Global Issues in Employment Relations

Abstract

Employment relation is a significant part of collective bargaining. Strategic human resource management has been taking the place of the employment relation. Due to the development of IHRM1, discrimination among the employees has thus lessened. In some cases, the employers have threatened the employees and collective bargaining has significant influences on employment relations. IHRM has better-integrated employment relations from international perspectives. This paper would examine how IHRM has been impacting traditional employment relations under globalization and how it would increase the productivity of labor in a better form than the traditional employment relations. But IHRM may not be the substitute for employment relations and this paper has argued the academies to have more research for further decision.

Introduction

Employment traditions and practices have experienced a dramatic change in recent years and the traditional employment relationship has shaped in a new dimension. All over the world, employee and employer relationships have turned easier than ever before. Various types of associations and organizations are triggering this relationship and have introduced different solutions for the existing conflicts. New economic and demographic trends have affected the career patterns as well as the employee’s expectations. These types of tendencies have turned employment relations into a redundant phenomenon and learning employment relationships has become worthless day by day. Strategic human resource management is taking the place of the employment relation. This paper would discuss the phenomenon and pathways to conquer the new ways of learning employment relationships called international human resource management. The paper also assesses the role of different demographic and contemporary issues associated with employment relations.

Employment Relationships

Dundon & Rollinson (2004, p. 15) stated that there are various viewpoints regarding the contents and method that constitute the employment relation and for this reason taking a simple essence to define employment relation is quite difficult. One school has suggested that the traditional thinking about the employment relationship should count as a matter of superseding. Thus, the employees have been losing their access to collective representation, and as an outcome, the reconfiguration within employment relations has become a common phenomenon in the industrialized market.

Another school stated that the reformation of organizational structure has distorted the traditional and simple boundaries between the employers and the employee. This viewpoint has resulted in a different definition and meaning of employment relations. It is true that employers and employees both have some goals in common. However, in many circumstances the interest of each other is conflicting. In every sphere of the organizational life of both the employer and the employee have been diminishing these types of conflicts as a key factor, which actually shaped the employment relations.

A good and well-accepted reconciliation means conformity and cooperation. So, it can be said that employment relationship is a relation between the employer and the employee where cooperation and helping tendency exists though there are many conflicts of opposite interests exist. These conflicting interests introduce differences in paradigms, which depend on the particular dimensions of employment relations. Hyman (2001, p.1-5) proposed a triangular approach to simplify the concept of the employment relation.

Triangular approach of employment relation
Figure I: – Triangular approach of employment relation (Dundon & Rollinson 2004, p. 28)

Each point of the triangle represents a single employment relation model. The models are differently entitled in different organizations based on their operation. Legal contract is suitable for the stable employer organizations. Legal contract is completely directive in nature and strictly follows the rules and regulations. In case of joint regulation, the organization has driven by the collective bargaining institutions. Here the formal ways have followed to minimize conflicts like reconciliation, arbitration and so on. The last titled organization has expressed as psychological exchange, which examines the value of the relationship between the employers and the employee. (Dundon & Rollinson 2004, p. 28)

Role of Power in Employment Relations

McBride (2007, p. 4) stated the role of power is a force which has to be distributed in greater society. From the organizational perspective, power is a key force of industrial and employment relations through which the balance of responsibility and right of the employers and employees have derived. The power practice within the organization has become redundant in recent years. Use of technology, extinctions of trade union, globalization and many other factors help to diminish the role of power in the employment relation. For these reasons, power has no space to play any role in the employment relations. Besides, the cooperative nature of the works and production create space for simple directive workplace environment in case of exercising power. (Lewis, et al 2003, p. 42)

Role of Justice in Employment Relationships

There is no doubt that justice in workplace is very significant. Justice means fair treatment to the employees by the employers. The role of justice was outstanding once upon a time in case of industrial relations. It has treated as one of the solution of unemployment. Justice has widespread almost all concerns like economic growth, reshaping of firms, increased level of competitive advantages, deregulating the labor force, sharing work responsibilities, creating teams and many other organizational arena. There were organizations that monitored the justice practice in the industries. However, this practice of measuring justice also became redundant in recent years. As employees are now associated with individual works, discrimination between employees have thus lessened. The role of justice has replaced by the role of responsibility. The employee gives a pre set criteria to fulfill and judged against the standards after the accomplishment of the work. The justice is now only synonymous to imply the laws and regulations related with the employee rights. (Alphasys 1994, p. 4)

