Employee Relations

Tejinder Pal Singh

 Employment Relationship
The term employment relationship describes the links
between employers and employees in the workplace. These
may be formal, eg contracts of employment or procedural
agreements or they may be informal in the shape of the
psychological contract
They can refer to individual contracts and expectations or they
can refer to the collective relationships between management
and trade unions or joint consultative bodies.
terms and conditions can be
•express terms
•implied terms
 Contract of Employment

 Express contract - uttered by mouth or set in

writing - usually contained in some document.
 Implied contract - not expressed in words but
assumed through common understanding.
Include common custom and practice,a
arrangements and accepted modes of
conducts, etc.
 Exercise
In pairs discuss

•what are the collective and individual rights.

•What are the statutory and contractual rights.

•Wavier of statutory rights.

•What happens if these are at variance.
 Collective and Individual Rights

•Collective rights - relate to union organisation,

collective bargaining and representation, and
industrial action.
•Individual rights -
•Statutory rights - rights everyone has by law.
•Contractual rights - rights contained in the
individual’s contract of employment.
 Exercise
• It has been argued that the employment
relationship is
• an economic bargain between employer and
employee
• a power relationship, in which the employee
surrenders his or her right to autonomy to the
employer

• From your experience at work, which statement do

you think is the best description of the employment
relationship.
 ER- Legal Framework
There are four sources of employment laws in UK.

•Statute law - written law arising from various Acts of

Parliament.

•The Common law - ‘unwritten law’ that arise from

custom and practice. E.g. - relevant to contract of
employment and law of torts (civil wrong)
 ER- Legal Framework

•Case law - the stock of cases issuing from the courts

and industrial tribunals, also European Court of
justice and European Court of Human rights. It
interprets statutes as they are applied in particular
circumstances.

•European Union Law - the legislation arising from

the treaty of Rome, 1957, and subsequent treaties
(e.g. Maastricht). It comprises Regulations and
Directives.
 Nature of the employment
relationship
The basis of the employment relationship is an
undertaking by an employee to provide skill and
effort to an employer in return for which the
employer provides a salary or wage, a safe
workplace and an obligation to to act in good faith
towards the employee.
Contractual relationship
•Open ended
•Economic
•Social
 Contract of employment
 Difference between commercial contract
and employment contract
 Equality and freedom of entry: market
individualisation
 Common law duties
 Types of employment contract
 Statutory rights
 Contract of Employment
in context - C Brewster (1985)
CBI
National
Economy Conservatives
Employers’
Associations
Industry
Management
Company CoE
Other Government
Political Employees
Parties
Trade Unions

Labour

TUC
Components of Employment
Contract
 Written Statement
 Letter of engagement
 Job Description
 Company Rules
 Collective Agreements
 Personnel Policies & Procedures
 Promotion procedures
 Pay & Benefits
 Common Law obligations
 Custom & Practice
 Employment Contract

•Written particulars- within two months individual

has the right to receive a statement from the
employer covering the main terms of employment.

•Breach of contract-
•Restore the rights
•Compensation
 Constructive dismissal
Where an employer commits a contractual
breach and when the result of the contractual
breach is that an employee feels that he or
she has no option other than to leave than
the person can seek compensation fo
constructive dismissal.
 Written Statement
(Employment Rights Act, 1996)
 Issued within 8 weeks in writing
 with related policies & documents
 include:
job title
job description
rate of pay (Scale)
intervals of pay
normal hours of work
 Written Statement
(Employment Rights Act, 1996) 2...
location
holiday entitlements
sick pay arrangements
pension scheme
terms of notice
rules of the job
safety procedures
disciplinary & grievance policies
redundancy rights
collective agreements
 Features of Contemporary
Employment Relations
• Unions sometimes marginalised at the
workplace
• Rise in individualism/individual negotiation
• Greater concern for individual employment rights
– equal opportunities
• Blurring of boundaries of work eg location
• Management increasingly in control
• Emphasis on human resource management
• Persisting issues of trust and fairness
 Some Reasons for Change in
Employment Relations
• Workplaces getting smaller
• Flexibility and fragmentation of the workforce
• Pervasiveness and urgency of change
• Feminisation of workforce and growing interest
in issues such as work-life balance
• Influence of American culture/individualism at
work
The Need for a New Conceptual
Framework
• The traditional collective model is less relevant
in many workplaces
• Need a model that can accommodate rise in
individualism and flexibility
• Need a model that can address core issues in
the employment relationship of trust, exchange
and control
• The psychological contract can meet these
requirements
 OPERATIONAL MODEL OF THE
PSYCHOLOGICAL CONTRACT

