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Employee Relations. Mike Leat. ER-A1-engb 1/2011 (1041)

Employee Relations Mike Leat ER-A1-engb 1/2011 (1041) This course text is part of the learning content for this Edinburgh Business School course. In addition to this printed course text, you should also
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Employee Relations Mike Leat ER-A1-engb 1/2011 (1041) This course text is part of the learning content for this Edinburgh Business School course. In addition to this printed course text, you should also have access to the course website in this subject, which will provide you with more learning content, the Profiler software and past examination questions and answers. The content of this course text is updated from time to time, and all changes are reflected in the version of the text that appears on the accompanying website at Most updates are minor, and examination questions will avoid any new or significantly altered material for two years following publication of the relevant material on the website. You can check the version of the course text via the version release number to be found on the front page of the text, and compare this to the version number of the latest PDF version of the text on the website. If you are studying this course as part of a tutored programme, you should contact your Centre for further information on any changes. Full terms and conditions that apply to students on any of the Edinburgh Business School courses are available on the website and should have been notified to you either by Edinburgh Business School or by the centre or regional partner through whom you purchased your course. If this is not the case, please contact Edinburgh Business School at the address below: Edinburgh Business School Heriot-Watt University Edinburgh EH14 4AS United Kingdom Tel + 44 (0) Fax + 44 (0) Website Employee Relations Mike Leat is currently the Head of the HRS, Operations Management and Business Strategy Group in the Business School at the University of Plymouth. He has been involved with and in employee relations for most of his working life, both as an academic and practitioner. He has worked for The Commission on Industrial Relations and ACAS, in both cases as an industrial relations expert. He also has practical working experience as a personnel practitioner and has occupied positions as both a personnel manager and head of personnel and administration. In recent years Mike has concentrated upon an academic role and his main areas of interest are now employee relations and international and comparative HRM. He has written a number of books and journal articles in these areas and in this course draws upon his wealth of experience and brings together these interests. First Published in Great Britain in Mike Leat 2008 The rights of Mike Leat to be identified as Author of this Work has been asserted in accordance with the Copyright, Designs and Patents Act All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the Publishers. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without the prior consent of the Publishers. Contents Module 1 Employee Relations and the Employment Relationship 1/1 1.1 Introduction 1/2 1.2 Definitions of Employee Relations 1/2 1.3 The Employment Relationship 1/4 1.4 A Psychological Contract? 1/4 1.5 Forms of Attachment, Compliance and Commitment 1/8 1.6 Conflict, Cooperation and Perspectives 1/ The Balance of Bargaining Power 1/ A Legal Contract and the Relevance of Ideology 1/ The Quality of Employee Relations 1/ An Industrial Relations System 1/ A Framework for Studying Employee Relations 1/21 Learning Summary 1/24 Module 2 The Nature of Work 2/1 2.1 Introduction 2/1 2.2 Taylorism Scientific Management Fordism 2/2 2.3 Disadvantages of Fordism and the Emergence of Post-Fordism 2/4 2.4 Flexible Specialisation 2/5 2.5 The Flexible Firm 2/6 2.6 Other Competitive Production Strategies 2/ Job Redesign and the Search for Commitment, Flexibility and Quality 2/ Japanisation? Quality, Involvement and Commitment as Competitive Advantage 2/ Incidence and Impact of the New Approaches to the Organisation of Work: Perceptions and Conclusions 2/19 Learning Summary 2/23 Module 3 Globalisation, Multinational Corporations and Employee Relations 3/1 3.1 Introduction 3/1 3.2 Globalisation and the Internationalisation of Business 3/2 3.3 Multinational Corporations 3/4 3.4 International Trade Union Organisation 3/ International Regulation and Control of MNCs 3/31 Learning Summary 3/34 Employee Relations Edinburgh Business School v Contents Module 4 The European Union 4/1 4.1 Introduction 4/1 4.2 History and Membership of the EU 4/3 4.3 Institutions 4/4 4.4 Legislative Forms and Decision-Making Processes 4/9 4.5 Subsidiarity 4/ Social Policy The Social Dimension 4/ Main Initiatives 4/ The Europeanisation of Social Protection and Employee Relations 4/49 Learning Summary 4/50 References 4/51 Appendix: Directives and other EU Instruments 4/52 Module 5 The