HUMAN RESOURCE MANAGEMENT BMG346J2

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HUMAN RESOURCE MANAGEMENT BMG346J2

• Week 6
• Strategic aspects of employee relations

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Employee relations

• AIM
• To review developments in employee relations and
  assess approaches to employee involvement
• OBJECTIVES
• Understand the background to changing forms of
  employee involvement and participations
• Articulate the differences between various forms
  of involvement and participation, in particular
  their methods and strategic influence

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Defining employee relations

• Employee relations consist of all those areas of
  HRM that involve relationships with employees,
  directly or through agreements with trade unions.

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Are employee relations important?

• Employee relations are now placed well down on
  the agenda of HR managers
• Recruitment, selection, development and
  performance management are regarded as more
  important
• Perception that UK employee relations are in a
  healthy state
• A good employee relations climate cannot be taken
  for granted
• A generation of HR managers are unaccustomed to
  dealing with collective disputes

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Trends in employee relations in the UK

• Trade union decline
• Decline in collective bargaining and industrial
  action
• Rise in emphasis on employment rights

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Trade union decline (1)

• Trade union membership fell from a peak of 13
  million in 1979 to 6.4 million in 2005 (26.2 per
  cent of the workforce, 29.0 per cent of
  employees)
• Fall due to
• Hostile employment legislation in the 1980s
• Industrial restructuring with decline in
  established industries and rise in small scale
  office and hi-tech operations

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Trade union decline (2)

• Northern Ireland has the highest trade union
  density compared to other UK regions (40.4 per
  cent of employees)
• Almost three in five public sector employees in
  the UK are trade union members
• Less than one in five private sector employees
  are trade union members

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Decline in collective bargaining and industrial
action

• Decline in the number of employees whose terms
  and conditions are determined through collective
  bargaining ( negotiation with a union or unions)
• National agreements on pay and conditions are now
  rare
• Fall in the number of days lost through strike
  action UK average lower than average for
  European Union

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Rise in emphasis on employment rights

• The law now provides a minimum floor of rights
  for employees in fields such as
• Unfair dismissal
• Anti-discrimination legislation (sex, race,
  disability, religion, sexual orientation)
• National minimum wage
• Family-friendly measures such as the right to
  request part-time working in some circumstances

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The nature of union recognition

• 1970s general assumption - most employers would
  automatically recognise and deal with unions
• 1990s many employers introducing new working
  patterns without consultation
• Present day, increasing distinction between
• Workplaces where unions have maintained a
  presence
• Workplaces where unions are being edged out
• Non-union workplaces
• Source Marchington and Wilkinson (2005)

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Contemporary study of employee relations

• Torrington, Hall and Taylor (2005) suggest
  employee involvement provides a good reference
  point when thinking about the strategic choices
  faced today by managers in employee relations
• Topics to consider
• Why involve employees?
• History and development of employee involvement
• Forms of involvement and participation

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Why have involvement and participation?

• Few would disagree that employees should have a
  say in workplace affairs. The problem is that
  there is less agreement over the ways in which
  the voices of employees should be expressed
• Hyman and Mason, 1995

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Reasons for introducing employee involvement

• Information and education
• Gaining commitment
• Securing enhanced employee contributions
• Recruitment and retention
• Conflict handling and stability
• External forces

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History of participation and involvement

• Profit sharing, 19th century
• Introduced by some employers as part of a policy
  to extend welfare provisions but dropped because
  of worsening economic conditions
• Whitley Councils 1917
• Whitley Committee proposed setting up joint
  employer-union bodies at national, district and
  workplace level and these have survived in parts
  of the public sector
• Joint Production and Advisory Committees 1940s
• Drive to stimulate productivity and growth
  through factory-level committees where employees
  were involved in discussions over efficiency and
  production

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History ctd

• Bullock Committee of Enquiry 1977
• UK entry into Europe and election of Labour
  government led to Committee established to
  discuss worker directors
• Many employers were hostile to the idea
• Government changed before recommendations
  implemented

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History ctd

• Individualist employee involvement
• 1980s, championed by management, associated with
  interest in HRM
• Directed at securing greater employee commitment
  to the organisation
• Grown largely without legislative support
• Employee empowerment represents the most recent
  manifestation

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Employee involvement and participation compared
(Hyman and Mason, 1995)

• Involvement
• Management inspired
• Employees may be passive recipients
• Tends to be task based
• Assumes common interests between employer and
  employee

• Participation
• Government or workforce inspired
• Employee representatives actively involved
• Decision making at higher organisational levels
• Plurality of interests recognised

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Components of employee involvement and
participation

• A degree of involvement the extent to which
  employees influence final decisions
• B level at which individuals are involved
• C range of subject matter dealt with
• D form of involvement
• Source Marchington (1992) discussed in
  Beardwell, Holden and Claydon (2004)

