HUMAN RESOURCE MANAGEMENT: WINTER 2009

Employee Relations
Its Changing Nature and the Contemporary Economy

Authors: Rupinder Kaur, Leah Orejudos, and Mira Vasani

4/13/11

Abstract: This paper attempts to examine the significance of Employee

Relations in the context of the current economic backdrop. Generally
speaking, organizations fail to acknowledge the role of Employee Relations
as a critical component of the strategic approach to Human Resources
Management (HRM); they also fail to stop and ask, “Will our top talent be
with us in both good times and bad? … Why or why not?” Market
conditions, conflicting priorities and a general sense of uncertainty have
drawn focus away from managing employee relations rather than towards
it. This research attempts to characterize the changing nature of Employee
Relations and cite many of the plausible weaknesses that develop within
the organization’s approach to strategic HRM when organizations fail to
signify the role of Employee Relations.
Introduction

At a macro-level, economies the world over are in gradual reform, reeling

from the recent financial crisis, as was characterized mainly by lack of liquidity,

diminishing global trade and a general sense of uncertainty, on the parts of both

organizations and their employees. On the other hand, recent studies revealed

facts that may not be conducive to true organizational success, as corporations

enter recovery mode, geared to thrive once more. Surveys conducted by Human

Resources research firms indicated that employee-manager interaction, amounts of

good-quality feedback, and the perception of loyalty on part of the employer have

all declined. The reasons for most of these numbers indicating such decline can

probably be linked to the global economic crisis.…

itHaving said that, It is important for firms to reassess how they value their

most significant and unique resource: their human capital. By reassessing the value

of its human resources, firms will be inclined towards reassessing how the way they

managethey manage this resource for the objective to , better aligned the

personnel goals with the organizational goals and strategyones. Over the last

couple of decades, globalization,in sthe paradigm shifthas changed the way the world

was doinges including business,business,,in trendsoutsourcing, innovatingon and

financing, coupled with the. diversityDiversity of the workforce, all is also

challenginge today’s managers to face the reality of the changing nature of

employee relations.

Human Resource professionals within the organization are credited with

being “strategic partners in growth”(author, year, p.). To this end, they can

becomeare the change agents for instituting a shift in managerial mindset with

regards to employee relations.

What are Employee Relations?

Traditionally, the term “employee relations” has been used synchronously

with terms such as industrial relations or labor management or even labor law ,,

while concepts such as conflict management, collective bargaining and legally

protected categories, come to mind. Beginning from theIn the early 1980s, there

has been a shift in perspective of the relationships, herein: while the term used to

reflect the relationship of the employer with collective institutions such as unions, it

is was gradually morpheding to reflect the employer’s relationship with individual

employees.

Authors Edmund Heery and Mike Noon (2001)1 defined employee relations as,

“a common title for the industrial relations function within personnel management

and is also sometimes used as an alternative label for the academic field of

industrial relations. The term underlines the fact that industrial relations is not

confined to the study of trade unions but embraces the broad pattern of employee

management, including systems of direct communication and employee

involvement that target the individual worker.” (Heery & Noon, 2001, p. x). The

Society for Human Resources Management (SHRM) takes a broader, more

contemporaneous perspective when defining the term, “A broad term used to refer

to, it refers to it as the general management and planning of activities related to

developing, maintaining and improving employee relationships by communicating

with employees, processing grievances/disputes, etc.” (SHRM, year, p.) Though

approached from different perspectives, both definitions retain the essence of the

1 A Dictionary of Human Resource Management, Edmund Heery and Mike Noon, Oxford
Press, 2001
terms: that there exist s a continuous relationship between an employer and its

employees and that managing this relationship is important.

Another term that aims to examine the success of employee relations is

“employee engagement”2, which is a union of employee commitment,

organizational citizenship behavior and motivation. An engaged employee is one

who is fully involved in, and enthusiastic about, his or her work, and thus will act in

a way that furthers their organization's interests. Employee engagement aims to

measure the “X Factor” that motivates the employee to go the extra mile and is

linked to cultures of high performance, innovation, and customer satisfaction. It is

concerned with the attitude of the employee towards his or her job.