Role of Culture in Employment Relations

Fisher et al. (2004, p. 805) stated that beside the national or regional culture, every organizations has its own culture which is the internal work culture. In the same nation, different firms have differences in culture though the national culture has influence over the organizational culture. Cultures are widely established norms, procedures, and means of doing work, which has based on beliefs, tradition, and custom of the organization or any other entity. Organizations of today’s business world are more or less experiencing the globalization and thus most of the organizations become multinational in nature. Employee’s participation in the decision-making, employee proactively, flexibility and responsibility affects the organizational pattern. Therefore, there is little or almost no space for culture to act now. MNCs2 have their working procedures and design their operations in such a way, which is applicable in all culture. The base of this type of planning is the preparation to become a multinational company at the starting of the business, which drives, for the multicultural ways of operation.

Trade Unions Roles in Employment Relationships

Katz & Kochan (2004, p. 117) indicated that the effects of trade union over the employment relations are declining in recent years. This decline has based on the share of work force. From the mid 1980s, the decline was in number of members, which tended to reduce the effective working capacities of the trade union. There are seven factors, which liable for the decline-

Factors liable for decline of trade unions
Figure II: – Factors liable for decline of trade unions (Self generated)

Changes occurred in the nature and the location of job has made it difficult to gain new members. There ere also various demographic changes occurred for which the availability of job has reduced. The structural change over the economy and the labor force has triggered to diminish the demand for working with a trade union. (Fisher, et al. 2008, p. 307)

There are many employers, who have banned union activity and compel the employees not to be unionized. The management of the most impressive organizations becomes sophisticated in this manner. Management has turned so aggressive that they consultant to grasp the tactics of preventing the employees to be unionized. Besides, in some election campaigns of the employers they spoke clearly against the trade union. In some cases, the employers have threatened the employees. (Lewis, et al. 2003, p. 44)

To work in the place of trade union, management appoints various types of personnel. Management normally started to use them, as they did not want to waste time to make the employees convinced with unnecessary of trade union. Thus, personnel practice worked as a substitute of banning the trade union. (Katz & Kochan 2004, p. 128)

From the late 1990s, government started to interfere openly in the employment relations. Government tried to shape the industrial relation through adopting different types of laws and regulation. Every organization would be bound to maintain these rules and regulation regarding employment relation. These regulations actually broke the traditional tendency of unionized as most of the laws are employee friendly and ensure the rights of the employee. (Katz & Kochan 2004, p. 128)

The American society now has based on the individualism and the extinction of traditional aristocratic leadership tends to diminish the need of trade union. This type of ideology prevents the movement of trade union and ensures the creation of self-conscious work force. (Fisher, et al. 2008, p. 307)

Unions are also liable to declining acceptance of unionism. In most of the cases, the union leaders worked for only their own betterment rather than the normal employees. Besides, employees get little time after doing union activities and the cut offs of political activities generate too much operational time. For these reasons, many employees left union and peruse others to leave. (Katz & Kochan 2004, p. 129)

Unions have traditional processes to recruit members, which has found defective in nature. American labor law argued that unions must convinced 50% of the labor force, which is a basic limitation for the union. To maintain these laws, unions need many resources which demand more money, effort and time. (Bamber, et al. 2004, p. 189)

The above discussed seven factors diminished the trade union activities which has now almost no impact on employment relations. This phenomenon generates the redundancy of the employment relation and makes scope for strategic human resource management as a replacing area.

