Managing Employee Relations

Section 1: Evaluate three major external constraints placed upon your Organisation’s approach to employee relations (1,018 words) Section 2: Analyse management’s approach to employee relations in your organisation making reference to appropriate academics models (1,023 words) Section 3: Evaluate whether the approaches identified in Section 2 above are the most effective for your organisation in the near future (3-5 years), justify any recommendations you make for a different approach (1,043 words)

Introduction This report is in three sections. The first section outlines the external constraints that impact upon employee relations within the organisation. A brief summary of this organisation can be found within Appendix 1. The second section outlines management’s approach to employee relations and the final section evaluates the effectiveness of this approach. External Constraints on Employee Relations Three key external constraints on employee relations within the organisation are recognised trade unions, legislation and competition.

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These constraints have been chosen as they are all very different to each other and impact upon the organisation in very different ways. Trade Unions Trade unions are recognised within an organisation as representing of all, or a group of employees for the purpose of jointly determining the terms and conditions of employment (Salamon, 2001). There are three unions that are recognised by the organisation for the purposes of collective bargaining. These unions represent the 3 main groups of staff. Those on a local contract are not represented by a recognised union.

These unions negotiate on a national basis to determine the national framework of pay and conditions of members. (Farnham, 2000) These negotiations are an external constraint to the university, as they determine amongst other things, the level of the annual pay award. The impact on employee relations of these negotiations depends upon whether the university wishes to adopt national recommendations or choose to negotiate locally on a variation. For example if the pay award could not be afforded by the organisation.

Should funding be available, then relations between employee and employer will not be affected, however should the funding not be available for the size of the award agreed, then this can cause problems with employee relations and can lead to the unions going into dispute with the university. (Farnham, 2000) This can lead to industrial sanctions being taken by the union and its members. This occurs because it is believed that this is the only by imposing their unilateral power on the management that the unions can achieve their employee relations objectives. The form of industrial sanctions can include * Working to contract Going Slow * Strikes The impact of these industrial sanctions on the organisation would be that students do not get the lectures they require for their degrees or that assignments go unmarked or marks unrecorded. In the long-term this may impact upon reputation and have a long term effect on recruitment and marketing as well as impacting on relations between employees, employers and unions. Legislation Legislation is an external constraint that affects organisations. It is concerned with * the relationship between employer and employee * the relationship between employer and union and the relationship between the union and its membership (Rose, 2001) One recent piece of legislation that has recently come into affect is that of the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002. This legislation, which came into force on 1st October 2002, required institutions to reduce significantly the use of these contracts. The Bett Report (The Report of the Independent Review of Higher Education Pay and Conditions – June 1999) recommended that institutions review carefully the reasons for such contracts in order to limit their use. The purpose of this legislation is: to protect employees on fixed-term contracts from being treated less favourably than comparable employees on indefinite contracts * to prevent the potential abuse of continuous use of fixed-term contracts by limiting the overall duration of a series of fixed term contracts to 4 continuous years after which the contract automatically becomes indefinite The organisation depends on a range of funding sources, all of them variable and insecure. It needs to make full use of modern and flexible work organisation and to adopt patterns of work that will fit challenges in the future.

One group of staff that this affects particularly is sessional lecturers (hourly paid teaching staff). These staff are employed year on year to deliver an agreed number of teaching hours. This group of staff is used to give the university flexibility. Sessional lecturers have commonly been used to cover absences. The impact of this legislation is that sessional staff, who have been with the university for over 4 years, have been offered indefinite contracts, whereas staff that have durations of less than 4 years have not.

The impact of this is to cause a poor relationship between employer and employee and as such the number of grievances are on the increase. Competition The extent to which the market influences employee relations and styles depends upon competitive pressure and customer pressure (Marchington & Parker, 1990; cited by Rose, 2001). Lack of competitive pressure can dictate terms to the customer because of the absence of alternative suppliers. The existence of competitive pressure may influence management styles as the organisation may have to make decisions affecting the workforce, including possible redundancies (Rose 2001).

