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Strategic Aspects Of employee Relations

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Strategic Aspects Of employee Relations
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C H APTER 20
STRATEGIC ASPECTS OF
EMPLOYEE RELATIONS
THE OBJECTIVES OF THIS CHAPTER ARE TO:
1 EXPLAIN THE DECLINE OF TRADE UNIONS IN RECENT DECADES
2 REVIEW DEVELOPMENTS IN THE FIELDS OF COLLECTIVE BARGAINING AND INDUSTRIAL ACTION
3 ACCOUNT FOR THE SUBSTANTIAL AND ONGOING INCREASE IN THE EXTENT OF EMPLOYMENT REGULATION
4 EXPLORE THE IMPLICATIONS OF THESE TRENDS FOR THE STUDY OF EMPLOYMENT RELATIONS
5 SET OUT THE MAJOR CHOICES AVAILABLE TO MANAGERS IN THE AREA OF COLLECTIVE EMPLOYEE
INVOLVEMENT
6 ASSESS THE VARIOUS APPROACHES USED AS A MEANS OF INVOLVING INDIVIDUAL EMPLOYEES IN THE
MANAGEMENT OF ORGANISATIONS
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Part V Employee relations
When we surveyed the activities and priorities of HR specialists in the early 1980s,
there was no doubt about the pre-eminence of employee relations as being the activity on which they spent most of their time and as being most central to the human
resource function (Mackay and Torrington 1986, pp. 149, 161). Only in recruitment
and selection did they feel that they had a slightly greater degree of discretion and
scope in decision making (pp. 146–8). Twenty years on, the situation has wholly
changed. A recent survey of HR managers showed that employee relations issues are
now placed well down the agenda in terms of their current and perceived future
importance (IRS 2003a, pp. 6–8). The emphasis is overwhelmingly on recruitment,
staff retention, development and performance management, along with the HR
implications associated with the introduction of new technology and legislation. The
main reason appears to be a widespread perception that employee relations in UK
organisations are in a healthy state. The 1998 Workplace Employment Relations
(WER) Survey found that 80 per cent of HR managers believed their own organisations’ employment relations climate to be either ‘good’ or ‘very good’, while only
2 per cent saw it as being poor – the same proportion that reported industrial action
as having taken place during the previous year (Cully et al. 1999, pp. 125 and
276–7). Similar findings were reported by the Industrial Relations Service (IRS 2000,
pp. 10–11), suggesting that the pressures placed on many workforces to become
more efficient and flexible are not leading to overt forms of conflict. Employee
relations is not therefore seen as an organisational problem. Interestingly the WER
Survey also found that a majority of employees were positive about the employee
relations climate in their own organisations, although theirs was a less enthusiastic
endorsement (21 per cent characterised the climate as being ‘poor’ or ‘very poor’).
Employee relations activities may not be as significant to HR practitioners as they
once were, but they remain important. A good employee relations climate is not created or maintained automatically; ongoing action on the part of managers is required.
ACTIVITY 20.1
What do you think are the main reasons for the fall in the perceived importance of
employee relations activities? What would need to happen for the position to be
reversed?
KEY TRENDS IN EMPLOYEE RELATIONS
The past twenty-five years have witnessed a sea change in the UK employee relations
scene. Most of the once well-established norms in British industry have been abandoned or have withered away as the nature of the work that we do and the types of
workplace in which we are employed have evolved. To an extent, cultural change has
accompanied this structural change too, creating a world of work in which employee
attitudes towards their employers and employer attitudes towards their employees
have developed in new directions. As we demonstrate throughout this book, ongoing change of one kind or another has affected and continues to affect most areas of
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Chapter 20 Strategic aspects of employee relations
HRM activity, but it is in the field of employee relations that the most profound
transformations have occurred.
That said, it is important to appreciate that change in this field proceeds at a different pace in different places. There remain many workplaces, particularly in the
public sector and in the former public sector corporations, in which more traditional
models of employee relations continue to operate despite attempts by successive governments to undermine them. What we now have, therefore, is a far greater variety
of approaches in place across the different industrial sectors than was the case in past
decades.
Trade union decline
The most significant and fundamental trend is the decline in the number of people
joining trade unions and taking part in trade union activity. In the UK membership
levels reached a historic peak in 1979, when it was recorded that over 13 million
people (58 per cent of all employees) were members of listed trade union organisations. In almost every year since then the number has declined as people have let their
membership lapse, older members have retired and younger people have not replaced
them. By 2002 membership stood at 7.3 million, representing just 26.6 per cent of
the working population (Labour Market Trends, 2003a). The rate of decline has
reduced somewhat in recent years, some unions reporting modest increases in their
membership levels as more people have joined the workforce, but trade union density (i.e. the percentage of employees in membership) has now fallen year on year for
twenty-five years.
