Labor Management Issues - Essay Example

Essay Question Name Course: Tutor’s Name Date Introduction Cost efficiency, social legitimacy, flexibility and managerial autonomy are the four goals that Boxall (2007) identifies as guiding employers in the management of employment relations in a competitive environment. This essay will discuss Boxall’s (2007) four goals and argues that they are indeed accurate especially when taken in context of HRM as labour management. The four goals will be discussed in the context of the contemporary challenge posed by workforce diversity that is confronting all firms (whether local, national, regional or multinational). In the concluding part, the essay indicates that attaining cost efficiency, social legitimacy, flexibility and managerial autonomy goals in the contemporary work environment where workforce diversity has taken centre stage is not always a straightforward undertaking. The easiest goal to achieve when workforce diversity is considered would be social legitimacy, but since the goal cannot be achieved in isolation, other goals (most especially cost efficiency) must be pursued by HR practitioners. Cost efficiency Cost efficiency is a goal by employers in which they seek to efficiently produce quality goods or services in the right amounts using the right amount of capital with the aim of satisfying customer demands (Boslie 2010). In other words, cost efficiency combines labour productivity attained through proper HR management and quality products or services whose main aim is to satisfy customer requirements. According to Boxall (2007, p. 57), cost effectiveness “can be understood as the need for every firm to stabilise a production system that enables it to compete in its chosen market”. In other words, an organisation must value its labour in a cost efficient manner, which allows for the firm to continue operating. Arguably, stabilising the production system for different firms requires HR managers to hire employees who have the right skills and experience to perform specific job-related tasks. Additionally, the HR department must play a key role in ensuring that the workforce is influenced to work within optimal levels of commitment and motivation (Durdyev & Mbachu 2011). Without the right combination of skills, experience, motivation and commitment, one can argue that it would be hard for HR to attain cost effectiveness in HR, because all the four components indicated herein complement each other. In light of workforce diversity, HR practitioners arguably have to put in more effort to ensure that the goal of cost effectiveness is achieved. Having observed that cost effectiveness in labour management is a product of combining HR management with the right set of skills, experience, motivation and commitment, workforce diversity brings in a new challenge to HR practitioners. Jayne and Dipboye (2004, p.409) for example note that “organisations spend $8 billion annually on diversity training”. The amount spent on diversity training is in addition to other diversity-related initiatives that include issues such as flexible work arrangements, diversity workplace programmes and domestic partner benefits among others (Jayne & Dipboye 2004). Arguably, it is not all a sad affair for organisations that have to invest in diversity programmes to cater for workforce diversity; according to Jayne and Dipboye (2004) investing in workforce diversity enables organisations to access talent which would otherwise be hard to acquire from the domestic talent pools. Additionally, the diverse workforce provides insight to their employer organisations, which enables such organisations to design effective strategies for dealing with a diverse customer base (Ibid.). To attain cost effectiveness however, HR practitioners have to be more strategic in how they handle labour productivity. The diverse workforce has to be recruited and trained in a manner that ensures that communication and group synergies are enhanced regardless of differences (cultural or otherwise). It has also been noted that conflict is probable in a diverse workforce and this leads to sub-optimal information sharing, which can jeopardise productivity (Hansen 2003 cited by Jayne & Dipboye 2004). In such cases, the HR practitioners have to be ready to organise the workforce in a manner that ensures that conflict is reduced and productivity enhanced. Flexibility Flexibility as a goal in labour management relates to the need by the employer to have employees who can make trade-offs between their own interests and the demands placed on them by their jobs (Boxall 2007). Specifically, flexibility is defined “as the capacity to change and/or adapt” (Boslie 2010, p. 57). Ideally, there are three types of flexibility in HRM. They include: numerical flexibility where an organisation seeks to be able to hire the right number of employees to cater for fluctuating demand by the customers; functional flexibility where an employer seeks to hire employees who can perform multiple