Managing the Employment Relationship
"Sales growth and employment growth are employed to measure business's potential for further development, while employee productivity is employed to estimate business effectiveness" (Wang et al, 2004).
Employment relations in general practice are influenced, as elsewhere, by a range of factors.
Since 20 years, the employment relationship remains hot topics due to the changes in employee organization relationships (EORs) occurring in business between employees and employers (Coyle-Shapiro and Shore, 2007).
Employment relationship primary focuses on the relationships between employees and employers and organizations. So many questions pop up regarding employment relationship such as how do employees and employers interact?; how do they communicate their decisions to one another, and resolve inevitable differences? and how to manage the relationship between employer and employee and many more.
There is a very simple relationship between employee and employer. Employees are expected to complete tasks delegated to them in return for a wage and employers are to decide what work is to be carried out and by whom.
2.0 Definition of the employment relationship
According to ILO, (2006) the employment relationship refers as reciprocal rights and obligations are created between the employee and the employer.
Refer to Rubery et al, (2004) the employment relationship is relationship between employer and employee normally and constituted employment law.
Edwards, (2003) defined the employment relationship as a relationship between an employee and an employer (refer to 1). The direct relationship may be mediated by the two other key institutions to IR, the trade union and the state. A trade union refer as the most basic role represents a group of workers in a specified part of their relations with a single employer which can be measured in terms of density, extent, mobilization and scope.
* Density is the proportion of an identified constituency who are members of a union.
* The extent of a union's activity refers to the range of the constituency: a union can represent a small group of employees in one locality, or all the employees in an occupation, or all the employees of a given employer, or extend beyond an occupation or an employer.
* Mobilization-the degree to which unions identify common interests among their members, persuade the members as to what the interests are, and organize in pursuit of the interests – is important because, most obviously in countries such as France, a union may be capable of mobilizing more employees than its nominal members. By the same token, members will not necessarily follow a union's policy. Unions face issues of how far they represent members and of aggregating membership interests into a common policy.
* Scope is the degree to which the various aspects of the employment relationship are within the purview of the union: it may bargain only over wages and hours, or cover also working conditions, or extend further to issues including training, the classification of jobs and the system of workplace discipline.
3.0 Human Resource Management and employment relationship
According to Hogler, (1996) employment relationships in historical perspective and considers some of the consequences for human resource management. In US, there are three periods fall into major phases of labor market transformation i.e, the Revolution and the Civil War (first stage-a class of wage earners), industrialization gave rise to a system of mass production based on repetitive work, intense supervision, and a detailed division of labor (second stage) and post-war (third stage-labor markets with a strong union presence in core industries and a stable system of white collar, professional employment; employees in both cases enjoyed an attachment to a particular firm and the protection of an “internal” labor market period).
Edgar and Geare, (2005) worked on employment relationship in human resource management (HRM) focusing on employee work-related attitudes. Employee attitudes can be maxmised by implementing lots of practices and also practitioners need to aware the way they implement their HRM practices (for the areas of good and safe working conditions, training and development, equal employment opportunities and recruitment and selection) towards employee attitude (organisational commitment, job satisfaction and organisational fairness).
Kane and Palmer, (1995) stressed out that some strategic from human resource management approach would appear to have become an additional aspect of the more complex process of managing the employment relationship rather than a substitute for it.
Harpaz and Meshoulam, (2009) also stated that employment relations and human recourse management are entangled and in many organizations are performed by the same function or department.
Human resource management duty is to ensure that employees are always efficient, effective and committed. Human resource management has an ongoing involvement with employees beginning from the start of someone's career right through the end in a company. Important duties delegated to human resource management which affect workers through their careers can consist of (Gardner et al,1992):
* Outlining appropriate procedures for recruitment and selection
* The classification of jobs and the organization of work
* Managing employee motivation and commitment
* Training and developing
* Involvement of payment systems
* Evaluating procedures to see which are most effective
Human resource management is seen to have a long term planning perspective, which is proactive not reactive. It has been noted that there are two versions of human resource management one being ‘hard' (approach treats employees as one of a number of different resources for the organization) and ‘soft'(emphasises communication, motivation and leadership) (Storey, 1989).
