Managing the Employment Relationship - Term Paper Example

 «Managing the employment relationship» Table of Contents 1. Introduction 3 2. Company overview 3 3. Employment relationships across the organization 3a. General aspects of existing employment relationships 4 3a1. Management level 5 3a2. Low levels of organizational hierarchy 6 3b. Priorities in existing employment relationships – emergent problems 3b1. Handling conflict in the organization 7 3b2. Allowing employees to express their views 9 4. Employment relationships and trade union 10 5. Conclusion 11 Bibliography 1. Introduction The development of competition worldwide has led to the increase of the role of strategic planning as a tool for the improvement of the performance of a firm’s various sectors. However, the effectiveness of strategic planning is not equal across modern organizations. Towards this direction, the management of human resources in firms internationally has been found to be a challenging task being depended on a series of factors like the position of the firm in the market, its financial strength, the availability of resources for the realization of the relevant plans but also the level of commitment of the firm’s management on the success of the HR strategies developed in various organizational departments. In the case under examination, the firm’s expansion – recently – has been an important indicator of the improvement of the organizational performance; however, the effects of this expansion on the firm’s employment relationships need to be appropriately addressed – ensuring that the specific strategic choice – expansion of organizational activities – will be viable in the long term. 2. Company overview The firm has been traditionally a small organization. All its departments were under the control of its director. In fact up to the firm’s expansion, the number of employees was estimated to 18. After the expansion, the hiring of staff – due to the needs of the firm – led to the increase of the number of employees to about 120. The specific strategic plan was not clearly set; in fact, the hiring of employees was not followed by the provision of training – explaining to employees the firm’s culture and its strategic direction. Moreover, there was no clear distribution of roles. In many departments, employees had just to observe the firm’s existing employees – a type of inter-training program – being prepared to provide similar services when being asked by the management team. Because the strategic plans of the firm – under its new form – were not developed on time, most of the employees were not given clear directions of their role. They were delegated general duties – the distribution of roles is to be completed within the next 2-3 months after the evaluation of the firm’s needs – in accordance with its performance – but also the market trends. As a result a series of conflicts was developed across the organization; employees were not given the chance to express their views and are going to proceed to measures against the firm – most of them considered that the use of a trade union for their representation has been the most appropriate solution. However, it has been proved – as explained below – that the involvement of a trade union in a firm’s ER could lead to the increase of internal organizational conflicts. For this reason, appropriate solutions should be retrieved by the firm’s HR managers. The limitation of conflicts among employees and the increase of the participation of employees in the development of HR policies should be the priorities of the suggested HR policies. 3. Employment relationships across the organization 3a. General aspects of existing employment relationships As already noticed above, one of the major problems currently faced by the firm’s HR managers has been the continuous increase of conflicts among employees in various organizational departments. On the other hand, most of employees claim that they are not given the chance to express their views on the firm’s existing HRM problems. These two problems is of particular importance taking into consideration that the number of employees was increased recently and there has been time for the adaptation of new staff on the firm’s culture. The responses of the firm’s managers to the problems presented above have not been the expected ones. As explained below problems developed at the high levels of organizational hierarchy prevent the effective handling of the crisis. 3a1. Management level Up to now, the firm’s managers had to deal with a limited staff: about 18 employees. The increase of the number of the employees to 120 led to the development of a series of problems in the management of various organizational activities; as for the response of the firm’s HR management team, this was rather inappropriate taking into account the current market conditions and the needs of the firm. It was decided that newly hired employees should enter the firm’s departments and have a short period of training but not through the typical procedures – no training sessions or discussion with the HR managers; rather, they would try to learn through their work, i.e. through their direct involvement in the organizational activities. This could be an effective strategic choice under the terms that the roles of the employees were appropriately distributed – no specific tasks were delegated to the employees who were told to wait for a period of 2-3 months during which the needs of the organization – under its new structure – were identified; the skills required for the specific organizational needs would be decided afterwards. In accordance with Rowden (1999, 22) ‘the new business context is prompting managements to take a greater interest in the utilization of their organizations’ human resources’. In the specific organization, a series of measures should be taken immediately for the improvement of employment relations (ER) in various organizational departments; otherwise, the performance of the firm is expected to be adversely affected and it is possible that there will be no burden afterwards for the intervention of HR managers. 