to be from an ethnic minority background, and tend to be slightly less qualified than the workforce overall. Men and women are equally likely to engage in temporary agency work, but are concentrated in different industries and occupations. Aside from this, there is a huge percentage of temporary agency workers who are employed for some companies for more than one year yet they are still classified as temporary workers. With this, the stability of a permanent job was not granted to them as well as the benefits and rights attached to this classification. The agency workers are faced with job instability and insecurity for they are the front liners when it comes to company lay-offs. They are the first ones who are threatened with job loss when this occurs. They may have jobs one day and tomorrow it may all be gone. This economic insecurity is reinforced by their legal position. In an economy where employment rights are often dependent on being an employee and having worked for the same employer for at least one year, agency workers lose out on both counts. In comparison to the permanent workers, the agency workers are usually paid less, entitled to minimum or zero benefits and rights. The fundamental rights that they have are the national minimum wage, statutory sick pay, maternity/paternity pay benefits and state pension. They are not entitled to bonuses, allowances or other incentives. There are even some agency workers who do not have these minimum entitlements which they should be entitled to. In UK employment law there is an important distinction between ‘employees’ and ‘workers’. Most agency workers are classed as workers and this serves to exclude them from entitlement to important employment rights such as unfair dismissal and redundancy protection, which are only available to employees. A company’s reward philosophy should be simple – they should pay for performance and the better the performance the more they should pay. Most companies have adopted a ‘market based pay’ approach to determining salaries which means they pay according to the value of the job in the market. Companies should be dedicated to the principles of employment and pay equity. They should be committed to taking steps to facilitate the integration and promote the full participation of previously under-represented designated groups such as agency workers in the labour market and encourage the utilization of the talents of all employees in order to realize the business objectives of the companies Employers should also be committed to implementing an Employment Equity Program to ensure that all groups of peoples, including people with disabilities, aboriginal people, members of racial minorities and women are given equal opportunities in the areas of employment. More specifically, no person will be denied employment opportunities for any reason unrelated to his/her ability to do the job. Firms should attract talented people through competitive compensation, benefit and work life practices; motivate corporate and individual performance by linking incentives to key strategic success criteria, strongly differentiating rewards based on personal performance; and promote long-term career relationships through multiple career path and growth opportunities, offering flexibility to meet employee priorities at various life stages. The Equal Opportunities Commission and other organizations aim to protect the rights of women in the workforce. Employment law is a complex area that is full of pitfalls. Getting it right means keeping in touch with developments, thinking out your policies and implementing them with care. Getting it wrong is easier, but could be extremely expensive. Some English laws are enacted to protect the workers in general. They have recognized the need for additional laws and regulations in reference to the agency workers to prevent their abuse and unequal compensation. The government made a public statement last March 2006. This was entitled Success at Work Policy which pertains to the measures that the government administration has taken in order to address the problematic issues involving agency workers. The following statements were included in the government document: 1. Introduce a right for the agency worker to stop using additional services offered by the agency without suffering detriment (e.g. loss of the assignment) 2. Prevent agencies from deducting loan repayments from wages without the express consent of the agency worker 3. Require all agencies placing drivers to make reasonable checks to ensure that the drivers are properly qualified and do not exceed working time limits. 4. Introduce a cooling-off period where up-front fees are charged in the modelling / entertainment sectors, for example by making it unlawful for the agent to take or seek fees on the same day that the actor/model meets the agent. With these statements made last March 2006, the actual reform was launched in the first quarter of 2007. They tried to simplify the tasks due to very short time allotted for employers and workers. There was an argument that started with the public statement and reform that was convened by the government. DTI strongly insists that the data gathered and the sources of information used by the government to back up their statements and recommendations were insufficient to support legislative change. They also stood by their belief that once the changes take into effect, it can lead to damages in labour market flexibility that could eventually result to a decrease in the status of overall employment. Employers also had their own stand on these changes in legislation. They are open to changes however; they would want to contradict some points regarding the extension of the existing employment coverage. They believe that these would result to there will be less nonconforming jobs made available by businesses due to the fact that permanent employees would not consider applying or transferring to these jobs. Another point is that businesses demand more commitment and productivity from the workers of these nonconforming jobs taken by agency workers and amendments in the employment contract will increase the tendency of further restrictions to the job expectations that they impose upon agency workers. With strong laws protecting the rights of the agency workers, some businesses might consider changing their recruitment and employee selection procedures which may be geared towards the advantage of the non-agency workers on the look out for new and better jobs. The DTI considered the reactions coming from the business sector. In February 2007, DTI introduced Consultation on measures to protect vulnerable agency workers. The written goal of the consultation is ‘to address the bad practices highlighted in Success at Work, that can affect the most vulnerable agency workers…..without placing burdens on the majority of reputable agencies who would not use such practices.’ The documents presented by DTI on were very similar with those data published on the material entitled 2006 Success at Work. With this comparison, it was apparent that there were no improvements, deletions or changes made that will aide in the prevention of prejudice and disparity experienced by agency workers. The consultation seemingly implied the pursuit to sustain labour market flexibility because the information deals with nature of contracts between the employer and the agency worker instead of imposing the rights that has to be availed by the agency worker. The problems areas were not resolved. RECOMMENDATIONS The Success at Work and the consultation document was successful in identifying the needs of agency workers in terms of employment right, job stability and safety and other additional benefits. However, they were not able to promulgate laws that will suffice these needs mentioned in the previous materials. The legal framework was not firmly and clearly established which should have been a guide for employers, agency workers and the government when it comes to elimination of discrimination and inequality are concerned. The employments laws in relation to agency workers should guarantee equal treatment so that agency workers receive the same core employment rights as directly employed workers. The regulations should state that an agency worker engaged on an assignment at a user enterprise should, for the duration of the assignment, be engaged on terms no less favourable than the user enterprise would engage or does engage a directly employed worker doing the same or similar tasks. Where there is no direct comparator, the regulations should provide for a hypothetical comparator. Unnecessary pre-employment fees should be removed as requirements to land a job being an agency worker. The laws should state clearly what the agency workers have to pay to the agency and the range of allowable amounts should be indicated as well. Some examples of these fees are the transfer fee and up-front fee. The latter is related to jobs within the entertainment segment. The question as to whether the agency worker plans to stay permanently with the agency or it is only a way to gain work experience and later on apply for permanent and direct-hire jobs have to be addresses as well. The employment agencies should also be regulated by requiring them to apply for license. This does not only include the agencies covered within Gangmasters’ Licensing Act. It will be very helpful for workers to submit applications only through the licensed and legal agencies to ensure that they meet the government standards when it comes to employment and is considered reputable in terms of credibility. With this, they will be able to keep track of the policies and procedures enacted by these agencies to check if they comply with the employments laws. They can do regular inspections and enforcements. The working class and the employing class should stand and live on equal grounds. Equality should be achieved in order for peace and unity to be possible between the labor workforce and the employing group. The working class should have similar benefits as what the employing class gets from their employment within the same institution Ashiagbor, Diamond. 2005. 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Zeitlin, Jonathan. 2005. "Introduction: The Open Method of Coordination in Question." In The Open Method of Coordination in Action: The European Employment and Social Inclusion Strategies, ed. Jonathan Zeitlin and Philippe Pochet, with Lars Magnusson. Brussels: P.I.E.-Peter Lang. Read More