Managing Employment Relationship - Case Study Example

 Strengths and Weakness of Joint Consultation Committees as means of influencing management decision making Introduction to changing management practices The global business environment has exposed the business organizations with increased challenges in the form of increased market competition, growing consumer expectations, high level of innovation in the industries and rapidly changing market dynamics. Organizations are increasingly focusing their strategies on human resource management to enhance employee productivity and performance. Evolving business climate includes vast transformations in the perception of organizational leadership, managerial functions, and human resource strategy. Corporate management faces more challenges in the form of changing corporate relations and increasing global influences that have set a new pattern in managing people and businesses. Managerial decision making in the current economic environment has undergone radical transformation in the past few decades. The focus of such strategies is based on increasing employee participation in the decision making process. Joint Consultation Committees and its strengths and weaknesses Traditional organizations adopted the age-old management practice of providing specific directions to their employees with managers giving explicit instructions on how to do their jobs to meet the organizational goals and objectives. “In traditional organizations, directing involves giving assignments, explaining routines, clarifying policies, and providing feedback on performance” (Nickels, 2008). Most organizations adopt this management style. However, changing business environment and increasing complexity in the operating market environment has forced organizations to revamp their management styles and practice to more flexible and friendlier approach that encourages active participation of employees in managerial decision making process. Nickels in his book Understanding Business concludes that various researches conducted have found that employee participation in decisions is highly effective in increasing performance and productivity besides increasing individual job satisfaction. “Many progressive organizations are highly successful at using democratic style of leadership that values traits such as flexibility, good listening skills, and empathy” (Nickels, 2008). There are many organizations that have in practice joint consultation committees to ensure the participation of employees in the managerial decision making process. These committees are highly effective in increasing employee involvement and boosting motivational levels to ensure enhanced productivity and performance. The overall objective of such committees is to increase employee empowerment within the organization and improve employee relations to harness organizational effectiveness. Employee empowerment is a new approach to management that incorporates employee self development programs to enable their involvement in corporate decision making process. Robert Heller (2005) in his article “Employee Empowerment: Management giving power to the people” defines empowerment as organizational culture where everyone can take action to enhance his or her own work, either in personal or professional terms. Empowerment has been defined by Dimitriades (2001) as the process of enabling, and supporting an organization’s human resources to make high quality, efficient, and effective decisions leading to continuous quality improvement. This kind of managerial practice is facilitated by a flat organizational structure that has a non-hierarchical structure. The non hierarchical organizational structure promotes responsibilities and motivates the employees to put in their best at work resulting in high performing organizations. Responsibility for the success of the organization is shared by all the employees. However, such work culture demands strong commitment and high level of energy from the employees. A vital ingredient for successful employee participation is communication flow within the organization. This establishes the pattern in which employees and managers communicate, exchange, or voice their ideas, opinions, instructions and issues faced by the workforce or operational challenges. Effective communication methods result in highly effective employee performance and productivity. Consultation is the process by which managers and employees collaborate to discuss problems and situations faced by them at workplace. It provides a healthy platform for discussing and examining issues faced by employees that eventually results in acceptable solutions to the issues. This process contributes to increasing organizational productivity and employee performance levels. However, the employee participation and consultation process within an organization faces distinct weaknesses in the form of lack of supporting infrastructure to encourage the process of open communication. Potterfield (1999) states that empowerment can be effective only when the organization provides the four essential ingredients to its staff and that includes – information about the organization’s performance, rewards based on organization’s performance, knowledge that enables the workforce to contribute to organization’s performance, and power to make decisions that influence organizational performance. A major constraint faced in the effective implementation of consultation practice is that the whole framework requires time and efforts to make the whole system work cohesively and contribute to organizational goals. Individual conflicts, behavioural issues that include employee attitude, biased opinions and preconceived views are some of the deterrents that pose limitations to this kind of managerial strategies. Overcoming such limitations requires skilful handling of situations. Managerial strategies associated with this form of organizational practice takes into account ways and means of strengthening interpersonal relationships