Principles of Employment Relationships - Essay Example

Principles of Employment Relationships Industrial relations refer to the relationships that exist between managers and employees in all spheres of economic activity. The term was originally defined as the interactions and relationships between employers and employees (Salamon, 2001). It covered all aspects of employment relations that include employee relations, human resource management, and labour relations. Accordingly, it focuses on the study and practice of trade unionism, collective bargaining, and labour management relations unlike human resource management which deals with nonunion employment relationships. The industrial relations include relationships between employees, the relationships between employees and their employer, the relationships that employees and employers have to the organization while promoting their respective interests, and the processes through which these relationships are expressed such as employees’ participation in decision making, collective bargaining and grievance and conflict management. The progress and success of the organization depend on its industrial relation. First, industrial relations ensure there is uninterrupted production. They ensure there is a continuous employment, for both managers and workers, organizational resources are fully utilized for maximization of production, uninterrupted income flow for all and that the smooth running of the industry also benefits other industries (Sappey et al, 2009). Secondly, good industrial relations reduce industrial disputes. More often, industrial unrest is reflected in organizations in form of strikes, go-slow tactics, lockouts and grievances organizations. The disputes arise due to failure of securing adequate satisfaction or basic human urges. The problems can only be cured by good industrial relations through the promotion of cooperation, and thus, increasing production. Thirdly, good industrial relations increase the employee morale. Increased production is realized when the employees have a feeling that their interest is common to that of employers. Both the employer and the employees should recognize that they co-owners of the gains of the industry hence they should share them equally and generously (Edwards, 2007). Good industrial relations enhance complete unity of thoughts and actions for the achievement of industrial peace, and thus, satisfying the workers ego by increasing their place in the society. This naturally increases the production due to mighty cooperative efforts. Fourthly, industrial relations aim for a complete revolution of the employees (Sappey et al, 2009). It creates industrial peace that lies ultimately on a transformed outlook of both the managers and workers. Through leadership in various ranks of the organization, both parties are able to establish a new relationship that is in consonance with the spirit of true democracy. They should take one another as partners in the industry and be able to recognize the role of each party. The recognition of respective role of each party positively impacts on the production of the organization. Finally, the maintenance of good industrial relationships based on recognition and cooperation of each other reduce wastage of material, human resource, and machine and thus protecting the national interest of achieving high productivity (Salamon, 2001). It is also evident that good industrial relations increase efficiency of the workers by promoting their morale and maintaining a harmonious relationship between the mangers and workers. Industrial relations system refers to a conceptual framework for studying industrial relations (Dunlop, 1984). It involves an interactional process between employees and organizations at the workplace and, more broadly, in establishing the terms and conditions of employment. Inputs such as capital, human labor and managerial skills from the environment are combined through various processes like legislation or collective bargaining to produce certain outcomes that include job satisfaction, high productivity and wage rates. Industrial relations can be best understood by identifying its main components and examining how they interact with one another so as to produce certain outcomes. The main features of a system of industrial relations are: i) the actors. According to Dunlop (1984), the actors include the management, workers and their organization, and the government. The employers have the right to hire and fire the employees and can affect their interests by exercising their right to close or merge the industry, relocate or introduce technological changes. On the other hand, the employees seek to improve their working terms and conditions by voicing their grievances and exchanging their views with the management. They also unite to form unions from which they get support against the management. The government regulates and influences industrial relations through rules, laws, agreements and awards of the court. It also includes labour and tribunal courts as well as other third parties. ii) Environmental or contextual factors. The actors and the organizations are situated within an environment that is defined in terms of labour and product markets, technology, and the locus and distribution of power in the whole society as it impacts on the workplace and individual employees (Edwards, 2007). In this environment, the actors interact and negotiate with one another, and use their political/economic power in determining the rules that comprise the output of the system of the industrial relations. The institutions cannot work independently or in an autonomous manner but they are rather shaped by their market, political and technological contexts, at least to some extent. iii) The third component is the processes that determine the terms and conditions of employment Dunlop (1984). These processes include legislation, judicial processes, collective bargaining, and unilateral management decisions among others. iv) The fourth component is ideology, rules and a set of shared belief derived from the industrial interactions which enhance system stability and govern the employment relationship (Deery, Iverson and Erwin, 1999). v) Lastly, a system of industrial relations consists of outcomes that include wages and benefits, job satisfaction, productive efficiency, employment security, industrial peace and conflict as well as industrial democracy (Edwards, 2007). Various theories and approaches have been developed to assist in the understanding of the industrial relations. Some theorists view it in terms of class conflicts, some in terms of mutual interest of different groups and others as a consequence of interactions among various factors, both within or outside the organization. Based on these orientations, Palmer (1997) illustrates three approaches or frames of reference: unitary approach, pluralistic approach and radical approach. Unitary approach In unitary approach, the organization is viewed as an integrated and harmonious system representing a happy family. It has a core assumption that the management and all organizational members have similar interests, objectives and purposes, and thus they work hand in hand towards a shared mutual goal. This approach demands the loyalty of all its employees and deems trade unions as unnecessary. In this approach, the employees view working practices as being flexible and thus they should be multi-skilled and must be ready to work efficiently in whatever task they are assigned (Palmer, 1997). It views a trade union as a further