3a2. Low levels of organizational hierarchy As already explained above, as a result of the firm’s HR policies, strong conflicts have been developed among employees – especially at low levels of the organizational hierarchy. Employees do not given the right to express their views and the solution of the trade union has been identified as the only possible – under current circumstances. However, the specific solution would not guarantee that the ER in the organization would be improved – on the contrary, increase of existing conflicts could be expected especially under the fact that the communication between employees and managers in the specific organization is extremely poor. Current ER conditions have affected the performance of employees; more specifically, the last three months the productivity of the firm was decreased to about 23%, a fact that has been related with the absence of communication among employees; keeping employees far from the organization’s centre of decision has adversely affected the firm’s performance. The entrance of a trade union could not resolve existing organizational problems. Rather measures should be taken immediately focusing on the limitation of conflicts across the organization and the provision to the employees of the right to express their view. 3b. Priorities in existing employment relationships – emergent problems 3b1. Handling conflict in the organization In order to identify the methods required for the limitation of conflicts in the specific organization, it is necessary primarily to refer to the general characteristics of the organization as depended on its size and its position in the market. As noticed above, until recently the firm was a small firm with about 18 employees. In the literature, there is no clear definition of firms of this size (Storey, 1994, 8 in Dundon et al., 2001, 434). The number of their employees is often used in order to distinguish these firms among others in a particular market. In this context, it is noticed that ‘in Britain, firms that employ fewer than 200 workers are defined as small, while in France, Germany and America the figure is 500’ (Odaka and Sawai, 1999, in Dundon et al., 2001, 434). In accordance with the above description, the firm’s position in the market has not been particularly affected by the changes occurred in its internal environment. From another point of view, in the research made by Marlow et al. (2005) it was revealed that ‘the perception that smallness – in terms of employment – was a foundation for industrial harmony was based on the absence of overt, collective conflict and dispute in smaller organisations noted by the Bolton Report (1971)’ (Marlow et al., 2005, 146). In other words, small firms have been often related with peace – as of their internal environment. However, this assumption could not be regarded as reflecting the organizational conditions in all small firms internationally. In fact, in small firms – like in the medium and the large enterprises – severe conflicts can be developed under the influence of ineffective strategic planning and the lack of communication among employees in various organizational departments. Within these conditions the implementation of changes in a small firm can be proved to be a challenging task. More specifically, in accordance with Greve (1998, 59) ‘organizational change has been considered “as an outcome jointly determined by motivation to change, opportunity to change, and capability to change’. From another point of view, Bunker et al. (2005) noticed that ‘much of that failure stems from not understanding how to manage the structural side of change and the human dynamic of transition’ (Bunker et al., 2005, 12). The study of Bunker et al. (2005) refers to the failure related with the attempts of managers in modern organizations to implement a series of changes. The above study, as the one of Greve, 1998, is not directly related with small firms; they can be applied on firms of all sizes on which plans of change are under implementation. In accordance with the above views, change in modern organizations cannot be avoided. For this reason, managers should try to develop strategies that would support the transition of the firm to the new conditions – rather than trying to impose changes as a willing of the firm’s management. Towards this direction, it is suggested by Rosenberg (1993) that when a change plan is introduced in a particular organization ‘managers must work to give their staff a sense of control over changing situations’ Rosenberg (1993, 21). In small firms, handling conflicts seems to be an easy task – if compared with the relevant practices of firms of other sizes. Indeed, the study of Dundon et al. (2001) revealed that ‘a low incidence of strikes among SMEs can be used to argue that the close proximity of owner-managers to employees ensures informal and harmonious relations, good communications and greater flexibility’ (Dundon et al., 2001, 433). In other words, HR managers would have a significant advantage towards their counterparts in medium and large firms: in small firms the conflicts developed within the organization are limited – if compared to the similar events in medium and large enterprises. At a next level, these conflicts could be handled more effectively if the appropriate measures are taken – like the promotion of the active participation of employees in taking important business decisions – as explained in next section. Other measures, like the provision of benefits (increase of equality in the workplace), the establishment of specific criteria for promotions and the delegation of specific tasks to the firm’s employees would be also helpful in order to limit the conflicts developed within the organization. 3b2. Allowing employees to express their views As suggested above, the improvement of communication between employers and employees could help to the limitation of conflicts in the organization. The term ‘communication’ could have many aspects. In the specific firm, the major problem – as stated by employees – is the fact that the latter are not given the chance to express their view, i.e. to be involved in the decision-taking process. In the literature it is noticed that ‘in one organisation the term ‘involvement’ may be used to identify certain practices that in another organisation are regarded as ‘participatory’’ (Dundon et al., 2006, 382). Referring specifically to the issue of employee participation, Dundon et al. (2006) stated that the specific term could be defined as ‘incorporating a range of mechanisms ‘which enable, and at times empower employees, directly and indirectly, to contribute to decisionmaking in the firm’’ (Dundon et al., 2006, 383). The involvement of employees in the decision making process could therefore help towards the effective handling of the crisis. The above involvement could be achieved by the establishment of meetings between the employees - HR managers; these meetings should be held on a regular basis – e.g. every 15 days; employees should be clearly informed on the firm’s plans of change and they should be given the chance to express their views; these views should be taken into consideration when the changes under discussion were to be implemented in the organization. The above strategy could help to improve communication within the organization and eliminate – as possible – the conflicts. In the study of Marlow et al. (2005) it is noticed that ‘the close proximity between employer, management team and employee creates an environment where the utilisation of formal policy and practice intrudes into the fluid and negotiated social relations of production’ (Marlow et al., 2005, 148). In other words, the scheme described above, regular meetings between employees – HR managers, could be proved to be particularly effective for the increase of employee satisfaction and the firm performance. At the same time conflicts in the organization could be effectively handled and the promotion of the organizational priorities could be promoted. 