Causes Content Consequences

organisational culture organisational

Fairness
citizenship
HRM policy and practice
organisational
Experience commitment
Trust
Expectations Motivation

Alternatives Satisfaction and

The delivery of the deal
well-being

Source: Guest D E, Conway N, Briner R and Dickman M (1996) The State of the Psychological Contract in
Employment, Institute of Personnel and Development
 What are Organisations? What is
Employment Relationship?
• Generally happy and harmonious places, people
work towards common goal, work is seen as fulfilling
• Generally sites of come conflict, people have
different interests and goals depending on group
membership, class or professional status, work is
necessary
• Generally sites of exploitation, where interests of
capital owners are served, work is alienating
 Unitarism and Pluralism
• Offer very different perspectives on organisations
and employment relationships
• Often seen as opposite ends of a continuum
• In practice many shades within each approach
 Unitarism
• Work organisations are an ‘integrated and harmonious whole
existing for a common purpose’ (Farnham and Pimlott 1991)
• Absence of conflict between capital and labour – members of
the same team
• Conflict is ‘pathological’
• Organisation single source of authority, unitary in structure
and purpose
• Employees loyal to the organisation
• Emphasises organisational culture, organisational values,
norms and common interests
• Assumed to be perspective most commonly held by many
managers
• See reflected in focus on ‘managerial prerogative’
• Managers’ ‘right to manage’ emphasises managers acting in
the interests of all in the organisation because they know best
 Unitarism
Public policy issues
• State to support and reinforce managerial prerogative
• Removal of rights/power base to trade unions through
legislation
• Restore property and decision-making rights to
managers
• Removal of support for collective bargaining to widen
basis of support for managerial decision-making
• More active role for legislation to curb and in extreme
cases outlaw strikes and other industrial action
 Unitarism
But
• Why should managers’ values be accepted
unquestioningly?
• Why should we assume values of organisation = those
of individuals and groups? Values of unitarism are
superficially appealing but much more difficult to turn into
practice
• How sensible is an approach which assumes an
unquestioning acceptance of managerial prerogative?
• Problems with more active role of law in ER
• We know that conflict does exist in organisations, how
do unitarists explain this?
 Pluralism
• For many (particularly academics) pluralism represents
more appropriate and accurate description of
organisations and employment relationships

• Organisations characterised by competing interests

• Conflict inevitable and legitimate and structured into
employment relationship
• For pluralists conflict is manageable and resolvable
• Focus on resolution of conflict – order, stability – rather than
how generated
• Tends to assume balance of power between parties with
different interests
• Legitimacy of trade unions as representing employee interests
and countervailing power to management
 Pluralism
• Influence on Public policy in employment relations
• Legalisation of trade unions and rights to ensure that
independent unions can operate to defend and further
employee interests
• Encouragement and legal support for collective
bargaining
 A radical perspective:
The labour process