within the workforce. Effective communication strategies and employee training play a significant role in overcoming such limitations. Employee training and development is essential for creating a knowledgeable workforce and equip them to understand issues and scenarios that will ensure effective decision making process. There are many organizations where efforts for employee participation and joint consultation committees have not made a positive impact on increasing operational efficiency owing to lack of adequate training within the workforce. The new business environment is influenced by globalization of economies and liberalization of markets has created the need for highly skilled professionals in their respective fields. Businesses today rely on the specialized knowledge and capacities of their workforce for success. Knowledge management has assumed great relevance in formulating managerial strategies and meeting new economic challenges. Conclusion Employee empowerment allows individuals to get actively involved in the various stages of decision making process that includes identifying problems, analyzing alternative solutions and recommending the most effective solution to the problem. Joint consultation committees can be highly effective provided the organization supports such initiatives through transparency in communication and enabling employee access to adequate information sources (ACAS, 2009). References: 1. ACAS. 2009. Employee Communications and Consultations. Accessed on December 2, 2009 from http://www.acas.org.uk/CHttpHandler.ashx?id=251&p=0 2. Nickels, William G. 2008. Understanding Business. Chapter 7: Management, Leadership, and Employee Empowerment. McGraw Hill Higher Education. 8th edition 3. Potterfield, Thomas A. 1999. The business of employee empowerment: democracy and ideology in the workplace. Greenwood Publishing Group. Pages 49-59. 4. Dimitriades, Z. 2001. Empowerment in total quality: designing and implementing effective employee decision making strategies. Accessed on December 2, 2009 from http://www.asq.org/pub/qmj/past/vol8_issue2/qmjv8i2dimitriades.pdf 5. Heller, Robert. 2005. Employee empowerment: management giving power to people. Accessed on December 2, 2009 from http://www.thinkingmanagers.com/management/employee-empowerment.php 6. Roberts, J. 2004. The modern firm: organizational design for performance and growth. Oxford University Press. 7. Holbeche, Linda. 2005. The High Performance Organization. Elsevier Butterworth-Heinemann Publication. (239-291). 8. Allenstein, David. 2009. Keep training. Human capital management journal. Jan-Feb 2009 22-24. 9. Morgan, Gareth. 1989. Creative organization theory: a resource book. Sage publishing. 10. Ongori, Henry. 2009. Managing behind the scenes: a view point on employee empowerment. African Journal of Business Management. Vol 3 (1) pp 9-15. Trade Unions and its implications on organizational strategies 1. Background and Introduction Tims Agro Foods Ltd. Started as a small sized business enterprise dealing in agro based food products. Within a period of five years the company has expanded its market operations through aggressive marketing and sales strategy. The company catered to its local customers initially but with growing popularity of its products and focus on quality ingredients has increased its market demand. The company employs 100 people working in various departments. The management has initiated a round of changes at various operational levels and this has presented numerous challenges in the form of employee resistance, conflicts and employee welfare issues. The employees want to affiliate to a trade union to represent their needs and welfare issues to the management. The management faces the dilemma of recognizing the trade union and the implications it can have on its business operations. This report presents an insight into the role of trade unions in organizations and how they can be used to promote healthy employee relationship in the long run. In this context the report also presents the implications that trade unions can have on managerial strategies and how it can be effectively dealt to work for the mutual benefit of both the organizations and its employees. Human resource management has been driven by the dynamic business environment in which it operates. Employers need to re-engineer their business strategies to meet new challenges posed by the changing business dynamics. The role of the HR department is to support the organizational functions through appropriate people management strategies that enable the employees to deliver their best and meet the operational requirements. It has been observed that entrepreneurs are driven by the goal of profit maximization and they adopt various strategies to achieve this goal. This process sometimes results in conflicts in employee interests and managerial objectives. The employees are often concerned about their growth and development within the organization and adequate benefits program that looks into their welfare. Lack of adequate communication channels between the two parties can result in ineffective meetings and discussion process to resolve such issues. Hence for years it has been the practice of employees to form a union that can help them represent their problems and issues to the management and work out amicable solutions for healthy employee growth and development. Trade union is “an organization of workers that aims to protect and advance the interests of its members” (BIS, 2009). Trade unions have long been a part of the operating environment driving labour markets and influencing organizational culture to accommodate efficient work practices. Bargaining with trade unions often mean recognizing their existence and this relationship can be fostered in many ways for mutual benefit. Organizations can effectively integrate their strategies to gain advantage from the existence of trade unions through the implementation of employee participation and promoting a healthy work culture that focuses on increased productivity. The report provides an in-depth analysis of how trade unions can be utilised to create a healthy balance of power between managers and employee unions. 