Because the decline started in 1979 at the time that Margaret Thatcher was first
elected Prime Minister, the actions of her governments have frequently been cited as
a major source of the trade unions’ decline. While it is true that a series of hostile
employment acts passed on to the statute books in the 1980s did not help the union
cause, the extent to which these directly impacted on union decline was limited. The
only full-frontal legal attack on the ability of unions to recruit members came in the
form of regulations which made it impossible to sustain closed shop agreements
whereby membership of a specific trade union was a necessary pre-condition of
employment in certain workplaces. This represented a major reform, affecting over
5 million employees who worked in closed shops (Dunn and Gennard 1984), but it
did not lead directly to a great number of resignations from unions. Membership
decline may to an extent have been precipitated by legislation of the 1980s and early
1990s which sought to reduce the number of strikes by making it harder for a union
to press its demands through industrial action, but there is little evidence to support
such an assertion. The view that ‘anti-union’ legislation can be blamed for membership decline in the UK is thus unconvincing, the more so when it is considered that
the substantial downward trend in the number of trade unionists was (and still is) an
international trend (see Vissa 2002).
The main cause of trade union decline has little to do with the employment policy
of governments and more to do with industrial restructuring of the kind that has
occurred across the developed world. Established industries in which union membership is the norm have declined (e.g. mining, ship building, heavy manufacturing
industry). The jobs that have been lost have been replaced by those in the service
sector in which union membership is a great deal rarer (e.g. call centres, hospitality,
tourism, retailing). The size of the average workplace has declined too, and this has
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Part V Employee relations
had an adverse impact on the propensity of employees to join a union. There are far
fewer large factories employing thousands on assembly lines than there used to be,
and many more small-scale office and hi-tech manufacturing operations. Management styles in small workplaces, even when part of a much larger group, inevitably
tend to be more ad hoc and personal. Grievances, disputes and requests for a pay rise
are thus discussed and settled in face-to-face meetings or informally between people
who know each other well, without the need to involve a trade union. Moreover, in
the private services sector the proliferation of small workplaces means that alternative employment is readily available for suitably qualified people. When receptionists,
shop workers, sales executives, call-centre staff or IT people are dissatisfied with
their work, their workplace or their managers, they can simply look for another
job and resign. They do not need to move house to find work and are unlikely, in the
present economic climate, to suffer any decline in income. Their jobs thus matter less
to them than was the case in the days of the steel town, the mining village or the city
suburb in which one big employer provided the lion’s share of all employment. In
short, there is now less need to join a union because there are other ways of resolving problems at work and relieving discontent.
By 1998 47 per cent of UK workplaces employing over 25 people stated that
they employed no union members at all (Cully et al. 1999, pp. 87 and 92), while in
hundreds of thousands more unions have no influence of any significance. For most
employees, therefore, the norm is now to work in a non-union workplace. As a
result, employee relations has come to be characterised by a far greater variety of
forms than had been the case throughout much of the past century, traditional
approaches continuing to decline:
What we find, therefore, is a marked split between the public sector, where traditional
industrial relations appears to have survived, albeit with some adaptations, and a
private sector which, with the exception of a declining set of large establishments, is
predominantly non-union and without worker representation. . . . Management appears
to be firmly in the driving seat, controlling the direction of employment relations.
(Guest 2001, p. 99)
The question of whether continued trade union decline is inevitable has been considered by many and, as with most debates about the future, this one is characterised
by diverse views. From a trade union perspective there are grounds for pessimism,
despite years of new initiatives aimed at recruiting new members in the private
sector. The proportion of younger people who choose to join unions has declined
dramatically, suggesting that they do not see membership of a collective employee
body as necessary or desirable. In 1991 as many as 37 per cent of people in the
25–34 age group were union members (Waddington 2003, p. 239). Ten years later,
union density among the under 30s had fallen to just 16 per cent, compared with
34 per cent among those over the age of 30 (Freeman and Diamond 2003, p. 29).
The second reason to anticipate further decline in the future relates to the continued
growth of industries which have not traditionally been unionised. With the exception of some jobs in the public sector, the fastest-growing professions are all ones
that have very low rates of union density (e.g. technicians, consultants, software
engineers, nursery nurses, hairdressers and beauticians).
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Chapter 20 Strategic aspects of employee relations
The alternative view rests first of all on the observation that trade unions have
been through periods of steep decline before and have later recovered. Kelly (1998)
shows how union membership declined steeply during the 1920s and early 1930s,
density falling as low as 22 per cent in 1933, only to recover again afterwards. His
theory of ‘long waves’ in industrial relations leads him to conclude that workers will
only ever put up with so much ‘exploitation and domination’ by employers, before
beginning to unite to fight back. Others take heart from research which shows that
many employees in the non-union sectors (including young people) are neither
strongly opposed to unions, nor unwilling to countenance joining a union in the
future. Fifty per cent of those asked in a poll in 2001 said that they would be either
‘very likely’ or ‘fairly likely’ to join if one were available at their workplace
(Charlwood 2003, p. 52). These figures suggest that unions could create a renaissance for themselves if they could find more effective ways of organising and marketing themselves in the private services sector.