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Degree of involvement the escalator

• Control
• Co-Determination
• Consultation
• Communication
• Information

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Level and range of involvement

• Level
• Can be differentiated between task, section,
  department, establishment, division/region,
  corporate and industry
• Range
• At one extreme these can be broad strategic
  decisions
• The other extreme concerns marginal items such as
  the state of the car park

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Forms of involvement and participation

• Downward communications
• Upward problem solving
• Financial employee involvement
• Representative participation

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Forms of participation another division

• Direct ( face to face or written contact between
  managers and subordinates)
• Indirect (employees involved through their
  representatives)
• Financial (profit sharing etc)

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Downward communications

• i) House journals/ company newspapers/e-mails
• ii) Employee reports
• iii) Team briefings
• Regular, structured system to enable top
  management to cascade through the organisation
  news and developments
• Used to encourage commitment and to channel
  conflict
• WERS (Workplace Employee Relations Survey 04
  used by 85 of companies)

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Upward problem solving

• i) Suggestion schemes (WERS 30 usage)
• ii) Quality circles
• Used to develop employees or to improve quality
• Groups meeting regularly and voluntarily to
  identify, analyse and solve problems (WERS - 21
  usage)
• iii) Attitude surveys (WERS 42 usage)
• Systematic means of investigating employees
  views
• Some companies see a benefit in avoiding
  reliance on trade union views
• Helpful in developing policies
• Enhance by establishing project teams

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Financial participation

• Employee share schemes include
• Share Incentive Plans (SIP) where companies can
  give up to 3000 worth of shares to each employee
• Savings Related Share Option Schemes (SAYE) where
  participants can save up to 250 per month to
  acquire shares

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Employee share ownership

• What do you consider to be the advantages and
  disadvantages from the point of view of the
  employee and employer?

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Representative participation Joint Consultative
Committees

• JCCs were popular in the 1940s, declined in the
  1950s and 1960s, and regained some popularity in
  the 1970s
• If they are given only unimportant issues to deal
  with, employees will view them as ineffectual
• Recent legislative changes include the European
  Works Council Directive and the Information and
  Consultation Regulations

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Empowerment

• Associated with culture change, delayering and
  restructuring
• Devolving power and responsibilities to teams at
  workplace or customer level
• a change management tool which helps
  organisations create an environment where every
  individual can use his or her abilities and
  energies to satisfy the customer (Cook and
  Macauley, cited Beardwell, Holden and Claydon,
  2004557)

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Claimed benefits of empowerment for
organisations

• Greater awareness of business needs among
  employees
• Cost reduction from delayering and employee ideas
• Improved quality, profitability and productivity
  measures
• Enhanced loyalty and commitment
• Decrease in staff turnover
• More effective communication

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Claimed benefits for employees

• Increase in job satisfaction
• Increase in day-to-day control over tasks
• Ownership of work
• Increase in self-confidence
• Creation of teamwork
• Acquisition of new knowledge and skills

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Criticisms of empowerment

• Practical reasons for failure, including lack of
  training and inadequate communication
• Failure to recognise that empowerment usually
  means wholesale culture change
• Ideological criticism that empowerment is
  exploitation
• Empowerment may undermine trade union influence

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Views on empowerment

• Empowering people today is as important as
  involving them was in the 1980s and getting them
  to participate in the 1970s?
• Empowerment will become a generic term to
  incorporate involvement and participation?

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Summary

• Employee relations practice in the UK was
  dominated by trade unions and collective
  bargaining for most of the twentieth century
• Employment legislation has become more important
  in the employment relationship
• As trade union influence has declined, managers
  have looked to other forms of employee
  involvement

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References

• Beardwell, Holden and Claydon (2004) Human
  Resource Management (chapter 14), FT/Prentice
  Hall
• Hyman,J. and Mason,B. (1995) Managing Employee
  Involvement and Participation, Sage
• Kersley.B. et al (2005) Inside the Workplace
  first findings from the 2004 Workplace Employee
  Relations Survey, ESRC/DTI
• Marchington,M. and Wilkkinson,A. (2005) Human
  Resource Management at Work, CIPD
• Torrington, Hall and Taylor (2005) Human Resource
  Management (chapter 20), FT/Prentice Hall

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Further reading and websites

• Gennard,J and Judge,G (2005) Employee Relations,
  CIPD
• Lashley,C. (1995) Towards an understanding of
  employee empowerment in hospitality
  services,International Journal of Contemporary
  Hospitality Management, Vol 7, No 1, pp27-32
• Rose,E. (2004) Employment Relations, FT/Prentice
  Hall
• www.delni.gov.uk (Department for Employment and
  Learning)
• www.dti.gov.uk (Department of Trade and Industry)
• www.lra.org.uk (Labour Relations Agency)