Chapter 10: Employee Relations Strategy

1. Employee Relations Strategy Defined 194 page

Employee Relations Strategy (ERS) is the plan an organization makes to manage good
relationships with employees and trade unions. It supports the overall business goal.

 If the business focuses on innovation and quality, ERS will include employee
involvement and improvement programs.
 If the business wants cost reduction, ERS will focus on cooperation with unions and
reducing problems for employees.

In short: ERS gives future direction ("how we’ll get there"), while policies deal with the
current way of doing things ("how we do it now").

For example:
Business Goal: Reduce costs
ERS: Work closely with unions to avoid strikes and layoffs, and maintain smooth operations.
যদি একটি কোম্পানি খরচ কমাতে চায়, তবে তারা কর্মী ইউনিয়নের সঙ্গে ভালো সম্পর্ক গড়ে তুলবে যাতে কর্মবিরতি বা
ছাঁটাই এড়ানো যায়। এটাই একটি Employee Relations Strategy

Distinction from Employee Relations Policies:

 Strategies are dynamic and provide a sense of direction, answering "How are we going to
get from here to there?". They represent deliberate decisions to change existing practices.
Strategy = Future plan
 Policies are about current practices, expressing "the way things are done around here" in
dealing with unions and employees. Policies evolve, but not always as a result of a strategic
choice. Policy = Present rules

2. Concerns of Employee Relations Strategy

Employee relations strategies are primarily concerned with how to:

1) Creating good, peaceful relationships with employees to reduce conflict.

2) Encouraging employee commitment by involving them and keeping clear
communication.
3) Building mutual understanding and shared goals between management and employees
(called mutuality).

3. Strategic Directions in Employee Relations

Employee relations strategies can direct an organization towards various outcomes, including:

1. Change union relationships (e.g., accept one union or remove union).

 2. Update rules for dealing with employee issues.
3. Change how negotiations happen, like using one table for all discussions or allowing
local level talks.
4. Increase employee involvement, giving them a voice in decisions.
5. Communicate directly with employees, not always through unions.
6. Strengthen management control, like making work more flexible.
7. Improve workplace harmony through better relationships.
8. Partner with unions for shared benefits and long-term trust.

4. Background to Employee Relations Strategies: Four Approaches

Industrial Relations Services (1993) identified four approaches to employee relations:

1. Adversarial: In this approach, management makes all the decisions, and employees are
expected to obey without much say. Employees can only show power by refusing to
cooperate or going on strike. This method was more common in the past but is now rare.
2. Traditional: Here, the organization and employees have a generally good working
relationship. Management puts forward proposals, and employees respond through their
elected representatives (like union leaders). This is still the most widely used approach
today.
3. Partnership: In this method, employees are actively involved in shaping and applying
company policies. However, management still has the final decision-making power. This
balanced and cooperative approach is becoming more popular.
4. Power Sharing: This is the most employee-friendly method. Employees take part in both
daily operations and strategic planning. It gives employees strong influence, but it's very
rare in real-world practice due to its complexity.
একটি কোম্পানি যদি কর্মীদের মতামত নিয়ে নতুন ওয়ার্ক-ফ্রম-হোম নীতিমালা তৈরি করে, কিন্তু চূড়ান্ত
সিদ্ধান্ত ম্যানেজমেন্ট নেয়—তাহলে এটি partnership approach বলা হয়।

5. The HRM Approach to Employee Relations

The Human Resource Management (HRM) philosophy translates into specific prescriptions for
employee relations, including:

1) Drive for Commitment: HRM aims to win employees’ full support—emotionally and
mentally—so they work harder, stay longer, and feel proud of the organization.
2) Emphasis on Mutuality: It promotes the belief that both management and employees
have shared goals, creating a “we’re in this together” mindset (unitarist view).
3) Complementary Communication Forms: Besides union talks, HRM encourages direct
contact with employees using team briefings or small group meetings.
4) Shift to Individual Contracts: There is a move from collective agreements (with
unions) to personal, individual contracts with each employee.
 5) Employee Involvement Techniques: HRM uses tools like quality circles and
improvement groups to let employees share ideas and solve problems.
6) Continuous Pressure on Quality: Implementing total quality management. The
organization uses methods like Total Quality Management (TQM) to continuously
improve performance and standards.
7) Increased Flexibility: Work is organized flexibly, with multi-skilled employees and job
security for core staff to improve efficiency.
8) Emphasis on Teamwork: HRM encourages working in teams to build collaboration and
better results.
9) Harmonization of Terms and Conditions: Efforts are made to ensure that all
employees enjoy similar job terms and benefits, reducing inequality.

Guest (1995) highlights key contrasting dimensions between traditional industrial relations and
HRM:
Dimension Industrial Relations HRM

Psychological
Compliance সম্মতি Commitment
contract

Behavior
Norms, custom, practice Values, mission
references

Relations Low trust, pluralist, collective High trust, unitarist, individual

Flexible roles, flat structure,

Organization Formal roles, hierarchy, division
teamwork and autonomy, self-
design of labor, managerial control
control

IR Example HRM Example

Workers strike for better HR designs a fair salary structure and
wages through union reward system to keep employees
negotiation. motivated without conflict.

The HRM model helps businesses achieve competitive advantages like innovation, quality, and
cost leadership. Innovation and quality depend on employee commitment, while cost leadership
can be easier to achieve without unions, as they may increase costs. Even if unions are
recognized, HRM can still be applied by involving employees directly, bypassing or minimizing
union influence.