WINDOW ON PRACTICE
Trade unions face a major problem in recruiting members in what are known
as ‘dispersed sectors’ in which people are scattered across the country in small
workplaces, working in small teams less than half a dozen strong or even alone.
Traditional approaches involving communication from the union hierarchy through
local shop stewards is clearly inappropriate for these groups. New methods such
as the use of mobile phone text alerts thus have to be harnessed.
Despite the difficulties some of the larger unions have enjoyed some modest
successes in recent years by setting up special sections for people working in these
dispersed occupations. IRS (2003b) gives several interesting examples. The GMB
union has recently started targeting professional boxers, London minicab drivers and
workers in the sex industry, while the Transport and General Workers Union has
signed up over 2,000 childcare workers in private nurseries. However, the biggest
success story is probably Amicus’s clergy and church workers’ section which has
over 2,500 members and recently succeeded in persuading the Church of England
to recognise the right of clergymen not to be unfairly dismissed.
Collective bargaining and industrial action
A major consequence of the decline in trade union membership has been a simultaneous decline in the number of employees whose terms and conditions are determined
through collective bargaining (i.e. negotiation with a union or unions). Here, too,
dramatic changes have occurred over recent decades. We have moved from a position in which a large majority of people worked in establishments which recognised
trade unions, to one in which a large majority do not. In 1970 over 80 per cent of
the UK workforce was covered by collective agreements. Thirty-three years later, the
figure was 35.6 per cent (Labour Market Trends, 2003a).
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Part V Employee relations
Table 20.1 Average number of working days lost due to strikes
1970–1974:
14.1 million
1975–1979:
11.6 million
1980–1984:
10.5 million
1985–1989:
3.9 million
1990–1994:
824,000
1995–2000:
594,000
2000–2002:
924,000
Source: Adapted from R. Taylor (1993) The Trade Union Question in British
Politics. Oxford: Blackwell; and Labour Market Trends (2003c) ‘Labour disputes
in 2002’, Labour Market Trends, June. London: HMSO.
Profound changes have also occurred within the sectors that remain covered by
collective agreements, and continue to do so. Over several decades we have seen
the breaking down of the system of national collective bargaining established in the
middle years of the twentieth century. Agreements of this kind are now very rare
outside the public sector whereas once they were the norm. They involve terms and
conditions being agreed at industry level between representatives of the relevant
unions and an employers association, resulting in an agreement to which all operating in the industry agree to adhere. One by one arrangements of this kind have
collapsed as collective bargaining, where it continues at all, increasingly takes place
at the level of the organisation or the individual workplace. In 1960, according
to Brown et al. (2003), 60 per cent of UK employees were covered by industry-level
collective agreements. By 1980 the proportion had fallen to 43 per cent and by 1998
to only 14 per cent. These remaining agreements are largely in the public sector and
are themselves under robust attack from government ministers who see local bargaining as a more efficient and fairer way of distributing public money.
Another major change in employee relations has been the very marked decline in
the incidence of industrial action in recent years. Contrary to commonly held perceptions, UK workers have never been more prone to take industrial action than
their counterparts in other countries, but the 1970s and early 1980s did see the loss
of millions of days’ work as a result of strikes, not to mention the fall of at least two
governments in the wake of major strikes. The position is now wholly transformed.
The UK’s strike rate has been below the average for both the European Union and
the OECD countries in every year except one since 1992 (Labour Market Trends
2003b), while the subject has long ceased to be one which influences voting patterns.
The number of stoppages varies from year to year. In 2002, for example, there was
a marked increase due to a long-running dispute in the fire service, but the overall
trend has been downwards for over a decade. The number of working days lost to
strikes each year is now a fraction of what it was thirty years ago (see Table 20.1).
The rise of employment law
Until the 1960s there was no such thing as employment law in Britain. With
the exception of basic protection for child workers and some health and safety
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Chapter 20 Strategic aspects of employee relations
regulations, the state ‘kept its distance’ from the relationship between employers and
employees. This became known as the principle of voluntarism and it meant that the
UK differed very markedly from most other industrialised countries. All workers and
employers, it was argued, were free to enter into whatever contractual relationship
they preferred and it was not for the state to determine people’s terms and conditions
or to set minimum standards. All the courts did was provide a mechanism for contracts of employment to be enforced when one side or the other breached them or
sought to change them unilaterally without the consent of the other party. Protection
from injustices perpetrated by managers and abuse of power was provided by trade
unions and through collective agreements.
Over the past thirty years this position has wholly reversed. In 1965 the first major
piece of modern employment legislation was introduced – a right for redundant
workers to receive payments by way of compensation. In the years since a major new
field of legal practice has been created as the law has intervened more and more in
the regulation of the employment relationship. As trade unions have declined in
terms of their size and influence, the law has stepped in to provide a minimum floor
of rights and to deter employers from acting without proper employee relations procedures. In recent years many developments have originated at European level, but
UK governments have pushed the agenda forward on their own account too.
