Industrial Relations: Theory and Practice - Assignment Example

Question 1. The importance of frames of reference as a means to understanding the attitudes and behaviors of the executive, managers and the employees at the workplace was highlighted best by Fox (1974). These frames comprise certain perceptions that mediate actions and ate rooted in specific assumptions, beliefs and values related to the nature of the organization about how they operate and the place of the employee and managers within them. Two predominant frames are distinguished in the context of industrial relations are distinguishable clearly given the fact that one of these frames is based on unitarism and the other on pluralism. The unitarist frame of reference is founded upon a presumed harmony of interest between employees and the management and therefore an assumption of shared goals, so denying the legitimacy of conflict and any group or groups which might express it. In contrast the pluralist frame of reference recognizes the inevitability of diverse employee and management interests related to competition over the allocation of scarce resources such as time, reward and effort. As a consequence it accepts different goals and the legitimacy of conflict and of groups and processes which might articulate and regulate it. The link between the unitarist and the pluralist dichotomy and the notions of individualism and collectivism has tended to rest on the nature of the relationship between interests and representation (Edwards, 2003). Individualism at the work place has been seen to be in close association with unitarism, given the fact that in this particular frame of reference, there is the scenario that suggests shared interests between the individual employee and the manger which is direct and unmediated by collective employee representation. Pluralism has been seen, on the other hand as being related to collectivism given that fact that this perspective implies conflicting employee-management interests and consequentially a preference for collective institutions and procedures in the form of trade unions and collective bargaining or state-sponsored work councils that would represent and regulate these conflicting interests. Seen in these terms, unitarism/individualism and pluralism/collectivism emerge as being mutually exclusive: interests are either shared or they are not; collective mechanism is either present or they are not. More recently, there have been new arguments made that state that the correlation of individualism with unitarism and pluralism with collectivism is a simplistic view of the situation (Purcell, 1987). In fact it is now being argued that individualism collectivism are complimentary rather than competitive. The new, more contemporary versions of these perspectives are more inclined to management of human resources and the neo-institutionalist approaches focus on the resource based value approaches to the analysis of business systems and the strategic choices in the management of organizational designs that promotes an associated HRM policy (Storey, 2007). The rise of CSR with respect the employees of an organization in any of the global cooperates can be seen as an evidence of this very trend in management and industrial relations. Both HR managers and employee representatives are jostling for positions to shape the resulting adaptation processes (Lutz, Axel and Dirk, 2009). This situation highlights not only the importance of first-mover advantages in such a contested terrain but also the need for both HRM and employee representatives to gain internal legitimacy before being able to play an active role in CSR. Question 2. An industrial relations system according to Dunlop at any one time in its development is regarded as comprising of certain actors, certain contexts, an ideology which binds the industrial relations system together, and a body of rules created to govern the actors at the place of work and community (Jackson, 1982). The creation of rules is seen to be central aim of the industrial relations system and Dunlop isolates three main groups of actors who take part in the rule making processes. In other words, the basis of decision making happens at three basic levels as far as the context of industrial relations is concerned. The first level is that of the hierarchy of managers and their representatives in supervision. These are important given the fact that it is this level where the majority of the decisions that would ultimately shape the fate of the industry and the business are taken and implemented. The hierarchy of workers (non-managerial) and their spokesperson form the second level of the actors. The third level is that of specialized government agencies and specialized private agencies created by the first two actors concerned with workers, enterprises and their relationships. The actors at all three levels are not free agents and are confronted by the environment and are influenced and limited by it. The important features of the environment though are determined by the larger society and its other sub systems and ate mot explained within the framework of the limited industrial relations systems. The systems approach and its sub level actors consist of the 1. the technological characteristics if the workplace and the work community 2. the market or budgetary constraints which impinge on the actors 3. the locus and the distribution of power in the larger society. These aspects of the environment can influence the industrial relations system in numerous ways. Technology influences the form of management and employee organization and the problems posed for the supervision. The IR systems are held together largely by ideology or a common set of beliefs. The levels have been further developed as the top management, collective bargaining cum personnel policy and work place (Adams, 1991). The first one is always significant given the fact