Neumark and Reed, (2004) mentioned that in the modern employment relationship, there is a role of information technology and the information sector of the economy. The authors pointed out that at least three reasons explained new economy that may changes in the employment relationship (Neumark and Reed, 2004);
* Firstly is in the employment relationship, giving recline to assertions that long-term jobs were disappearing which refers to a workers with experienced the most stable and secure job and as well as older workers with more educated in managerial and professional occupations.
* Secondly is in modern employment relationship, workers employed in flexible staffing arrangements time due to the factors such as technological changes, the growth of computer use in the workplace and the role of technology in changing the environment of work and as well in productivity.
* Thirdly, the modern employment relationship threatens traditional employment relationships by reducing reliance on traditional employment and increasing the use of ‘‘contingent'' or ‘‘alternative'' work arrangements (including, but not limited to, use of contractors)
4.0 The employment relationship and law
According to ILO, (2006) some laws define the employment contract as the framework for relationship of an employee and an employer. The labour codes in some countries define not only the employment contract but also the employment relationship, understood to mean the fact of performing a service, irrespective of the nature of the agreement under which it is performed.
According to ILO, (2006) article, in Malaysia a contract of service is defined as an agreement whereby one person agrees to employ another as an employee and that other agrees to serve his employer.
Refer to Hogler, (1996) the emerging employment contract was that it conferred power on the employer or master to direct and control the subordinate. It has been documented that under various civil rights law, the right of direction and control remains the determinative factor in the creation of employment relationships.
Economic relationship with a particular organization depends on the contract of agreement occurs when an employee agrees to work for an organisation in return for a particular pay and benefits package. employment relationship, and the contractual obligations is a basic level of trust is built around the acceptance from both sides of this contract. Outside of these contractual commitments is the psychological contract which is more intangible contract that exist in employment relationship (Kelly, 2007)
Schweitzer and Lyons, (2008) noted that once high value employee is commit, develop and maintain a long term relationship, the author proposed that employee expectation will be;
1. To receive a variety of benefits from the relationship (of value to the employee);
2. That the values of the organization match their own;
3. Trustworthiness on the part of the employer; and
4. A developmental relationship, which stresses personal and professional growth.
Meanwhile, the employers expectations will be;
1. That employees provide performance and competitive advantage (of value to the employer);
2. An organizational culture of excellence;
3. Trustworthiness; and
Continuous development in terms of skill enhancement and knowledge creation.
5.0 Challenges in managing employment relationship
According to Bamber and Legget, (2001) since countries endeavored to move their economies along the value-added path, one of the consequences for employment relations is the need for increasingly refined HRM practices. The author noted that In China, a ``socialist market economy'' with its associated employment relations changes has been relatively continuing resulting state owned enterprise to maintain employees who would otherwise become unemployed if a rapid transition to free market forces occurred. The challenge that China faces is to undergo training again such employees as the economy comes to be conquered by private firms.
Refer to a work by Fuchs M, (2002), the author stated that since human resources are seen as a critical element in fast changing hyper competitive business environment resulting many employees are dismissed in an effort to shake off the conservative, burdensome modes pertain and structure.
Fuchs M, (2002) mentioned that secure and long term employment relation will reduce staff turnover costs and employee mobility which resulting indefinable and proprietary knowledge is to be welcome. Thus, when such knowledge is critical in developing core competencies and should therefore not be available to competitors. At the same time, if there is a reduction in mobility, its will also a disadvantages in highly dynamic business environment for employees and organizations.
Another challenge in managing employment relationship is flexibility issues. Johnson, (2004) pointed out that so far, a number of issues have appeared were how to understand the complexities of meeting the expectations of workers wishing greater freedoms and control over their working lives and employers expecting greater flexibilities, whilst turn down some control in the process of working.
Marlow and Patton, (2004) stated that the relationship between employer and employee become unclear especially in team working when the owner has to exert overt control. The authors had given an example of workplace discipline or dismissing employees. The authore mentioned "if the labour management strategy creates compliance and shared values, any individual who articulates discontent with the situation or engage in disruptive behavior presents a challenge to the team ethos."