Collective Bargaining and Employment Relation

Employment relation is an important part of collective bargaining. An employee always exists under some working conditions whether in the work or leisure. Collective bargaining is thus has significant influences over employment relation. Based on the collective bargaining the study of employment relation has focused on the labor and trade union and related work dimensions. (Katz & Kochan 2004, p. 3)

There have three major participants in employment relations. These are:

Participants in employment relation
Figure: 3- Participants in employment relation (Self generated)

Management means the individuals or group of individuals who are responsible for designing the goals of the organization and its employees. They would be organized with three types of individuals and they are owners or shareholders of the organization, top executives, and the human resource managers. Labor means the employees work under the management and union represents the employees. Government means the local or national political force that has the right to pass and enforce related laws and to work for public interests. (Katz & Kochan 2004, p. 3-4)

These three participants design the employment relations based on the collective bargaining. According to this concept, labor has considered as more than just a commodity. Here the labor force has considered as a resource. Another important thing is the inherent nature of conflict among the management and the employees as both have multiple interests, which are common in some case and in some way it is conflicting. (Katz & Kochan 2004, p. 4-5)

Employee Participation

As the traditional views on employees have changed, they are now encouraged to participate in almost all area of production consisting reward system, performance measurement and many more. Employee’s participation in workforce keeps pressure on the traditional thinking of the employment relation and employees are now effectively participate in decision making and also in performance measurement system. Fisher et al. (2004, p. 577) stated that the involvement of employee in many phases like in reward system has positive impact. These involvements have empowered the employees to strive for the declining employment relation, and increased the importance of broad study of human resource management. (Fisher et al. 2004, p. 577-578)

Employee Grievances in the Age of Global Competitiveness

Fisher et al. (2004, p. 568) addressed that grievance means to complain against the management by the employees and treated it as a labor contract unfairly. In this modern age, the business and work of the employees has become more and more competitive, employee grievances would not useful. The grievance has actually caused previously for the dissatisfactions among the employees. These dissatisfactions arouse by the unfair treatment, dismissals, discriminations and some other inappropriate activities of the management. However, in competitive global working environment management is considering employees as wealth and work for the betterment of it. The discriminatory attitude has almost abolished and for these reasons, employees have almost no space for complaining against the management.

Analysis of Earning Gaps of Executives and Workers

Aslam (1999, p. 1) mentioned that in USA, the corporate officers get mounting payment, which is generated gap between them and their co- workers. Some corporations have pocketed 419 times in average wages of blue-collar labor, which has shown in U.S. Bureau of Labor Statistics (BLS). In 1990, the corporate inequalities were swelling from 85 times and it has increased up to 326 times in 1997. According to BLS 3 Employment Cost Index, the payment of blue-collar employees’ has increased only 2.7%, white-collar employees by 3.9% and 442% increased by CEOs. In another study demonstrated, the payment of CEO has jumped to 297%; corporate profits have also risen by 116%, but unfortunately, workers wages increased by only 32%. (Blyton & Turnbull 2004, p. 30)

These inequalities between the payment of lowest paid labor and CEOs are backing the seven corporations in USA, which shows a maximum ratio, like Citigroup, General Electric, AT&T etc. (Tucker 2008, p. 10)

The gaps of earning between executives and co- workers have also occurred because of gender and race differences between them. The earnings are differed by 71.4% with same age group, but differed in gender. The financial and social performance linked with the payment of wages of lower level workers, which is supportive in General Electric by 6.65%. (Sansbury 2004, p. 8)

Impact of Profit and Economic Growth on Employment Relations

Dundon & Rollinson (2004, p. 12) explained that the employment relationship has affected on productivity and profitability with various aspects like wages, benefits, total employment, and workers’ percentages binding in legal employment contracts. In developed countries, the wages and bonuses are less effective comparing to relationship with the employer, by giving those medical insurances, pension, injury insurances, maternity insurance, and accommodation facilities. It is obvious that, employers desired for profit maximization. The employers also give the employees the security of employment, social status, and identification in workplace. (Lua et al. 2009, p. 3-6)

In economic concern of non- state sectors, the corporations are dominant by economy driven by labor union. The conflicts between employers and workers have founded in non- state sectors, with great example in China. In USA, the wages of employees of many companies have increased by 12% in 2006, who are involved in union. The rate of government workers are higher than the workers engaged in private sectors. Technology and managerial roles in corporation can also bring economic efficiency in workforce level with the management of proper relationship. (Finnov 2009, p. 1)