• Fundamental and inherent conflicting interests between

management and workers.
• Uneven distribution of power between bargaining
groups, within the workplace and society.
• The role of trade unions—to challenge managerial
control.
• The state protects the interests of capitalists.
 A radical perspective:
The labour process (cont.)
Class struggle and control in the labour process
• Marx argued that capital social relations are based on a fundamental
divide between the bourgeoisie and the proletariat.
• Labour possesses labour power—the potential effort that each
employee offers.
• Potential labour does not always equal actual labour.
• Management’s task is to convert this labour power into actual work and
effort, in order to make a profit.
– Braverman (1974) argued that management seeks control and
improved performance through deskilling labour.
– Friedman (1977) argued that management could use either:
• direct control or
• ‘responsible autonomy’ based approaches.
 Management Styles
• Implies the existence of a distinctive set of guiding
principles, written or otherwise, which set
parameters to and signposts for the management
action regarding the way the employees to be
treated.
• Two dimensions
– Individualism
• Employees as individuals with needs and aspirations
– Collectivism
• Managers accept employees right to act collectively; and are
willing to negotiate and consult with employee representative
Purcell and Ahlstrand, 1994
 Individualism
One broad extreme
• ‘High individualism’ or ‘investment orientation’
towards staff emphasises following policies and
practices –
– Employees seen as important resource
– A focus on internal labour market
– Employee development, appraisal and individual
systems of reward
– Empowerment
• Neo-unitary view –conflict can be prevented
• aimed at generating employee engagement
 Individualism- contd
Other extremes
• Traditional unitary view- low concern with
individual employees – will adopt ‘cost
minimisation’ view emphasising
– Labour as a commodity bought and returned to
external market
– Emphasise of numerical flexibility
– Limited, if any, training
– Tight control over pay
 Collectivism
• One extreme there would be resistance and hostility
towards TUs Traditional unitary approach)
• On other extreme – cooperative relationship sought-
regular consultation on strategic plans, extensive
information exchange and joint working parties. -
Partnership approach
• In between – adversarial relationship
– Unions recognised for many years but managers prefer not
to negotiate. ‘managerial prerogative’ (Storey, 1983)
– Control and stability of Employment relationship –
important – through formally agreed procedures.
– Issues on which union can negotiate are carefully and
tightly drawn.
 Management Styles
1. Traditionalist
- oppose unions
- little attention to employee needs
2. Sophisticated Paternalist
- emphasises employee needs
- discourages unionism
- demands loyalty & commitment
 Management Styles – cont’d
(Purcell & Sisson 1983)
3. Sophisticated Modern
- accepts T.U. role within limits
- encourages direct dealing
4. Standard Modern
- accepts T.U. role
- no overall strategy - ‘fire fighting’
 Partnership Agreement
• At the heart of partnership working is the notion
that it benefits the employer, the recognised
union and the workforce at large. (William and Adam-
smith, 2010)

• Some common elements

– Shared commitment to the organisational success
– Development of new form of communication and
consultation arrangements.
– Some form of employers guarantee on job or
employment security
– Union acceptance of the need for its members to
work flexibly.
 Employee Engagement
• ‘Where managers are able to achieve an engaged
workforce … it can lead to organisational success and
employee well being.’ (Macleod et al and Clark, 2009)
• It has three dimensions (Alfes et al, 2010)
– Intellectual engagement
– Affective engagement
– Social engagement
• Drivers of engagement (Alfes et al, 2010)
– Meaningfulness of work
– Employee voice
– Senior management communication and vision
– Line management
– Person-job fit
– Supportive work environment
 Employee Voice
• The say employees have in matters of concern to them
in their organisation.
• ‘Employee voice is the term increasingly used to cover a
whole variety of processes and structures which enable,
and sometimes empower employees, directly and
indirectly, to contribute to decision-making in the firm’.
Boxall and Purcell (2003)
• Employee voice arrangements are concerned with
involvement and participation

Source: Boxall P and Purcell J (2003) Strategy and Human Resource Management, Palgrave
Macmillan
 Involvement and Participation
• Involvement means that management allows employees
to discuss with them issues that affect them but that
management retains the right to manage. It is primarily a
management-driven concept.