4. Employment relationships and trade union One of the suggestions of the firm’s employees regarding the handling of the crisis has been their representation by a trade union. In order to understand the role of the trade union in such a crisis, it would be necessary to refer primarily to the union’s characteristics. A trade union is an organization focusing on the protection of the rights of its members – referring to their employment rights. The power of the union to intervene drastically in employment conflicts has been doubted in the literature. The relevant studies led to different results. In practice, it has been proved that the involvement of a trade union in a firm’s ER could help to the improvement of these relationships. More specifically, in a survey developed in the University of Warwick (the results of which are presented by Bacon et al., 1996) it is proved that ‘in non-union firms there was generally no compensating investment in employee involvement or other similar HRM strategies’ (Bacon et al., 1996, 83). On the other hand, the study of Bryson (2005) in which data referring to a survey conducted in 1998 in workplaces across Britain are analyzed it is concluded that ‘the only union effect common across employers and employees is poorer perceptions of employment relations where union coverage is at the level known to generate a union wage premium’ (Bryson, 2005, 1111). It is clear from the above that the effectiveness of trade unions in the representation of their members can present significant differentiations. The potential involvement of a trade union – as suggested by the employees – in the promotion of employees’ rights would not have the expected result. More specifically, in the firm under examination, the conflicts have been caused because of the changes implemented – especially the increase of the number of employees. There has been no chance given to the firm’s managers to handle these conflicts. Primarily, efforts should be made in order to handle workplace resistance – by providing to the employees the right to express their views and by possibly providing additional benefits – as explained above. If these measures would fail, then the use of a trade union could be considered as a potential solution for the support of employees’ rights. It should be noticed that even in case that the involvement of a union was accepted by the employer, still there were issues to be addressed: the level of communication between the employees and the union, the effectiveness of the specific union in terms of the employees needs and so on. 5. Conclusion The limitation of conflicts in the workplace is depended on many different factors. Moreover, the causes of these conflicts can be differentiated – in accordance with the market conditions, the position of the firm in its market, the country’s employment law, the social trends and so on. HR managers have to identify the precise causes of conflicts in their organization and suggest the appropriate methods for facing the problem within a short time framework. In the case under examination, the development of conflicts across the organization is based on the implementation of changes – increase of number of employees – without informing existing employees; moreover, the support provided to newly hired employees was also limited – conflicts should be normally expected to appear. The firm’s HR managers should proceed to specific strategic choices, offering the employees the right to express their view and participate in the firm’s decision-making process. The fact that the firm is a small one can be considered as positive regarding the potential success of the above measure. Bibliography Bacon, Nicolas; Ackers, Peter; Storey, John & Coates, David, (1996) "It`s a small world: managing human resources in small businesses", International Journal of Human Resource Management 7, 82-100, London: Routledge, Bryson, A. (2005) Union effects on employee relations in Britain. Human Relations, 58(9): 1111-1119 Bunker, K., Wakefield, M. (2005). Changing Workforce: Leading Effectively When Change Is the Norm Canadian Government Managers Discover How to Weather Draconian Layoffs and Budget Cuts by Turning Inward to Become More Authentic. The Public Manager, 34(4): 9-17 Day, D., Lord, R. (1988) Executive Leadership and Organizational Performance: Suggestions for a New Theory and Methodology. Journal of Management, 14(3): 453-464 Dundon, Tony & Wilkinson, Adrian, (2006) "Chapter 15: Employee Participation", Redman, Tom & Wilkinson, Adrian, Contemporary Human Resource Management: Text & Cases, 382-404, Prentice Hall Dundon, Tony; Grugulis, Irena & Wilkinson, Adrian, (2001) "Chapter 14 : New management techniques in small and medium sized enterprises", Redman, Tom & Wilkinson, Adrian, Contemporary Human Resource Management: Text & Cases, 432-463, Prentice Hall Greve, H. (1998). Performance, Aspirations and Risky Organizational Change. Administrative Science Quarterly, 43(1): 58-63 Marlow, Susan & Gray, Colin, (2005) "Chapter 10: Information and consultation in small and medium sized enterprises", Storey, John, Adding Value through Information and Consultation, 145-158, Palgrave Macmillan Rosenberg, D. (1993). Eliminating Resistance to Change. Security Management, 37(1): 20-22 Rowden, R.W. (1999) ‘Potential Roles of the Human Resource Management Professional in the Strategic Planning Process’, SAM Advanced Management Journal, 64(3): 22-29 Sum, C., Kow, L., Chen, C. (2004) A taxonomy of operations strategies of high performing small and medium enterprises in Singapore. International Journal of Operations & Production Management, 24(3): 321-345 Read More