means of communication between organizational groups and the company. It emphasizes on good industrial relations as well as sound terms and conditions of employment. Employees in the organization are empowered through their participation in making decisions. In addition, there is emphasis of teamwork, creativity, innovation and discretion in problem solving as well as quality and improvement groups among others. For the employers, the unitary approach means that the organizational staffing policies inspires and motivates the employees (Jackson, 1992). They are required to properly communicate and discuss the organization’s wider objectives with their staff. Reward systems should be deigned such that they foster and secure the employees’ loyalty and commitment. Lack of information and inadequate presentation of the management policies result in staff-management conflicts. Thus, every employee’s personal objectives should be discussed and integrated with the organizational needs so as to avoid such conflicts. Pluralistic approach This approach views the organization as being made up of divergent subgroups and powerful trade unions. Disagreements and conflicts between workers and managers over the distribution of profits are perceived as normal and inescapable. The role of management leans towards persuasion and coordination and less on enforcing and controlling the organization. Trade unions legitimately represent the employees (Deery, Iverson and Erwin, 1999). In this approach, conflicts are dealt through collective bargaining and it is not necessarily regarded as a bad thing but rather, if managed properly, can lead to evolution and positive change. Realistic managers have a greater propensity for conflict than harmony and they anticipate solving them by securing agreed procedures in order to settle the disputes. Personnel and industrial relations personnel are necessary for the organization since they advise managers and provide services in matters related to staffing and union negotiation and consultation. Resolutions can also be resolved through the use of independent external arbitrators while encouraging the union representatives to carry out their duties. Any comprehensive collective agreements should be addressed and negotiated through the unions. Radical approach This approach views industrial relations as a by product of a theory of social change and capitalist society. Walker (1999) argues that the contradiction and weakness inherent in the capitalist system lead to ascendancy and revolution of socialism over capitalism. Capitalism favors monopolies and makes the organizational members to compete for a win ground. The radical approach focuses on the fundamental division of the interests between labour and capital, and regards workplace relations against this background. It is concerned with the nature and structure of the society and assumes that conflicts in the workplace are reflective of the structure of the society. Therefore, they are seen as inevitable and the trade unions serve in response to the exploitation of the workers by capital. Australia uses the compulsory arbitration system that describes the arrangements used to settle labour disputes (Walker, 1996). There is greater governmental regulation of the industrial relations in the Australian system but it also gives individual employers the greater freedom of managing their own plants without restriction. The commonwealth has the responsibility and power of settling interstate industrial dispute through arbitration and conciliation. The commonwealth tribunal sets wages and conditions either directly or by example for the Australian employees. According to Hunt (1995), the industrial relations system is aimed at resolving the conflicts of interest. Both the formal and informal arrangements established in the system govern the freedoms and rights possessed by unions, individuals, employers and managers at the workplace. These arrangements also affect the investment decisions that impact on the employment levels as well as affecting the quality and the nature of goods and services that are provided to the consumers. Over the last two decade, there have been changes made on the Australian state and federal relations systems. The changes in the federal legislation has made in legal terms and the scope of this legislation has substantially expanded to the extent of relying on the external affairs power of the Australian constitution and the corporation power unlike the traditional federal industrial relations that dealt with interstate industrial disputes (Sappey et al, 2009). The federal commission has been structured to incorporate a new bargaining division and to deal with unfair employee dismissal. The new Australian relations system has various provisions that counter discrimination. In this system, the strikes are deemed legal during a given period. The adoption of compulsory arbitration has made various organizations to follow the state of the labour market at a time. Therefore, in a tight labour market (employees and unions are in a good position of engaging in a collective bargaining) the organization favors compulsory arbitration. While, when unemployment is higher, the position of the labour market tends to be weaker, and thus the business favors direct bargaining (Sappey et al, 2009). Since collective bargaining is one of the key elements of industrial relations that are not always embraced in the Australian industrial relations system, we can not define industrial relations to encompass the changes in the Australian labour markets. Industrial relations system provides a conceptual framework for the understanding of the various elements of industrial relations and for organizing knowledge about these relationships. The combination of the components of industrial relations produces particular outcomes. Good and harmonious labour relations improves the economic conditions of the employees, promotes industrial democracy through the sharing of managerial decisions and profits and minimizes or eliminates strikes and lockouts and thus increasing productivity. The key elements of industrial relations such as the actors, environmental factors, processes that determine employment conditions, ideologies and rules, and outcomes constitute to an industrial relations system. Industrial relations can be perceived differently through unitary approach, pluralist approach, and radical approach. The Australian labour relations system has been influenced by key developments in the federal system and has been structured in a way that affects the freedoms and rights of both the employer and the employees. References Deery S., Iverson, R. and Erwin P 1999, Industrial Relations Climate, Attendance Behavior and the Role of Trade Unions, British Journal of Industrial Relations, 37(4), 533–558. Dunlop, JT 1984, Dispute resolution: Negotiation and consensus building, Greenwood Publishing Group, New York Edwards, P 2007, Industrial relations: theory and practice, Wiley-Blackwell, California. Hunt, I 1995, The new industrial relations in Australia, Federation Press, Australia. Jackson, MP 1992, Industrial relations: A textbook, Taylor & Francis, California Palmer GG 1997, Employment relations, Palgrave Macmillan Australia, South Melbourne Salamon M 2001, Industrial relations: Theory and practice, Trans-Atlantic Publications, London Sappey, R et al 2009, Industrial relations in Australia, 2nd edn, Pearson Education Australia, Frenchs Forest, New york Walker, KF 1999, Australian industrial relations systems, Harvard University Press, London. Read More