Employment Relations

A Critical and International Approach

Pauline Dibben, Geoffrey Wood, Gilton Klerck

• Publisher: CIPD - Kogan Page
• Year: 2011
• Print ISBN: 9781843982685
• eBook ISBN: 9781843983255
• Edition: 1
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

Drawing on the latest research, Employment Relations is a key text for anyone studying the CIPD Level 7 Advanced module Managing Employment Relations as well as all those looking to expand their knowledge and understanding in this area. Covering both the conceptual debates and contextual factors relating to employment relations as well as key management interventions, this is invaluable reading for anyone looking to understand both the theory and practice of employment relations.

With coverage of the main players in employment relations - Trade Unions, Employers and the State - and critical discussion of the local, national and global effects on employment relations, Employment Relations provides a thorough grounding in the international context of employment relations. With comprehensive consideration of key workplace issues including employee engagement, discrimination, conflict, downsizing and redundancies, this is ideal reading for students and practitioners alike. Packed with exercises, examples and case studies, this book allows readers to take a critical approach to this crucial topic. Online supporting resources include an instructor's manual, lecture slides, additional cases, annotated web links and further reading.

CHAPTER 1

Introduction

CHAPTER OVERVIEW

This chapter examines all aspects of employment relations, drawing attention to contentious issues that may impact on the employment relationship. In doing so, the chapter begins by exploring the employment relationship, and then moves on to determine what might be meant by the term ‘employment relations’. Taking something of a pluralist perspective (see Chapter 3), the next section investigates the different interests of employers and employees in terms of their expectations of workplace terms and conditions. Later sections focus on different dimensions of the employment contract, including both legal and economic perspectives, and – somewhat unusually for an introductory chapter – the psychological contract. As is explained later in the chapter, although the psychological contract is not formalised, it can nevertheless be a key feature of the employment relationship. The final section of the chapter begins to explore the management of employment relations in different contexts. Although much of the chapter assumes the potential involvement of trade unions as a key party to the employment relationship, it is acknowledged that the majority of small firms tend to be non-unionised, and this is particularly the case in developing and emerging economies. We therefore also consider non-unionised firms. Finally, attention is drawn to the differences inherent in the management of employment relations in private, public and non-profit-making organisations, in small firms, and – of particular relevance to a text that covers international dimensions – initial insights are provided of the nature of employment relations within multinationals.

LEARNING OUTCOMES

After studying this chapter you should be able to:

•critically discuss the concept of the employment relationship

•define what is understood by the term ‘employment relations’

•explain the potential differences between employer and employee expectations

•define the employment contract from legal, economic and psychological perspectives

•explain different approaches to managing employment relations in unionised and non-union organisations

•compare aspects of employment relations in multinational, small and large, private, public and non-profit-making organisations

THE EMPLOYMENT RELATIONSHIP

Employment relations deal with the individual and collective dimensions of labour and the buying and selling of labour power. However, the fundamental object of inquiry that defines the field of employment relations is not the institutions of trade unions, employers’ associations or government agencies or the processes of collective bargaining, but rather the employment relationship. In Chapter 2, the different parties to the employment relationship are considered in some depth. Here, however, it is important to note what defines the employment relationship itself.

As Poole (1986) points out, employment relations are best described as a discipline concerned with the systematic study of all aspects of the employment relationship. This relationship is one in which the employee sells his or her capacity to work in exchange for a wage and other benefits, and the employer hires employees in order that they produce goods or services that can be sold at a profit or – in the case of the public sector and non-governmental organisations (NGOs) – in order that they are productive members of the workforce (see Collings and Wood 2009).

The employment relationship may be defined as ‘the set of conditions determining the exchange, use and reproduction of the labour force’ (Michon 1992: 224). It is therefore the product of economic, social, political, legal and technological developments as well as the ways in which the various actors interpret and respond to these developments. It is possible to discern, as Blyton and Turnbull (1998: 8) argue, a growing tendency

to locate the [employment] relationship within the broader nature of economic activity; to analyse the structural bases of conflict and accommodation between employer and employee; to consider the influence of the wider society; and to develop an interdisciplinary approach using concepts and ideas derived from sociology, economics, psychology, history and political science.

In other words, in seeking to understand the employment relationship it is not sufficient simply to consider the relationship between the employer and employee. It is also necessary to consider the potential for disagreement between them, and also to take account of the broader context.

