Employee Relations - Research Paper Example

Employee Relations - Collective Bargaining Processes Contradict the Basic Assumptions of the HRM Approach to People Management – Instructor’s Name Subject / Course Date Table of Contents I. Introduction ………………………………………………………………. 3 II. Definition of Terms ……………………………………………………… 4 III. Literature Review ………………………………………………………… 5 a. The Main Purpose and Function of HRM within a Globalized Market ………………………………………………. 5 b. Basic Assumptions of HRM in Relation to People Management …………………………………………… 7 c. Application of Theories and Models Commonly in the Study of Employee Relations ………………………………… 8 d. Does Collective Bargaining Fits in with HRM? ……………. 9 IV. Analysis and Discussion on the Contemporary UK and European Context of Employee Relations …………………………… 10 V. Conclusion ………………………………………………………………… 10 References ……………………………………………………………………… 12 - 14 Introduction One of the biggest challenges in line with the study of Human Resource Management (HRM) is the effective handling of the employees. Since the era of the Industrial Revolution back between the years 1700 – 1900 1 up to the present time, HR managers have kept on dealing with labour unions who continuously voice out their concerns over the long working hours, unsafe working place and even the relatively low wages they get in exchange of the service they render for their employers. Many types of labour union were developed since the Industrial Revolution. Back between the late 1700s and the early 1800s, at least two types of labour unions known as the craft unions and the industrial unions were reported to emerge.2 Over time, the number of reported labour unions eventually increases. Today, the after effects of globalization have caused many labour unions to strengthen their forces for their own self-benefits. Despite the new opportunities that globalization is offering to the big multinational companies, the expected income of the local workers suffers as a result of the massive ‘lay-offs’ that has been going on throughout many developed and underdeveloped countries. Specifically the economic recessions that lead to labour cost-cutting policies resulted to the rise to the issue of labour unions and collective bargaining. The purpose of this study is to prove that the process of collective bargaining significantly contradict the basic assumptions of the HRM approach to people management. To enable the readers to fully understand the topic research, the researcher will first provide a definition of collective bargaining, employee/industrial relations, and labour unions. Eventually, the researcher will conduct a literature review discussing about the main purpose and function of HRM as well as its basic assumptions in relation to people management. In the process, the researcher will discuss the application of theories and models that are commonly used in describing employee relations. Based on the gathered literature review, the researcher will discuss and analyze these theories and models in relation to the contemporary UK and European context of employee relations. For the conclusion, the researcher will provide some evidences as to whether or not the collective bargaining processes contradict the basic assumption of the HRM approach to people management. Definition of Terms Collective Bargaining – “a voluntary negotiation between employers’ organizations and workers’ organizations, with a view to the regulation of terms and conditions of employment by collective agreement.”3; “a process of negotiation between the management and the union representatives for the purpose of arriving at mutually acceptable wages and working conditions for employees.4 Employee / Industrial Relations – refers to the study of rules, regulations and agreements by which employees are managed both as individuals and collective group in order to achieve the organization’s goals and business objectives.5 Labour Union – “a group of workers who have collaborated to achieve a common goal in terms of their wages, working hours and working conditions.6 Literature Review The Main Purpose and Function of HRM within a Globalized Market Aside from the huge impact of globalization in the study of HRM, Hodson (2002) stated that the increasing workforce education as well as the constantly changing production technologies also has a great impact on employee relationship.7 Despite the changing internal and external pressures, HR managers are being challenged to maintaining the peace and order within the working environment as well as the proper functioning of each employee. In other words, HR managers should increase the quality and productivity of its human resources through motivational factors which can be attained by providing them sufficient trainings needed for the job as well as offering them intrinsic and extrinsic rewards in exchange for their good performance.8 The main function of HRM is entirely different from the traditional personnel in the sense that the modern HRM is using strategic management in order to utilize the available manpower to meet the main objectives of the management. Aiming to preserve the company’s competitiveness