6.0 Factors effectiveness of managing employment relationship
Nowadays, employees need to balance between their work and home. The best way for employees to achieve the balance is to offer flexible work arrangements (Stavrou-Costea, 2005).
Furthermore, Stavrou-Costea, (2005) stated that a main component of the growth in organization is flexible working practices. The flexible working patterns are broadly alleged to offer an efficient way of combining successfully home and work loyalty towards achieving fairness of opportunity.
Refer to a work by Sparrow, (2000) employees dissatisfaction due to the time of the work-life balance that generally poor. Employees felt over-worked, drained and separate from many aspects of their non-work life resulting dissatisfaction.
In order to achieve successful employment relationship, flexibility must carry the role of an ability management to recognize the problems faced by different groups of employees result in the organization (Sheridan and Conway, 2001).
Kalleberg et al, (2003) stated that worked on flexible staffing arrangements such as temporary, contract, and part-time work based on US organizations. There are differences between flexible staffing from standard employment relations in terms of the employers use flexible staffing arrangements to lower labor costs, pay low wages, lack fringe benefits and to reduce their uncertainty surrounding the availability of labor.
For example in Japan, occording to Ono, (2008), most of the employment system are inflexibility and inability to respond quickly to business cycle fluctuations, therefore, to overcome this matter, the companies are reducing their core, and expanding their periphery labor force. However, the author pointed out that especially the large companies are still worship the implicit contract of lifetime employment and protect those who are in the core which is far from dead.
It has been reported that women employees show the highest number in part time employment due to women need to balance their work and family. in Australia, there is an approach on flexibility. Flexibility employment enabling especially women employee with family responsibilities to engage equally in the paid workplace and valuing the diverse work patterns that emerge within organizations as employees balance work and family (Sheridan and Conway, 2001).
2. Relationship that creates mutual value
There are three kinds of value or benefits can be developed based on the relationship i..e, economic, social and psychological. Economic benefits refer as salary, pay raises, bonuses, health benefits, and retirement benefits. Social benefits are related to colleagues (respect, consideration and trust) and management (managers as supportive). Psychological benefits refer to the intrinsic rewards that employees receive as a function of their employment, such as competence or achievement, autonomy, and relatedness, advancement opportunities, decision-making input, job-responsibility, challenge, feedback and supervisory support, empowerment, and a sense of meaning and purpose in work (Schweitzer and Lyons, 2008).
The article by Harris, (2003) noted the employment relationship refers to interactions, and more specifically to the perception of mutual exchanges between employer and employee. Harris, (2003) reported on how working from home shapes the employment relationship and the implications this may have for those line managers responsible for a home-based workforce in UK. The authors explored seven areas: the physical environment, productivity, balancing home and work life, socialization, communication, tools and general issues.
3. Shared values and a culture of excellence
It has been suggested that when implementing Western solutions in an Asian context when culture, values and etc, there should be implemented in proper and careful way due to both west and east are still different although globalization has brought closer dimensions in term of work (Johnson, 2004).
It has been noted that employees will perform best and remain in the organization if the organization cultures such as values, norms, believes, behavior and attitudes that match employees' personal values. The role of employers in this sense is to support and stimulate an organizational culture of excellence that contributes to quality, performance, and customer satisfaction (Schweitzer and Lyons, 2008).
According to Stavrou-Costea, (2005) in order to sustain good employee relations, the companies' manager should provide fair and consistent treatment to all employees. The author mentioned the companies with good employee relations are likely to have a human resource strategy that places high value on employees as organizational stakeholders.
Schweitzer and Lyons, (2008) stressed out trust is critical key factor in employment relationship. The authors proposed that trust consists of three components resulting effectiveness employment relationship between employer and employee. The three components of trust are the two way communication, dependent on the expectation that the employer-employee relationship is open (mutual benefit relationship) and dependent on the presumption that employer-employee relationship will abstain from opportunistic or unethical behavior that endanger the relationship.
