Employment Relations and Human Resource Management

During the last 30 years, there have been significant shifts in employment relations and the HR management field of study. In today’s competitive workplace employers must remain attuned to the needs of their workforce. Those who do will have a distinct advantage. One of the tools being used by global firms to meet this objective is the use of flextime. The changes are continuous and take place in all spheres of employee relations involving wages and compensation, trade unions and time, motivation and communication, etc.

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Following Blyton and Turnbull (2004): “ theory might be viewed as a useful means of classifying variables relevant to industrial relations, but it is hardly an explanatory approach in its own right. If anything, it is more…. Indeed, both theoretical and substantive criticisms” (p. 27). In modern theories, there are two main parties: management and labor. The phrase “Eliminate, simplify, and combine” is an old engineering term that is often associated with job design.

It represents an attitude, rather than any specific technique. The attitude is one of constantly challenging every task, every step within a task to see if there is a better way.

You are always trying to find ways of eliminating any work or part of the work. If parts of the work cannot be eliminated, then maybe some aspects of the job can be simplified or combined. Such inefficiencies in day-to-day operations are far from uncommon. Most companies have enormous extra or irrelevant work built into their process, but to eliminate, simplify, or combine, you first have to know what you do. That alone may tell an employer what he needs to do to improve things (Abbott, 2007).

Following Tsui and Wu (2005) there are many innovative alternatives to empowering and motivating people, many of which theorists adapt to the modern workplace. Sometimes, though, the best approach may be to simplify work. As it is unrealistic to expect to set everyone up in his or her own business, what can be done?

There are many simple, but effective, alternatives. In addition to setting up new business ventures, Hyatt does simple things like conducting monthly sessions with its workers where employees discuss issues that are bothering them. These same workers are given a chance to critique anonymously and then discuss the quality of their boss’s leadership.

While such simple communication tools help diffuse discontent, permanent improvements in the workplace depend on restructuring work. Finding and keeping employees is difficult but not enough; the real trick is to keep them productive and happy, a result especially difficult in times of downsizing, labor shortages, and restructuring. The size of this problem was seen by the Society for Human Resource Management, which surveyed 1,468 restructured companies (Daniels, 2006).

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Rose (2004) underlines that ‘To survive, industrial relations needs to change its focus to “employment relations”, examining not just institution” (p. 8). In terms of building employee involvement and relations, one of the most significant activities of companies is to make a point of showing the rest of the corporation that they have the support of the top management. the case of Ford corporation shows that trade unions have a great impact on modern employee relations.

These teams included union leaders and corporate labor relations representatives. As such, the composition of these teams demonstrated the support of both management and labor. Meetings conducted by these teams generally emphasized that employee relations efforts were separate from the normal collective bargaining agreements. employee relations were not to be thought of as a substitute for normal grievance procedures.

Furthermore, the teams emphasized that participation in activities was purely voluntary and that any employee relations projects would be based on local needs–not corporate mandates. Trade unions told local facilities that, along with their efforts, locally-elected union representatives were also to be directly involved in implementing any projects (Leat 2001).

To continue to build support at the local level, teams told these sites those trade unions’ efforts would slowly evolve rather than be forced on them. Finally, they made the point that local management and union leadership could terminate a project at any time. Once local projects were underway, the trade unions would also make periodic visits to bolster morale and momentum. In general, the purpose of trade unions is for key members of management and the union to meet regularly to discuss issues of mutual concern.

There is no formal collective bargaining at these forums, but almost any other subject is open to discussion (Daniels, 2006). These discussions have included operating schedules, quality and performance indicators, product plans, new business opportunities, competition, economics, vacation scheduling, working conditions, attendance, and community government relations. At the national level, the trade union was used to create leadership conferences that brought together the top officials of both the company and the union (Leat 2001).

Open communication was an important aspect. Union leaders were briefed on the company’s financial status and its competitors’ new products and services. These conferences provide just one example of Ford’s new attitude of greater sharing of information. The goal was greater acceptance and cooperation between the union and management, and it generally appears to be working.

“The employment relationship is partly concerned with groups of employees who are represented by trade unions. The nature of this representation is collective… unions arguably have greater power to influence decisions concerning, for example, levels of pay and working conditions than those employees who do not join them” (Rose 2004, p. 4).

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Modern scholars give special attention to communication, compensation, and time management. The concept of flextime refers to a variety of flexible arrangements, including unconventional hours, part-time work, job sharing, leaves of absence, and working at home.

