Employment Relations in the Voluntary Sector

Struggling to Care

Ian Cunningham

• Publisher: Routledge
• Year: 2012
• Print ISBN: 9780415427135
• eBook ISBN: 9781134090754
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This new book addresses the topical issues surrounding employment relations in UK voluntary organizations that operate within the quasi-market of social care. Combining an analysis of the established literature with in-depth qualitative field work, Ian Cunningham explores the nature of power relations between state and voluntary sector; implications of employment policy and subsequent pressures for change in pay and working conditions; the influence of trade unions in the sector; management's capacity to resist external pressure and employee responses to this environment.

Cunningham's focus on the employment relationship in this sector is unique, highlighting a complex and variable pattern of interdependence and subordination between government agencies and voluntary sector employers. The author examines the way in which financial pressures from the state coupled with weak unionization diminish working conditions, arguing that employee morale will not be sustained if the voluntary sector fails to maintain its autonomy and minimize its dependency on state funding.

1    Introduction

In the context of a closer relationship between voluntary organizations and state funding bodies in the UK, the purpose of this book is to investigate how this relationship is shaping human resource (HR)/employment relations policies, work organization and commitment among paid staff in the third sector. This is an important area of study given the UK voluntary sector workforce, as with most western industrialized countries, now provides social services to some of the most vulnerable people in society. This includes areas of provision for the elderly, social housing, and young people, those with learning difficulties, the physically disabled and people with mental health problems. This growth in activity is a direct consequence of almost twenty years of ‘contracting out’ of social services provision by central and local government agencies to the sector, encouraged firstly by Conservative and then Labour governments (Kendall, 2003).

However, despite this central position in providing social services, we have limited knowledge of the employment implications emanating from the changing state–voluntary sector relationship. The expansion of contracting out of services has contributed to considerable employment growth in the sector so that it now employs over 600,000 employees (Wainwright, Clark, Griffith, Jochum and Wilding, 2006). At the same time, we have limited information regarding how these employees are managed. There is, for example, limited published academic research regarding the implications for management’s employment relations and HR policies in the context of this closer relationship. We also have only limited insights into working conditions in the sector, with only a few exploratory studies focusing on the Conservative era of contracting (Cunningham, 2001: Knapp, Hardy and Forder, 2001) and similar neglect of the New Labour era (with Barnard, Broach and Wakefield, 2004 being one of the few exceptions). The focus of these studies has largely been on pay and other aspects of employee rewards, and it is of concern that they suggest a persistent downward pressure on such conditions across the sector, because of external cost pressures from government funders.

Crucially, still less is known with regard to worker morale and commitment in the UK voluntary sector in this climate. Traditionally, the provision of the extremely labour intensive services provided by the sector was assumed to be undertaken by a highly committed group of staff eager to serve a cause (Paton and Cornforth, 1992: Zimmeck, 1998). Yet, these early observations of worker orientations in the sector are mainly anecdotal and have, again, since been subject to only limited empirical scrutiny through single case studies (see Alatristra and Arrowsmith 2004 for an example) or limited insights from the NCVO Almanac of trends in employee turnover (see Wainwright, et al, 2006). Still rarer are efforts to try and directly link the two research themes, i.e. the role of various levels of the state in shaping and influencing HR policies and pay and working conditions in voluntary organizations through the close funding and contractual relationships between the two parties, and the subsequent impact this can have on employee commitment, and therefore service quality to vulnerable groups in society.

These gaps in our knowledge would be of concern in any event given the voluntary sector has already become a significant employer (2.2 per cent of the UK workforce in 2004) (Wainwright, et al, 2006). However, the study of employment relations in the sector is becoming even more significant because of the sector’s position on the UK political agenda. Political parties of all persuasions are persistently espousing the virtues of the sector as a deliverer of public services. This is because it is seen as having greater capacity to meet service user needs, build stronger communities and encourage social enterprise (Cabinet Office, 2006). At the time of researching and writing this volume New Labour had introduced a series of regulations, regulatory bodies and statutes to directly and indirectly facilitate this role, such as The Care Commission, The Social Care Council, Compacts, new care standards and workforce qualifications and Best Value. It was also clear as the Blair Premiership was coming to an end that the role of the voluntary sector workforce in providing social services in this regard would persist and expand, with the Labour government creating a Cabinet level post with responsibility for social exclusion; establishing a new Office of the Third Sector within the Cabinet Office and a Minister for the Third Sector; and introducing a new Charities Act 2006 (Davies, 2007). A Local Government White Paper (2006) was also recommending further movement towards local authorities commissioning the sector to provide more services (Department for Communities and Local Government, 2006).