in the market, the HRM adopts the ‘unitarist perspective’ when dealing with employee relations.9 Basically, the strategies used in HRM are greatly influenced by the nature of the business as well as the entire structure on the firm. Other significant external factors such as the presence of a trade union, the legal system, as well as the labour market situation also affect the HRM strategies.10 In line with employee relations, Hagen (2003) explains that the modern HRM is focusing more on the implementation of efficiency from employee participation rather than a democratic one.11 Efficiency among the employees in terms of having good interaction and coordination at work could prevent uncontrollable stikes within a business organization. Basic Assumptions of HRM in Relation to People Management One of the basic assumptions of HRM with regards to people management is the fact that the HR managers treat the labour as an asset rather than a variable cost. A lot of the modern organizational concepts believe that employee participation in the business is considered good.12 Therefore, they believe that investing on human resources is more beneficial on the part of the business since these people could eventually provide the company with enormous returns. In order to save the company some training and development costs, the modern management we have today ensures that ‘economies of scale’ is met by shifting from an individualistic orientation to a collective one.13 In line with the importance of the employee, Schein (1998) states that the relationship between the employer and employee assumes that employees will be honestly treated equally; practice an open communication between both parties with regards to the changes and developments; the job security and degree of employement will result to employees’ loyalty to the company; and that the production input of the employees will be recognized and valued by the employer.14 Application of Theories and Models Commonly in the Study of Employee Relations When analyzing the position of labour within the economic system of a capitalist environment, Bourdieu (1987) explains that there is a need to combine objectivist theoretical approach such as the marxist tradition with a subjectivist approach in order to avoid ‘theoreticist illusion’.15 In order to prevent using the constructivists’ approach on the HR managers’ decision making, objective and subjective analysis should be used in understanding employee and employers’ different views on working arrangements, values and culture within the organization, and the living conditions of the people. Among the common theories that are applied in the study of employee relations include: Unitarism and Pluralism. Under the unitarism, David Guest (1992) explains that unitarism follows only a single authority such that there is no ‘us’ or ‘them’ but one as a group.16 Therefore, it is believed that the organization that follows unitarism functions as a one big happy family. Pluralism is totally different from unitarism in the sense that the organization in a pluralist environment is usually composed of individuals and groups that has different values, interests, and objectives. Therefore, the possibility of a trade union and collective bargaining process is more likely to occur. 17 Does Collective Bargaining Fits in with HRM? The philosophy behind HRM follows a unitarist concept in the sense that the top management and employees work together under one common value and organizational objectives. The explanation of David Guest (1992) regarding unitarism totally contradicts the opinion and views of a trade union which is to go for a collective bargaining in order to fight for their beliefs and personal interests.18 Contrary to the statement of Guest (1992), Godard and Delaney (2000) suggest that “the modern HRM practices are viewing the labour unions and collective bargaining as a core innovation in industrial relations.”19 In line with the conflicting statement of Guest (1992) and Godard and Delaney (2000), Armstrong (1987) explains that the adaptation of the HRM strategy does not totally disregard the existence of collective bargaining within a business organization.20 Considering that all organizations are pluralist societies in the sense that each individual will have different specific needs and concerns, Armstrong stress out the need to integrate all the internal and external factors into a commonly acceptable HRM principle that is effective in getting all the members of the organization to work well is all that matters.21 Analysis and Discussion on the Contemporary UK and European Context of Employee Relations The number of trade unions in the British workplaces has constantly declined since 1980s.22 Considering that the main cause of trade union is dissatisfaction among the workers23, the application of the HRM pay close attention to this area in order to avoid the unnecessary trade unions. Machin and Wood (2005) reported that the use of effective human relations practices as well as the new forms of work organizations has significantly contributed to the decline of the number of trade unions.24 By simply providing