HUMAN RESOURCE MANAGEMENT

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HUMAN RESOURCE MANAGEMENT

• Norma Heaton
• Week 10 Employee Relations

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Employee relations

• AIM
• To review the changing context of employee
  relations and the key issues facing managers in
  the employee relations field
• OBJECTIVES
• Understand trends in employee relations
• Examine forms of employee involvement and
  participation

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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
• However, a good employee relations climate cannot
  be taken for granted

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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

• Trade union membership fell from a peak of 13
  million in 1979 to 7.3 million in 2002 (26.6 per
  cent of the workforce)
• 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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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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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
• 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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Components of employee involvement

• 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
• 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 98)
  used by 65 of companies

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Upward problem solving

• i) Suggestion schemes (WERS 25 usage)
• ii) Quality circles (WERS 49 usage)
• Used to develop employees or to improve quality
• Groups meeting regularly and voluntarily to
  identify, analyse and solve problems
• iii) Attitude surveys (WERS 45 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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Motives for introducing financial participation
schemes

• Wanting to involve employees in their success
• Giving a stake in the company
• BUT most schemes provide for a small distribution
  of shares
• See www.inlandrevenue.gov.uk/shareschemes

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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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European Works Council Directive

• Aimed at multi-national companies employing 1,000
  or more workers and with 150 employees in two or
  more EU member states
• Adopted in 1994, revised 1997
• Implemented in UK 2000

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Information and Consultation Regulations

• Due to come into effect in Northern Ireland in
  April 2005
• Affecting organisations with 150 employees
  initially
• Employees can request information on a companys
  economic situation and employment prospects
• See www.delni.gov.uk

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The escalator

• Control (employee-
• owned orgs)
• Co-determination (Works Councils)
• Consultation( Quality circles, JCCs)
• Communication (Teambriefing)
• Information (House journals,E-mails,
  noticeboards)

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Empowerment

• Associated with culture change, delayering and
  restructuring
• Devolving power and responsibilities to teams at
  workplace or customer level
• the process of giving people more scope or power
  to exercise control over, and take responsibility
  for, their work(Armstrong,1999)

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Claimed benefits of empowerment for
organizations

• 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 recognize 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
• Torrington, Hall and Taylor (2005) Human Resource
  Management (chapter 20), FT/Prentice Hall

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Further reading

• Gennard,J and Judge,G (2005) Employee Relations,
  CIPD
• Salamon,M. (2000) Industrial Relations Theory
  and Practice, FT/Prentice Hall