ZABLON ONGENG OMONDI

TEESSIDE BUSINESS SCHOOL, UNIVERSITY OF TEESSIDE M.A-H.R.M. 2005/2006 I.C.A.

PARTNERSHIP: MANAGERIALISMS FINAL ASSAULT ON COLLECTIVISM

Walsh (2001) makes what is on the surface a very persuasive argument in support of partnership agreements in present day U.K workplaces. From an employee relations (ER) standpoint however, outright agreement with the assertion that partnership, when set-up and maintained well is good for business, even when ignoring semantic generalisations, would be to fall into the trap of what Danford (2005) terms the existing false dualism between

industrial (employment) relations and the labour process. If business as used by Walsh narrowly refers to facilitating capital accumulation process, boosting business performance or survival by capturing employee commitment then the assessments of commentators (Guest and Peccei 2001, Roche 2000, Ackers and Payne 1998, Suff and Williams 2003) would support Walshs assessment. ER however, comprises of complex interrelations between labour, capital (and regulatory agencies), in an environment where the structure of the capitalist political economy (Hyman 1975) makes consideration of conflict, power and control of the labour process central to any qualitative assessment of the nature of labourcapital relationship. Any assertion about the benefits of partnership should transcend generalities and consider the extent to which the concept and its practice reconcile the existing tensions in employment relations. This therefore calls for an examination of the wider economic, social and political environment within which ER occurs and whose instability greatly impacts on labour-capital relations ( Kochan et al 1994). This helps us understand why theorists (Magerinson 1969, Fachett and Whittingham 1976) have argued that conflict should form the basis of employment relations analysis. Additionally it also calls for the conceptualisation of partnership within ER theory framework so as to deconstruct those characteristics that would or would not make it a successful vehicle for conflict resolution and improvement of labour-capital relations.

Ever since Dunlop (1958) proposed the systems theory as a theoretical framework for the analysis of ER, conflict in the sense of difference of interests or expectations between employer and employee has been central to ER studies. It can be argued that the prominence given to bargaining in Dunlops model, suggests the recognition of inevitability of conflict by allowing for a mechanism of its resolution. There has been considerable debate however, about the extent to which conflict characterises the fundamental nature of employment

relationship (Leat 2001). The success of partnership when analysed within an ER theory framework therefore depends on the perspective (frame of reference) the analysis adopts as its point of departure. Indeed, unanimity lacks in conclusions of studies that have investigated the benefits of partnership (Stewart et al 2004), the extent to which it improves the different dimensions of ER as well as business performance. Stewart et al (2004) attribute partly to ideological allegiances of individual researchers, pointing out that the locus of power and conflict is a contested issue in ER.

Partnership is not a new concept as there has been some form union-management cooperation at different times in the past (Rose 2001); perhaps based on idea of the unifying ideology amongst ER actors suggested by Dunlop (1958) and the mutual dependency existing between both labour and capital that calls for co-operation within an adversarial context (Hyman 1975, Haynes and Allen 2000). Thus Whitley committee of 1919 recommended the establishment of JICs which provided a formal forum which employers and unions could negotiate (Rose 2001). In the 1960s and 1970s there existed a form of state corporatist arrangement (Ackers and Payne 1998) that involved the representatives of labour capital and the state. Overseen by the tripartite body NEDO (National economic and development organisation), the arrangement allowed unions a voice in employment and policy in exchange for responsibility over pay claims and industrial action (Rose 2001, Ackers and Payne 1998).