However, the impression of a committed and content workforce providing these (in many cases public) services to vulnerable groups and the wider community is misleading. In particular, there have been reports of persistently high employee turnover, recruitment problems and skills deficits in the sector (see Wilding, Collis, Lacey and McCullough, 2003: Scottish Centre for Employment Studies (SCER), 2005: and Wainwright et al, 2006) suggesting that all may not be well with employee morale in voluntary organizations. This makes a study of the state’s influence on employment relations/HR policies and practices, working conditions and worker commitment in voluntary organizations in the UK timely. This book, therefore, seeks to draw together and explore two core research themes, which are:

What is the impact of the state on employee relations/HR policies and working conditions in voluntary organizations?

and

What is the impact of any changes to employee relations/HR policies and working conditions on employee orientations and commitment in the voluntary sector?

In undertaking this task the book presents results from two interrelated phases of fieldwork based on predominantly qualitative research undertaken in the social care market in Scotland. The chapter now proceeds to outline the plan for the remainder of the book.

Outline of chapters

The remainder of the book comprises of a further eight chapters. To explore the above themes and develop sharper research questions there follows two distinct literature chapters. The purpose of Chapter 2 is twofold. The first is to provide a more in-depth outline of the development of the state – voluntary sector relationship since the advent of contracting, through to contemporary policy developments introduced by New Labour. In doing so, the chapter identifies two distinct forms of intensifying influence by the state on the voluntary sector employment relationship. The first is through an increasing regulatory burden. This includes changes in employment law experienced by all employers, as well as a series of specific normative pressures peculiar to the care sector which impact on the content of HR and employment relations policies and practices. This includes, Best Value and a series of measures from the Care Commission and the Social Services Council. The second source of influence is a consequence of a greater financial dependency on the state, and relates to efforts from funding bodies to control costs in the delivery of contracted out services, with implications for pay, employee relations and working conditions in the sector. At the same time, this chapter also highlights a literature that reveals how some voluntary organizations can to some degree maintain autonomy in the face of this intensifying state influence on internal employment issues.

As a consequence of these areas of possible state influence and voluntary sector autonomy, the chapter then outlines a theoretical framework to evaluate these three dimensions to the state–voluntary sector relationship. In doing so, it argues for the utilization of three theoretical perspectives. The first is institutional theory, largely influenced by the perspectives of Meyer and Rowan, (1977) and DiMaggio and Powell (1983). Here, institutional theory is utilized as a framework to explore the depth of state (coercive) isomorphic influence on voluntary sector HR/employment relations policies, in the light of employment law, the establishment of the Care Commission etc. and the ongoing relationship with local authorities, while also highlighting other sources of isomorphic influence on HR policies (i.e. mimetic and normative). The second part of this theoretical framework then argues for a focus on changes to the labour process in voluntary organizations to provide a tool to evaluate the influence of cost pressures from the state on working conditions in the voluntary sector. The third part of this framework then draws lessons from studies of inter-organizational relations that explain the circumstances under which organizations can exercise strategic choice and autonomy in employment issues while facing external pressures from state-funding bodies.

Chapter 3 is designed to construct a framework to explore employee orientations and commitment in the voluntary sector. In particular it is concerned with three broad questions:

Why do people choose paid employment in the voluntary sector?

To what extent do employees experience the anticipated benefits of working in the voluntary sector?

What are the reactions of employees to breaches in their employer’s ability to deliver anticipated benefits from working in the sector?

The chapter begins with an overview of UK and international literature exploring what is already known with regard to people’s orientations and commitment to working in non-profit organizations and the factors that may alter them. In doing so, it draws on any lessons from these studies to inform the conceptual framework for this phase of the research, e.g. the need to recognize the multiplicity of reasons for taking up work in the sector and the importance of gender in any analysis of employee experiences.

It then moves on to argue that the psychological contract construct, as developed by Rousseau (1995), has a number of strengths that can contribute to answering these questions. In particular, its ability to identify and categorize complex reasons behind employees accepting employment in organizations, and the nature of reciprocal arrangements between employer and employees; how it identifies sources of disenchantment among employees with regard to the employment relationship and nature of work through the concept of violation; and how the link between violations to the psychological contract and organizational citizenship behaviour helps to explore the consequences of dissatisfaction among workers in the sector. Chapter 4 then outlines the methodology for the fieldwork. In doing so, it presents the rationale and undertaking behind two distinct phases of fieldwork, which is predominantly qualitative in nature, with each phase designed to explore the two broad themes of this study.

Chapters 5 to 8 then outline the findings of this book. Chapter 5, utilizing the conceptual framework outlined in Chapter 2, specifically addresses the issue of the impact of local authority funding bodies on HR and employee relations in the voluntary sector. This does so through an outline of findings from a qualitative study of 24 voluntary sector organizations, and seven local authorities, investigating the impact of the purchaser–provider relationship on employment relations in the sector. Chapters 6–8 are then designed to specifically outline the findings from three case study organizations from within the voluntary sector. The purpose of these chapters is to investigate, using the conceptual framework outlined in Chapter 3, the impact of the purchaser – provider relationship on employee psychological contracts in work. These case study findings are set firmly within the context of each organization’s reported relationship with external funding bodies, and the impact that this has on internal HR/employment relations policies.

