EMPLOYEE

RELATIONS &
EMPLOYEE PARTICIPATION

LECTURE 8
  Employee Relations involves the body of
work concerned with maintaining
employer-employee relationships that
contribute to satisfactory productivity,
EMPLOYEE motivation, & morale.
RELATIONS
 Essentially, Employee Relations is
concerned with preventing & resolving
problems involving individuals which arise
out of or affect work situations.
  ‘Industrial relations’ is generally
understood to refer to the relationship
between employers and employees
INDUSTRIAL collectively. The term is no longer widely
RELATIONS VS used (CIPD, 2012).
 It is commonly being referred to as
EMPLOYEE employee relations, in part due to the
RELATIONS increasing nature of the employment
relationship where focus is shifting more
towards the individual employee rather
than collective.
 There are generally two views
regarding the relationship
PERSPECTIVES
ON EMPLOYEE between the employer & the
RELATIONS employee, namely,
Pluralist
Unitarist.
 Managers who take this view
regard themselves as the only
legitimate source of power and
authority which they value and
protect.
UNITARIST
They see their role as one of
controlling the activities of the
workforce and assume that all
employees share the common
goals of the organisation
 Unitarist philosophies emphasize
the prerogatives of managers in
the control of organisational
change.
UNITARIST Thus, the emphasis has been on
direct communications with
workers rather than representative
committees thereby undermining
the role of trade unions.
  Managers may allow & actively foster
freedom of expression and the
development of groups, which establish
their own norms & elect their own
informal leaders.
 Rooted in an inherent conflict of interest
PLURALIST between employers & employees
interacting in imperfect labour markets.
 Consequently, corporations, labour
unions, public policies, & dispute
resolution procedures are important
institutions.
  When an organization truly wants to
create a positive work environment that is
based on high trust, exceptional customer
service, collaborative teamwork,
operational excellence, and creative
WHY problem solving:
EMPLOYEE  Then the leadership team must begin to
RELATIONS? understand, invest in, & be responsive to
the needs of the group that represents the
organization’s most valuable assets, and is
also one of its most important customers,
the employees
 Continuous change in product &
service markets combined with
tightening quality demands require
employers to seek more efficient and
WHY flexible means of production.
EMPLOYEE
RELATIONS Partly in response to these economic
(CONT) demands and partly as a consequence
of other societal shifts, there have
been corresponding changes in the
composition and activities of the
workforce
  The labour force is becoming increasingly
qualified as older non-qualified staff give
way to growing ranks of university and
WHY college educated newcomers to the labour
market. These have relatively more
EMPLOYEE demanding needs that the older,
RELATIONS uneducated employees.
(CONT)  For employers of scarce and highly
qualified labour, commitment, rather than
control, has ostensibly become the key
objective of people management
 Employee involvement is a
process for empowering
employees to participate in
EMPLOYEE managerial decision-making
INVOLVEMENT
and improvement activities
appropriate to their levels in
the organization.
 Employee empowerment
means that management
recognizes this ability, and
EMPLOYEE
EMPOWERMENT provides employees with
the tools & authority
required to continuously
improve their performance
  A process which allows employees to
exert some influence over their work and
the conditions under which they work”
(Heller, et al. 1998, p.15),
 Employee participation means the
EMPLOYEE involvement of workers in decision
PARTICIPATION making.
 Employee participation can take either a
representational (indirect) or direct
(management dealing with employees)
form as well as individual or collective
form.
 Employee surveys,
Self-managed teams and team
briefings,
DIRECT Suggestion programs—offering
METHODS OF
EMPLOYEE rewards for cost saving / efficiency
PARTICIPATION improving ideas
Job enrichment , job design,
quality of working life
programmes.
 Works councils,
Board representation,
INDIRECT Involvement groups & task
METHODS OF
EMPLOYEE forces
PARTICIPATION Ownership
Quality circles
 The increasing attention given to
employee participation is
premised on the nature of the
environment within which firms
RATIONALE operate, which is characterized by
FOR EMPLOYEE frequent and rapid change in
PARTICIPATION demographics, technology,
legislation, globalization, etc.
These have therefore necessitated
improved employee participation.
  Employee participation alters employee
attitudes to work, employee association
with management values and employee
motivation at achieving the objectives.
ECONOMIC  Employee ownership may increase
RATIONALE commitment to organization and thereby
ensuring improved performance and the
long-term survival of the entity.
 Reduced opportunities for disruptions due
to labour issues (strikes, sit ins, closures)
 Reduced costs to the employer in
ECONOMIC terms of reduced turnover and
RATIONALE absenteeism (Wilson and Peel, 1990).
(CONT) Improved company performance.
 Improved quality of work life
Improved perceptions of fairness
and equity
Social responsibility to
SOCIAL stakeholders and customers.
RATIONALE
Increasing emphasis on customer
service demands a more
personalized and affective
approach to production and service
delivery.
 The government rationale encompasses
both the economic and the social reasons
for employee participation initiatives.