functions and tasks hence making it possible for such processes as job rotation, job enrichment, job enlargement and teamwork; and mental flexibility where an employer seeks to hire employees who have the mental capacity (i.e. in terms of willingness and ability) to accept changes that are proposed in the workplace (Boslie 2010). Overall, and as indicated by Luoma (2000), flexibility should be seen not just in how well an organisation is able to manage the behavioural patterns of its employees, but also in the structures and processes, which should be flexible enough to accommodate any changes needed in the competitive environment. Flexibility has to be embedded in an organisation’s strategy if the organisation is to succeed as noted by Luoma (2000). Viewed in relation to workforce diversity, flexibility as a goal encounters opportunities as well as challenges. Jayne and Dipboye (2004, p. 416), for example, note that “areas requiring greater flexibility, creativity and innovation are likely to experience the greatest benefits from a diverse workforce”. However, workforce diversity may hinder other forms of flexibility because processes such as downsizing cannot be done as easily as would have been the case if the workforce was not diverse. Before downsizing for example, the organisation has to consider its cost in obtaining its employees, and whether the investment made on them had already been recovered. For example, the organisation must try to balance its downsizing to affect all the groups represented in the workforce. As such, its flexibility in retaining the number of employees who are most relevant to the organisational goals is reduced by the need to balance the different interests of the people represented in the workforce. For example, men cannot be favoured during the downsizing exercise despite the fact that they are more likely to dedicate more hours to work compared to women who (in some cases) have to juggle between work and domestic responsibilities. Arguably, the organisation must also consider how easily it can rehire the same talent should the need to do so arise. MacGillivray and Golden (2007) also note that even where flexibility involving diverse workforce has been attained, managers have to be more accountable, and must be willing to exercise much more oversight. Social legitimacy Social legitimacy is arguably a concept that has not been fully investigated in the HRM literature. According to Boxall (2007), social legitimacy in HRM refers to the need for an organisation to be reflected as a legitimate entity in the eyes of its own employees, customers, the government, labour unions, its competitors and the society at large. Arguably, the social legitimacy of an organisation can be put into question by bad publicity created by poor work conditions, poor remuneration of labour, and/or poor management practices among others. By outsourcing the manufacturing of shoes, Nike has been credited for using a business strategy that has raked in millions-worth of profits for the company. However, Nike’s social legitimacy suffered after it was revealed that child labour and sweatshop conditions were involved in the outsourced production processes (Beder 2000). In other words, it did not matter that the manufacturing companies where child labour and sweatshop conditions were practiced were not owned by Nike. All that mattered was that Nike was the main beneficiary since it owned the brand that was manufactured in those sweatshops and as such, its social legitimacy suffered. Arguably, the four Ps of marketing (i.e. product, price, promotion, and place/distribution) no longer determine how well a product or brand will be regarded by consumers. Consumers consider other factors such as the corporate social responsibility aspects of the brand owner. The foregoing considerations make it even more important for organisations to attain social legitimacy. Notably however, organisations try to balance the pursuit of social legitimacy with labour productivity, but must do so in the full knowledge that “society ultimately acts to reduce the power of those who have not used it responsibly” (Davis 2001, p. 314). This argument has more backing in legitimacy theory, which claims that organisations have implied contracts with their stakeholders to provide for their long-term needs (Guthrie & Parker 1989). Legitimacy theory further indicates that organisations are able to legitimise their existence by providing for the needs and wants of their different stakeholders (Guthrie & Parker 1989). Viewed from a social legitimacy perspective, enhancing workforce diversity is to some scholars, the right thing to do for most organisations. Ely and Thomas (2001) for example indicate that workforce diversity eliminates discrimination, hence giving people of all genders, age, creed, race, nationality or physical abilities (or lack thereof) equal chances at employment. Lyness (2002) however indicates that several factors must be upheld by an organisation in the handling of