Today, HR professionals carry out a range of activities with regards to both

employee relations and employee engagement. These include:

• managing the employment contract, e.g., its legal basis, pay and

conditions, discipline, absence, health and safety

• ensuring compliance with employment law, e.g., redundancies, unfair

dismissal, minimum wage, working time, discrimination

• direct communication through team briefings and employee surveys

• promoting retention, involvement and engagement through partnership,

teamwork and work–life balance policies

• the collective processes of negotiation and consultation, with and without

trade unions

Strategic Human Resource Management and Employee Relations

2 Institute for Employment Studies Newsletter, No. 129, Dilys Robinson and Sue Hayday
 Strategic Human Resource Management is a process that takes a long-term

approach to Human Resource Management through the development and

implementation of programs that address and solve business problems and directly

contribute to major long-term business objectives. Thus, it aims to align employer

goals and objectives with those of its employees. This ensures optimal allocation of

a firm’s human capital and also ensures growth on part of both employer and

employee. Research reflects several ways to equate and measure the relationship

between the two, e.g., converting the value of human capital into organizational

value, which is then embedded in the (market) value of its products and services.

Tremendous amounts of research also linked the correlation between improved

business performance and strategic HRM. The Strategic approach to HRM is

comprised of several practices, one of which is achieving optimal Employee

Relations.

Employee relations and moreover, fostering optimal employee relations are a

critical component of the strategic approach to HRM. They contribute to high

performance cultures of organizations and are characterized by strong visibility of

organizational vision, core values and resources; effective, strategic interpersonal

communications across the organizational hierarchy and finally, highly leveraged

conflict management.

The Need for and Impact of Change

The two cases below, where organizations instituted strong employee

relations initiatives, exemplify the need for change more succinctly than pages of

research combined:
 1. Best Buy, Inc.: Though not instituted from top-down, in 2003, Best Buy

employees effectively demonstrated the use of the work-life balance

concept, to the fullest. There was a radical reshaping3 of the workplace as

two managers decided to conduct a private experiment that enhanced

performance throughout the company. Prior to the experiment called

ROWE (Results-only Work Environment), where employees were assessed

on output-based performance and engagement based on evidence,

employees were stressed and unable to sustain the work-life hex that

threatened to negatively impact business. The success of the experiment

revolved and brought about a change in the culture at Best Buy, Inc.

Today, employees interviewed evidence they are truly engaged and have

weathered the storm with the company.

2. Xerox Corp4.: In the late 1980s, Xerox stumbled upon the

premise that employee satisfaction and customer satisfaction have a

strong correlation. In its search for customer satisfaction, Xerox studied its

changing market and drew parallels with regards to the demographic of

its employee base. It also undertook a challenging quest to achieve

employee satisfaction worldwide. Based on a survey and other initiatives,

Xerox rooted out nine (9) common causes of employee dissatisfaction:

training, career, benefits, inconsistent management practices, personal

recognition, work environment, communications, workload/resources and

compensation. The greatest impact was the enhanced relationship of

employees with their immediate managers.

3 “Smashing the Clock” Business Week, Dec 11, 2006

4 Employee Satisfaction leads to Customer Service”, Neville C. Tompkins, HR Magazine, Nov.
1992
 Challenges with Effecting Change

For managers, the two most critical skill sets crucial to fostering successful

employee relations and a culture of employee engagement, are interpersonal

communication and conflict management.

Effective communication across the organization is instrumental to breaking

down barriers and fostering the right climate, attitudes, beliefs and behaviors in the

workplace. Managers have the opportunities to leverage this skill in many ways:

one is having the ability to influence his or her team and motivate them to remain

engaged and perform at their best. Another benefit is the ability to demonstrate

effectiveness with diversity and foster collaboration across the team and across the

division or even regions and the organization as a whole. In less advantageous

economic situations, employees tend to wither hoard institutional or functional

knowledge or opportunities, thus hindering continuity of organizational goals.