Although labour-capital co-operation is not a new concept, commentators have had difficulties trying to define its latest incarnation in the form of partnership. There is confusing rhetoric (Ackers and Payne 1998) from the concerned actors such that its meaning shifts depending on the particular interests being promoted (Haynes and Allen 2000, Upchurch et al 2003). For the management it is a paternalistic, ethical co-operation that recognises the management right to manage in the interests of other stakeholders. (Ackers and Payne 1998) In other words partnership legitimises managerial prerogative. Partnership is perceived in unitarist terms that discounts conflict of interest between equal shareholders with a positive sum view on power that actually seems to obscure robust stakeholder rights. The same ambiguity pervades the New Labours third way conceptualisation of partnership. There is an echo of the socially conscious Rhineland or continental Europes capitalism codetermination partnership (Ackers and Payne 1998); but without its institutional arrangements like works councils (Haynes and Allen 2000). The fact that it is not underpinned by legislation to ensure equalization of power (Ackers and Payne 1998) is probably due to neo-liberalist ideology that this would have negative impact in terms of business competition (Upchurch et al 2003). Yet there is emphasis on stakeholder philosophy

(Ackers and Payne 1998) and corporate social responsibility that is apparently aimed at curbing the excesses of capitalism (Upchurch et al 2003). Further while acknowledging the need for trade unions, its unitarist stance is exemplified by Blairs (1996: The Times, 2 October: 6-7) No more bosses versus Workers, you are on the same side statement.

In an attempt to delineate characteristics that might enable the examination of partnerships attempts have been made to define them in terms of their perspectives that is unitarist, pluralist and hybrid models ( Guest and Peccei 2001) and in terms of their origin that is the EU social model, the US mutual gains model and the new realism UK model (Sisso and Marginson 2003) endorsed by the TUC in response to the changed political and economic circumstances in the 1980s and 1990s that curtailed its influence Rose (2001).

In response to increased international competition the conservative government elected in 1979 adopted a fundamentalist neo-laissez faire doctrine (Rose 2001). Its overriding philosophy reflected the supply side approach that aimed to trigger economic revival through regulation of ER, instead leaving terms and conditions of employment to be determined by market forces (Leat 2001). This neo-liberal approach was premised on the belief that economic development depends on competitiveness which called for substantial control of inflexibilities caused by successful labour movement (Rose 2001). As Hyman (2001) has pointed out, laissez-faire doctrine of withdrawal in ER actually involves systematic intervention and deregulation, the enact ion of legislation that end up empowering some economic actors while disempowering others (the majority). With the frontier of control shifted in their favour, the management responded with new-realism initiatives that strengthened management prerogative-movement from bargaining to communication and consultation, dissemination of information to individual employees and not union members, decentralised bargaining to take advantage of labour market conditions, introduction of employee involvement initiatives- EI that promoted flexible working- (Salamon 1998) Managements proactive approach to ER, integrated with business objectives heralded the beginning of the marginalisation and decline of trade union influence in the work place. Trade unions responded by, in the unflattering words of some commentators, selling themselves to employers and competing with in beauty contests in order to secure employer recognition (Rose 2001:26). It was from this position of weakness that the new realism model was conceived. The significance of this position is explained by Kellys (2004) power resource hypothesis. Perhaps informed by Ramsays (1977) cycle of control theory attributed managements attraction to co-operation at certain times and not others to threats to its authority or when it sought compliance, Kelly proposes that changes in power resources could

lead to either genuine co-operation or to employer coercion and union compliance. Power is therefore a variable that can determine the success of partnership. Taking into account these developments TUC (1999) new realism proposed six principles of partnership as a foundation stone for improved competitiveness and performance (TUC 1999). These are:

1. Joint commitment to success of enterprise 2. Union management recognition of each others legitimate interests and to resolving differences in an atmosphere of trust 3. Commitment to employment security 4. Focus on quality of working life 5. Transparency and sharing of information 6. Mutual gains for unions and employers delivering concrete delivering concrete improvements to business performance, terms and conditions and standards and EI