the workers with a job satisfaction, security as well as benefits constitutes the win-win relationship between the workers and employers. Conclusion Despite the fact that trade unions still exist in UK and Europe, the current employee relations among the local employers and employees are strengthening due the adoption of the HRM practices. The collective bargaining process does not literally contradict the basic assumption of the HRM approach to managing people. Even though in the sense that HRM follows a unitarist approach which states that the entire group works under a common values and business objectives, the fact that HRM regards the employees as an asset instead of a variable cost, a collective agreement between the management and employees can be utilized as a means of communication between the two. I strongly agree with Armstrong (1987) statement that “all organizations are pluralist societies in the sense that each individual will have different specific needs and concerns.” Even though a unitarist organization believes that the entire organization follows only one goal and values, it is still unavoidable that some members of the group will not have a negative feeling about the practices and culture within the working environment. Therefore, in the absence of a collective agreement, it would be difficult for the top management to prevent the employees from becoming dissatisfied which could eventually end up with the formation of more labour unions. *** End *** References: Armstrong, M. “HRM: a Case of teh Emperors New Clothing?” Personnel Management (1987): 8:30 - 35. Berlanstein, Leonard R. The Industrial Revolution and Work in 19th Century Europe. London, England: Routledege, 1992. Blyton, Paul and Peter Turnbull. The Dynamics of Employee Relations. London: Macmillan, 1994. Boone, Louis E. and David L. Kurtz. Contemporary Business. Fort Worth, TX: Dryden Press, 1999. Bourdieu, Pierre. “What Makes a Social Class? On the Theoretical and Practical Existence of Groups.” Berkeley Journal of Sociology (1987): XXXII:1 - 17. Davis, Peter. “Human Resource Management in Cooperatives.” International Labour Organization (2004): 1 - 191. Estey, Marten. The Unions. New York: Harcourt Brace Jovanovich, 1976. Fiorito, Jack. “Human Resource Management Practices and WOrker Desires for Union Representation.” Journal of Labor Research (2001): Vol. 22, No. 2: 335 - 354. Gennard, John and Graham Judge. Employee Relations. 3rd Ed. London: CIPD, 2002. Godard, John and John T. Delaney. “Reflections on the High Performance Paradigms Implications for Industrial Relations as a Field .” Industrial and Labor Relations Review (2000): 53(3):482 - 502. Graham, H.T. Human Resource Management. 3rd Edition. in Falkum, Eivind (ed) "HRM and IR Perspectives - Antagonistic or Compatible? Conceptual Constraints in Studies of Participation and Performance. Communication Paper to the IIRA 13th World Congress, Berlin. September 8 - 12, 2003. Guest, David E., et al. “Human Resource Management and Corporate Performance in the UK.” British Journal of Industrial Relations (2003): 41(2):291 - 314. Guest, David. “HRM and Industrial Relations.” Journal fo Management Studies (1987): 2418:503 - 521. Heller, Frank. “The Under Utilization of Human Resources in Industrial Relations Theory and Practice.” The International Journal of Human Resource Management (1993): Vol 4, Issue 3: 631 - 644. Hagen, Inger Marie. “Bedriftsdemokrati fra rettighet til produktivitet. in Falkum, Eivind (2003) "HRM and IR Perspectives - Antagonistic or Compatible?".” Communication Paper (2003): 1 - 17. Hodson, Randy. “Worker Participation and Teams: New Evidence from Analyzing Organisational Ethnographies.” Economic and Industrial Democracy (2002): Vol. 23 (4): 491 - 528. “International Labour Organization.” 1996. ILO Right to Organize and Collective Bargaining (No. 98), 1949. in Sriyan de Silva (1996) "Collective Bargaining Negotiations". [ Online] 4 January 2008 . Machin, Stephen J. and Mark Stewart. Trade Unions and Financial Performance. in Falkum, Eivind (ed) "HRM and IR Perspectives - Antagonistic or Compatible? Conceptual Constraints in Studies of Participation and Performance. Communication Paper to the IIRA 13th World Congress, Berlin. September 8 - 12, 2003. Machin, Stephen and Stephen Wood. “Human Resource Management as a Substitute for Trade Unions in British Workplaces.” Industrial and Labor Relations Review (2005): Vol 58, No. 2: 201 - 218. Purcell, John. The Impact of Corporate Strategy on Human Resource Management in John Storey (ed) "New Perspectives on Human Resource Management". London, UK: Routledge: pp. 67 - 91, 1991. Schein, Edgar H. Organizational Psychology. Englewood Cliffs, NJ: Prentice Hall, 1998. Storey, John “HRM in Action: The Truth is Out at Last.” Personnel Management (1992): 28 - 31. Storey, John. Human Derek Torringtons "Resource Management and the Personnel Function" in "New Perspectives on Human Resource Management". London: Routledge. pp. 55 - 66, 1991a. Storey, John. Introduction from Personnel Management to Human Resource Management in New Perspectives on Human Resource Management. London, UK: Routledge, 1991b. Read More