Topic 5: Industrial relations
What are industrial and employee relations?
Why is IR important for people management?
The major players in IR
Industrial relations in Australia
International industrial relations
We will be using the term industrial relations (IR) for the system of laws, regulations, agencies and associations set up to deal with conflicts that arise over pay and conditions for workers. IR deals with the interaction between unions, employers, employer associations and the government. Employee relations (ER) deals with the relationship between a specific employer and its employees, covering the actual negotiation within an organisation to set the pay and conditions for the employees, and the way the employer treats the workforce.
In general, IR involves the following elements:
* a set of rules and regulations for dealing with conflicts over pay, conditions and other aspects of the employment relationship, usually specified in legislation
* government agencies which are responsible for overseeing the operation of the rules and regulations and for changing them as necessary
* employees and their collective representatives in the form of trade unions
* employers and their collective representatives in the form of employer associations.
Unitarist views of organisational life—in which everyone has shared interests—are regarded with increasing scepticism by researchers (Deery et al., 1997: 1.7). Pluralist and Marxist perspectives are more plausible, to the extent that they acknowledge that conflict is an inevitable element of organisational life, in particular where pay and conditions are concerned (Blyton & Turnbull, 1998: 23).
Government is a central actor in IR across the world (Deery et al., 1997: 4.1). The roles of government which are relevant to this topic are as:
Legislator: Governments in most countries establish bodies of employment law, as well as rules and procedures for dealing with industrial issues, and these provide the framework in which IR takes place.
* Labour market regulator: Governments often establish standards of pay and conditions.
* Conciliator, arbitrator and mediator: In many countries, governments seek to facilitate the resolution of industrial disputes by establishing tribunals or advisory services which bring the parties
Employer associations exist in most of the advanced economies and are collective organisations which have as their central aim representing the interests of individual employers in IR (Plowman, 1982). Employer associations emerged largely in response to the growth of trade unions and the realisation by employers that they could represent their interests more effectively via collective means than individually.
The remaining major player in IR is the union movement. Unions emerged in a number of countries in response to industrialisation in the nineteenth century, as skilled workers banded together in an attempt to protect their pay and working conditions (Adams, 1995: 8–9). The primary objective of unions is to improve the well-being of their members, chiefly by seeking improvements in pay and conditions (Deery et al., 1997: 7.2). This is done by lobbying governments in an attempt to influence policy, by negotiating on behalf of members with employers, and by representing employees in tribunals and courts (Ford & Plowman, 1989). The most powerful weapons of a union are those which disrupt the operation of an industry or organisation, such as strikes, go-slows, or work-to-rules.
The process for employees taking industrial action under the Fair Work Act remains mostly unchanged from that outlined in WorkChoices. Industrial action is only protected during a bargaining period, during which time participants must be genuinely trying to reach an agreement. The action must also be approved by a secret ballot of employees. Adequate notice of the intention to take industrial action must also be provided to the employer— three days or more. Pattern bargaining is not protected.
The world is going through a period of dramatic change in industrial relationships, with significant alterations in the power of different stakeholders. In most industrialised countries the power of the unions has been reduced in the last two decades due to the effect of globalisation and the need to remain competitive internationally. The UK and Australia are two examples of this, with reductions in union membership and a reduction in their legal bargaining powers.
The challenge for managers is to provide the kinds of incentives and challenges which will motivate the employees. One of the first requirements is to survey the employees to find out just what factors are causing dissatisfaction, and what is likely to motivate the people. A friendly and flexible workplace is one powerful motivator.
A survey of US organisations (Bolger, 2004) found the following results:
* Emotion. The study found that the workplace mood has a fundamental impact on performance.
* Communication. The data supported the existence of a direct link between performance and the degree to which participants understand the desired goals and steps they can take to help get there.
* Buy-in. The study found that performance thrives when employees feel engaged in the goal.
* Feasibility. The study found that programs rewarding individuals based on their own achievement, rather than rewarding a predetermined number in so-called tournament or closed-ended programs, provide much better results.
* Work utility. The research confirmed the intuitive link between work satisfaction and sense of purpose.
* Employee capability. People quickly become discouraged if they want something, but lack the skills to get it; motivation goes hand-in-hand with a participant's sense of ability.