The new realism model can be likened to the US model owing to its emphasis on mutual gains. Unpacked the mutual gains model exhibits both unitarist and pluralist characteristics hence it has been also been labelled the hybrid model Guest and Peccei (2001). The pluralist aspect of new realism model is evidenced by its recommendation of representative arrangements hence acknowledging the difference of interests between labour and capital. The unitarist aspect is evidenced by the acceptance of EI initiatives which are tools of the unitarist HRM and involve direct practices restricted to the job and not wider employment issues. Their primary aim is to maximize worker contribution and are complemented by communication designed to increase commitment to organizations goals and values. Analysed within Dunlops theoretical framework, the success of the new realism initiative would lie in the attempt to seek compromise and consensus to the acknowledged existing conflict of interests amongst the actors. The mutual gains concept and the voluntarist framework on which it rests offers an explanation for the non-confrontational positive sum win-win negotiation process employed to resolve the substantive issue of pay at vertex for example. While recognizing the potential differing interests, the underlying notion of partnership is that of working together to achieve shared or complementary goals (Guest and Peccei 2001). This notion echoes the unifying ideology suggested by Dunlop (1958) as being held by ER actors and which holds the system together.

Importantly, this notion provides basis for trust (Guest and Peccei 2001) whose significance in an ER context is examined by Fox (1974). Kelly (2004) suggests that changes of cognition and feelings of unions (employees) and management towards each other can result in positive partnership outcomes. The notion of shared benefits and mutual gains as opposed to suspicions of exploitation amongst employees for example would foster trust that in turn facilitates co-operation. It can be theorized that management can therefore expect minimal challenge to its right to manage and the introduction of managerially driven (Rose 2001:28) unitarist initiatives.

Guest and Peccei (2001) suggest that high trust partnership can have positive outcomes for both employees and employers. For example the latter benefits from higher employee contributions brought about by the products of social reorganisation of the workplace like flexible working practices and teamwork (Haynes and Allen 2000). This in turn leads to enhanced financial performance (Suff and Williams 2003). As individuals, the former benefits from the employment security that enhanced business performance guarantees, the outcome being the strengthening of the psychological contract (Guest and Peccei 2001).

Collectively workers are afforded the opportunity to influence corporate strategy through representation in such facilities as company councils that exist in some partnership organizations like Barclays (Heery 2002). Workers therefore have a codetermination opportunity. Haynes and Allen (2000) have suggested the machinery of consultation offers unions the opportunity to broaden their ambit and represent the qualitative needs of their members, such as training, personal development, return to learn and equal opportunities. For Ackers and Payne (1998) the benefit can be found in the fact that the concept gives unions a chance to re-establish their institutional presence after the period of neo-liberal hostilities.

Studies (Suff and Williams 2003, Guest and Peccei 2001, Stewart et al 2004) have shown though that in reality the balance of advantage in partnership practiced in the workplace is skewed in employers favour. From a radical perspective, the success partnership can be perceived in terms of the extent to which it perpetuates the interests of the capitalist organisation and not necessarily that of the workers by enhancing employers control of the labour process. In other words it helps sustain economic injustice against workers. According to radicals capitalism is exploitative of workers as the owners of the means of production employ labour at a price less than value of its products (Leat 2001). This is because to survive capitalism needs to grow continuously and growth requires the creation of surplus. Hence in the workplace, labour and capital continually struggle to control the labour process.

While rhetoric promotes partnership as a mutual gains initiative, Suff and Williams (2003) state that studies have shown that for most part partnership agenda is managerially driven. Analysed using Kellys (1998) mobilization theory, which re-orients the focus of ER to the study of injustice, the attraction of employers to mutual gains partnerships can be viewed as employer counter mobilization strategy, an employer offensive to weaken the unions.

According to Kelly (1998) collectivization is the natural response to injustice and in ER this calls for a strong union pursuing its own agenda. Currently however, labours position (which rises and falls with the rhythm of the capitalist economy), is weak. Economic necessities have led to the downward regulation of labours position (Upchurch et al 2003) and consequently the frontier of control has shifted to the management. While increased competition means that employers need worker co-operation their relative position of strength means management dictates the terms. Commentators (Ackers and Payne 1998, Suff and Williams 2003) have noted that having had difficulties in implementing initiatives meant to increase business performance while bypassing unions, management now courts unions to implement EI for example. Partnerships pluralist veneer, it has been argued (Taylor and Ramsay 1998), is designed to capture employee commitment and emasculate unions while maintaining semblance of bargaining relations. Identified hostility towards unions (Stewart et al 2004, Heery 2002) has led commentators to suggest that partnerships have been adopted not much out of a genuine need to improve workers lot but as a pragmatic compromise necessitated by circumstances ( Suff and Williams 2003).

