Management Prerogative in Employment Relations - Essay Example

The employer’s prerogative makes the employees liable to perform a certain duty of obedience and a broader duty of loyalty’ (Employers’ Managerial Prerogative, Eurofound). Hence employer’s prerogative ensures the basic right of an employer to apply his/her creative concepts in the business. However, it does not entitle the employer to harass employees but only gives them the right to satisfy his/her business interests. The following part will critically analyze the factors which normally influence the exercise of management prerogative in employment relations in the US, UK, and China.

The US’s ‘right to manage’ is very different from that of the other developed countries. “Joint determination of a relationship between employers and organized employees through collective bargaining is now a protected right in the United States” (James 1992). Obviously, the United States has adopted a more liberal policy towards employees’ rights. The US law insists that the managerial objectives should be achieved through good employer-employee relations in order to reduce the work difficulties and employees’ physical and mental stress. In the opinion of Summers (1976), the US considers employees’ termination as economical capital punishment (ibid). During the last decade, many states have limited employers’ traditional rights to terminate the workers any time as they liked.

The adverse impact of this law is that sometimes even the most unproductive workers get the opportunity to continue the job and thus the long-term objectives of the enterprise get impeded. This law enforcement is against the employer’s right to ‘hire and fire the employees. Numerous US regulations including EEO legislation and other non-discrimination acts tend to favor employees rather than employers' rights. For instance, a company is liable to prove that the termination of any employee is not due to discrimination of any sort. As a positive outcome of such restrictions on employer’s prerogative employee-employer relationship has been enhanced in the US business environment. In contrast, the restrictions would pull back innovative entrepreneurs from conducting their own independent business experiments.

Although trade unions in the UK argue for equal participation in the managerial decision-making process, British law gives emphasis on the satisfaction of both the parties- employer and employee. According to the Managerial Functions Agreement of 1922, “the employers have the right to manage their establishment and the trade unions have the right to exercise their functions” (Ellis, n.d.). The ultimate managerial objectives can be achieved if and only there is mutual understanding between employers and employees. The essence of the Employment Rights Act 1996 (ERA) s 230(2) is that an employer-employee relation is a legal contract that imposes some contractual obligations on both parties to perform the terms of the contract.

The UK employer’s prerogative is more powerful than that of US employers since it allows the UK employers to exercise better control over their employees. For instance, employees in the UK are subject to compulsory retirement after the age of 65 whereas in the US employers do not have the right to terminate an employee for the same reason. Maximization of the firm’s wealth and thereby economic growth of the nation are the main objectives that influence employers’ prerogative in the UK. Undoubtedly, government regulation is one of the most important factors which determine an employer’s prerogative policy in the US and UK.

Although the Chinese government also has initiated restrictions on employers’ rights in relation to employees’ termination and punitive actions, businessmen have been highly promoted to implement their own innovative notions in the present Chinese business environment. China could achieve an important poison in the world market as a result of its regulated policies. The Chinese industrialists always try to preserve employees’ interests with the intent to take maximum advantage of them. However, Chinese trade unions have inevitable importance in the organizational management of business houses due to the notable influence of the Chinese Communist Party.

As far as I am concerned, the employer’s prerogative is an essential element for business sustainability. As Blanpain and Anderson (2005 p.223) suggest, an employee is obliged to obey the policies of his/her master. A businessman or entrepreneur starts his/her business with the intent to make maximum profit and thereby increase social stature. Since the business owners are liable for the business returns no matter surplus or deficit, business decisions must go according to their own discretion. An employer cannot effectively apply his/her creative ideas in business if he is deprived of the ‘right to manage’. If there is no threat of termination, employees would become comparatively inactive. An employer who runs his business with an aged and inefficient workforce would hardly achieve his business goals. In addition, the restriction on the ‘right to manage’ would prevent entrepreneurs from entering new ventures.  Read More