Discipline and Dismissal Issues in Employment Relations

When employer may have raise serious concerns with an employee, than it commenced disciplinary action including dismissal or warning. The managers have to have clear understanding and abilities to prevent and solve these kinds of problems. As day-to-day concentration, most common type of these problems is warning, which has caused by misconduct or failure in changes, which is resulted dismissal in near future. Some other type of this action is suspension from working, removing privileges from the workforce level or demotion etc. (Lewis, et al. 2003, p. 47)

Dismissal indicates the termination of employment by employer, which could be for redundancy or health reason or may be for non renewal of fixed terms of contract. For dismissal, there are certain the employer should take actions first, which are:

(Department of Labor 2009, p.12)

Employers actions taken in Dismissal situation
Figure IV: – Employers actions taken in Dismissal situation (Self- generated)

Nevertheless, in recent procedures, the statutory obligations are compensated the employees by 50%, which is increased by 25% with the practice of actions given before by the figure. (What economics tells us about labor law, Anon, 2007, p.3)

Current Financial Crisis and Employment Relationship

In global economy, the roots of financial crisis has raised by changing financial technology and reflection of social distribution risk of the USA. The institutional changes and income inequalities would deliver another reason, determined by the financial system supports of Europe, who ensured the stable employment and equitable income among workers in the companies. In 20th century, the incremental portion of middle class employment and distribution of equal income are resulting stable economic growth in both the USA and Europe after Second World War. (Lua, et al. 2009, p 7)

McBride (2007, p. 1) stated that US GDP per capita has grown almost 2%, but the economic growth become instable by decline of stability of income of middle class employees from 1980s. The changes in relationship of employment with employee and companies have increased the economic insecurity in world’s largest economy within access stable middle class job. Therefore, the current financial crisis is nothing but the systematic risks for the employers as well as for the companies. (SRI World Group 2000, p. 1)

International Comparative Perspectives of Employment Relations

Taylor (2009, p. 4) pointed out that the comparative approach of employment relationship is differ from country to country with important areas of industrial relations. It is one of the major issues in all countries, so comparative analysis should have international differences with style and legal status in labor contract. The impact of globalization also creates the patterns of relationship of national and international employment relationship. In the context of European Industrial relations, its existence, characteristics, and differences with national industrial relations have focused with following issues:

Differences between national and international employment relationship
Figure V: – Differences between national and international employment relationship (Self- generated)

These comparative issues have increased potential benefits between social partners and governments with the eligibility of comparative model in the implications of collective actions. (Bamber, et al. 2004, p. 1-6)

Redundancy of Employment

Tucker (2008, p. 11) mentioned that the employer has decided about the job of an employee has been performing in a trade union is no longer needed for redundancy, which can be occurred by ordinary and customary turnover of labor. Redundancy can be possible for following reasons:

Reasons of Redundancy in employment
Figure VI: – Reasons of Redundancy in employment (Self- generated)

The redundancy has defined by the employment agreement with relevant policies. In the process of redundancy, the employer should do some important tasks, which are:

  • To talk with the employees about the redundancy and showing the relevant documentation and feedback by employers before making the final decisions,
  • To select specific employee between two of them, this has followed by employment agreements or policies for selection.
  • Before termination, the employees have facilitated with alternative option like, appointment in another position.
  • Employees should have facilitated with redundancy compensation.