In his power resource hypothesis, Kelly (2004) has argued that partnership can only be effective for both parties in cases where they both have lost their traditional power resources, otherwise employers, faced with weak unions, might use partnership agreements to secure employer and not mutual gains. Ramsey (1977) argues that inequalities and conflict inherent in the capitalist society sets limits on the viability of mutuality. According to Danford (2005) when the context of current capital accumulation strategies is considered, there are dwindling issues upon which workers (unions) and employers can co-operate and far more upon which they differ. The internationalization and centralization of capital and globalization has put pressure on firms to cut costs and increase efficiency (Kelly 2000) and the strategies employed to further organisation interests are in direct conflict with workers interests. The qualitative benefits for workers, say, of social reorganisation of the workplace (eg flexible working practices and team-working), intended to increase efficiency and for which workers co-operation is sought are outnumbered by quantitative loses like work intensification, growth of earning and increase in insecure jobs or even job loses (Heery 2002, Hyman, 2001, Kelly

2000). This has led commentators (Danford 2005), to argue that the underlying exploitative nature of such practices negate workers co-operative attitudes.

Additionally, Upchurch et al (2003), Kelly (2000), argue that promises of job security are made in apparent disregard to the chronic instability of the product markets in which partnership firms operate, a fact that makes the keeping of such promises impossible. Kelly (2000) points to 1998 WERS survey that showed that presence of job security agreement made no difference to rate of job losses and that to avoid raising worker expectation employers are ignoring the principle altogether. Another contradiction is the widening of the wage gap between majority of workers and highly paid managers (Kelly 2000, Upchurch et al 2003) despite the rhetoric of equality. Involvement in decision making sometimes amounts seeking workers opinions about such mundane issues like deciding parking spaces (Marchington 2005), raising questions about validity of mutual trust claim and employee voice. Some commentators (Taylor and Ramsay, 1998, Marchington 2005, Danford, 2005) are sceptical about co-option of workers representatives into corporate decision making process. Marchington (2005) argues that this amounts to covert design to weaken employees collective will, while Taylor and Ramsey (1998) say representatives might end policing employer policies instead of protecting employees from them.

Kelly (2000) is categorical that any benefits of partnership have accrued to the organisations and this has been accomplished by its use as a counter-mobilisation tool by employers.

Partnership as used in ER is clearly a controversial concept. However, optimists (Ackers and Payne 1998) and pessimists alike (Danford 2005) seem to agree that after the marginalization periods of fundamental neo-liberalism period, it offers unions the opportunity to re-establish institutional presence in the workplace and a collective voice to counter managerial prerogative. Fears are that its unitarist and partnerlistic undertones negate any real benefits by co-opting unions and subjecting them to the logic of employers. Disagreeing with orthodox pessimists who suggest that unions can only exist as junior employer partners in the present climate, Haynes and Allen (2000) argue that successful partnership depends on retention of independent union agenda. Recognition of strategic business needs does not discount or neglect the needs of membership. A radical strategy to this end is to fight the war of position suggested by Italian Marxist Gramsci (see Forgacs 1988). Appropriate for advancing interests of weakened unions operating in democracies, war of position, as opposed to war of manoeuvre involves the pursuit of independent agenda that transcends narrow economic interests and speaks for needs of society, the creation of a hegemonic bloc (Ackers and Payne 1998) and exploring the spaces offered by partnership that allow for critical engagement and

where necessary, taking oppositional stances (Danford 2005). This way the unions can preserve their independence, stem their qualitative and quantitative decline in the face of attack by capitalist institutions. If Kellys (1998) wave theory that links fluctuations of labours fortunes to changes in the capitalist economy is right, then the ultimate success of partnership from workers standpoint will be in unions application of Gramscis strategy in the present climate to preserve their independence sufficiently enough such that when circumstances in the capitalist economy change to favour workers, they will be ready to make significant gains.

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