 Harmonious labour market conditions
GOVERNMENT may encourage foreign direct investment
RATIONALE  Enhancing national economic efficiency
 Improved welfare of the work class
citizens which has an impact on the
individual, family and society at large
 POLITICAL CONTEXT
The government which has the
power to pass legislation defining
employment relationships is
THE composed of politicians. Politicians
CONTEXT OF
EMPLOYEE
have a stake for their own political
RELATIONS and economic goals.
In some countries, there are close
working relationships between
politicians & employee
representatives (RSA)
 Employment relations will be a
factor of local as well as
international social and
THE SOCIAL economic pressures.
ECONOMIC
CONTEXT Corporate social responsibility
may force firms to adopt
different practices to the
management of employees
 The industry to which an
organization belongs and the
organizational factors may also
shape different approaches to the
INDUSTRY & management of employee
ORGANIZATION relations.
AL CONTEXT 
The historical traditions of
management approaches by the
firm may also shape its
subsequent nature of employee
relations.
 The HRM approach to employee
relation places emphasis on the
following:
A drive for commitment – winning
HRM & the ‘hearts and minds’ of
EMPLOYEE employees to get them to identify
RELATIONS with the organization, to exert
themselves more on its behalf and
to remain in it, thus ensuring a
return on their training and
development;
  Mutuality – getting the message across
that ‘we are all in this together’ and that
the interests of management and
employees coincide.
HRM &
 The organization of complementary
EMPLOYEE
forms of communication, such as team
RELATIONS briefing, alongside traditional collective
bargaining – i.e approaching employees
directly as individuals or in groups rather
than through their representatives;
 Reducing collective bargaining
to individual contracts;
HRM & increased flexibility in working
EMPLOYEE arrangements, including multi-
RELATIONS skilling, to provide for the more
effective use of human
resources
  An organization that represents the
people who work in a particular
industry, protects their rights, and
discusses their pay and working
conditions with employers.
COLLECTIVE  The employment relationship
PARTICIPATION:
TRADE UNIONS inherently gives more power to the
employer, and as a check against
such power, trade unions enable
employees get on more power to
enable the presentation of
employees’ side to management.
  Is an organization of workers who have
banded together to achieve common
goals such as protecting the integrity of
its trade, achieving higher pay, increasing
TRADE the number of employees an employer
hires, and better working conditions.
UNIONS  Trade unions exist because an individual
(CONT) worker has very little power to influence
decisions that are made about his or her
job. By joining together with other
workers, there is more chance of having a
voice and influence.
 Service function: provide
protection, support and advice,
providing legal, financial and other
FUNCTION services to their members.
OF TRADE
UNIONS Representative function: provide
workers with a ‘collective voice’ to
make their wishes known to
management
 Regulatory function: trade unions
are important stakeholders in the
development of new legislation,
FUNCTIONS (e.g. Pensions Act, 2010)
OF TRADE Governance function: the trade
UNIONS union plays crucial role in the
(CONT) maintenance of healthy
employment relations and
effective labour market.
 The ability of a union to carry out its
functions may depend on the union
membership and the union density.
A small union with few members is
UNION unlikely to have as much influence as
DENSITY a very large union with many
members.
Union density is expressed as:
Union membership
 100
Potential union membership
 The supply of union labour can
be affected by:
Closed shop – requires union
UNION membership as a condition for
DENSITY employment.
Union shop – requires
employees to join the union
within a specified time.
 Craft Unions are the oldest type
of union. Workers with common
skills often joined together to form
unions. Examples
TYPES Industrial Unions are formed by
OF unions of a particular industry,
UNIONS such as coalminers, railway
workers or gas workers
General Unions are made up of
workers with a wide range of skills.
 Trade unions are democratic
organisations which are accountable
to their members for their policies
and actions. Unions are normally
TRADE modeled on the following structure:
UNION Members - people who pay a
STRUCTURE subscription to belong to a union
Shop stewards - sometimes called
union representatives - who are
elected by members of the union to
represent them to management
  Branches - which support union members in different
organisations locally. There is usually a branch
secretary who is elected by local members
 District and/or regional offices - these are usually
staffed by full time union officials. These are people
STRUCTURE who are paid to offer advice and support to union
OF TRADE members locally
 A national office - the union's headquarters which
UNIONS offers support to union members and negotiates or
campaigns for improvements to their working
conditions. At the top of the organisation there is
usually a General Secretary and a National Executive
Committee, elected by the union's members.
  Decline in employment in manufacturing
(where union membership is traditionally
strong) and an increase in employment in
the service sector (e.g. retail) where unions
are less well established
 Growth in the number of small firms which
MEMBERSHIP tend not to recognize (or need) trade unions
DECLINE  Significant growth in flexible working (part-
time, temporary, seasonal) – where
employees see less need for union
protection
 Improved employee involvement in the
workplace – so less perceived need for
 In some countries, the blurring of
boundaries between politics and trade
unions are disenfranchising some
potential members. Some union
leadership has been perceived to be
MEMBERSHIP too close to those in power thereby
DECLINE compromising their role to members.
At times, union membership has not
been seen to improve the welfare of
its membership and this has reduced
its reputation among members.