Studies show that organizations considered highly effective communicators ensure

their employees know how they will be affected as the business changes. They also

trust and train their managers to talk about change and follow up with metrics.

Managers must also learn to leverage conflict management skills, which

require listening, articulation, asking questions and providing solutions.

By capitalizing on these skills, managers will be able to face the daily

challenges that arise in the workplace that test their fortitude and endurance, by

expending the right amounts of energy, time and effort, in the right direction.
A Note on Motivators: Recognition and Reward

Employers are finding it difficult to offer monetary rewards to their

employees. A study conducted by The California State University Northridge (CSUN)

introduceds new ways of rewarding employees. A factor includes lifting the

employee’s self-esteem, also categorized as recognition. The nine ways of

recognition are:

1. Give it frequently. “People often say that motivation doesn’t last. Well,

neither does bathing… that’s why we recommend it daily.” (Zig Ziglar, year,

p.). This quote is a great example of why praise is needed frequently rather

than occasionally.

2. It must be varied. Recognition can be given often, but such that it retains

meaning.

3. It must be honest.

4. It should be given to the person, not the work. Using one’s words wisely is

important so that the employee does not feel discounted. Saying things like

“You did a good job”, instead of “This project is excellent”.

5. It should be appropriate to the achievement, effort and time-wise.

6. It should be consistent, across employees.

7. It must be timely, as perceived by the person managing the project.

8. It should be “receiver” oriented.

9. Reward what you want more of, which is simply positive reinforcement.

Positive feedback for good work done, promotes continued performance.

Conclusion
 To conclude, theThe role of an organization’s Human Resource Managers and a

top down effort on part of its Senior Management, are critical determinants of its

the organization success in achieving optimal employee relations. To its credit of

being a strategic partner in business, the HRM department is tasked with

establishing policies and procedures and drafting strategic initiatives that will create

a platform for achieving optimal employee relations. In the same vein, all levels of

management, beginning with a “tone at the top” effort are pivotal to creating a

culture that fosters employee engagement and promoting it in times of both

prosperity and turbulence. While these efforts are overwhelmingly challenging to

institute, they are not impossible. They require cultural changes, which gradually

permeate the organization as a whole, giving the competitive edge it needs to

survive, thrive and compete, in today’s ever changing environment.

Organizations that fail to engage their employees, in effect, fail to

understand one of the most basic building blocks of business: it’s the uniqueness of

an organization’s human capital that gives it the company an edge. Organizations

that effectively build employee relations and engage their employees are already

reaping the benefits of their efforts: they have survived the recent global financial

crisis and are now poised to thrive again. need one more sentence (paragraph

format)

Be very careful with your sentences some of them are misleading and

confusing.

The paper is well organized; however, I don’t see your paragraph for the

problematic at the beginning of the paper. Also in your conclusion, you are

supposed to add an opening statement (a small paragraph) for your application.

What are you going to suggest? Are you going to work on best way to
communicate? or how to avoid interpersonal conflicts? or how could an organization

effectively build employee relations? I can’t tell from your paper

Works Cited

Aside from works footnoted, below are some references used in this paper:

1. Managing Employee Relations,

http://findarticles.com/p/articles/mi_m3495/is_5_50/ai_n13721394/
2. When the Economy Recovers...Will your Best People Still Be With You?,
http://www.hr.com/SITEFORUM?
&t=/Default/gateway&i=1116423256281&appl
3. Reward and Recognition, http://www-
admn.csun.edu/ohrs/eap/recognition.html
4. Employee Relations: An Overview, Chartered Institute for Personnel and
Development,
http://www.cipd.co.uk/subjects/empreltns/general/emprelsovr.htm
5. Studies Highlight Recession’s Impact on Employee Relations, Dec. 8, 2009,
Rebecca R. Hastings, SPHR