Role of Government 5/1 5.1 Introduction 5/1 5.2 Ideologies and Political Approaches 5/3 5.3 Government and the Economy 5/6 5.4 Government as Legislator and the Legal Context 5/ Government as Employer 5/ The State and Dispute Resolution 5/34 Learning Summary 5/38 References 5/39 Appendix: UK Acts of Parliament 5/39 Module 6 Demography, Labour Force and Market Characteristics and Trends 6/1 6.1 Introduction 6/1 6.2 Demography 6/3 6.3 Labour Force Participation 6/5 6.4 Part-Time Employment 6/7 6.5 Unemployment 6/ Employment by Sector 6/ Factors Influencing Female Participation 6/ Educational Attainment and Labour Force Participation 6/23 Learning Summary 6/25 Module 7 Trade Unions 7/1 7.1 Introduction 7/1 7.2 Definitions 7/2 vi Edinburgh Business School Employee Relations Contents 7.3 Why Trade Unions and Why Do People Join Them? 7/4 7.4 The Objectives of Trade Unions 7/6 7.5 Trade Union Structure 7/ Trade Union Membership 7/ Trade Union Recognition 7/ Challenges and Responses 7/36 Learning Summary 7/43 Module 8 Managing Employee Relations 8/1 8.1 Introduction 8/1 8.2 HRM: What Is It? 8/3 8.3 HRM and Implications for Employee Relations 8/ Management s Objectives 8/ Managerial Style(s) 8/ Employee Involvement and the Pursuit of Employee Commitment 8/23 Learning Summary 8/28 Module 9 Employee Relations Processes 9/1 9.1 Introduction 9/1 9.2 Employee Participation 9/3 9.3 Collective Bargaining 9/9 9.4 Joint Consultation 9/ Bargaining Power 9/24 Learning Summary 9/25 Module 10 Employee Relations Procedures 10/ Introduction 10/ Procedures What They Are and Why They Are Needed? 10/ Disciplinary Procedures 10/ Grievance Procedures and Handling 10/18 Learning Summary 10/28 Appendix 1 Practice Final Examination A1/1 Practice Examination Questions 1/2 Employee Relations Edinburgh Business School vii Contents Appendix 2 Answers to Review Questions A2/1 Module 1 2/1 Module 2 2/3 Module 3 2/5 Module 4 2/8 Module 5 2/11 Module 6 2/16 Module 7 2/18 Module 8 2/21 Module 9 2/24 Module 10 2/27 Index I/1 viii Edinburgh Business School Employee Relations Module 1 Employee Relations and the Employment Relationship Contents 1.1 Introduction... 1/2 1.2 Definitions of Employee Relations... 1/2 1.3 The Employment Relationship... 1/4 1.4 A Psychological Contract?... 1/4 1.5 Forms of Attachment, Compliance and Commitment... 1/8 1.6 Conflict, Cooperation and Perspectives... 1/ The Balance of Bargaining Power... 1/ A Legal Contract and the Relevance of Ideology... 1/ The Quality of Employee Relations... 1/ An Industrial Relations System... 1/ A Framework for Studying Employee Relations... 1/21 Learning Summary... 1/24 Learning Objectives After studying this module you will be able to: discuss the main differences of view as to the subject matter of both employee and industrial relations and the differences between them; identify the relevance of contexts to the employment relationship; explain the concept and relevance of a psychological contract; analyse the employment relationship in terms of the form of power available to employers and the nature of employee involvement; examine the nature of the employment relationship in terms of compliance or commitment; distinguish between the notions of employee involvement and commitment; demonstrate the significance of perspective to our understanding of the employment relationship; decide whether you think the employment relationship is essentially a conflictual one; examine the meaning of quality in employee relations and explain the relevance of perspective; discuss the appropriateness of the many possible indicators of the quality of employee relations and the relevance of perspective; critically examine the notion of an industrial relations system. Employee Relations Edinburgh Business School 1/1 1.1 Introduction Employee relations is a term that has become commonly used only in relatively recent years to indicate a particular area of subject matter. Prior to this it is likely that you would have found the term industrial relations in more common use. The question of whether there are genuine differences attached to the meanings and uses of these two terms forms part of the discussion in this first module. Also we examine briefly the issues of the nature of the employment relationship, whether it is characterised by conflict or consensus, the significance of perspective and the relevance of expectations, interests and the notion of a psychological contract. You are also introduced to the questions of what constitutes good industrial or employee relations, what quality means, what it looks like and, perhaps even more relevant, whether we can actually measure it in any meaningful sense. The relevance of perspective to that debate is also illustrated. Finally in this first module, we introduce the notion of an industrial relations system and its limitations as a theory of industrial relations, and, in this context, outline a framework that centres upon the employment relationship and also provides an explanation for the