6. Policy Options for Employee Relations

Guest (1995) outlines four policy options for developing employee relations strategy:
 1. The New Realism: This approach integrates both HRM and industrial relations.
Companies like Rover and Nissan focus on flexibility, multi-skilling, and quality
improvement while aiming for a single status system.
2. Traditional Collectivism: This approach emphasizes industrial relations over HRM.
Companies maintain established union channels for communication, grievances, and
discipline.
3. Individualized HRM: Firms prioritize HRM without industrial relations, often seen in
North American-owned businesses. It's more opportunistic and less common.
4. The Black Hole: This option involves no industrial relations at all. Companies choosing
this approach often avoid unions and do not focus on HRM.
যদি কোনো প্রতিষ্ঠান The Black Hole নীতি অনুসরণ করে, তবে তারা ইউনিয়নকে স্বীকৃতি না দিয়ে শুধু HRM
ব্যবস্থায় মনোযোগ দেয়।

7. Formulating Employee Relations Strategies

While strategies may develop over time, it's best to deliberately create them to ensure a clear,
shared agenda and direction. These strategies can be communicated through processes like
involvement and open communication. A partnership agreement can be an effective way to put
the strategies into action.

8. Partnership Agreements

8.1) Definition: A partnership agreement is a formal understanding between management and

trade unions to work together cooperatively for mutual benefit. It reduces conflict and builds
trust. For example, management may promise job security if the union agrees to more flexible
work practices.

8.2) Key Values for Partnership (Roscow and Casner-Lotto, 1998):

1. Mutual Trust and Respect: Both sides should believe in and respect each other.
2. Joint Vision: There must be a shared goal for the future and a plan to reach it.
3. Continuous Information Exchange: Regular and open communication helps prevent
misunderstandings.
4. Role of Collective Bargaining: Partnership values still respect the union's role in
negotiations.
5. Devolved Decision-Making: Decisions should be made closer to where work actually
happens, not just at the top.

Successful implementation of these values can lead to productivity gains, quality improvements,
a more motivated and committed workforce, and lower absenteeism and turnover67.

8.3) Impact of Partnership:

A 1997 report by the Department of Trade and Industry and Department for Education and
Employment concludes that partnership is crucial for successful organizations. Focusing on
customer needs drives the desire to engage employee attitudes and commitment. Research with
"innovative and successful" organizations revealed five main themes for enhanced business
performance through employee partnerships:

1. Shared Goals: Employees understand the company’s mission and feel connected to it.
2. Shared Culture: Fairness and trust create a workplace where people do their best.
3. Shared Learning: Training and development make employees more open to change and
loyal.
4. Shared Effort: Teamwork and flexibility help the company respond to change quickly.
5. Shared Information: Communication should flow at all levels, and unions or councils can
help spread important messages and support change.

These five paths have three levels or stages of good practice that an organization must establish
before progressing further.

9. Employee Voice Strategies

9.1) Definition: Employee voice means the ways employees can share their opinions, influence
decisions, and challenge management actions when needed. It includes both direct methods (like
suggestion systems or meetings) and indirect methods (like unions or employee representatives).
The goal is to involve employees and give them a chance to participate in workplace decisions.
যদি কোনো প্রতিষ্ঠান একটি ফিডব্যাক সিস্টেম চালু করে, যেখানে কর্মীরা সরাসরি তাদের মতামত
বা সমস্যা জানাতে পারে, তবে এটি কর্মীদের "ভয়েস" বা মত প্রকাশের একটি উপায়।

9.2) Framework for Employee Voice:

Marchington et al (2001) developed a framework with two dimensions:

 1. Individual Employees vs. Collective (Union and other representation): This
differentiates between direct involvement (individual) and indirect involvement
(collective).

a) Direct Involvement:
This means employees take part in expressing their views or concerns individually
and directly to management, without using any representative. Common examples
include employee involvement programs (like feedback sessions) and grievance
procedures for handling complaints.
b) Indirect Involvement:
Here, employees share their views or negotiate through representatives, like trade
unions or worker councils. It’s more formal and collective. Examples include
partnership agreements (mutual cooperation) and traditional collective bargaining
(union-management negotiation).

2. Shared Agenda vs. Contested Agenda:

a) Shared Agenda: Focuses on collaboration and problem-solving, exemplified by

employee involvement and partnership agreements.
b) Contested Agenda: Involves disagreement and negotiation, seen in grievance
procedures and traditional collective bargaining.

Organizations usually lean toward either a shared or contested agenda, with varying levels of
direct or indirect employee involvement. It’s rare to see both partnership and traditional
collective bargaining used together, as management’s attitude toward unions strongly shapes the
chosen strategy.

Example: A company listens to workers' feedback in meetings (direct, shared) and also
negotiates salary through union reps (indirect, contested).

9.3) Planning for Voice:

The appropriate employee voice strategy depends on management's (and unions', if present)
values and attitudes, as well as the current employee relations climate. Strategic planning should
involve:

1. Reviewing existing forms of voice: This involves assessing the current methods through
which employees can express their opinions and influence decisions within the organization.
2. Discussions with stakeholders: Engaging in conversations with key stakeholders, such as
line managers, employees, and union representatives, is crucial to understand the
effectiveness of current arrangements and identify areas for improvement.
3. Developing new or revised approaches: Based on the insights gained from these
discussions, new or modified strategies for employee voice can be developed.
4. Briefing and training those involved: It is essential to inform and train individuals about
their roles in the implemented employee voice strategies to ensure successful execution.