Customer pressure is dependent upon customer demand and customer profile. The more stable the demand by customer, and the more predictable the customer profile, the easier it is for managers to predict what is going to happen and therefore make the necessary changes to the workforce (Rose 2001). For many years The organisation has been the sole provider of business courses within the city. From September 2002, a competitor has emerged. This now means that the two organisations are now offering similar courses and thus competing for the same students.

There are only a certain number of students wanting to go to study. Given this, it means that there will be a risk of fewer students going to the organisation to study their business courses. As Rose stated above, the competitive pressure is being increased on the university and this in turn will have an impact on employee relations. Fewer students on courses would mean less funding for the university. One option may include reducing the number of staff, or the number of hours each member of staff works. Analysis of Managements Approach to Employee Relations

This section of the report will identify the current approach by management to employee relations within the organisation. Employee relations can be defined as “the study of the regulation of the employment relationship between employer and employee, both collectively and individually, and the determination of substantive and procedural issues at industrial, organisational and workplace levels” (Rose, 2001) Management style can be defined as “a distinctive set of guiding principles, written or otherwise, which set parameters to signposts for management action in the way employees are treated and particular events handled.

Management style is therefore akin to business policy and its strategic derivatives. ” (Purcell, 1987; cited by Salamon, 2000) Therefore it is management style that dictates the boundaries and direction of acceptable management action in its dealing with employees (Feltham, 2000). Pluralist Approach Management approach within the organisation has a pluralist perspective. A pluralist perspective believes that * there are rival sources of leadership and attachment within organisations * conflict can be functional if recognised and contained within the organisations procedures e. . ‘creative tensions’ * trade unions are legitimate, useful and an integral part of the organisation (Feltham, 2000) The staff within the organisation are made of 4 staff groups. Each of these staff groups have different terms and conditions and as such the organisation is in a ‘permanent state of dynamic tension’ (Salamon, 2000), this, together with perception of role, purpose and value (teaching versus non-teaching, faculty versus centre, school versus faculty) result in the conflict of interest between the various groups of staff.

Within the organisation, there are 3 recognised unions; these unions represent the different groups of staff with the organisation. Local contract staff are not represented collectively by a union, it is up to individuals to join a union on an individual basis and as such do not have any collective bargaining rights with the organisation. Individual bargaining is in effect. The unions negotiate nationally the pay awards for their members and agree the best terms and conditions for their members

The model defined by Dunlop (1958) and later modified by Woods (1975) identified the inputs that go into employee relations, including the actors, contexts and ideology that form the employee relations system. The processes which have been implemented and the outputs that exist are highlighted by the model. Internal and external conflicts are represented by the inputs, whereas conflict resolution is represented by the outputs. With reference to the organisation, the actors are the managers, the employees and the various legal bodies.

The political, legal and economic contexts influence the various processes that happen within employee relations, such as conciliation, arbitration, negotiation and bargaining. Sources of conflict within the university could include new working practices (for example those introduced because of the use of new technology), rising absence levels, bullying and harassment. the organisation have very clear employment relations policies, including disciplinary, grievance and capability. These policies are written to promote good practice, to comply with legislation, and to provide a positive ethos.

Soft Approach the organisation has a soft approach human resource management. The soft approach sees employees as valued assets and are proactive and capable of development, worthy of trust and collaboration, through participation and informed choice. (Legge, 1996) This is because the organisation has a strong emphasis on developing and multi-skilling its staff; it recognises unions and values them as assets of the organisation. Management expects employee commitment and gains this through strong leadership, communication and motivation. Rose 2000) the organisation is currently in the process of realigning its staffing profile, to meet the needs of the students, its customers. For example, the demand for one type of degree programmes is declining, whilst the demand for another is on the increase. To overcome this problem, the organisation would first consider the re-training of lecturers from one discipline to another, in preference to a harder solution such as redundancy. Descriptive-Functional Model Personnel management within the organisation can be described as following the ‘descriptive-functional’ model (Rose, 2001).

