EMPLOYEE RELATIONS STRATEGY CONCERNS OF EMPLOYEE RELATIONS

STRATEGY
Employee relations strategies define the
intentions of the organization about what needs Employee relations strategy will be concerned
to be done and what needs to be changed in the with how to:
ways in which the organization manages its
 build stable and cooperative
relationships with employees and their trade
relationships with employees that
unions. Like all other aspects of HR strategy,
minimize conflict; l
employee relations strategies will flow from the
 achieve commitment through
business strategy but will also aim to support it.
employee involvement and
For example, if the business strategy is to
communications processes;
concentrate on achieving competitive edge
through innovation and the delivery of quality  develop mutuality – a common interest
to its customers, the employee relations in achieving the organization’s goals
strategy may emphasize processes of through the development of
involvement and participation, including the organizational cultures based on shared
implementation of programmes for continuous values between management and
improvement and total quality management. If, employees.
however, the strategy for competitive STRATEGIC DIRECTIONS
advantage, or even survival, is cost reduction,
the employee relations strategy may The intentions expressed by employee relations
concentrate on how this can be achieved by strategies may direct the organization towards
maximizing cooperation with the unions and any of the following:
employees and by minimizing detrimental  changing forms of recognition,
effects on those employees and disruption to including single-union recognition, or
the organization. derecognition;
Employee relations strategies should be  changes in the form and content of
distinguished from employee relations policies. procedural agreements;
Strategies are dynamic. They provide a sense of  new bargaining structures, including
direction and give an answer to the question decentralization or single-table
‘How are we going to get from here to there?’ bargaining;
Employee relations policies are more about the  The achievement of increased levels of
here and now. They express ‘the way things are commitment through involvement or
done around here’ as far as dealing with unions participation – giving employees a voice
and employees is concerned. Of course, they  deliberately bypassing trade union
will evolve, but this may not be a result of a representatives to communicate
strategic choice. It is when a deliberate decision directly with employees;
is made to 193 change policies that a strategy  increasing the extent to which
for achieving this change has to be formulated. management controls operations in
Thus if the policy is to increase commitment the such areas as flexibility;
strategy could consider how this might be  generally improving the employee
achieved by involvement and participation relations climate in order to produce
processes more harmonious and cooperative
relationships;
developing a ‘partnership’ with trade unions as positive, productive, cooperative and trusting
described later in this chapter, recognizing that climate of employee relations.
employees are stakeholders and that it is to the
THE HRM APPROACH TO EMPLOYEE RELATIONS
advantage of both parties to work together (this
could be described as a unitarist strategy aiming The philosophy of HRM has been translated into
at increasing mutual commitment) the following prescriptions, which constitute the
HRM model for employee relations:
THE BACKGROUND TO EMPLOYEE RELATIONS
STRATEGIES  a drive for commitment – winning the
‘hearts and minds’ of employees to get
Four approaches to employee relations have
them to identify with the organization,
been identified by Industrial Relations Services
to exert themselves more on its behalf
(1993):
and to remain with the organization,
1. Adversarial – the organization decides what it thus ensuring a return on their training
wants to do, and employees are expected to fit and development;
in. Employees only exercise power by refusing  an emphasis on mutuality – getting the
to cooperate. message across that ‘we are all in this
together’ and that the interests of
2. Traditional – a good day-to-day working
management and employees coincide
relationship but management proposes and the
(ie a unitarist approach);
workforce reacts through its elected
 the organization of complementary
representatives.
forms of communication, such as team
3. Partnership – the organization involves briefing, alongside traditional collective
employees in the drawing up and execution of bargaining, ie approaching employees
organization policies, but retains the right to directly as individuals or in groups
manage. rather than through their
representatives;
4. Power sharing – employees are involved in
 a shift from collective bargaining to
both day-to-day and strategic decision making
individual contracts;
Adversarial approaches are much less common  the use of employee involvement
than in the 1960s and 1970s. The traditional techniques such as quality circles or
approach is still the most typical, but more improvement groups;
interest is being expressed in partnership as  continuous pressure on quality – total
discussed later in this chapter. Power sharing is quality management;
rare.  increased flexibility in working
arrangements, including multiskilling, to
Against the background of a preference for one
provide for the more effective use of
of the four approaches listed above, employee
human resources, sometimes
relations strategy will be based on the
accompanied by an agreement to
philosophy of the organization on what sort of
provide secure employment for the
relationships between management and
‘core’ workers;
employees and their unions are wanted and
 emphasis on teamwork;
how they should be handled. A partnership
 harmonization of terms and conditions
strategy will aim to develop and maintain a
for all employees
 processes and accelerate moves towards single
status.