The three components of trust are described below in detail (Schweitzer and Lyons, 2008);
The two way communication must be honest, open, timely can clarify objectives, align perspectives, foster trust, develop knowledge, experience, and expertise that should be applied equally to employer and employee.
Mutual benefit relationship by building loyalty to trust. For example, employee trust may expect that she or he will not be termination except for just cause. Employer trust may expect employee will be loyal, seek to remain and commit with the organization.
employer-employee relationship will abstain from opportunistic or unethical behavior that endanger the relationship means any suspect behavior on the part of employers or employees would create distrust, sending a clear signal that they cannot be relied upon to faithfully uphold their end of the relationship.
Study by Atkinson, (2006) emphasized on trust and the psychological contract between employers and employees. The author found trust that operates in the psychological contract and the implications of their manner of operation may have practical implications for the management of the employment relationship. Giving an example, in order to create if there cognitive trust and transactional obligations, there should not be frequent breach of cognitive trust resulting an employer develop and benefit from affective trust.
5. Developmental opportunities and performance
Fuschs, (2001) stated that if the organization succeeds in promoting active, long term, mutually beneficial relations for employees and employer, employee will be the one of the most valuable assets in organization.
According to Schweitzer and Lyons, (2008) employers need to understand what high-value employees expect in terms of the benefits that they seek from the employment relationship, the values that they bring to the relationship, the trust they engender, and the developmental opportunities that they seek. The important in employment relationship is understanding the bilateral nature of these expectations, and ensuring that neither party is ignorant or inattentive to the other party's expectations. The tool such as customer relationship management (CRM) may be adapted by employers to help manage relationships with high-value employees.
Each manager has responsibility for work life issue (includes the managerial appraisal system) according to each business unit. A budget and support staff is provided to managers in order to support in the implementation of the Equality Business Plan as part of their own development plan (Johnson, 2004).
6. Work-environment improvement
It has been reported by Govindarajulu and Daily, (2004) that there are four factors encouraging employees enhanced environmental performance i.e, management commitment, employee empowerment, rewards, and feedback and review stood out as key elements (refer 1).
1: Motivating factors for environmental performance (Extracted from: Govindarajulu and Daily, 2004).
Govindarajulu and Daily, (2004) stated that employee empowerment and employee involvement (known as a participative process to use the entire capacity of workers, designed to encourage employee commitment to organizational success) in environmental improvement efforts include:
* improvements in environmental health, worker health, and safety
* improvements in economic, liability and public image
* development of more knowledgeable supervisors and employees; and
* reduced environmental impact of the company, improved competitiveness, and increased overall company performance
According to Catwright, (2003) nowadays technology play an essential role in enabling employees to work at times and in place of their own choosing. In addition, it has potential to go beyond geographical, cultural and temporal boundaries resulting collaboration among organization and the members successfully.
7. Leadership style
Leadership styles effectiveness depends on the employee group. It is important for leaders to create leader competently motivates the employees to accomplish the tasks according to the organization's requirements for the specific employment group and considering the variation in skills and expected employee behaviors for workers in different employment modes (Liu et al, 2003).
According to (Stavrou-Costea, 2005), the management style of line managers directly affects employee relations. since line managers are vital links to the human resource function, managers role are to organize the distinctive skills, experiences, personalities, motives of individuals, facilitate the interactions that occur within work groups, provide direction, encouragement, and authority to evoke desired behaviors due to
In addition, the author noted that the management style will influence which HRM programs are communicated and implemented resulting tool to increase employee satisfaction, which will transfer into greater productivity and organizational effectiveness (Stavrou-Costea, 2005).
8 Managing Diversity
In order to achieve successful employment-relationship, managing diversity is very important because it implies that a firm can gain competitive advantage by enhancing its performance managing a workforce that is diverse in terms of its sex, racial and ethnic composition. It is also clear that the evolution from employment antidiscrimination to managing diversity represents a change in emphasis from macro- or policy-level outcomes to micro- or firm-level outcomes (Stephenson K, Lewin D, 1996).