2. Managerial issues in context of recognizing trade unions Often within organizations employees come together to form an association or trade union group to represent their concerns to the managers for appropriate action. There is a general perception among managers and business owners that trade unions can act as a threat to their business organization and pose several problems in context of the smooth functioning of the business. However, this may not be the case and there are number of strategies that can be adopted to promote mutual interests and increase productivity through increased employee participation and involvement in managerial decision making process. Small businesses in general do not require trade unions or associations to represent their interests since communication is easier and convenient in small offices. The larger business enterprises often seek the intervention of trade unions or similar associations to ensure effective resolution of problems and conflicts that may arise at workplace. Communication in larger organization is relatively complex and employees are unable to voice their concerns effectively to the right people who are capable of addressing such issues. The role of communication is hence of significant importance in the effective management of operations and resolution of conflicts between the employees and managers or business owners. The subsequent section of the report provides a detailed explanation of strategies that can be adopted by the organization to ensure effective relationship with employees and associated trade unions. These strategies include the establishment of effective protocols to be maintained at workplace, internal communication system, increasing employee collaboration, employee empowerment, rewards and recognition scheme, and encourage innovation and creativity at work. 2.1 Establishment of effective protocols at workplace Organizations are run by standards and frameworks that guide employee behaviour at workplace, provide the regulations for disciplinary actions against misbehaviour, and provide the essential rules that should be followed by people within the organization to ensure the smooth functioning and create a healthy work environment. The management is responsible for drawing the guidelines and laying the protocols to ensure a proper code of conduct among the employees. “People need to know what is expected of them in terms of standards of performance and behaviour” (ACAS, 2009). It is not effective practice to impose restrictions on employee conduct or define employee performance standards as and when required by managers at the workplace. A pre-defined set of expected behaviour protocols handed out to the employees is effective in conveying a uniform standard to all employees across all levels and departments. This also helps immensely in guiding the employees on what actions or steps should be taken next in response to a specific case or situation at the workplace. There is no room for ambiguity or misunderstandings once these protocols are defined and explained to the workforce. Many companies have a set of procedures defined for employee grievances and feedback that is useful in providing assurance to the employees that their problems will be dealt with confidentially and in uniformity with the company procedures. This ensures fair resolution of problems and guides the managers in dealing with conflicts within teams and individuals. The success of a business enterprise is to a large extent dependent on the human capital resources available. In view of the present economic perspective employee relations play a critical role in deciphering the business strategies and profitability. Conflicts are an inevitable part of the business environment and organizations have adopted various strategies to resolve conflicts arising at workplace. The conventional way of doing business viewed conflicts as a negative and threatening action working against the organizational interests. However, with changing business dynamics it is felt that conflicts can be used to leverage organizational goals and objectives through the use of effective leadership and managerial strategies. Conflicts within organizational perspective arise at various levels that have diverse impact on the organizational productivity and performance. The individual conflict arising in workplace is more evident in the form of personal goals and objectives that clash with the goals of other individuals (Weijun, 2006). Employee aspirations and career related goals form a distinctive part of this kind of conflict. Conflicts of this nature has adverse impact on the organizational productivity in some cases while in other cases it may result in increased efforts from employees to excel in their work front and gain recognition. A competitive work environment promotes individuals to prove their abilities and go that extra mile to achieve higher goals. Managers and leaders instigate a competitive environment to achieve organizational goals and targets and motivate the employees to perform better. The consequences are realized in the form of increased productivity, market share and profitability. The stakeholders gain from this kind of conflicts arising at workplace. Any changes to the current and existing work procedures are met with stiff resistance from the people involved. Managing conflicts and implementing changes in an organization is a complex task that requires an able leadership that has the capacity to visualize and identify possible barriers or resistance to the planned changes. Ensuring high levels of performance within the organization requires active participation of both management and individuals in the workforce in implementing tasks and objectives (Roberts, 2004). “Managers can unlock an individual’s ability and willingness to perform at high levels