The legal element of the contract of employment is the express promise to perform work in return for a promise to pay wages. However, most contracts of employment do not and cannot specify in detail the work that should be provided. This uncertainty is resolved by creating a standard contractual rule: the employer has the power to direct labour and the employee is under a corresponding obligation to comply with all lawful instructions of his or her employer. In its most basic form, therefore, every employment relationship is an economic exchange (an agreement to exchange wages for work) and a power relation (the employee ‘agrees’ to submit to the authority of the employer). The employment relationship is linked, on the one hand, to the position of employers and employees in the product and labour market, and on the other hand, to the division of labour within the workplace and to the control systems (such as a performance management system) which govern their behaviour (Bryson et al 2006). In some instances, the market-determined aspects of the employment relationship may dominate the relationship – for example, where an employee is hired on a temporary basis to perform a specified task. Here the employment relationship is essentially a cash nexus. In other instances, the organisation-determined side of the exchange may be predominant – for example, where the employee is appointed to a permanent, full-time job. Thus, there is more to the employment relationship than the simple sale of an amount of labour power: it involves issues such as power and managing expectations. Much of modern HRM and employment relations is really concerned with an attempt to resolve these issues.

THE EVOLUTION OF THE EMPLOYMENT RELATIONSHIP

The employment relationship, as we understand it today, is a comparatively novel phenomenon. In most industrialised and industrialising countries, as recently as the late nineteenth and early twentieth century, other ways of organising the sale of labour services predominated, the most common being some variant of the labour contract system. Historically, managers sought to evade responsibility for the control and direction of labour through using intermediaries such as labour brokers and subcontractors. Research by Littler (1982: 46) demonstrates that early capitalist industrialisation was ‘based on the avoidance of direct employer/ employee relationships and the reliance on existing patterns of subordination’. The employment relationship is one of the great innovations behind the rise of the modern business enterprise. It revolutionised the organisation of work, providing managers and workers with a very flexible method of coordination and a basis for investing in skills.

THE ADAPTABILITY OF THE EMPLOYMENT RELATIONSHIP

The employment relationship is adaptable, enabling management to decide detailed work assignments after workers have been hired. Given the enormous difficulty in anticipating all of the problems that may arise in providing customers (or citizens) with the goods and services they desire, the flexibility of the employment relationship – which builds on workers’ agreement to be available to undertake certain types of work as and when their employer directs – is a great advantage. However, few employees would agree to giving their employers unlimited powers over work assignments. The rise of the employment relationship owes much to ‘the development of job rules that square the apparent circle of providing employers with flexible job allocations and employees with limited liability to follow their employer’s instructions’ (Marsden 1999: 3–4). For the employment relationship to provide a stable framework for collaboration in the workplace, it must protect against opportunism (whereby the employer may try to exploit the worker in the short term) and satisfy both the employer’s need for flexibility and the employee’s need for security. The employment relationship therefore reflects the struggle over the degree of employer control and the nature and extent of autonomy under which people work.

Defining the limits within which management may determine the tasks to be assigned is problematic. If we assume that employer and employee are pursuing their own (partly divergent) goals, that information is asymmetrically distributed, and that both employers and workers find it costly to find alternative labour and jobs respectively, then we must accept that the conditions for opportunism are ripe (Marsden 1999: 12). Managerial authority is therefore likely to be problematic both in its application by managers and in its subsequent acceptance by workers. Opportunism can be restrained by factors such as loyalty and commitment, but they are inherently unstable and never given once-and-for-all. In a context of high replacement (such as recruitment) costs, individual workers or firms may have to tolerate quite wide margins in co-operation before quitting or firing becomes a viable option, especially for workers with extensive experience and company-specific skills (Grimshaw et al 2001).

The problems of opportunism are intensified by a lack of clear definition of the range of tasks over which the employer’s authority extends, and the tasks on which the employee will agree to work (Bryson et al 2006). Such problems can potentially undermine the advantages of the employment relationship. Faced with a restrictive attitude from employees, the employer might lose the inherent flexibility of the employment relationship; faced with demands for flexibility beyond the bounds of agreement, employees may prefer the additional bargaining power that they wou...

Table of contents

• Cover
• Publisher Information
• Title
• Copyright
• Contents
• List of Figures and Tables
• Acknowledgements and Dedication
• Preface
• Chapter 1 Introduction
• PART 1: CONCEPTUAL DEBATES AND CONTEXTUAL FACTORS
• PART 2: MANAGEMENT INTERVENTIONS IN EMPLOYMENT RELATIONS
• Glossary
• References, by chapter
• Index