Unfair dismissal law dates from 1971, sex discrimination law from 1975 and
race discrimination law from 1976. Since 1974 we have had comprehensive health
and safety law together with a government inspectorate to enforce it. Regulations
relating to ‘transfers of undertakings’ were introduced in 1981, when it also became
a formal requirement to consult collectively when making redundancies. The past
ten years have seen an astonishing quickening of the pace. We now have disability
discrimination law, a national minimum wage, restrictions on working time, compulsory union recognition, a host of new family-friendly measures, extensive data
protection law and measures preventing discrimination against people employed on
fixed-term and part-time contracts. 2003 saw the introduction of new regulations
outlawing discrimination on grounds of sexual orientation and religion or belief, as
well as significant improvements to the rights of people with family responsibilities.
In 2004 new workplace dispute resolution measures were introduced, and 2005 will
see major new obligations introduced in the field of information and consultation,
while from 2006 we will have age discrimination legislation in place.
Employment tribunals now oversee nearly 100 separate areas of jurisdiction (i.e.
distinct types of claim that an aggrieved employee, ex-employee or job applicant can
bring to court). In addition there are some thirty or forty separate types of claim
rooted in the laws of contract, trust or tort that can be taken to the county courts.
Over 100,000 claims are lodged with the Employment Tribunal Service each year,
leading the government to reform procedures and adjust remedies so as to discourage parties from pursuing cases they are unlikely to win. Given the acceleration of
developments in the field of employment law, it is not surprising that its implementation by organisations now comes so much higher up HR managers’ agendas than
more traditional employee relations concerns (IRS 2003a). In the vast majority of
workplaces the nature of the relationship that is established between employers and
employees, and the rules that govern it, owe far more to the requirements of employment law than to the demands of trade unions. This represents a total transformation from the position that prevailed a generation ago.
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ACTIVITY 20.2
Why do you think employment practice in the UK moved from being unregulated to
being so highly regulated in thirty years? Do you agree that we now have ‘too much’
employment law? If so, which statutes would you like to see kept and which repealed?
THE STUDY OF EMPLOYEE RELATIONS
The profound changes in the employee relations world outlined above have had, and
continue to have, important implications for those whose job it is to study and conduct research into this area of organisational life. Until recently most of this work
continued to be carried out within a frame of reference founded on the assumption
that union membership and collective bargaining were the norm. The questions asked
and the research undertaken focused for the most part on trade union organisation,
forms of bargaining, industrial conflict and resolution, and the ‘assaults’ on established UK employment practices by employers and government. Since 1997 a great
deal of attention has been given to the operation of the new institutions that have
been set up to provide trade unions with a method of forcing employers to recognise
them when they have sufficient support in the workforce, and to other measures
introduced by the Blair government aimed at fostering partnership agreements
between employers and employee representatives (see Chapter 21). The focus for
many thus remains the formal, collective aspects of the employment relationship and
the prospects of a revival in the fortunes of trade unions. The continued, widespread
use of the term ‘non-union firm’, when such employers have constituted the large
majority for many years, illustrates the lasting influence of this long-established
frame of reference.
Increasingly academics specialising in this field are looking at employee relations
from new perspectives and are asking different kinds of questions in their research.
Some have firmly argued that the time has come for industrial relations specialists ‘to
move on’ and focus on the lived reality of working in contemporary workplaces in
which trade unions and collective bargaining are either peripheral or wholly irrelevant:
the search for the familiar – committees, procedures and so on – could blind the
discipline to the relative sociological marginality of many of these new forms. Whereas
collective bargaining in 1968 was a central social institution comparable to supermarket
shopping today in its impact on the economy and ordinary people’s lives, these new
institutions are of far lesser significance . . . The danger is that we cling to one small log
that is being washed downstream by a mighty river of socio-economic change. The log is
worth grasping, clearly, but Industrial Relations needs to address the encircling current
too. Ackers and Wilkinson (2003, pp. 13 –14)
We are thus now witnessing a very interesting period in the development of
employee relations as an academic discipline. Prominent figures in the field are
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Chapter 20 Strategic aspects of employee relations
directing their minds to different types of issues and the development of new paradigms. Guest (2001), for example, has argued that developments in the state of
the psychological contract between employers and employees (see Chapter 1) might
provide a good focus for the study of employee relations in the future, while Rubery
and Grimshaw (2003) make a good case for focusing on a wider range of employment institutions beyond those which derive from union recognition and collective
bargaining. Their comparative studies look at regulatory practices in the areas of
training, pay determination, working time, retirement, downsizing and employee
involvement.
Because the last of these (employee involvement) has been studied in depth by UK
researchers for some time, it provides a good reference point when thinking about
strategic choices faced today by managers in the employee relations field, and it will
provide our frame of reference for the remainder of this chapter. The key questions
that need to be asked are the following:
• How far should employees be involved in decision making?
• Should their involvement be direct or through representatives such as trade
unions?
• What form should the involvement take?
