Running Head: EMPLOYEE RELATIONS MANAGEMENT 1

Employee relations management

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EMPLOYEE RELATIONS MANAGEMENT 2

Challenges facing companies in employee relations management

Introduction

Employee relations focus on expansive issues of employment-related matters which may

simply be termed as the governance of the employment relationship. According to Clifton (2008)

employee relations is a managerial subject, with all the contradictions, uncertainty, and potential

for conflict that engulfs such a relationship. Coffman (2000) argue that the employers right to

direct an employee to do the employers bidding requires the employer to give them some

tangible rewards and intangible ones as well. In any organisation, there is the management and

the staff, and each aspect has its own duties. In an effort to maintain the relationship between the

management and the staff, there may arise some problems.

The current challenges in employee relations

Mostly, organisation employees might have a narrow focus which brings about the

misunderstanding between them and their seniors or management (Dernovsek 2008). Instead of

focusing on his or her contribution to a company develops or benefits the company, an employee

is more concerned with the workload. Most employees do not see the management as the

facilitating body that is there to assist them achieve their goals or improve the companies

working strategies but they rather view them as commanding instructors (Ellis and Sorensen,

2007: Hollinshead, Nicholls, Tailby, 2003)

Another factor that arises in companies is the inflexibility of the employers, which can

cause restrain on the employees. According to Erickson (2005), when the employees feel

unnoticed and insignificant in the workplace, or as if their views are not regarded, it can bring

about strife between the management and the employees. This squashes the innovations of the

employees which are much equally as important to improve the companys position in the
EMPLOYEE RELATIONS MANAGEMENT 3

market. A management system that permits its staff to take more responsibilities of the

organisation and also chip in ideas to develop the company, experiences good conditions in the

business environment as compared to those who do not (Fernandez, 2007).

In most companies, there is the mentality of us against them (Heintzman and Marson,

2005). Employees have the notion that there exists a division between the management and them

the staff members. This division can create issues like problems in contract negotiations,

interfere with labor unions and trade interventions, as well as cause strikes. The us against

them mentality is a common phenomenon in employment relationships. There is a general

notion among the employees that a great division exists between them and the companys

management. This division is likely to result in an array of issues including and not limited to;

negotiations of contracting terms, strikes and the necessary intervention by the trade unions. Free

and efficient communication between the management and the staff creates unity and in turn

improves their productivity in the company.

De Waal (2007) cites salary difference as another potential source of problems between

the two aspects. For instance, in the manufacturing companies, salary increment is lesser and not

changing as compared to other industries; this results to complain and even strikes within

companies since they feel that the labor and salary are not at per. In addition, there is a huge

compensation gap amid the senior executives and the staff. This causes a feeling of

discrimination and discontent in the labor force mostly the staff level Verweire & Van Den

Berghe (2004)

According to Blackburn, (2005), the differences in treatment of employees in the

workforce who have been employed through various routes like contracts or permanent have

caused differences in the companies. The contract type of employment insinuates distrust and
EMPLOYEE RELATIONS MANAGEMENT 4

suspicion of the employed. It develops a feeling of discrimination from the permanently

employed resulting to disruptive emotional actions. This unethical behavior is very common

among companies like Pricol, Honda, Maruti, and Hyundai just to mention a few (Human

Resources, 2007).

In countries such as India, there are political and fixed interests of external and internal

leaders of the trade Unions who have changed the objective of collective bargaining. Long

pending disputes and unreasonable politically motivated actions, coupled with a mutual lack of

trust, have jeopardized the intent of Trade Unions in India( Harrison, 2006) This has resulted in

collective bargaining agents raising unreasonable demands, thereby increasing the time it takes

for dispute resolution or agreement.

Evolution of employment relations

Employment relations issues have been core to political and economic debates. Every

political party claims to possess superior qualifications to in the achievement of both micro and

macro-economic reforms. Most of the employment relations in the last century have been

associated with unending incidences of organized conflict. Since the onset of the twentieth

century, trade unions have greatly contributed to the current face of the labor market. In

Australia for instance, there was a transition from a system that was highly centralized to one

that was more decentralized. The centralized system was founded on mandatory arbitration that

was administered by state tribunals and the Commission of Australian Industrial Relations while

the decentralized systems employ the method of enterprise level Bargaining (Chartered Institute

of Personnel and Development, 2006). Perhaps a brief glimpse on the evolution of industrial

evolution in New Zealand will give a better comprehension of the current face of the labor

market as highlighted by Blanchflower and Bryson (2003)