Refer to Johnson, (2004), the author mentioned that in order to meet the organizations objectives, it is advisable for a managers attempting to manage an atypical workforce such as shift from attempting to offer incentives and rewards based on career development through promotions, status, job security toward personal reputation, team working and challenging assignments. In addition, the focus will need to be on enhancing employability security.
7.0 Outcomes effectiveness employment relationship
Employment relations in general practice are influenced, as elsewhere, by a range of factors. Allard and Simón, (2006) reviewed on the links between competitiveness and the employment relationship in European countries. The authors discovered there were certain characteristics of the labor relationship that were associated with competitiveness.
In order to contribute positively to organizational efficiency, there is a need of secure and long term employment. This not merely through their ability to function as a basis upon which performance related structures of social capital and the accessibility of idiosyncratic knowledge, necessary to develop these bundle of resources within the firm upon which competitive advantages can be built (Fuschs, 2001).
2. Satisfaction and commitment
According to Forde and Slater, (2006) consider job satisfaction, which plays an important role in affecting turnover, work effort and productivity. The author noted that employees commitment is likely to have dual better position to the nature of their employment relationship.
Schweitzer and Lyons, (2008) pointed out that meeting or exceeding employees' relational expectations with respect to benefits, values, trust, and development will lead to employee satisfaction, and commitment to the employer. In order to determine the satisfaction and commitment level among employees, tools of market research such as surveys, interviews, and focus groups are very helpful.
3. Less withdrawal and turnover
Schweitzer and Lyons, (2008) mentioned that employee who feel dissatisfy and employee with low level of commitment resulting withdrawal or turnover. According to the authors, turnover is costly to firms because of the need to recruit, staff, and retrain workers to replace those who leave. Therefore, CRM approaches can be useful and may be adapted by employers to help manage relationships less withdrawal and turnover.
Schweitzer and Lyons, (2008) noted that employee advocacy due to satisfaction and commitment. Employees' willingness into part-time marketers reflects a willingness to recommend the organization to others through word-of mouth interactions. It has been noted that employees who are recruited through referrals by existing employees tend to demonstrate greater levels of quality and satisfaction, and lower levels of turnover, than more formally recruited employees. In essence, giving employees reasons to believe in their company also gives them reasons to act as advocates of the company.
5. Stability and performance
In order to enhance organizational stability and performance, the employee satisfaction, commitment, and advocacy, as well as reduced withdrawal and turnover need to be fulfill. Employees' satisfaction and commitment are engaged with productive, and more likely to work to their full potential resulting increasing performance, reductions in turnover and as well as increase stability in the organization (Schweitzer and Lyons, 2008).
6. Profit maximization
In terms of employee relations, Abeysekera, (2008) found the good relations between a firm's management and workers' unions enabled the firm to increase capital accumulation. Disclosure about positive employee relations, with little or no disclosure about continuous reduction in employee numbers, helped divert public attention away from the social costs of early employee termination designed to maximise capital accumulation.
Employee measurement, the author, Abeysekera pointed out that the value added by employees was shown in financial terms in the firms' voluntarily disclosed value-added statements. The value-added statements enabled these firms to create an impression to constituents that they were not solely driven by capital accumulation but also by the common good of employees and also constructed a view that management and semi-skilled and unskilled workers functioned as a single stakeholder. Therefore, the share option schemes and share discount schemes would have little effect in motivating employees and thereby increasing the firms' capital accumulation.
The reciprocal dependence of individuals, groups, corporations etc. has magnified the importance of human relationship in present-day life. There is employer-employee relationship society and business relationship, buyer and seller relationship, investor and corporate relationship subordinate and many more.
Employees are the internal public and they should be treated as human beings and not as commodity and their co operation is necessary in order to achieve the corporate objectives. It is the responsibility of the manager to keep them satisfied and content.
The successful in organizations or business is mainly dependent upon the positive and cordial employment relationship between employer and employee.
Therefore, it is very important that manager must sincerely promote their interest. The interest of the employee are fair wages, good working conditions, adequate service benefits, job security opportunities for career development and so on. In addition to this every employee spends a major part of his time, in the organization.
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