• At what organisational level should the involvement take place?
• Which issues should be the subject of involvement?
The answers vary from workplace to workplace. In some, particularly those
in which trade unions are not well established, managers have a wide choice about
how and to what extent they involve their employees in decision making. In others
managers have limited room for manoeuvre if they are to avoid a deterioration
in employee relations and/or their position in competitive labour markets. It is
possible to run a successful business with minimal employee participation of any
kind, but this is often not the best option. A strong case can be put for a substantial
degree of worker involvement both directly and through the actions of legitimate
representatives.
COLLECTIVE EMPLOYEE INVOLVEMENT
Management always needs the collective consent of its employees: it also needs a
mandate to manage. This can partly be delivered by trade union recognition, but
other approaches are also available. The recent changes in union membership,
employment legislation and fluctuating unemployment levels have provided academic analysts with the challenge of describing how employee relations strategies
have changed. We still lack a full explanation, but one of the best-known approaches
has been the attempt of Purcell and Sisson (1983) to categorise management styles
in industrial relations. These are summarised in Table 20.2 and the key distinguishing feature is a collective view of the workforce.
The categories in Table 20.2 are useful, although some organisations do not fit
easily into any one of them. Most large, long-established companies will be in one of
the last three; most public sector organisations will be in category 4; and many newer
businesses will be in some version of category 2.
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Part V Employee relations
Table 20.2
Categories of
management
styles in
employee
relations
Style
Characteristics
Traditional
Fire-fighting approach. Employee relations not important until there is trouble.
Low pay. Hostile to trade unions. Authoritarian. Typical in small, owner-managed
businesses.
Paternalist
Unions regarded as unnecessary because of employer’s enlightenment. High pay.
Concentration on encouraging employee identification with business objectives.
Consultative
Union participation encouraged through recognition. Problem-solving, informal
approach to employee relations. Emphasis on two-way communications.
Constitutional
Similar to consultative, but emphasis on formal agreements to regulate
relationship between two powerful protagonists.
Opportunistic
Large company devolving responsibility for employee relations to subsidiaries,
with no common approach but emphasis on unit profitability.
Source: J. Purcell and K. Sisson (1983) ‘Strategies and practice in the management of industrial relations’, in
G.S. Bain (ed.) Industrial Relations in Britain. Oxford: Blackwell, pp. 112–18.
ACTIVITY 20.3
Which of the five categories in Table 20.2 most closely fits your establishment? Does
the category vary for different groups of employees?
If we take a strictly managerial view of trade unions and their recognition, the
interest is the degree to which recognition will deliver collective consent to a general
framework of rules and guidelines within which management and employees operate. Collective consent implies the acceptance of a situation, while agreement has
the more positive connotation of commitment following some degree of initiative
in bringing the situation into existence. We are not, therefore, necessarily describing
active employee participation in managerial decision making. The range is wider,
and includes the variety of circumstances in which employees consent collectively to
managerial authority, so long as they find it acceptable.
In order to couch the discussion in terms that can embrace a variety of styles, we
set out seven categories of consent, in which there is a steadily increasing degree of
collective employee involvement. We begin with a category in which there is straightforward and unquestioning acceptance of management authority, and then move
through various stages of increasing participation in decision making and the necessary changes in management style as the power balance alters and the significance of
bargaining develops and extends to more and more areas of organisational life.
1 Normative. We use this term in the sense of Etzioni (1961), who described
‘normative’ organisations as those in which the involvement of individuals was
attributable to a strong sense of moral obligation. Any challenge to authority
would imply a refutation of the shared norms and was therefore unthinkable.
Many of the exercises in corporate culture are construed by some as strategies to
develop this type of consent, with strong emphasis on commitment and the suppression of views opposed to managerial orthodoxy.
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2 Disorganised. In organisations that are not normative there may be collective
consent simply because there is no collective focus for a challenge; disorganised
consent is where there may be discontent but consent is maintained through lack
of employee organisation to articulate and endorse the dissatisfaction. A Victorian
sweatshop would come into this category.
3 Organised. When employees organise it is nearly always in trade unions and the
first collective activities are usually those dealing with general grievances. It is very
unlikely that there will be any degree of involvement in the management decisionmaking processes. Employees simply consent to obey instructions as long as
grievances are dealt with.
4 Consultative. Consultation is a stage of development beyond initial trade union
recognition, even though some employers consult with employees before – often
as a means of deferring – trade union recognition. This is the first incursion into
the management process as employees are asked for an opinion about management proposals before decisions are made, even though the right to decide remains
with the management.
5 Negotiated. Negotiation implies that both parties have the power to commit
and the power to withhold agreement, so that a decision can only be reached
by some form of mutual accommodation. No longer is the management retaining
all decision making for itself; it is seeking some sort of bargain with employee
representatives, recognising that only such reciprocity can produce what is
needed.