Chapter 9 then seeks to draw the key results of the findings chapters together and discuss their relevance to literature. The aim here is to highlight the implications of this study with regard to our existing knowledge of HR and employee relations policies and worker orientations in the voluntary sector. A key part of this chapter will be to draw out some comparisons with wider international literature in the field. Moreover, it will also seek to raise some future areas of research and conclude by discussing a series of policy implications for the sector in the light of these results.

2 The Development Of The State

Voluntary sector relationship and its impact on employment relations

Introduction

The purpose of this chapter is twofold. The first is to outline the changing policy agenda experienced by voluntary organizations in the UK since the advent of the contract culture. This begins by more specifically identifying that part of the voluntary sector that forms the focus of this study, i.e. organizations providing personal social services under contract with government agencies. It then proceeds to outline aspects of the changing environment that this part of the voluntary sector has experienced over the last 20 years from the Conservative through to the New Labour era. This is followed by an outline of the financial, workforce and employment relations implications from this changing environment. Here, the chapter identifies some of the gaps in our knowledge with regard to employment issues. In doing so, it identifies a series of specific normative and cost-based pressures on employment relations policies in the sector generated from state agencies. Moreover, it highlights specific possibilities and circumstances where voluntary sector organizations may have the capacity to resist such pressures.

The remainder of the chapter then proceeds with its second purpose – the construction of a theoretical framework for the first phase of this study’s fieldwork, which is intended to analyse the impact of the above pressures on the sector. Here, it is argued that institutional theory provides a useful tool to evaluate the various normative pressures on employee relations/HR policies and practice in the voluntary sector from state agencies. At the same time, there is an acknowledgement that institutional theory is an insufficient tool to scrutinize the impact of cost pressures from the state on pay and conditions and work organization. Therefore, the next section develops the analytical framework further by highlighting the insights that can be gained through scrutinizing changes to the labour process in voluntary organizations. However, to avoid a view of complete passivity by the voluntary sector in its relations with the state, the fourth section outlines lessons from recent literature concerning inter-organizational relations that identify the factors that may help voluntary organizations exercise some degree of autonomy in their approach to employment relations in the face of state pressure. The chapter then concludes with a summary of the refined research questions for the first phase of this study’s empirical work.

Background

Researching the voluntary sector – definitional issues

It is acknowledged that there remains no internationally accepted definition of the voluntary sector. In the UK, this definitional issue is a continuing source of debate (see Vincent and Harrow, 2005). For the purposes of this study, it is noted that the narrow definition of the sector is one that is utilized and seen as useful by a number of influential UK scholars (Kendall and Almond, 1998). Within this narrow definition, voluntary organizations are referred to as constitutionally independent and self-governing organizations that are non-profit distributing and include a degree of voluntarism (Kendall and Knapp, 1996: Kendall and Almond, 1998). Such a definition covers a vast number of established national charities, with huge budgets and paid professional staff. The activities of these organizations can range from environmental, health, social services, leisure activities and the protection of animals, but excludes schools, universities, trade unions and business associations (Vincent and Harrow, 2005).

Within this definition, this study focuses on that part of the voluntary sector that provides personal social services/social care to various vulnerable groups. This excludes large charities that are engaged in activities solely concerned with overseas development, conservation and the protection of domestic animals, while not ruling out voluntary organizations that undertake other functions in addition to providing social and welfare services, for example advocacy and campaigning. The study is narrowed even further through its fieldwork being located in voluntary organizations delivering personal social services in Scotland. More will be said later in this volume with regard to the implications of this focus, but at this juncture it is worth noting that the Scottish voluntary sector is a substantial concern in its own right with around 50,000 organizations and income resources of £2 billion (equivalent to the financial services industry) (Scottish Council for Voluntary Organizations, 2004a). The chapter now turns to outlining the changing policy agenda of voluntary organizations concerned with delivering social services over the last twenty years. This analysis is predominantly of broad UK developments, but also provides specific Scottish information.

The marketization of public services and the growth of voluntary sector activity

Successive governments have played a significant part in shaping UK voluntary sector activity in the post-war era, with two periods of activity being particularly significant. The first occurred during the period of the post-war consensus, where successive UK governments perceived the market to be an inadequate or inappropriate mechanism to deliver facilities such as health and social services. The provision of welfare in the UK was therefore deliver...

Table of contents

• Cover
• Halftile
• Title
• Copyright
• Dedication
• Contents
• List of tables
• Acknowledgements
• Abbreviations
• 1 Introduction
• 2 The Development of the State: Voluntary Sector Relationship and its Impact on Employment Relations
• 3 Understanding Psychological Contracts in the Voluntary Sector
• 4 Research Methods
• 5 Voluntary sector work and employment relations in the quasi-market
• 6 Case Study 1: Starlight
• 7 Case Study 2: Galaxy
• 8 Case Study 3: Universal
• 9 Discussion and Conclusion
• Bibliography
• Index