Employment Relations in the Health Service

Stephen Bach

• Publisher: Taylor & Francis
• Year: 2013
• eBook ISBN: 9781136006463
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Employment relations within the health sector have undergone radical reform over recent years. This book is an important new study that examines the responses of managers and workers to these different reforms, at both national and local level.

Bringing together analyses of both employment relations and public sector management, the book focuses on understanding why certain initiatives have been adopted, how managers have responded to them and the consequences of the HR modernisation agenda. Topics covered include:

• HR strategy and structure at the workplace
• employee involvement and union influence
• pay modernisation
• management of work.

Featuring detailed case study research in three NHS trusts, the book illustrates precisely how government policies are implemented in the workplace and in doing so offers a unique insight into the sector's changing work environment. A comprehensive study of atopical area, this book will be of interest to students and academics in health service management, human resource management and employment relations.

1 INTRODUCTION

In the last two decades there has been a great deal of interest in how the management of employees has changed. Traditional institutions of employment relations have been eroded with reductions in trade union membership and declining coverage of collective bargaining. Management has been in the driving seat with greater scope unilaterally to decide employment relations matters (see Millward et al. 2000). Other commentators have highlighted a process of work intensification and more direct scrutiny of the work of professions (Burchell et al. 2002; Dent and Whitehead 2002). In the public sector, traditional institutions of employment relations remain intact, nevertheless, analysis of the public sector has been dominated by debate about the extent of change in organizational structures, management practices and the decline of the model employer tradition (Carter and Fair-brother 1999; Corby 2000; Winchester and Bach 1999). These trends indicate a variety of changes in employment relations, raising questions about the type of organizational change being introduced, the process used to implement employment relations initiatives and who the dominant actors are in shaping the reform agenda.

Under successive Conservative and Labour governments, the restructuring of the organization and management of public services moved centre stage. In the health service, the impact on employment relations of the market-style reforms of Conservative governments and the modernization agenda of the Labour government has been a source of controversy. Conservative government ministers suggested that their reforms were leading to higher performance standards; managers had acquired the autonomy and influence to establish their own organizational employment practices, without hindrance from trade unions or interventionist governments. Labour government ministers have emphasized the centrality of employment relations issues to their modernization agenda; developing a human resources (HR) strategy for the health service, incorporating HR targets into the National Health Service (NHS) performance management framework, and embarking on a fundamental reform of the system of pay determination.

The scope and significance of these changes have been disputed. During 1979–97 many studies emphasized the radical nature of health service reform and suggested transformation was under way in organizational structures and employment practices (Burchill and Casey 1996: 63; Ferlie et al. 1996: 236). Nonetheless, there were plenty of dissenting voices that were struck by the limited impact of the internal market (Le Grand, Mays and Dixon 1998: 129; West 1997: 145). By 2002, neo-liberal commentators had revised their assumption about the radical nature of Conservative reforms and stressed the problems of the ‘triple nationalization’ of the NHS in terms of state owned provision, state defined demand (i.e. cash limits) and state defined resource allocation (i.e. no patient choice) (Blackwell and Kruger 2002: 5; Lea 2002: 42–3). These criticisms were almost identical to the Prime Minister' critique of monolithic, state-managed public services (Blair 2002). What is clear is that continuing debate about the direction and pace of health service restructuring has prompted unprecedented interest in health service employment relations.

This chapter starts by outlining the overall aims of the book and goes on to identify its research focus. The central premise of this study is that workplace behaviour at trust level reflects the interaction of national policy developments and local decision-making shaped by the idiosyncrasies of the political economy of the health service. This research approach is developed in relation to management strategy and structure, the management of employment relations, and pay determination and work organization. The research methods and forms of data collection are then outlined before the structure of the book is explained.

Purpose of the study

The aim of this book is to examine the responses of managers and workers to the reform of employment relations in the health service. Workplace change in the acute hospital sector is examined in the context of the historical evolution of the NHS and recent national policy developments that underpin workplace reform. It is based mainly on analysis of developments since 1991, allowing comparisons to be drawn between Conservative and Labour government periods in office. The focus on the acute sector reflects the continuing dominance of acute hospitals within the NHS in terms of staff employed, health service expenditure and policy priorities (e.g. staff shortages and waiting times). The approach of this study can be outlined in relation to three more specific objectives of the book. First, it provides a detailed up-to-date analysis of developments in employment relations practice, pay bargaining reform and work reorganization within the acute hospital sector. The focus is on understanding why initiatives have been adopted within individual NHS trusts, and how managers have introduced politically sensitive reforms to employment practices, and on assessing the views of the main participants to these attempts to reconstitute NHS employment practices.