6 Participative. When employee representatives reach the stage of participating in
the general management of the business in which they are employed, there is a
fundamental change in the control of that business, even though this may initially
be theoretical rather than actual. Employee representatives take part in making the
decisions on major strategic issues such as expenditure on research, the opening of
new plants and the introduction of new products. In arrangements for participative consent there is a balance between the decision makers representing the
interests of capital and those representing the interests of labour, though the balance is not necessarily even.
7 Controlling. If the employees acquire control of the organisation, as in a workers’
cooperative, then the consent is a controlling type. This may sound bizarre, but
there will still be a management apparatus within the organisation to which
employee collective consent will be given or from which it will be withheld.
All of the above categories require some management initiative to sustain collective consent. In categories 1 and 2 it may be exhortation to ensure that commitment
is kept up, or information supplied to defer organisation. In each subsequent category there is an increasing bargaining emphasis, which becomes progressively more
complex.
The implication is that there is a hierarchy of consent categories, through which
organisations steadily progress. Although this has frequently been true in the past,
it is by no means necessary. Some may begin at 6 or 7: there is no inflexible law
of evolution, and change can move in the opposite direction as well. Some instances
of partial or complete de-recognition of trade unions could be characterised as
examples of regression back down the hierarchy.
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Part V Employee relations
INDIVIDUAL EMPLOYEE INVOLVEMENT
Whether or not employees are involved and able to influence decision making collectively, there remains scope for direct individual involvement. Interest in this area
of activity has increased in recent years, partly as a result of government interest
and partly because employers have seen involvement as a means by which employee
commitment and organisational communication can be improved. Involvement
initiatives are particularly useful in an environment in which unions are absent or
marginal – because they can provide an alternative means whereby managers gain an
understanding of feelings and attitudes ‘on the shop-floor’.
Direct forms of employee involvement are not incompatible with collective forms
such as are associated with trade union recognition. However, they are generally
initiated by employers and are often seen by critical writers as a method that is used
to discourage trade union growth. The suggestion is that if employees’ desire for
involvement can be partially satisfied using individual initiatives, they will be less
inclined to seek it through collective means. While it is clear from some surveys (for
example IRS 1999) that some employers specifically design employee involvement
initiatives to weaken trade unions, a good business case can be made on many other
grounds. The major reasons are as follows:
•
•
•
•
•
Employees like to be involved and appreciate involvement initiatives.
Employee involvement initiatives improve organisational commitment.
Involvement makes change easier for employees to accept.
Involvement increases levels of job satisfaction.
Involvement is associated with lower levels of staff turnover.
In theory, therefore, employee involvement can potentially be seen as making a
significant contribution to improving organisational performance. While there is
some evidence to support this contention (see Guest and Hoque 1994; Fernie and
Metcalf 1996; IRS 1999b), it is very difficult to prove conclusively. The methodological limitations of research in this area are summarised by Marchington (2001,
pp. 246–7). He states that all that can be said with certainty is that employees like
the idea of involvement initiatives and prefer participative management styles to
those which are autocratic in nature. The evidence is too tenuous to be a base for any
firm claim that involvement leads to a change in employee attitudes or to improved
organisational performance. The claim is nonetheless persuasive intuitively, and can
explain the growth in direct involvement initiatives over recent years.
ACTIVITY 20.4
How far do you think that your own work performance is/would be affected by the
presence of individual employee involvement initiatives at your workplace? What about
your level of commitment to the organisation?
The major forms of direct involvement used in the UK are team briefing, the publication of company news sheets (often now web based), quality circles, suggestion
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schemes and attitude surveys. Teamworking is less common but has generated considerable interest among researchers because it involves individual workers, together
with their colleagues, exercising substantial control over their own areas of work. It
can therefore be characterised as the most far-reaching form of individual employee
involvement.
Team briefing
Team briefing is an initiative that attempts to do a number of different things simultaneously. It provides authoritative information at regular intervals, so that people
know what is going on, the information is geared to achievement of production
targets and other features of organisational objectives, it is delivered face to face to
provide scope for questions and clarification, and it emphasises the role of supervisors and line managers as the source of information:
[Team briefings] are often used to cascade information or managerial messages
throughout the organisation. The teams are usually based round a common production
or service area, rather than an occupation, and usually comprise between four and
fifteen people. The leader of the team is usually the manager or supervisor of the section
and should be trained in the principles and skills of how to brief. The meetings last for no
more than 30 minutes, and time should be left for questions from employees. Meetings
should be held at least monthly or on a regular pre-arranged basis. (Holden 1997,
p. 624)
With goodwill and managerial discipline, team briefing can be a valuable contributor to employee involvement, as it deals in that precious commodity, information.
Traditionally, there has perhaps been a managerial view that people doing the work
are not interested in anything other than the immediate and short term and that the
manager’s status partly rests on knowing what others do not know. For this reason
all the managers and supervisors in the communications chain have to be committed
to making it a success, as well as having the training that Holden refers to above.
Team briefing gets easier once it is established as a regular event. The first briefing
will probably go very well and the second will be even better. It is important that
management enthusiasm and commitment do not flag just as the employees are
getting used to the process.