This model defines personnel management in terms of the functions it actually serves, rather than what these functions should be. Torrington and Hall (1987) describe this as a series of activities which: enable working people and their employing organisations to agree about the nature of their working relationships and it also ensures the agreement is fulfilled. This model is most common in a pluralist organisation. Under this model, the personnel department is a mainly administrative based personnel department that is more reactive rather than pro-active. Consultative Style

Purcell and Sissons (1983) identified five typical management styles; authoritarian, paternalistic, consultative, and constitutional and opportunist. The consultative style describes an organisation that operates through a mixture of formal and informal mechanisms in its employee relations, but both are based upon forward planning and pro-activity in managing people. Trade unions are considered to be partners and are central to communication process as well as representing employees’ opinions. the organisation fits into the consultative style where trade unions are used on a regular basis to assist with problem solving.

Staff are consulted and asked for their opinions through the use of staff questionnaires and focus groups. In summary the organisation, as a pluralist organisation recognises trade unions as being a useful part of large organisations. Conflict is inevitable, but is functional within the context of the university, it is therefore necessary to structure and accept it. Sophisticated Modern Approach Fox (1974) identified six sub-categories of patterns of employee relations management. The style the best represents the organisation is that of ‘Sophisticated Modern’.

Sophisticated Moderns are described as accepting a trade union presence, even though this may limit managements’ perceived freedom of decision making. There is a strong emphasis upon the development and operation of formal and informal procedures on order to handle and resolve conflicts of interests. (Rose 2001) Procedures are in place within the organisation for dealing with issues such as poor attendance, managing performance, capability or gross misconduct. These procedures are detailed in the employment handbook and require a series of meetings between managers, employees and personnel staff.

Evaluation of the Effectiveness of Managements Approach to Employee Relations in the Near Future In order to evaluate managements approach to employee relations in the next 3 to 5 years, the challenges and factors that will affect employee relations need to be identified. These challenges can be summarised as financial pressures, implementation of a new HR Strategy (including job evaluation and a reward strategy) and EU and government regulations. Hard versus Soft Approach Funding from the government, within the sector is likely to follow the trend of gradual decline over the coming years.

With less money, the soft approach (Legge, 1996) to employee resourcing becomes under pressure. the organisation would have to start looking at a hard approach, and to start treating its employees as expense of the organisation. The ‘hard’ model emphasises the importance of integrating human resource policies with the business strategy. (Rose, 2001) The hard approach sees human resources as passive and reactive rather than creative and proactive. (Storey, 1987; cited by Rose, 2001). This approach is used by organisations to become more competitive, to become a market leader.

Management would put the business first and the employees second. In this situation, re-profiling of staff through retraining and natural wastage would not be able to continue in the current fashion. Management would need to consider downsizing issues such as effectiveness, value etc. (Staff are the highest cost within the organisation ? 65m, from a turnover of ? 110m) Other methods that management may look at, as a way of saving money, include not paying the cost of living award to staff and not paying overtime. All these methods heavily impact upon the employee relations within the organisation.

The impact of this approach could be a loss in motivation by staff, an increase in staff turnover and an increase in the sickness levels. The hard approach may also be adopted to increase the organisation’s position competitively within the higher education sector, together with an improved marketing strategy, which would in turn improve student numbers, and thus increase funding. (Funding for universities is directly related to the number of students) Recommendation: That a harder approach to human resources be implemented, through integration of the human resource strategy with the business strategy.

This will give the university competitive advantage, should the funding continue to decline. Pluralistic versus Unitary Approach The continuing involvement of EU and UK legislation in the areas of employee rights and allocation of financial resources requires the organisation to operate a pluralist approach to employee relations, in order to agree policies and processes with the unions. This is the process used to implement new legislation. Moving towards a unitary perspective would require the organisation to take on a paternalistic approach.

However, the paternalistic approach requires the employer to take a ‘fatherly’ interest in its workforce. These organisations are described by Rose (2001) as neo-paternalistic. This is practised by organisations such as Marks and Spencers and tends to be the style of non-union companies which display a sense of caring, high growth, single status and profit sharing (Blyton and Turnbull, 1998 cited by Rose, 2001). the organisation has a heavily unionised workforce, a lack of profit and as such would not be able to fully adopt this paternalistic/unitary approach.