that rather than merely focusing on the role of the industrial relations function, within a given management structure it enables the consideration of the strategies and events having significant impact in industrial relations processes and outcomes that start well above the functional level of industrial relations within the firm. Question 3. A Trade Unions- Structure and Purpose: Trade unions are highly complex and diverse institutions, because that are so complex, they can best be studied from the viewpoint of disciplines such as economics, political science, sociology and history. Most modern day trade unions work within the given structure of a capitalist mode of production and functioning. They have views about the desirable evolution of the system but do not, necessarily seek to bring about this change through a planned revolution. Most trade unions function on principles of democracy, and thus have an accountability to their constituent members for the formation of policies and the implementation of actions. Most trade unions are constituted in line with the following structure (Biz. Ed.com): 1. The most essential part of the trade union are the members-these are the people who help the trade union survive by paying a fee and providing an identification to the union 2. The second essential elements in the trade union hierarchy are the Shop stewards also known as the union representatives. These are the members that have been elected so that the views, needs and desires of the union could be presented to management 3. Branches - which support union members in different organizations locally. There is usually a branch secretary who is elected by local members 4. District and/or regional offices - these are usually staffed by full time union officials. These are people who are paid to offer advice and support to union members locally 5. A national office - the union's headquarters which offers support to union members and negotiates or campaigns for improvements to their working conditions. At the top of the organization there is usually a General Secretary and a National Executive Committee, elected by the union's members. Historical records suggest that workers around the world have joined trade unions principally to get higher wages and shorter working hours. Contemporary investigation would reveal a more complex set of motives, prompted primarily by the fact that for a worker employed in an already unionized establishment, wages and hours would remain same, irrespective of whether or not he joins the union (Ross, . Another purpose for the establishment of trade unions is the relative importance of the desire to help in maintaining union wage scales as a motive for supporting the union. Many join given the fact that they have witnessed incidents in the plant where they believe there was un unfair deal that was meted out to the workers. Finally, the biggest reason for the formation of trade unions is so that the process of collective bargaining is facilitated. Collective bargaining is the process by which unions deal with employers to arrive at an administer agreements governing the terms of employment (Marsh and Ryan, 2006). This would therefore mean that the purpose for the formation of the union is that the claims of the labor as a collective group are recognized. In the United States for example, the Wagner Act, and its successors guarantee workers the right to organize and to bargain collectively in employments affecting interstate commerce, an area that has been interpreted broadly. Question 3 B: An economic model is a simplification of reality. Models are based on mathematical equations that provide a simplified picture of employment and income relationships (Miller, 2008). The following answer will analyze in some detail the two models of wage theories and discuss the various ways wages are defined within the purview of this literature. Economic impact models are used to assess the impacts of shocks to the existing economic structure. The two basic models of wage related theories are the rigid wage model and the flexible wage model. Both models are valid, but the concept of validity is a moving target. The fixed wage model produces a greater increase in labor for a given increase in demand (Gregory, Salverda and Brasen, 2000). It is most applicable in cases wherein model is most appropriate for the measurement of and dealing with small shocks to the economy and in case of economies with high unemployment. The standard efficiency wage-based explanation of labor market dualism hinges on the existence of differences in monitoring across sectors (Pisauro, 2003). Dual labor markets can be explained by the assumption that the wage –productivity nexus is important in some sectors of the economy, but not in others. Wage rigidity is is about how frequently wages change, how much they change, and how disperse is the distribution of wage changes or wage growth. The wage could be rigid with respect to some shocks and flexible with respect to others, smoothed through time, or rigid within firms and flexible across firms, etc. But a key feature is that wage rigidity compresses the distribution of wage growth relative to the distribution of productivity growth. Consequently, the grip of the rigid wage approach weakens with intertemporal variation in the reported wages of stayers.  