Linked to this objective, a central component of the book is detailed case study research, in three NHS trusts, which examines employment relations policy, pay bargaining reform and work reorganization. An important consideration in pursuing this research agenda has been the limited amount of detailed empirical work focused on alterations in NHS employment practices and the practical outcomes of these policies. Most published research has concentrated on traditional institutional mechanisms of collective bargaining reform and trade union organization, to the exclusion of broader issues of human resource management policy (Lloyd 1997; Thornley 1998). These issues include work organization and labour utilization policies, systems of performance management and policies on employee involvement and communications. In addition, although the type of HR policies adopted and the role of personnel specialists in implementing this agenda has been explored (Procter and Currie 1999; Truss et al. 2002), these studies concentrate on formal management policies and provide little insight into worker responses and the process that is adopted to bring about workplace change. The concern of this research has been to understand how government policies are mediated at the workplace by the responses of managers, workers and trade unions. This is crucial for understanding workplace change.

The second objective of the book is to advance policy analysis on employment relations in the NHS, especially in terms of pay determination and work organization. Employment relations as a field has a long tradition of policy orientated research, and many research questions are framed within wider policy debates. This is especially relevant for a public service like the health service because the government as employer has a direct impact on the employment policies implemented within the workplace. The most pressing research questions are therefore shaped by government policy; for example, the impact of the internal market or the consequences of the performance targets established for NHS trusts on management and worker behaviour. Kelly (1998: 17–18) has expressed concern that policy orientated research in industrial relations tends to neglect theoretical concerns and is tailored to managerial concerns about whether a policy is effective. The implication that such research is invariably managerialist is dismissed by Edwards (2001: 4). He suggests that examining the contradictions of management policy, such as the handling of absenteeism, can generate important insights into workplace behaviour.

The third objective of the book is to develop an integrated understanding of employment practice change in the NHS and thus straddle the boundaries of institutional employment relations, human resource management and public administration. These areas of study share many characteristics; they are rooted in multi-disciplinary analysis and often focus on policy orientated research. The field of employment relations (or industrial relations as it has traditionally been termed), has drawn attention to the influences beyond the workplace that shape the employment relationship. The existence of conflict and co-operation, and an asymmetry of power between workers and managers, has ensured a continuing concern with the manner in which workers have defined their interests collectively within trade unions (Kelly 1998). These considerations remain pertinent to an understanding of health service employment relations. The workforce remains highly unionized, and it will be argued that influences beyond the workplace have a strong influence on health service employment relations.

Human resource management (HRM) is less amenable to definition, and the term HRM is often used interchangeably with employment relations (see Bach and Sisson 2000; Edwards 2001). For the purpose of this book HRM is defined in a generic sense as an approach to employment management that uses a variety of policies and practices related to the management of people, rather than in a narrow sense as a particular high commitment style of managing people. It differs from employment relations, however, in its dominant interest in management practice. In particular it is associated with a tight coupling between human resources and business policy with an integrated set of personnel policies that support the business strategy of the organization (see Bach and Sisson 2000; Storey 2001). HRM is also usually focused on the workplace and the responses of individual employees to management policies. For the purposes of this study HRM draws attention to the extent that health service employees are being managed on a more individual basis; the degree to which employment management is being led by HR specialists; the influence that they command within NHS trusts; and in what ways employment management policies and practices support trust Managers' ‘business’ strategy.

Public administration has roots in political science, constitutional law and administrative science (Ranson and Stewart 1994: 32). This reflects long-standing concerns with the efficient administration of public services as prescribed by legislation and an emphasis on the distinctive character of public administration arising from the implementation of political choices in an equitable and accountable manner. Public administration has therefore been suspicious of drawing a firm line between management and politics. Traditional public administration, however, has been challenged by an emphasis on public management, located within business schools (Gray and Jenkins 1995: 82). The introduction of general management, the internal market reforms and public—private partnerships forms part of a broader attempt to replicate private sector ‘best practice’ and indicate the influence of the so-called new public management. This study draws on insights from public administration and public management to examine the ways that the NHS ‘management revolution’ has enabled managers to break free from central political control and to assess the implications for professional staff.

Research focus

Many of the characteristics of state employment that have traditionally differentiated it from the private sector derived from the unique role of the state as employer. These relate to the diverse functions of the state, distinctive forms of accountability that are embedded within bureaucratic forms of organization and the occupationally diverse character of the workforce (Edwards 1986: 146–54; Fredman and Morris 1989). It also includes the ‘political contingency’ (Ferner 1988) – the need for governments to be sensitive to their electoral constituency — and these concerns are to the fore in the government' role as an employer.

Fredman and Morris (1989) suggest that these unique features of state employment resulted in the state being a distinctive employer that tried to set an example to the private sector. Elsewhere Morris (2000: 169) argues:

Until 1979 the implementation of the ‘good employer’ philosophy in Britain meant job security; the encouragement of trade unionism and collective bargaining; pay determined by reference to appropriate private sector comparators; and, latterly, the promotion of equal opportunities.