structure and contents of this book. 1.2 Definitions of Employee Relations There are debates and differences of view as to the meaning of each of the two terms, employee and industrial relations. Some people argue that there are identifiable differences between them, that there are differences of a substantive nature sufficient to justify the use and maintenance of each term, while others argue that the concepts and phenomena described are to all intents and purposes interchangeable. Blyton and Turnbull (1994: 7 9) discuss this in explaining why they have chosen to use the term employee as opposed to industrial. They begin by arguing that they see no hard and fast distinction between the two, the difference being in the tendency of each to focus the subject inside different boundaries, but in reviewing various contributions to the debate they do state some of the more common views. They point out that industrial relations: became inevitably associated with trade unions, collective bargaining and industrial action; had too strong a tendency to view the world of work as synonymous with the heavy extractive and manufacturing sectors of employment, sectors that were dominated by male manual workers working full-time and that are now in decline in nearly all developed economies. Using the term employee relations, they say, enables them to adopt a broader canvas and to: encompass the now-dominant service sector, which in many developed countries now employs more than 70 per cent of the workforce, and the changes in the composition of the labour force such as more women working and more part-time, temporary and fixedterm contracts; include non-union as well as union scenarios and relationships. 1/2 Edinburgh Business School Employee Relations Nevertheless, Blyton and Turnbull do not go as far as some others in that they choose to continue to focus their study of employee relations upon the collective aspects of the employment relationship. They suggest that in this they are maintaining a distinction between employee relations and other areas of study namely, personnel management and human resource management, each of which, they suggest, focuses upon the individual as opposed to the collective elements of the relationship. Marchington and Wilkinson (1996) also discuss this difference and they suggest that the term employee relations has emerged for three main reasons. 1. The term has come to the fore through usage, fashion and slippage. 2. It is increasingly used by personnel practitioners to describe that part of personnel and development concerned with the regulation of relations (collective and individual) between employer and employee. 3. There are actual and real differences of focus, with employee relations tending to focus upon management and management issues alone and on contemporary rather than historical practices; the way things are as opposed to the way things were. Marchington and Wilkinson have chosen to use the term employee relations principally for the second of these three reasons, though they also acknowledge that they use the terms interchangeably. A comparison of these two views indicates that both seek to argue that use of the term employee relations makes it easier to encompass change in the employment relationship, its environment and in the make-up of the labour force, and both explanations would appear to allow the term to encompass union and non-union relations. However, where Blyton and Turnbull are keen to maintain a collective focus and see this as the basis of a continuing distinction between employee relations and both personnel and human resource management in which, they suggest, the focus is upon the individual and the individual employment relationship, Marchington and Wilkinson see employee relations encompassing both individual and collective relations. Another point of difference is that Marchington and Wilkinson seem to endow the term employee relations with a managerial focus, suggesting as they do that there is a tendency for the subject matter of employee relations to be dominated by a concern with managerial issues and a managerial perspective rather than being concerned with all parties and interests in the employment relationship. Arguably, another point of similarity is that both views tend to see employee relations as a wider concept than industrial relations, with the former able to encompass the latter. The managerial focus identified by Marchington and Wilkinson is also adopted by Gennard and Judge (2002) in their text for the Chartered Institute of Personnel and Development, the professional body for personnel and HRM practitioners in the UK. In seeking to explain the concept of employee relations they state the following: Employee relations is a study of the rules, regulations and agreements by which employees are managed both as individuals and as a collective group, the priority given to the individual as opposed to the collective relationship varying from company to company depending upon the