Managing Employment Relations

John Gennard, Graham Judge, Tony Bennett, Richard Saundry

• Publisher: CIPD - Kogan Page
• Year: 2016
• ISBN:
  9781843984351
• Edition: 6
• Topic: Business
• Subtopic: Gestione delle risorse umane
• Index: Business

Managing Employment Relations is an indispensable guide for anyone studying the CIPD Level 7 Advanced module Managing Employment Relations as well as anyone looking for a thorough understanding of the theory and practice of the relationship between employers and employees. Fully updated, this edition has new coverage of the changing labour market, regulatory reform and the global environment, ensuring that readers have access to the most up-to-date information in this area.

Covering the context, processes and legal aspects of employment relations, Managing Employment Relations gives a thorough grounding in all the underpinning theory of employment relations. It also provides practical guidance on employee engagement, involvement and representation as well as employment relations strategies, policies and change. In this sixth edition, there is a brand new chapter on workplace mediation and enhanced coverage of discipline, grievances and redundancies. Supported by a lecturer guide, sample essay questions and powerpoint slides for instructors as well as annotated web links and annual updates for students, this book is essential reading for anyone teaching or studying employment relations.

CHAPTER 1

Introduction

OVERVIEW

LEARNING OUTCOMES

The key themes that underpin this book are that:

• an employment relations system consists of actors, their institutions, and government agencies, and is set within its own economic, legal, social and technological environmental context
• changes in this corporate environment impact on the balance of bargaining power between the employers and employees and on the employment relations policies adopted as a result by an organisation
• Europe and European institutions, and increasingly global pressures, influence the employment relationship, and that there is a need for practitioners to be aware of, and understand, these influences
• there is a need to understand and appreciate the relevance of employment relations within both unionised and non-union environments
• if employers are to engage their employees and improve organisational performance, management approaches to employment relations need to reflect and promote fairness, equity and trust
• negotiation, communication, consultation, listening, persuasion and presentation are all key employment relations skills
• line managers in particular need support in developing people management skills
• there is a growing imperative to devise coherent strategies and practices for managing workplace conflict.

In the last three decades, employment relations has undergone significant change. Union membership has declined rapidly, collective bargaining has contracted and there has been a significant and seemingly permanent reduction in the incidence of strikes and other forms of industrial action. At the same time, the development of human resource management has put an emphasis on communication, employee engagement and business performance. In this context, students sometimes question the relevance of employment relations for the contemporary HR practitioner. To this end, in this opening chapter we set out the case for acquiring the knowledge, skills and insight that underpin employment relations.

1.1 THE RELEVANCE OF EMPLOYMENT RELATIONS

First, employment relations is not only relevant to the management of people in unionised organisations. On the contrary, its fundamental objective is to understand and, therefore, more effectively manage the employment relationship between employer and employee, irrespective of whether or not that individual belongs to a trade union. Furthermore, despite the increasingly individualised nature of employment relations, collective relationships still exist in all organisations which require appropriate channels of voice through, for example, collective bargaining, employee councils or joint consultative committees. Similarly, in both unionised and non-unionised environments, employee grievances have to be resolved, disciplinary matters processed, procedures devised, implemented, operated, reviewed and monitored.

Second, the study of employment relations provides practitioners with insights that are largely missing in other management disciplines. A core objective of this book is to broaden our readers’ understanding of the management of power and conflict in the workplace. The interests of different parties within any organisation do not always align. This book is designed to help you to identify the causes of conflict and to develop responses and strategies to the benefit of both the organisation and its employees. For instance, a fundamental employment relations concept is the relative balance of bargaining power between the buyers and sellers of labour services. If certain knowledge and skills are scarce in the labour market, or unions are strong in a particular sector, employees are more likely to be able to negotiate improved terms and conditions. Conversely, if labour is cheap and easily replaceable, or unions are less strong or absent from a workplace, the employer is more likely to be able to set the agenda for any discussion on the terms and conditions of employment for its workforce.

Third, the context within which organisations operate is central to the study and practice of employment relations. Bargaining power is shaped by the external environment and therefore changes in product and labour markets, government economic policy or employment legislation fundamentally shift the terms on which employers and employees interact. Good examples are the changes in representational rights in grievance and disciplinary procedures and the statutory recognition procedures contained in the Employment Relations Act (1999), which provided an opportunity for trade unions to gain a foothold in organisations that were hostile to their involvement. In contrast, the financial crash and subsequent recession of 2008 radically reduced the bargaining power of labour, and growing employment insecurity meant that workers accepted deteriorating terms and conditions in order to stay in work. At the time of writing, the Employment Bill (2015) proposes new restrictions on the ability of trade unions to take industrial action, which will strengthen the hand of managers when negotiating with trade unions. We investigate the merits and limitations of such laws later in the book, but, crucially, the professional employment relations manager has to be capable of offering advice on how their organisation might deal with such situations that stem from decisions over which they have no direct control. This book is designed to help in this regard.