Fredman and Morris (1989) argue that the election of the Conservative government in 1979 led to a decline in the model employer tradition because its commitment to market-based principles undermined collective organization and overturned the basis of the model employer tradition. Consequently the dominant strand of debate has focused on the extent to which public sector employment relations have been transformed since 1979. Corby (2000) suggests that the most radical employment relations changes have occurred in the civil service, for instance on pay determination, while Morgan and Allington (2002) highlight an increase in job restructuring (i.e. a two-tier workforce), an assault on collectivism and poor pay outcomes.

Fredman and Morris' arguments need to be extended in two ways. First, a recognition that state employment relations are distinctive needs to be decoupled from the assumption that the state has been a ‘model employer’. In the UK, examination of the historical legacy has indicated that the model employer tradition developed in a partial and uneven manner (Bach 1999a; Carter and Fairbrother 1999). In particular, the state was a model employer if judged in procedural terms such as support for trade union recognition and collective bargaining, an emphasis on fair procedures and greater concern for issues of equal employment policies, but much less so in terms of substantive outcomes (Thornley 1995). This historical legacy continues to exercise an important influence over state policy, with both Conservative and Labour governments seeking to portray themselves as model employers. The Labour government has reiterated that the first pillar of effective human resource management is to make the NHS a model employer:

The model employer or ‘3 star’ employer embraces a composite of best policies, practices and facilities. The HR in the NHS Plan paints a picture of the model employer and through a series of accredited phases, assists each NHS organisation to progress towards the ideal. (Department of Health 2002a: 4)

It is therefore important to investigate how far the state continues to emphasize an appeal to the procedural aspects of the model employer tradition in the management of health service staff and how these policies are interpreted by managers and workers at workplace level.

Second, the policies associated with the state as model employer idea were grounded in an analysis of civil service employment, but major differences in employment relations exist between central government, local government and the health service (Bach and Winchester 2003). These variations arise from differences in financing arrangements; forms of political accountability and political sensitivity; and the character of the workforce and their representative organizations. Consequently the distinctive features of public sector employment provide a necessary starting point for analysis of employment relations, but require further development. The central argument of this study is that the most effective understanding of health service employment relations is derived from an analysis of the distinctive characteristics of the NHS that arise from its financing, centralized control and the professional character of the workforce. This analytical framework is developed in Chapter 2 and will inform a series of research questions that are set out below.

Management strategy and structure

Successive Conservative and Labour governments have tried to reform management practice in the health service to enhance efficiency and improve labour utilization. This process was reinforced by the Griffiths reforms, the internal market and the performance framework adopted by the Labour government, focusing attention on the strategies and organizational structures adopted by senior managers. Frequently, analytical frameworks developed in the private sector have been applied to the public sector. The role of increased competitive pressures, especially globalization, has been viewed as a catalyst for change in employment practices in the private sector, and the extent to which managers can exercise a degree of strategic choice in shaping their employment policies has been a dominant issue (Kochan et al. 1994; Katz and Darbishire 2000).

Kessler and Purcell (1996) have extended this analysis to the public sector. They argue that it is necessary to assess whether the research on the link between organizational structure, management strategy and employment practices which developed in the private sector is relevant to the experience of the public sector. The starting point for this approach has been the establishment of the multi-divisional organizational structure within the public sector, including the NHS (Bach 1995). The experience of the private sector indicates that the development of multi-divisional organizational structures influences a range of employment decisions, particularly the role of the personnel function, the degree of decentralized collective bargaining and the stance towards trade unions (Purcell and Ahlstrand 1994; Marginson et al. 1995).

Their analytical framework for the public sector retains the key elements of the strategic choice model. It focuses on the relationship between upstream and downstream decisions within employer units (i.e. NHS trusts). It suggests that first order decisions on the mission and scope of activities undertaken by the organization influence second order decisions on organizational structure and control. In turn these decisions define the parameters for the discretion exercised by managers on third order decisions which comprise employment choices over whether to focus on individualism or collectivism, cost minimization or employee development, upskilling or deskilling, etc. The application of this framework, however, revealed that a range of socio-economic, legal and political factors constrained these choices in the public sector (Kessler et al. 2000).

The strategic choice framework has been very influential in the consideration of the employers’ role in shaping industrial relations practice. Three issues need to be considered in assessing its value for public sector analysis. First, the strategic choice approach emphasizes agency over structure. It suggests that managers have the power and political influence to develop organizational structures and employment practices in line with their own preferences (Child 1997). The emphasis on the choices available to managers may exaggerate the discretion available to th...

Table of contents

• Cover
• Half Title
• Full Title
• Copyright
• Contents
• List of tables
• Preface
• Abbreviations
• 1 Introduction
• 2 The Governance of Health Service Employment Relations
• 3 Reforming NHS Management Practice
• 4 Pay Bargaining Reform
• 5 Strategy and Structure at the Workplace
• 6 Employment Relations: Performance, Union Influence and Employee Involvement
• 7 The Management of Pay
• 8 The Management of Work
• 9 Conclusions
• References
• Index