During economic recessions there is a boost to the team briefing process because
so many managements have so much bad news to convey. When you are losing
money and profitability, there is a great incentive to explain to the workforce exactly
how grim the situation is, so that they do not look for big pay rises. Whatever the
economic climate, team briefing continues to be used widely and was found to operate in a majority of organisations featured in the 1998 WER Survey (Cully et al.
1999).
Quality circles
Originating in Japanese firms, quality circles comprise small groups of employees
(10–15 maximum) who meet regularly to generate ideas aimed at improving the
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quality of products and services and of organisational productivity. They can also
be used as problem-solving groups and as a means by which employee opinion is
transmitted to senior management. Some quality circles consist of staff who work
together within a team or organisational function, others are cross-functional and
focus on interdepartmental issues. They can form part of total quality management
approaches such as those we assessed in Chapter 11:
These sorts of practice have several objectives, such as to increase the stock of ideas
within an organisation, to encourage co-operative relations at work, and to legitimise
change. These practices are predicated on the assumption that employees are
recognised as a (if not the) major source of competitive advantage for organisations, a
source whose ideas have been ignored in the past or who have been told that ‘they are
not paid to think’. (Marchington 2001, p. 235)
Not only, therefore, are quality circles a potential source of useful ideas for
improving systems and saving costs. They also give people a welcome opportunity to
contribute their thoughts and experience. A general positive impact on employee
attitudes should thus result.
News sheets
Another common form of employee involvement occurs through the regular publication of in-house journals or news sheets either in paper or electronic form. On one
level they simply provide a means by which information concerning finances, policy
and proposed change can be transmitted by managers to employees. This is a limited
form of employee involvement which does little more than improve the extent to
which employees are informed about what is going on elsewhere in their organisations. This will engender a perception of greater involvement and belonging, but
does not directly involve employees in any type of decision making. For that to occur
the news sheet must be interactive in some way. It may, for example, be used as a
means by which employees are consulted about new initiatives, or may provide a
forum through which complaints and ideas are voiced.
Attitude surveys
Regular surveys of employee opinion are very useful from a management point of
view, particularly where there are no unions present to convey to management an
honest picture of morale and commitment in the organisation. In order to be effective (that is, honest), responses must be anonymous, individuals stating only which
department they work in so that interdepartmental comparisons can be made. It also
makes sense to ask the same questions in the same format each time a survey is
carried out, so that changes in attitude and/or responses to initiatives can be tracked
over time.
The major problems with attitude surveys are associated with situations in which
they reveal serious problems which are then not properly addressed. This can easily
lead to cynicism and even anger on the part of the workforce. The result is a poorer
employee relations climate than would have been the case had no survey taken
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place. The same is true of suggestion schemes. It is counter-productive to involve
employees if their contribution is subsequently ignored.
Teamworking
Teamworking is a direct descendant of the concept of autonomous working groups,
which had their highest profile in the Volvo plant at Kalmar (now closed down),
and a rather vague movement of the 1960s, called Quality of Working Life (QWL).
At Volvo there were the twin aims of improving the quality of working life and
enhancing productivity. The QWL was directed mainly at making life more tolerable, as the title implies, and it is difficult to see what impact it had. More recently
teamworking has become more comprehensive in its approach and its objectives. It
is very fully explained in the work of Buchanan (1993; Buchanan and McCalman
1989).
Teamworking aims to focus work activity among small groups of about a dozen
members, who are mutually supportive and who operate with minimal supervision.
Management sets performance targets (often after consultation) and allocates tasks,
but it is for the team itself to decide exactly how these are to be achieved. The team
organises its own activities, appoints its own leaders and works out for itself how to
overcome problems. Teamworking can thus be characterised as a form of worker
control, even though it operates within heavily prescribed limits. Managers refrain
from giving day-to-day supervision, but are on hand to give advice or more direct
assistance where necessary. Disciplining staff, for example, is a task carried out by
managers and not by team members. Teamworking is often associated with situations in which several regionally based teams compete with each other to meet or
exceed performance targets. Team-based remuneration then accounts for a proportion of the total pay received.
INTERNATIONAL PERSPECTIVES
Employee relations, more than other areas of HRM practice, varies considerably
from country to country. Although some analysts believe that there has been a degree
of convergence in recent years in response to increased global competition and new
technologies, it is clear that substantial differences remain. In important respects different countries have witnessed different responses to the same environmental pressures (see Bamber and Lansbury 1998 for a summary of these debates).
Comparative studies undertaken in the industrialised countries reveal the continued effect of different industrial relations traditions on contemporary practice.
They also identify the importance of historical experience and institutional differences in explaining the observed variations. The major dimensions across which
national systems vary are as follows:
•
•
•
•
•
high union membership v. low union membership;
single-employer bargaining v. multi-employer bargaining;
interventionist government role v. non-interventionist role;
adversarial tradition v. consensual (or social partnership) tradition;
autocratic management style v. involving management style.