Fourth, changes in the corporate environment help to explain the dynamic nature of employment relations. In the late 1960s and early 1970s, in the context of rising prices, low unemployment and with the pay of most employees decided by collective bargaining, trade union membership grew steadily, strike action was more frequent, and higher wage increases were obtained by employees from their employers. Today, trade union membership has fallen, strike action is relatively rare and most employers are able to decide unilaterally on the rules and regulations that govern employment and, courtesy of low inflation, wage increases are much smaller. Employment relations professionals require an understanding of the impact of such changes so that they can develop an effective and realistic employment relations strategy.

Fifth, in conducting their employee relations activities, professional managers should behave in a fair and reasonable manner and seek to persuade their management colleagues to behave similarly. This means acting with just cause and conducting all stages of employment relations procedures in a way that is compatible with the standards of natural justice. For example, as we explain in Chapter 12, when handling a disciplinary matter, it is crucial that: the employee concerned is aware of the detail of allegation against them; they are given the opportunity to respond to this; they are provided with the opportunity to be accompanied to a disciplinary hearing; and they can appeal against any decision that is made. However, practitioners must also appreciate why such ‘good practice’ is essential to protecting and advancing the interests of the organisation – namely, the avoidance of costly and damaging litigation but also, and perhaps more importantly, establishing a degree of workplace justice which can in turn secure the trust and engagement of employees. In short, good employment relations practice also helps to underpin high levels of productivity and performance.

Finally, it is crucial to acknowledge that the effective management of change and innovation in employment relations policies and practices is essential in a modern economy. This involves being able to analyse the suitability of new processes and practices, and anticipating any problems with implementation, and, in particular the wider implications for relationships with key stakeholders. However, this also requires employment relations professionals to be able to identify the different negotiating situations in which managers may find themselves, appreciate the different stages through which negotiation may proceed, and be familiar with the skills required.

More broadly, a fundamental objective of this book is to equip our readers with the key knowledge, skills and insight to successfully satisfy the requirements of the CIPD professional standards. We understand that many students who study employment relations have very little prior knowledge or understanding of the subject and have often graduated in other disciplines or perhaps come to study through their managerial experience. For this reason, we try to provide the necessary basic knowledge to understand employment relations and also the perspectives to allow for a more critical and nuanced analysis of the subject.

REFLECTIVE ACTIVITY 1.1

What are your initial thoughts on the study and practice of employment relations? Which areas have you had experience of already in your professional work? Which areas appear challenging and why? What strategy might you adopt to overcome these challenges in your study and practice?

1.2 THE CIPD HR PROFESSION MAP

In the last two decades or more there has been a shift in the focus of the HR profession. It is now increasingly charged with improving the performance of the organisation by building sustainable organisational capability – not just delivering on the day-to-day people management role, although that remains important. In light of this trend, the CIPD decided that a radical re-visioning was necessary to equip the profession for the challenge ahead. So, in 2008, it commissioned one of the most comprehensive surveys of the HR community yet undertaken. Around 4,500 people answered detailed questions about their job, their professional needs and their aspirations. The results showed that:

• increasing numbers of HR people go beyond their traditional role and are now required to understand what drives business performance and to bring into focus the employee capabilities their organisations will need in the future
• whereas 50% of participants saw themselves as HR generalists, 50% saw themselves as specialists – for example, in the areas of reward, learning and development and employment relations – but also in roles such as that of ‘business partner’. They wanted to go narrower and deeper in their basic and subsequent training
• 30% had an international dimension to their job
• 29% were studying. This included recent entrants studying to become CIPD-qualified but also people doing MBAs and other master’s degree programmes. The survey demonstrated that members of the HR community were looking for more structured learning and accreditation as they progressed in their careers.

The key messages from the survey were:

1. There is a greater need for HR practitioners to know the organisation inside out. They are increasingly required to demonstrate an understanding of business strategy and an ability to apply that understanding while working in partnership with senior people to contribute to organisational performance.
2. The profession has become broader in reach, with greater depth in its exper...