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New Zealand's workplace relations evolved in five phases. The first phase that stretched

from 1894 to 1972, highlight events that necessitated the intervention of the government in the

industrial relations. The second phase stretched from 1973 to 1986. The Industrial Relations Act

of 1973 marked the beginning of this phase and disputes resolution process followed the

guidelines of the Act. The third phase stretched from 1987 to 1990. Labor Relations Act of

1987 marked commencement of the phase. The Act advocated for organized bargaining. The

fourth phase stretched between 1991 and 1999. The Employment Contracts Act of 1991 was

introduced. The act abolished the unions rights on monopoly of bargaining and rendered

membership to these unions voluntary. In the year 2000, the Employment Relations Act was

enacted. The Act continues to be in force to date. The Act marks also marked the pro-union

phase by reversing majority of the anti-union stands defined by the preceding Acts, the

Employment Contracts Act.

Case study

Case studies in industrial relations. Industrial Relations Associates & Pigors, (2015).

Schaub is a sales and marketing organisation that deals with selling satellite dishes. The

company was started in 2014 with staff members and two executives. After a period of six

months, the company had expanded to a total of twenty managerial executives and fifty six sales

persons. Jean Joslyn who was the head of sales was poached from Havana satellites a company

that sells satellite dishes too. Jean used her position to ensure that everything run smoothly until

after sometime she felt that the profit being made was below average. She added the working

hours from nine hours to fourteen. Jason the company CEO employed some of his relatives in

the managerial sector. One of the relatives whom Jason so much trusted came up with some

policies which he argued would better the company. The new constitution got rid of all
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commissions and reduced the salaries of the employees. The working hours were added and but

no overtime pay. This was to reduce on spending and add on profit making. This brought a lot of

disagreements that the employees quitted their jobs one after the other. Finally the company

collapsed after two years of struggle and mismanagement.

Effects of bad employee relations practices

Companies often advertise their work environments as appealing places for employees.

Most organizations are below average when it comes to the relations within the company

(Belfield and Heywood, 2001). Employees in these organizations complain every now and then

and most even hate their jobs. The poor relations make operations improvement much difficult.

Some companies even say that it is their relations with their clients that cause problems within

the organization. Schaub was a sales and distribution company for satellite dishes in the central

part of Brazil that was started in 2014. It later collapsed after two years of mismanagement and

poor working conditions. Workers in the company had the following complains before it

collapsed.

The employees claimed that their earning was not proportional to their services and also

complained about promotions which were rare and offered unfairly when available. Promotions

were based not on skills or hard work of the employees but on other basis like close relations

with the employers. This caused chaos within the companies and the required expertise to

improve the company was reduced until the company collapsed.

The customer facing company had a management that emphasized sales at all cost

regardless of the effects often at the customer service expense. It involved targets that were

impossible to meet like hourly sales were supposed to be 50% of what was actually possible to

sell. Sales representatives in this company complained that the intense culture of unreasonable
EMPLOYEE RELATIONS MANAGEMENT 7

sales per hour caused outright hostility and bad blood. The management was inconsiderate and

extremely rude mostly to the staff members. In addition, the training offered like for instance to

the casuals was poor and their working conditions were also poor. The working hours were too

much- employees were expected to during holidays such that they did not have time to rest. The

labor they were being subjected to was way much less than the salaries they were allocated.

Work with no pay demoralizes the employees (Addison and Belfield, 2004).

Another issue was lack of communication between the staff and the management. The

staff contributions or ideas were not considered by the management. The executive believed that

what the sales people innovated was irrelevant and that them being the management knew what

was best for the company. Williams, (2002) argues that, those on the ground like the sales

representatives usually know what requires to be improved for profit increments.

The stiff competition in the market also discouraged the company. Workers felt that they

were bulldozed to the bottom by other sales companies. It being a young company, felt that they

had to make enormous profits like other older companies and this brought rivalry since they

would sabotage other companies and try to steal their customers. The sales people would sell

their products at a throw away price in an attempt to attract customers. They focused on quality

rather than quantity.

References

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Industrial Relations, Vol. 43, No. 2, 305-323

Belfield, C. R. and Heywood, J. S. (2001), Unionization and the pattern of nonunion wages:

evidence for the UK, Oxford Bulletin of Economics and Statistics, 63, 5: 577-598
EMPLOYEE RELATIONS MANAGEMENT 8

Blackburn, R. (2005), Researching the employment relationship in small firms: what are the

contributions from the employment relations and small business literatures?, in S.

Marlow, D. Patton and M. Ram (eds.), Managing Labour in Small Firms, London: Routledge.

Blanchflower, D.G. (2007), A cross-country study of union membership, British Journal of

Industrial Relations, March

Blanchflower, D.G. and Bryson, A. (2003), Changes over time in union relative wage effects in

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