From a company’s perspective, allowing employees to work fewer and more flexible hours is a powerful way to attract and retain top-caliber people. From the employees’ perspective, flexible work arrangements give them a greater sense of empowerment. Flextime gives many a stronger feeling that their company trusts them (Rose 2004).

Additionally, in these times of dual-career parents, it helps parents raise their children more responsibly. It also turns out that professionals who have such arrangements are fiercely loyal to their employers. Not all flextime involves working less time or different days. Sometimes employees can share the work.

Employees who wish to share often must write a lengthy proposal spelling out, in detail, how sharing will work. For example, how long will it last and what happens if one of the job sharers leaves? Such a document is a good planning tool for anyone wanting to share jobs (Rose 2004). Most companies normally pay these work sharers 120 percent of what one person would make in the job. Thus, a sharer gets about three-fifths of a regular salary plus some benefits. Not all flextime is creative; sometimes it simply means shifting the time you come into work (Daniels, 2006).

The key point with compensation, as with recognition, is equity. Management has to be fair and open. My friend’s plant has open disclosure of the company’s assets, liabilities, and so on and puts the knowledge of how to make good decisions in the hands of the lowest personnel. Everyone understands a balance sheet and how to read an income statement. Employees decide whether to invest or increase bonuses. It is a financial and emotional partnership.

Compensation inequity is not the only reason compensation plans are being reconsidered. Flatter pyramids, labor shortages, and downsizing have meant rethinking traditional pay plans. One increasingly popular pay plan, whose time seems to have come, is dual-track compensation (Abbott, 2007).

The principle is simple: pay the best nonmanagerial professional on par with the managers. Lump-sum bonus incentives, along with gain-sharing plans, have become increasingly popular. Lump-sum bonuses involve employees’ receiving a one-time cash payment based on performance. Such a payment does not go into one’s base pay. For this incentive to be effective, the plan must be fair and management must have a good relationship with employees.

From a managerial standpoint, its main advantage is that the plan helps control fixed costs by limiting pay raises and benefits. A sometimes serious drawback is that award bonuses can sometimes be seen as subjective and therefore unfair (Edwards, 2003). Following Leat (2001): “As with other individual rights, effective prosecution of the law may provide the aggrieved employee with financial compensation but other remedies are extremely difficult to enforce” (p. 383).

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Following Rose (2004: “HRM incorporates industrial relations and personnel management within an overall organizational strategy which emphasizes the human’ aspects of management and concern with people… scope than the management of industrial relations and often includes the following aspects: it stresses the development of the talents and capacities of each individual employee; • it seeks to communicate directly ” (p. 65). this explanation allows us to say that modern employee relations combine industrial relations and new management tools widely used by employers.

While just about every company is interested in recruiting, retaining, and improving employee relations, some manage these activities more easily than others do. Their success in this area is no accident. They have a corporate culture that generates their human resource success. American Express provides us with an excellent example of a positive culture creating a positive human resource. Every culture has to have a central theme, something that makes the company distinctive. The center of the culture at American Express is a focus on the customer.

The customer as the centerpiece of the company is a philosophy that is understood by all managers and employees. Anything, any process or technique, that contributes to better customer relations is of interest. Unlike most companies (Fairbrother, 2000). Many company’s concern for the customer is more than talk.

It set up a system to make sure everyone buys its cultural focus. Putting the customer at the center of better customer relations is of interest. Unlike most companies, American Express’s better customer relations are of interest. Unlike most companies, American Express’s but helps. Some companies use the budget, some use a participatory goal-setting process, and some even use the inherent value of the service provided as their focal point (Abbott, 2007).

Regardless of the focus, it is essential for management first to identify what is important before trying to improve relations with, and performance of, employees. It is not necessarily critical that every organization emphasize quality to have a competitive culture and a motivated workforce. The important point is that every organization needs some vehicle for employees to learn about their corporation and the importance of their jobs to the health of that business.

Other equally effective operational systems can be used to teach employees about their contribution and the importance of their jobs. “Most deals involve trading flexibility and a commitment to avoid industrial action with a measure of job security and scope for union recruitment” (Leat, 2001, p. 332).

In their training sessions managers also try to knock down walls. In line with this holistic view, they make sure trainees do not just look at what sales or data processing or accounting or even customer service does. Rather, they try to have everyone look at the total business operation. In this process, people learn about the business and its needs and the interdependence of each other. This holism is a critical ingredient.