workforce diversity, if at all perceptions of social legitimacy are to be created. For example, the senior management must be seen to be committed and accountable to diversity programmes (Lyness 2002). Without workforce diversity-related social legitimacy, an organisation can face social sanctions ranging from economic, moral or legal sanctions as indicated by Boxall (2007). To socially legitimise themselves, firms must also be conversant with the baseline expectations of the diverse workforce. For example, firms must understand what to offer their female employees, male employees, disabled employees, able-bodied employees and other diverse representations in the workforce without creating an impression of favouritism or bias. Managerial autonomy The idea that managerial autonomy in labour relations as expressed by Boxall (2007) stems from the notion that managers seek to have control over uncertainties in the workplace, and that they (managers) like to position themselves in a position of power, where their subordinates’ role is to obey them. Boxall (2007) argues that although managerial autonomy, at sufficient levels, is needed to enable managers to handle problems related to building flexible and productive enterprises, too much autonomy undermines workers’ rights, and can hence undermine an organisation’s social legitimacy. When exercised within a diverse workforce, managerial autonomy faces challenges in that not all people represented in the workforce have the same perceptions about managerial authority. For example, workers drawn from a culture where there is little power distance will find it hard to accept orders without questioning the same. It could also be that workers drawn from a society where large power distance exists have problems interacting with managers and other people in positions of power. Either way, it would be the responsibility of human resource managers to design labour management processes that ensure that managerial autonomy that is desirable in the organisation is attained. As Thompson (2003) indicates, the pursuit of managerial autonomy sometimes has to give way (or draw a compromise) with other factors such as job enlargement, labour and capital. Conclusion Cost efficiency, social legitimacy, flexibility, and managerial autonomy are indeed goals that human resource managers hope to accomplish in managing labour. However, as indicated in this essay, attaining the aforementioned goals in the contemporary work environment where workforce diversity has taken centre stage is not always a straightforward undertaking. Arguably, it would appear that social legitimacy is the simplest goal to achieve when workforce diversity is considered. Notably however, the goal of social legitimacy cannot be attained in isolation without considering other goals. The goal of cost effectiveness is especially relevant because it ensures that an organisation remains in business by managing labour in a manner that ensures that the right number of employees is used, for the right reason, and in the right quantities in order to produce goods and services that serve the needs and preferences of the consumer. Flexibility is also an important goal in HRM, although as indicated herein, workforce diversity presents opportunities as well as challenges to the flexibility goal. By providing a large pool of talent to an organisation, a diverse workforce enhances flexibility in an organisation. However, the need to balance and be sensitive to the diverse people and interests represented in the workforce, for example during downsizing, undermines flexibility. Finally, managerial autonomy is a goal by HRM which seeks to ensure that managers have the mandate to chart a flexible and productive future for their organisations. However, where a diverse workforce is concerned, charting such a future is not always clear-cut; managers have to consider the different cultural beliefs and values represented in the workforce, and find a management approach that is acceptable to as many employees and other interest groups as possible. References Beder, S 2000, ‘Putting the boot in’, The Ecologist, vol. 33, no. 3, pp. 24-28. Boslie, P 2010, ‘Human resource management & performance: Adding value through people’, In Strategic human resource management: A balanced approach, pp. 47-69, McGraw-Hill, London. Boxall, P 2007, ‘The goals of HRM’, In P Boxall, J Purcell & P Wright (Eds.), The Oxford handbook of human resource management, pp. 48-67, Oxford University Press, Oxford. Davis, K 2001, ‘The case for and against business assumption of social responsibilities’, Academy of Management Journal , vol. 16, no. 2, pp. 312-322. 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MacGillivray, E D & Golden, D 2007, ‘Managing and leveraging diversity in a global workforce’, International HR Journal, Summer, pp. 38-46. Thompson, P 2003, ‘Disconnected capitalism: Or why employers can’t keep their side of the bargain’, Work, Employment & Society, vol. 17, no. 2, pp. 359-378. Read More