in many ways – for instance, by translating long-term goals into step by step plans, clearly stating expectations and holding people accountable” (Holbeche, 2005). Training the employees is an effective conflict management strategy. It provides the employees with increased information and knowledge on the impact of organizational policies or programs and thinks in a pre-defined manner to accept such changes. There are numerous other employee management strategies that can be implemented by the organization to ensure increased performance levels and adherence to quality standards. This includes performance appraisals, team meetings, one-to-one discussion forums, personal development plans and feedback sessions that encourage a healthy exchange of views and suggestions. The organization should outline and explain the step-by-step procedure that needs to be followed by the employees and the managers in fulfilling the objectives of performance appraisals and personal development plans. The managers should be provided with adequate guidelines on the way the system should work, how often the plans need to be reviewed and trained in the ways of conducting effective appraisal sessions. Documentation of each phase of these plans is necessary to provide the managers and employees with improved clarity on the goals decided, action plans drawn, review period and feedback of the session. 2.2 Internal communication system and collaboration Improved communication can help in motivating employees, increasing productivity and result in improved customer service. But it needs to be understood that the communication process is not simply conveying the message. It is a two-way process that needs interaction between the two parties. The management and the employees need to interact on how the managerial strategies are going to take shape and what are best possible ways to minimize risks and hurdles in the process. Giving the employees a chance to participate in management decisions not only makes them feel valuable but also ensures their support and enthusiasm in the whole process. Another vital ingredient for successful communication process is consistency. The management policies need to be consistent in their approach to instill trust and confidence in the employees. The process of communication has however evolved over the ages to encompass a host of technology tools and applications that have provided a new dimension to the way people communicate with each other. Business enterprises are adopting new and innovative technology and tools for the purpose of improved communications and collaboration between the customers and its associates. The Internet has assumed great significance in improved accessibility and communication revealing a new dimension to sharing and disseminating information across the globe. It has changed the way people perceive markets and communicate with their potential clients or suppliers. The global reach of the Internet has provided businesses with increased scope of connectivity, interactivity, and information transfer between remote corners of the globe. The time and cost advantage provided by this technology has led to optimum utilization of business resources and effective performance standards. The growth of open communication channels has promoted the emergence and development of healthy communities or group practices that have made a visible impact on business growth strategies. The company should adopt a reporting structure that has reduced hierarchical levels to enable employees easy approach and increased transparency in communication process. Access to information resources through the use of Intranet and other collaboration tools such as online forum, discussion panels and instant messaging system will enable the employees with improved knowledge sharing that contributes to increased productivity. 2.3 Employee empowerment Employee participation in managerial decision making process is highly effective in leading a corporate culture that is based on employee empowerment. Participatory style of management is highly effective owing to their impact on employee decision making abilities, performance level, and positive reinforcement at work. “Employee empowerment makes employees feels that they are valued in organizations and will create a high degree of job satisfaction and commitment” (Ongori, 2009). This kind of management practice requires a flat organization structure for effective implementation and results. Employees or associates on the other hand benefit from the extensive learning and self development opportunities within the organization. This fulfils their personal and professional objectives creating a sense of worth and enthusiasm at work. 2.4 Rewards and recognition scheme A significant part of human resource strategy is the amount of financial compensation paid to the employees. Rewarding an employee with financial compensation is a form of motivation that is intended to increase productivity and encourage others within the organization to strive harder to reach the specified performance targets. Rewarding the employee on the basis of his productivity or performance generates enthusiasm and interest within the employee to perform better. Moreover, this approach tends to increase the level of motivation encouraging him to perform better. The amount of financial compensation being provided as incentive should meet the extent of hard work required to reach the desired level of performance. It is well established fact that a significant portion of employee behaviour and attitude to work is guided by the nature of rewards and compensation strategy adopted by the organization. The amount of financial compensation paid plays a significant role in increasing employee motivation and work harder to reach the individual goals and targets set by them. The highly competitive market environment has opened extensive job opportunities for individuals and organizations are focusing their managerial strategies on retaining individual talents. Financial compensation is a key factor in retaining employees within the organization. However, financial compensation is not adequate in all circumstances. Employees need to grow and develop their skills and responsibilities and an organization providing good growth prospects motivates employees to accept challenges and adopt innovative techniques to get the work done more effectively. An intrinsic part of rewards and compensation strategy is performance management that seeks excellence and high quality work from the work force. “Rewards have two organizational objectives: to equitably recognize past performance, and to stimulate and motivate people to perform competently or differently in nature” (Holbeche, 2005). The amount of financial compensation being provided as incentive should meet the extent of hard work required to reach the desired level of performance. 