BUS332 Week 1 Introduction to Employment Relations

Overview

 What is ER?
 Explain the relevance of ER
 Recognise different ideological approaches to ER

Definition of/ What is Employment Relations (ER)?

 ER involves the body of work concerned with maintaining employer-employee relationships

that contribute to satisfactory productivity, motivation, and morale
 “the study of the formal and informal rules which regulate employment relationship and the
social processes which create and enforce these rules” (neo-institutionalist approach)
 ER is the overall management of employees including their behaviour and their wellbeing
 ER is how people arrange things so that work gets done

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What is ‘common sense’ industrial relations?

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 Sensational: dramatic and newsworthy

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 Collectivist: group behaviour by employees and activities of trade unions

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 Conflictual: involves disagreement & protest, even violence; union members protest against
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employer’s actions; employer responds e.g. police protection, court action, etc
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From industrial to employment relations (industrial -> employment)

 Inferences are misleading and they’re often inaccurate

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 Usually about routine, everyday actions and practices

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 Cooperation is more common than conflict in the workplace

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 The Business Council of Australia (BCA) argued that:

o ‘… industrial relations assumes employers and employees are inherently at
loggerheads, and that, in the public interest, the outcome of their relationship in
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the workplace must be regulated in detail, both to protect employees and to control
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wages and otherwise avoid disrupting the economy. As a result, the main concerns
of industrial relations are with pay and conditions and the resolution of disputes’
(BCA 1989, p. 5)
 … there is a developing consensus around the proposition that IR (industrial relations) as
is

traditionally conceived is too closely associated with a narrow concern with unions and
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collective bargaining and that a more modern and wider appellation is needed. The leading
candidate appears to be ‘employment relations’. (Giles 2000, p. 55)

Searching for a definition

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 Definitions are important; set the scope of study and practices

 A comprehensive and reflective definition of employment relations:
o Job regulation (legally oriented)
o Social relations at work (psychologically oriented)
 Employment relations is more than just the study of rules or the study of social relations at
work: is it both

Employment Relations “open-ended” & “indeterminant”

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 BUS332 Week 1 Introduction to Employment Relations

 Created when one person sells labour to another person or organisation for pay ( the market
transaction)
 Employees sell their promise to work in the future (the production relationship)
 Employers must pay wages and also ensure that employees do what they promise
 Central to neo-institutionalist analysis

What is ER?

 The study of employment relationship

 Consists of formal and informal rules
 Rule-making
 Individual employer-employee relationship
 Collective bargaining by employees and their unions
 Absence of unions or collective action does not mean employment relations disappear
 It is more than sensational, collectivist and conflictive (‘common sense’)

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Rules and the employment relationship

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 Rules are:

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o Necessary

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o Cover pay, hours, job description etc
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o To avoid and resolve conflict
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o Can be formal or informal
o Are the analytical tool to analyse employment relationship
o Central to “institutionalist” and “neo-institutionalist” understanding of ER
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The Employment Relationship

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The Employment relationship

 Interested in both the labour market and the production process

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 BUS332 Week 1 Introduction to Employment Relations

 Labour market
o The ways in which employees, employers and their representatives determine wages,
working hours as well as other terms and conditions of employment
 Production process
o The strategies that employers use to manage employees at work, the responses of
employees to these strategies and the ways that employee representatives (union &
non-union) become involved in workplace issues

The distinctiveness of employment relations

 Each theoretical approach has its particular:

o Analytical tools
o Ideological perspective

Alternative approaches to the ER

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Approach Key analytical tools Ideological
perspective

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Neoclassical Rational economic Egoist

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economics decisions by individuals
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Human resource The organisational Unitarist
management leadership and policies
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required to satisfy the

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psychological needs of
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employees
Marxism Class struggle and Radical
control within the
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labour process
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Employment The rules that Pluralist

Relations regulate the
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employment
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relationship

Approaches to the ER
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Neoclassical Economists

 Interested in ‘market transaction’

 Employees free to negotiate with their employers about individual employment contracts
 Assumes that ‘workers and employers are equal in terms of economic power, legal expertise
& protections, and political influence’ (Budd & Bhave 2008, p. 103)
 This is termed the ‘egoist’ theory of the employment relationship

Human Resource Management

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 BUS332 Week 1 Introduction to Employment Relations

 Psychology and organisational behaviour, combined with an emphasis on ‘strategic fit’

between organisation’s HR strategy and business (Bud and Bhave, p 103).
 Dual focus of the ‘unitarist’ theory of the employment relationship:
 Conservative and pro-management

Marxism

 Focus on class struggle and control

 Assumes two defining features of the employment relationship under capitalism:
o The machinery, technology and the raw materials necessary for production of goods
and services are owned by one class (capitalists); and
o Production requires labour, which capitalists must buy from workers in the form of
labour power
 Radical and anti-management

Employment Relations

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 Adopts analytical tools from ‘institutionalist’ theoretical tradition

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 Assumes attitudes and behaviours of employees and employers can be understood by

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focusing on the ‘rules’

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 The definition of ER:
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o The study of the formal and informal rules which regulate the employment
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relationship and social processes which create & enforce these rules
 ER is ‘pluralist’
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