values of management. As such it is concerned with how to gain people s commitment to the achievement of an organisation s business goals and objectives in a number of different situations Employee Relations Edinburgh Business School 1/3 Here we have the subject matter being defined to include both collective and individual dimensions of the employment relationship, a managerial focus is adopted and they go further and spell out what they perceive to be the purpose or objective of management in its dealings with both individuals and collectives. They also suggest that it is management that determines the priority given to the individual or collective relationship. What is clear from this brief discussion of a number of different definitions and perspectives is that it is the employment relationship that is at the core or heart of the subject. In this text we use the term to encompass both individual and collective dimensions, union and non-union relationships, the changing nature of work and the employment relationship, and the wider contexts within which the employment relationship occurs. We do not take a managerial perspective or standpoint but do examine the management of employee relations. 1.3 The Employment Relationship In this section we examine some of the more important issues and debates surrounding the employment relationship. In particular we examine the concept of a psychological contract, the importance of values, the interests of the parties and the extent to which the employment relationship is characterised by compliance or commitment, conflict and/or cooperation, the relevance of perspective and the notion of control of the labour process. No employment relationship occurs in a vacuum and it is important to realise that there is a range of contexts within which it occurs and which, to varying degrees, impinge upon the relationship. One of these is the legal context, and at the level of the individual there is a legally enforceable contract between employee and employer. It has also been suggested that the employment relationship can be perceived as a psychological contract. 1.4 A Psychological Contract? Schein (1988) is largely responsible for this notion of a psychological contract and his suggestion was that between employer and employee there exists an implicit contractual relationship which is derived from a series of assumptions on the part of employer and employee about the nature of their relationship. These assumptions may not be legally enforceable but they constitute a set of reciprocal arrangements and form the basis for a series of expectations that may have a considerable degree of moral force. The main assumptions are that: employees will be treated fairly and honestly; the relationship will be characterised by a concern for equity and justice and this will require the communication of sufficient information about changes and developments; employee loyalty to the employer will be reciprocated with a degree of employment and job security; and employees input will be recognised and valued by the employer. Underlying this notion of a psychological contract we can also detect assumptions about what people look for in terms of returns and satisfactions from work and, indeed, there is an element of prescription in that Schein can be interpreted as specifying the way in which employees should be treated. 1/4 Edinburgh Business School Employee Relations In this particular instance it is pretty clear that these underlying assumptions are essentially consistent with the sets of individual needs identified many years ago by American researchers such as Roethlisberger and Dickson (1939), Maslow (1943) and Herzberg (1966), and which encompass equity and justice, security and safety, recognition of worth and input, and self-fulfillment. This model of a psychological contract, where fulfilled, provided the means for employees to derive intrinsic as well as extrinsic satisfactions and rewards from their work. The notion of a psychological contract has been extended in recent years to encompass a wider range of expectations of both parties to the relationship; these, to some extent, can be perceived not only as expectations but also as the respective interests of the parties. Gennard and Judge (2002), in discussing the psychological contract and employees and employers interests, suggest that, in addition to a reward package representing the monetary and extrinsic aspect of the relationship, employees may have the following expectations: security of employment social relations and sociable atmosphere potential for advancement access to training and development to be treated as a human being rather than as a commodity job satisfaction and empowerment regarding their job family-friendly work life balance conditions of work fair and consistent treatment some influence over their day-to-day operations but also at a policy level (often the term 'voice' is used in this con
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