The key contrasting dimensions of traditional
industrial relations and HRM have been 2. Traditional collectivism – priority to industrial
presented by Guest (1995) as shown in Table relations without HRM. This involves retaining
18.1. Guest notes that this model aims to the traditional pluralist industrial relations
support the achievement of the three main arrangements within an eventually unchanged
sources of competitive advantage identified by industrial relations system. Management may
Porter (1985), namely innovation, quality and take the view in these circumstances that it is
cost leadership. Innovation and quality easier to continue to operate with a union, since
strategies require employee commitment, while it provides a useful, well-established channel for
cost leadership strategies are believed by many communication and for the handling of
managements to be only achievable without a grievance, discipline and safety issues.
union. Guest comments that ‘The logic of a
3. Individualized HRM – high priority to HRM
market-driven HRM strategy is that where high
with no industrial relations. According to Guest,
organizational commitment is sought, unions
this approach is not very common, except in
are irrelevant. Where cost advantage is the goal,
North American-owned firms. It is, he believes,
unions and industrial relations systems appear
‘essentially piecemeal and opportunistic’.
to carry higher costs.’ An HRM approach is still
possible if trade unions are recognized by the 4. The black hole – no industrial relations. This
organization. In this case, the strategy might be option is becoming more prevalent in
to marginalize or at least sidestep them by organizations in which HRM is not a policy
dealing direct with employees through priority for managements but where they do
involvement and communications processes not see that there is a compelling reason to
operate within a traditional industrial relations
POLICY OPTIONS
system. When such organizations are facing a
There are a number of policy options that need decision on whether or not to recognize a
to be considered when developing employee union, they are increasingly deciding not to do
relations strategy. The following four options so.
have been described by Guest (1995):
FORMULATING EMPLOYEE RELATIONS
1. The new realism – a high emphasis on HRM
STRATEGIES Like other business and HR
and industrial relations. The aim is to integrate
strategies, those concerned with employee
HRM and industrial relations. This is the policy
relations can, in Mintzberg’s (1987) words,
of such organizations as Rover, Nissan and
‘emerge in response to an evolving situation’.
Toshiba. A review of new collaborative
But it is still useful to spend time deliberately
arrangements in the shape of single-table
formulating strategies, and the aim should be to
bargaining (IRS, 1993) found that they were
create a shared agenda that will communicate a
almost always the result of employer initiatives,
common perspective on what needs to be done.
but that both employers and unions seem
This can be expressed in writing, but it can also
satisfied with them. They have facilitated
be clarified through involvement and
greater flexibility, more multiskilling, the
communication processes. A partnership
removal of demarcations and improvements in
agreement may well be the best way of getting
quality. They can also extend consultation
employee relations strategies into action.
PARTNERSHIP AGREEMENTS customer needs has brought with it the desire
to engage the attitudes and commitment of all
Defined In industrial relations a partnership
employees in order to meet those needs
arrangement can be described as one in which
effectively, says the report. The report was
both parties (management and the trade union)
based on interviews with managers and
agree to work together to their mutual
employees in 67 private and public sector
advantage and to achieve a climate of more
organizations identified as ‘innovative and 198 l
cooperative and therefore less adversarial
HR strategies successful’. It reveals how such
industrial relations. A partnership agreement
organizations achieve significantly enhanced
may include undertakings from both sides; for
business performance through developing a
example management may offer job security
partnership with their employees. There are five
linked to productivity and the union may agree
main themes or ‘paths’ that the organizations
to new forms of work organization that might
identified as producing a balanced environment
require more flexibility on the part of
in which employees thrived and sought success
employees.
for themselves and their organizations:
Key values
1. Shared goals – ‘understanding the business
Five key values for partnership have been set we are in’. All employees should be involved in
down by Roscow and CasnerLotto (1998): developing the organization’s vision, resulting in
a shared direction and enabling people to see
1. mutual trust and respect; how they fit into the organization and the
2. a joint vision for the future and the means to contribution they are making. Senior managers
achieve it; in turn receive ideas from those who really
understand the problems – and the
3. continuous exchange of information; opportunities.