Additionally, employers should also considering other supportive actions like counseling, time off to attend job interviews or outplacement services according to employment agreement. (Department of Labor 2009, p. 13)

International Human Resource Management

Ackers & Wilkinson, (2003, p. 212) added that within the context of employment relations, the employees are concentrated on their employment more by regional context with traditional approaches. Nowadays in 21st century, the changes in global economy become major forces in human resource management of every company. The government, often must bound when the companies are choosing different approaches of HR practice in dealing with employees. This new approaches are changing HR planning, selection, compensation, and design of jobs of employees. The practices of this approach are important for multinational companies to do business in worldwide, which is popular as the name of International Human Resource Management. (Fisher, et al. 2008, p. 20)

Contemporary Issues in Employment Relations

Employment Relations Act 2000 (ERA) and Human Rights Act 1993 (HRA) both have justified the way of dispute between employer and employee in different issues discussed as well (Discipline and Grievance, Anon., 2008, p. 2). If the issues have failed according to requirements of employment, then the further progress handled to HRA, which can protect unlawful discrimination in employment. (Department of Labor 2008, p. 1)

Different Viewpoint

Though the academies and corporate world have kept their effort to justify the cut down the necessity of employment relationship with reference to current economic downturn, but the current financial crisis and its relevant job cut is not at all a justification to ignore employment relationship. The leaders of corporate world may think their corporate social responsibility as a mater of propagation rather then a real social progression. Nevertheless, the anxiety with unemployment, bailout bill and rescue packages of government proves the truth that how far significant the threats of employment relationship is. When government keeps its efforts to overcome the situation subsidizing hundreds billions of dollars to protect the job cut and create employment opportunity, the corporate world is spending most of the money for executives remuneration rather than ensuring the employment opportunity and the essence of different subsidy packages. Thus to consider employment relations as outmoded and throw out from the curriculum of the Universities would be a matter of living in the heaven of foolish.

Conclusion

International human resource management (IHRM) is now establishing the bridge between the management and the employees. The employees have now treated appropriately, as the study of IHRM is wide spreading worldwide. The concept and theories of this course have broken many traditional concepts, which has previously established by employee relations. The rise of IHRM results the demolition of the necessity to learn employee relation. To cope up with the present complex business practice, organizations should keep more efforts to research on the concepts of IHRM, but no way to ignore employment relations.

Reference List

Ackers, P. & Wilkinson, A., 2003. Understanding Work & Employment Industrial Relations in Transition. 4th ed. Oxford University Press.

Alphasys, 1994. A Call for Justice Concerning Employment. Web.

Anon, 2007. What economics tells us about labor law.

Anon, 2008. Discipline and Grievance: Where Employment Law and HR management meets. Web.

Aslam, A. 1999. U.S. Wage Gap Widens. Web.

Bamber, G. J., Lansbury, R. D. & Wailes, N., 2004. International and Comparative Employment Relations: Globalization and the Developed Market Economies. 4th ed. Singapore: South Wind Production.

Blyton, P. & Turnbull, P., 2004. The Dynamics of Employee Relations. 3rd ed. Macmillan Plagrave.

Department of Labor, 2009. Disciplinary Action, Dismissal, Redundancy, and Ill Health: Guide for Employees. Web.

Department of Labor, 2008. Contemporary Mediation Practice. Web.

Dundon, T. & Rollinson, D., 2004. Employment Relations in Non-Union Firms. pp 15, 28. Web.

FINNOV, 2009. FINNOV research in the context of the current international financial crisis. Web.

Fisher, C. D., Schoenfeldt, L. F., & Shaw, J. B., 2008. Human Resource Management. 5th ed. Biztantra.

Katz, H. C. & Kochan, T. A., 2004. An introduction to collective bargaining and industrial relations. 3rd ed. McGraw Hill.

Lewis, P. Thornhill, A. & Saunders, M., 2003. Employee Relations: Understanding the Employment Relationship. Financial Times Management.

Lua, Y., Taoa, Z. & Wangb, Y., 2009. Union Effects on Performance and Employment Relations: Evidence from China. Web.

McBride, J., 2007. The Dynamics of Power and Control in the Employment Relationship in Maritime Construction Industries on the River Tyne.

Sansbury, G. E., 2004. The employment relationship and integrated theory. Web.

SRI World Group, 2000. Report Highlights Executive/Worker Pay Gap. Web.

Taylor, R., 2009. The Future of Employment Relations. Web.

Tucker, J. S., 2008. Doing the math on earnings inequality.

Footnotes

  1. International Human Resource Management.
  2. Multi national companies.
  3. Bureau of Labor Statistics.

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