• Participation is about employees playing a greater part in

the decision-making process. It is therefore much closer to
the concept of employee voice systems, that is,
arrangements for ensuring that employees are given the
opportunity to influence management decisions and to
contribute to the improvement of organisational
performance.
 Purpose of Employee Voice
• Articulation of individual dissatisfaction: to rectify a
problem with management or prevent deterioration of
relations.
• Expression of collective organisation: to provide a
countervailing source of power to management.
• Contribution to management decision making: to
seek improvements in work organisation, quality and
productivity.
• Demonstration of mutuality and co-operative
relations: to achieve long term viability for the
organisation and its employees.
• Marchington M et al (2001) Management Choice and Employee Voice, CIPD
The Framework of employee Voice

Shared agenda

Employee Partnership
involvement agreements

Direct Indirect
involvement involvement

Grievance Traditional
procedures collective
bargaining

Contested agenda

Source: Marchington M et al (2001) Management Choice and Employee Voice, CIPD

 Levels of Employee Voice
Management joins
with employees
in making
decisions
Degree to which
management
prerogative is Management
preserved consults employees
before making
final decision

Management
communicates
decisions to
employees Degree to which
employees are
involved

Management decides
unilaterally
 Conflict
– A process that begins when one party perceives that
another party has negatively affected, or is about to
negatively affect, something that the first party cares
about.
• Is that point in an ongoing activity when an interaction
“crosses over” to become an interparty conflict.
– Encompasses a wide range of conflicts that people
experience in organisations
• Incompatibility of goals
• Differences over interpretations of facts
• Disagreements based on behavioral expectations
 Transitions in Conflict thought
• Traditional view – belief that all conflicts are
harmful and should be avoided.
– Causes- poor communication, lack of
openness, failure o respond to employees need
• Human relations view – conflict is a natural
and inevitable outcome in any group
• Interactionist view- it is not only positive
force but absolutely necessary for a group
to perform effectively
 Conflicts
• Functional versus dysfunctional
– Whether supports goals and improve
performance

• Task conflict
• Relationship conflict
• Process conflict
 Conflict-Handling Styles

Source: K. Thomas, “Conflict and Negotiation Processes in Organizations,” in M.D. Dunnette

and L.M. Hough (eds.), Handbook of Industrial and Organizational Psychology, 2nd ed., vol. 3
. (Palo Alto, CA: Consulting Psychologists Press, 1992), p. 668. With permission.
 Conflict Management Techniques
• Problem solving
• Superordinate goals
• Expansion of resources
• Avoidance, Smoothing, Compromise
• Authoritative command
• Altering human or structural vaiable
• Communication
• Bringing in outsiders
• Restructuring the organisation

Source: Based on S. P. Robbins, Managing Organizational Conflict: A Nontraditional Approach

. (Upper Saddle River, NJ: Prentice Hall, 1974), pp. 59–89
 Negotiation
• Negotiation (Bargaining)
– A process in which two or more parties exchange
goods or services and attempt to agree on the
exchange rate for them
• Two General Approaches:
– Distributive Bargaining
• Negotiation that seeks to divide up a fixed amount of
resources; a win-lose situation
– Integrative Bargaining
• Negotiation that seeks one or more settlements that can
create a win-win solution
.
 Distributive versus Integrative
Bargaining
Bargaining Distributive Integrative
Characteristic Bargaining Bargaining
Goal Get all the pie you Expand the pie
can
Motivation Win-Lose Win-Win
Focus Positions Interests
Information Sharing Low High
Duration of Relationships Short-Term Long-Term

Integrative

Distributive

.
Source: Based on R. J. Lewicki and J. A. Litterer,
Negotiation (Homewood, IL: Irwin, 1985), p. 280.
 Equal Opportunity and Diversity
• The legal framework (equal opportunities) is
developed around definition of indirect
discrimination- ‘discriminating against people on
the grounds that are irrelevant to the jobs they
are doing or for which they are applying’
(Chryside and Kaler, 1996)
• Diversity approach recognises that everyone is
different though some may share certain
characteristics.
 Equal Opportunities and Managing
Diversity
Equal Opportunity Managing diversity
• externally imposed • internally initiated /internalised

• legally driven • business needs driven

• Focus on groups • Focus on individuals

• problem focused • opportunity focused

• assumes assimilation • assumes pluralism

• reactive • Proactive

• race, gender and disability • all differences

• Perceived as cost • Perceived as investment