2.5 Innovation and creativity at work The existing business environment has increased the need for creativity and proactive behaviour from employees. Businesses require skills for doing the job and in current market conditions advancing technology at rapid pace makes it imperative to learn new skills and upgrade one’s knowledge to adapt to changing market conditions. “Innovative companies not only try to hire creative people, they also try to develop in ways which will increase their creative output” (Christiansen, 2000). Rapidly changing business dynamics have made it critical for organizations to adapt to the changing market trends in order to survive and retain its competitive edge. Managers are increasingly realising the role training and development can play in pursuing new strategies and enhancing employee productivity. Employees working in teams can contribute to enhanced learning process and deliver innovative solutions at workplace. Dr. David Weiss and Claude Legrand (2009) claim in their work Innovative Team Learning that a team can generate increased knowledge and value within organizations that is beyond the scope of individual learning and development capacity. The team learning process is not only innovative and inspiring to the members but it also helps the organization devise new strategies and creative ideas that can work wonders for the business. It also helps the organization to meet the challenging economic demands and risks posed by the operational environment. 3. Conclusion and recommendations The report highlights strategies and measures that should be adopted by the organization to ensure increased employee participation and involvement in the managerial decision making process. The implementation of these measures will provide the company with efficient workforce supported by adequate organizational policies for promoting their welfare and development within the organization. Representatives of the trade unions should interact on a regular basis with the management to communicate issues and challenges faced by the workforce and decide possible strategies for resolution of these problems. The effectiveness of the whole exercise can be increased if the union representatives make it a point to communicate any potential issues with the management. The key benefits of having an employee representation at workplace is its role in encouraging trust and confidence within the employees and effective decision making process for the managers. It also helps in improving employment relationship and increasing organizational effectiveness. “A further benefit of effective systems of representation at work is that they can help facilitate a cooperative approach to employment relations and in many cases the development of partnerships” (ACAS, 2009). A healthy and positive work culture can be promoted through the development of good communication between the employer and the employees and if this is effectively handled through employee representation the issues faced by employees can be efficiently resolved. References: 1. ACAS. 2009. Representation at Work. Accessed on December 2, 2009 from http://www.acas.org.uk/CHttpHandler.ashx?id=298&p=0 2. Holbeche, Linda. 2005. The High Performance Organization. Elsevier Butterworth-Heinemann Publication. (239-291). 3. Nickels, William G. 2008. Understanding Business. Chapter 7: Management, Leadership, and Employee Empowerment. McGraw Hill Higher Education. 8th edition 4. Heller, Robert. 2005. Employee empowerment: management giving power to people. Accessed on December 2, 2009 from http://www.thinkingmanagers.com/management/employee-empowerment.php 5. Weijun, Tang. 2006. Organizational Behavior. Chapter 21: Managing Conflict. 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Ongori, Henry. 2009. Managing behind the scenes: a view point on employee empowerment. African Journal of Business Management. Vol 3 (1) pp 9-15. 13. Walton, E. and Nadler, D.A. 1994. Diagnosis for organizational design. Guilford Press. 14. Christiansen, James A. 2000. Building the innovative organization. 1st edn. New York, St Martin’s Press. 15. Allenstein, David. 2009. Keep training. Human capital management journal. Jan-Feb 2009 22-24. 16. IBM GBS. 2008. The changing face of communication. IBM Global Business Services. 17. BIS. 2009. Working effectively with trade unions. Accessed on December 2, 2009 from http://www.businesslink.gov.uk/bdotg/action/detail?r.s=m&r.l1=1073858787&r.lc=en&r.l3=1074020279&r.l2=1074436102&r.i=1073792416&type=RESOURCES&itemId=1073792417&r.t=RESOURCES 18. BIS. 2009. Recognizing a trade union – the issues. Accessed on December 2, 2009 from http://www.businesslink.gov.uk/bdotg/action/detail?r.s=m&r.l1=1073858787&r.lc=en&r.l3=1074436131&r.l2=1074436102&type=RESOURCES&itemId=1074437966 19. Forth, Bewley & Bryson (2006), Small and medium sized Enterprises: Findings from the 2004 Workplace Industrial Relations Survey available as electronic text. Accessed on December 2, 2009 from www.berr.gov.uk/files/file31580.pdf 20. ACAS. 2009. Model Workforce. Accessed on December 2, 2009 from http://www.acas.org.uk/media/pdf/g/e/Model_Workplace.pdf Read More