The fixed wage model The greatest weakness of the fixed wage model is the fact there are no explanations that are offered for employers that do not adjust wages when supply and demand are not in equilibrium. The flexible wage model is also known as the efficiency wage model and is most appropriate for large shocks to the economy and for economies with low unemployment. It was developed in response to the fixed wage model and take a more optimistic view of things. The model says that equilibrium wages are determined by the intersection of the demand and supply curves for labor in a particular market. Workers and firms in the market are thus price takers; they take the market-determined wage as given and respond to it. The allocation of between workers and jobs might be obscured in the job competition model. Since wages are constant for each occupation, workers will not be allocated to the jobs where their productivity is optimal. The model is also known as the wage competition model. Crucial in the job competition model is the difference in wage between those lucky enough to find a job that matches their education and those that have to accept a job below their levels. The wage competition model however instead of focusing on supply excess, responds to labor market. The model is overall less pessimistic than the job competition model. Question 3 C. Trade unions can influence industrial relations and personnel management for good or ill. The union impact on things like apprenticeship methods, promotion policies, work organization, wage levels and payments systems. Most of these factors will have a direct feed through with respect to productivity. The two definite school of thought with respect to the relation between productivity and labor union are clear in their stance-one believes that they have a negative effect on productivity, the other believes that the effect is positive.   The first school states that unions are associated with restrictive work practices, industrial actions have negative impacts, union firms usually invest less as compared to non union firms and unions are associated with an adversarial style of industrial relations which result in low trust and lack of cooperation between parties (Addison and Schnabel, 2005). The group for example suggests that union actions tend to reduce he effectiveness of resources devoted to marketing and distribution; company performances are automatically impaired if dates and deadlines are not met. The best example of the school is the Australian case. Australia compared to Japan and Germany for example has a less cooperative tradition of labor relations, partly influenced by multi-unionism. This has resulted, according to the first Australian Workplace Industrial Relations Survey (AWIRS) in union presence being associated with lower labor productivity. The actual impact of unions was in fact rather small. It has been concluded by Drago and Wooden (1992) in their survey that the net effect of unions on productivity is negative and that multiple unionism is associated with poorer outcomes than the recognition of a single union. In another study, Crockett (1992) measured data from 759 private sector workplaces. The study concluded that trade unions were associated with lower productivity in the Australian labor market and each union indicator has a negative sign and is significant at 10 per cent or better.   The second school on the other hand argues that a firm’s responses to union relative wage effects may result in higher labor productivity, unions at times play a monitoring role on the behalf of the employer, familiar collective voice arguments may have favorable consequences. The view was confirmed by the Donovan Commission’s classic study of UK’s shop stewards. It emphasized the role that the shop steward played in communication, information and discipline and described shop stewards as lubricants rather than irritants (Addison and Schnabel, 2005). Although the employer does not necessarily have to operate through the union, these help given the fact that the steward is drawn from within the ranks of union thus making the workers more amenable to negotiation and making the management system a lot more efficient. Unions enhance productivity where management are supportive of the union (Freeman and Medoff, 1984; Bryson et al., 2006) and where they are associated with high-performance management practices (Bryson et al., 2005). Nevertheless, the broad consensus is that British unions have either a negative or benign effect on labor productivity. If unions are generally unable to pay for the union wage premium with better productivity than the non-union sector, this implies that unions may hit company profits. The relationship between the union and productivity will depend ultimately on the manner of management by the company.   Reference: Storey J, 2007, Human Resource Management: A Critical Text, pub, Cengage Learning EMEA, p40 Lutz P, Axel H and Dirk M, 2009, The rise of CSR: implications for HRM and employee representation, pub, International Journal of Human Resource Management, Vol. 20 No.4, pp 953-973 Edwards P K, 2003, Industrial relations: theory and practice, pub, Wiley Books, pp314-315 Biz. Ed.com, Structure of Trade Unions, accessed November 2, 2009, < http://www.bized.co.uk/compfact/tuc/tuc13.htm> Rees A, 1989, The economic of trade unions, pub, University of Chicago Press, pp22-26 Marsh A I and Ryan V, 2006, Historical Directory of Trade Unions, pub, ashgate Publishing, p124-136 Bryson, A, 2005, Union effects on employee relations in Britain, pub, Human Relations, Vol. 58 No.9, pp. 1111-1139  Freeman, R. and J. Medoff, 1984, What Do Unions Do?, pub, New York, Basic Books, pp24-28  Addison J T and Schnabel C, 2005, International handbook of trade unions, pub, Barnes and Nobles, pp124-140 Gregory M, Salverda W and Brasen S, 2000, Labour market inequalities: problems and policies of low-wage employment, pub, oxford Press, pp218-220 Wages and employment in competition accessed November 3, 2009, < http://www.flatworldknowledge.com/pub/1.0/principles-microeconomics/28342> Miller R, 2008, Economic Models for Impact Assessment, presented, to MI-SBTDC Pisauro G, Efficiency Wage, Fixed Employment Costs, and Dual Labour Markets, pub, Journal of Labor Sciences, Vol.14 No.2, pp213-244 Jackson P, 1982, Industrial Relations: A textbook, pub, Barnes and Nobles, pp14-16 Adams R J, 1991, Comparative industrial relations: contemporary research and theory, pub, Routledge, p72 Read More