However, the organisation should strive to build a more effective, “high performing” culture over the coming few years, by smoothing the differences between teaching and non-teaching staff, to see each others as equals, to make things better. Recommendation: That the organisation begins a move towards a more unitary approach by removing some of the differences that are apparent between the teaching and non-teaching community’s. the organisation currently has 3 unions representing various groups of staff. These unions currently represent the organisation staff independently of each other, negotiating separately for their own staff.

This is a time consuming method and one way forward for the university is for these unions to form a single bargaining unit and to operate single table bargaining. Single-table bargaining is the process whereby there is one set of negotiations between unions and the employer, in a multi-union setting, covering both manual an non-manual workers. (Rose, 2001) Single-table bargaining allows for all unions to keep their recognition status. The single bargaining unit would consist of representatives from each union and could be used for information and consultation.

Single-table bargaining would give management the following advantages:- * To make the bargaining process more efficient, remove potential sources of conflict within the organisation and to build trust and co-operation of between management and the unions * To support changes in working practices * To achieve consistency between different groups of staff (Salamon, 2000) This process would look at harmonisation of terms and conditions between the groups of staff, for example the hours per week, holidays and sick leave and would reflect what is happening nationally.

However the problems that may be encountered if single table bargaining is bought in, include:- * Unions needing to have a common bargaining strategy, which would mean that, any differences that existed between them would have to be resolved. * The status differences that exist between groups of staff; academics and non-academics; manuals and non-manuals * Management not being able to reward specific groups of staff who are making above average contributions to the organisation As many of these issues are those that nationally are trying to be resolved, then single table bargaining seems a natural way forward at the organisation.

Recommendation: That single table bargaining be considered at the organisation, to facilitate the process of harmonization of terms and conditions. Consultative Style There is pressure from the sector for all institutions to implement a job evaluation scheme. National negotiations between unions are also working towards a new pay modernisation framework. The outcomes of these negotiations will need to be implemented within the next 5 years. The effect of these changes on employee relations will depend upon the individual concerned.

Some staff may gain an increase in pay, whilst others may have their pay frozen for a period of time. the organisation currently has a consultative style (Purcell & Sissons, 1983), whereby the unions are central to the communication process. This will need to continue, in order that these outcomes are implemented. Recommendation: That the consultative style of management be continued. Conclusion From this report it can be seen that managements approach to employee relations over the next 3 to 5 years may need to change in order to increase he competitive advantage of the organisation. These changes can only be implemented if management, staff and unions all work together for the benefit of the organisation. Bibliography Blyton, P. & Turnbull, P. (1998) The Dynamics of Employee Relations. London, Macmillan Fox, A. (1974) Beyond Contract: Work Power and Trust Relations. London, Faber and Faber Feltham, D. (2000) Employee Relations in Context, 2nd edition, CIPD Legge, K. (1995) Human Resource Management: Rhetorics and Realities, London, Macmillan Marchington, M. amp; Parker, P. (1990) Changing Patterns of Employee Relations. London, Harvester, Wheatsheaf Purcell, J. & Sisson, K. (1983) Strategies and Practice in the Management of Industrial Relations, Journal of Management Studies Purcell, J. (1987) Mapping Management Styles in Employment relations, Journal of Management Studies, 24(5) September Rose, E. (2001) Employment Relations, London, Financial Times Prentice-Hall Salamon, M. (2000) Industrial Relations, London, 4th edition, Financial Times Prentice-Hall Storey, J. 1987) Developments in the Management of Human Resource Management: an interim report, Warwick Papers in Industrial Relations, no 17. Coventry, University of Warwick Torrington, D. & Hall, L. (1987) Personnel Management: A New Approach, London, Prentice-Hall Tyson, S. (1987) The management of the personnel function, Journal of Management Studies, 24(5) Woods, S. J. , Wagner, A. , Armstrong, E. G. A , Goodman, J. F. B. & Davis, J. E. (1975) The Industrial Relations System concept as a basis for theory in industrial relations, British Journal of Industrial Relations, vol 13, p295

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