If all companies are going to be able to retain employees and improve relations with them, managers need to find ways of creating this integrated understanding of their business. American Express can do this through the work of its Quality Assurance Centers. Developing a greater understanding and appreciation of one’s impact on others is another key to employee motivation and enhancement of relations within the entire organization. Think about it.

It is often surprising how few employees do know whom they serve and who serves them. Few employees know what others want, and fewer still know what others truly need from them. (Leat, 2001).

Modem researchers underline that effective performance and motivation are a part of employee relations (Leat, 2001). No discussion of motivation would be complete without a discussion of leadership, which determines how to motivate others and how to build team pride. Rose (2004) says great leaders believe what they say and say exactly what is on their minds.

The author emphasizes that they inspire loyalty and trust because they deliver what they promise. “There is evidence that employees generally welcome such initiatives, but there is no consistent evidence of their impact upon motivation, performance or industrial relations outcomes” (Leat 2001, p. 13).

To implement and reap the benefits of improved relations and productivity, an organization’s decision-making process must change. Decision-making must be less authoritarian, more focused on participation, less focused on management, and more focused on employees. Not only must the focus change, but local or plant-level people must “buy into” the process. It means local ownership and, most importantly, local control. Corporate management cannot simply tell local sites what to do and expect it to get done (Cully et al 1999).

There must be significant local involvement. There must be local control over objectives, methods, resources, communication, and even evaluation of the success of the process. The need for local control does not imply that there are no corporate guidelines. At Ford, guidelines for EI were hammered out between its top management and the top leadership of its union. Guidelines and encouragement must come from the top, but local leaders must decide when they are ready for EI and how to do it (Leat, 2001).

Overspecialization of job duties is the enemy of productivity. At some point, specialization may have been necessary, but today it has hampered what people can do. It has often led to feelings of alienation by many of the workforces since employees and managers feel they are only a cog in the organizational machinery.

One of the solutions to the problem of specialization is called multiskilling. Some call it cross-training. Regardless of what you call it, its aim remains the same: improve productivity and quality by developing a broader, more flexible workforce. It is having an effect. Union companies like G.M. and National Steel have improved speed and efficiencies by losing job classifications: Motorola trained workers how to do several jobs and solved critical quality problems with its cellular phone. Multiskilling usually involves being paid for the variety of skills one masters rather than for the job one has acquired (Gennard and Judge, 2005).

Employees get pay increases provided they learn new skills and maintain their quality at their workstation at zero defects for five consecutive days. Because of these teams, employees are more committed (Cully et al 1999). Employees do not simply come to work and do what someone tells them to do. Instead, because of these teams, employees have a sense of ownership. Building teamwork, so essential to effective teams, requires shifting some authority and responsibilities to team members. This change may alienate some traditional managers who felt they will lose authority and responsibility (Gennard and Judge, 2005).

In sum, modern theories of employee relations state that the new age demands innovations and a new vision of the workplace. During the last 30 years, there was the shift from industrial relations to employee relations based on effective communication and motivation issues. The modern company is employee-owned and operated, but many of those types of companies have not been successful.

While some companies have completely restructured themselves, from a more practical viewpoint, each of us can make work less work and more enjoyable by applying some simple rules for eliminating irrelevant work, reports, rules, and so forth.


Abbott, K. 2007, Employment Relations: Integrating Industrial Relations and Human Resource Management. Problems and Perspectives in Management. Sumy: 5 (1), 61-73.

Blyton, P. & Turnbull, P. 2004, The Dynamics of Employee Relations Basingstoke: Macmillan.

Cully, M., Woodland, S., O’Reilly, A. and Dix, G. 1999, Britain at Work: As Depicted by the 1998 Workplace Employee Relations Survey. London: Routledge.

Daniels, K 2006, Employee Relations in Organisational Context London: CIPD.

Edwards, P 2003, (ed.) Industrial Relations: Theory and Practice Oxford: Blackwell Publishing.

Fairbrother, P. 2000, Trade Unions at the Crossroads London: Mansell.

Gennard, J., Judge, G. 2005, Employee Relations (4th Edition), CIPD, London.

Leat, M. 2001. Exploring Employee Relations. Butterworth-Heinemann.

Rose, E. 2004, Employment Relations London: Prentice Hall.

Tsui, A. S., Wu, J. B. 2005, The New Employment Relationship versus the Mutual Investment Approach. Human Resource Management, 44 (2), pp. 115–121.

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