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ACTIVITY 20.5
Making reference to our description of employee relations trends above, consider in
which ways the UK employee relations system has evolved along each of these
dimensions in recent years.
Clearly, of course, there is a great deal of variation within as well as between
national systems in all the above areas. It is also true that things do not remain static
over time and that prevailing norms within any country evolve in new directions.
However, it remains the case that certain approaches remain associated with particular countries. In Japan, for example, union membership is high and management
practices relatively autocratic, but the unions themselves are enterprise based and
there is a consensual tradition. In Germany and the Scandinavian countries the social
partnership approach is well established, but here it is associated with industrybased unions, national-level bargaining, extensive employee involvement in decision
making and heavy government intervention. Hence employers are obliged by law to
consult and share decision making with their workforces through works councils. In
France, by contrast, union membership is notoriously low, but the unions maintain
a role in negotiating terms and conditions because they are empowered to do so in
law. The government is further involved through the setting of minimum standards
in areas such as training provision, holiday entitlements, wages, hours of work,
health insurance and pensions. Government intervention is also extensive in the
Eastern European countries, but here union membership remains high, while bargaining is often carried out at industry level.
The main practical implications associated with this variation in approach are for
multinational organisations. They have an understandable impulse to strengthen
their corporate culture by taking a standard approach to employee relations management across their operations, but also have to take account of local conditions.
For them, success comes when they find ways of creating a company-wide, international strategy which is adaptable to the requirements of the various countries in
which they operate. Employee relations considerations thus play a major role in
determining which countries are chosen as the locations for their operations. They
can also contribute to decisions about plant closures when retrenchment is deemed
necessary.
SUMMARY PROPOSITIONS
20.1 Employee relations practice in the UK was dominated by trade unions and collective
bargaining for most of the twentieth century.
20.2 Since 1979 trade union membership has declined along with the significance of
collective bargaining.
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20.3 As trade unions have become more marginal, managers have sought other forms of
employee involvement over which they are able to exert more influence.
20.4 Increasingly it is the requirements of the law more than the demands of employees
that shape the rules which govern employment relationships.
20.5 It is possible to identify seven categories of consent to illustrate variations in the
level and type of collective employee involvement.
20.6 Individual employee involvement initiatives are direct; they do not operate through
workforce representatives. The most common are team briefing, attitude surveys,
quality circles, news sheets and teamworking initiatives.
20.7 Despite some evidence of convergence in recent years, national employee relations
systems remain very different from one another in important respects.
GENERAL DISCUSSION TOPICS
1 Why should employees be involved and what should they be involved in?
2 To what extent do you agree with the proposition that the decline of trade unions in the
form that they have traditionally taken is inevitable?
3 Which of the forms of direct employee involvement described in this chapter do you think
is most attractive from an employee perspective and why?
FURTHER READING
Boeri, T., Brugiavani, A. and Calmfors, L. (eds) (2001) The Role of Unions in the Twenty First
Century. Oxford: OUP
Gospel, H. and Wood, S. (eds) (2003) Representing Workers: Union recognition and membership in Britain. London: Routledge
There is no shortage of excellent scholarly writing on recent trends in employee relations, and
in particular on the position of trade unions. An up-to-date summary of UK-based research is
provided by the authors contributing to the book edited by Gospel and Wood (2003). For an
international perspective Boeri, Brugiavani and Calmfors (2001) provide a good starting point.
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
Milward, N., Bryson, A. and Forth, J. (2000) All Change at Work? London: Routledge
It is impossible seriously to study trends in employment relations in the UK without taking
account of the findings of the vast Workplace Employee Relations Surveys which are undertaken periodically. The most recent survey was conducted in 1998 and the findings are extensively summarised in the above books.
Blyton, P. and Turnball, P. (2004) The Dynamics of Employee Relations, 3rd edn. London:
Palgrave Macmillan
Geary, J. (2003) ‘New forms of work organisation: still limited, still controlled, but still welcome?’ in P. Edwards (ed.) Industrial Relations: Theory and Practice, 2nd edn. Oxford:
Blackwell
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Marchington, M. (2001) ‘Employee Involvement at Work’, in J. Storey (ed.) Human Resource
Management: A Critical Text, 2nd edn. London: Thomson Learning
Developments in the field of employee involvement, both collective and individual, are discussed at length in the major texts on employee relations. Thought-provoking critical analyses
which reach somewhat different conclusions are provided by the three works listed above.
REFERENCES
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employment relations’, in G. Bamber and R. Lansbury (eds) International and Comparative Employment Relations, 3rd edn. London: Sage.
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IRS (2003a) ‘HR Prospects 2003’, IRS Employment Review, No. 775, May. London:
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IRS (2003b) ‘Part of the union’, IRS Employment Review, No. 764, November. London:
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An extensive range of additional materials, including multiple choice
questions, answers to questions and links to useful websites can be
found on the Human Resource Management Companion Website at
www.pearsoned.co.uk/torrington.
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