4. recognition of the central role of collective 2. Shared culture – ‘agreed values binding us
bargaining; together’. In the research, ‘organization after
5. devolved decision making. organization acknowledged that a culture has to
build up over time… it cannot be imposed by
Their research in the United States indicated senior executives but must rather be developed
that, if these matters were addressed in an atmosphere of fairness, trust and respect
successfully by management and unions, then until it permeates every activity of the
companies could expect productivity gains, organization’. Once achieved, a shared culture
quality improvements, a better-motivated and means that employees feel respected and so
committed workforce and lower absenteeism give of their best.
and turnover rates.
3. Shared learning – ‘continuously improving
The impact of partnership ourselves’. Key business benefits of shared
learning include an increasing receptiveness to
The Department of Trade and Industry and
change, and the benefits of increased
Department for Education and Employment
organization loyalty brought by career and
report on partnerships at work (1997) concludes
personal development plans.
that partnership is central to the strategy of
successful organizations. A growing 4. Shared effort – ‘one business driven by
understanding that organizations must focus on flexible teams’. Change has become such an
important part of our daily lives that Employee voice can be seen as ‘the ability of
organizations have learnt that they cannot deal employees to influence the actions of the
with it in an unstructured way, says the report. employer’ (Millward et al, 2000). The concept
The response to change cannot be purely covers the provision of opportunities for
reactive, as business opportunities may be employees to register discontent and modify
missed. While teamworking ‘leads to essential the power of management. It embraces
co-operation across the whole organization’, involvement and, more significantly,
care must be taken to ensure that teams do not participation.
compete with each other in a counterproductive
The framework for employee voice
way. It is essential that the organization
develops an effective communication system to The framework for employee voice strategies
ensure that the flow of information from and to has been modelled by Marchington et al (2001)
teams enhances their effectiveness. as shown in Figure 18.1. This framework
identifies two dimensions of voice:
5. Shared information – ‘effective
communication throughout the enterprise’. 1) individual employees; and
While most organizations work hard at
downward communication, the most effective 2) collective – union and other representation.
communication of all ‘runs up, down and across The shared agenda of involvement and
the business in a mixture of formal systems and partnership is a form of upward problem
informal processes’. Many organizations with solving. This is on the same axis as the
unions have built successful relationships with contested agenda of grievances and collective
them, developing key partnership roles in the bargaining. But these are not absolutes.
effective dissemination of information, Organizations will have tendencies towards
communication and facilitation of change, while shared or contested agendas, just as there will
others have found representative works councils be varying degrees of direct and indirect
useful in consulting employees and providing involvement, although they are unlikely to have
information. partnership and traditional collective bargaining
Moving on at the same time. As Kochan, Katz and McKersie
(1986) point out, among the strongest factors
An important point that emerged from the affecting the choice of employee voice strategy
research is that there are three levels, or stages, are the values of management towards unions.
within each of these five paths. These are the
levels ‘at which certain elements of good Planning for voice
practice must be established before the The employee voice strategy appropriate for an
organization moves forward to break new organization depends upon the values and
ground’. attitudes of management and, if they exist,
EMPLOYEE VOICE STRATEGIES trade unions, and the current climate of
employee relations. Strategic planning should
As defined by Boxall and Purcell (2003), be based on a review of the existing forms of
‘Employee voice is the term increasingly used to voice, which would include discussions with
cover a whole variety of processes and stakeholders (line managers, employees and
structures which enable, and sometimes trade union representatives) on the
empower employees, directly and indirectly, to effectiveness of existing arrangements and any
contribute to decision-making in the firm.’
improvements required. In the light of these
discussions, new or revised approaches can be
developed, but it is necessary to brief and train
those involved in the part they should play.