Topic 2 The nature of the employment relationship

BUSM1084 Employment Relations Semester 3, 2011

Introduction
Overview of Chapter 1 of Balnave (2007) The nature of the employment relationship Conflict and the employment relationship Frames of reference (unitarist, pluralist, radical) Individualism and collectivism Industrial relations HRM Integration of IR and HRM Employment relations

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Introduction

Activity: are you a unitarist, pluralist, or radical? Note that Balnave is written from a pluralist orientation. Up to page 9 is presented as merely factual yet is really predicated on a pluralist orientation.

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Intro
Definition of employment relations: a bridging term that both integrates industrial relations and HRM, and broadens the boundaries of both disciplines to encompass a wider range of stakeholders and environmental factors (Balnave et al 2007, p. 497)

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Nature of the employment relationship

At its most basic level, the employment relationship is an economic exchange, an agreement between employer and employee over the sale of the latters labour power or capacity to work. (p. 2) ie simple economic exchange

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Nature of the employment relationship

But more complicated power relationship in which employee submits simple exchange is for labour power, not actual effort workers can challenge collectively by bargaining, unions Workers can restrict labour they provide Hence the employment relationship is a continuous and open-ended contract that is renegotiated many times throughout its life
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Nature of the employment relationship

So, contradictions Management cant treat workers as another commodity, they need workers effort & creativity Mgt must seek consent to directives Workers resist exploitation, subordination; but also need to ensure their employment and viability of the org

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Nature of the employment relationship

This is what makes the employment relationship interdependent. Employment relationship cannot be viewed as a simple dialectic of (management) control and (worker) resistance. Rather, it involves a fractured interplay of control, consensus, and bargaining. (Balnave, p. 3 citing Bray & Littler)

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Nature of the employment relationship

Psychological contract: Unwritten expectations which are beyond the legal contract of employment the perception of both parties to the employment relationship, organisation and individual, of the reciprocal promises and obligations implied in the obligations Expectations of fairness, trust, loyalty, job security etc
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Nature of the employment relationship

Psychological contract: Growing recognition among researchers that the psychological contract of employment has broken down in recent years Permanent, full-time, secure employment declining in Australia New psychological contract? Contra Singapore situation?

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Conflict and the employment relationship

The multidimensional nature of the employment relationship creates potential for conflict between the parties ie industrial conflict. Can be over: Wages and employment conditions Social and political concerns (not in Singapore) Managerial prerogatives

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Conflict and the employment relationship

Managerial prerogative: the right of managers or business owners to make unilateral decisions about all aspects of their business without interference from government, workers or unions (p. 5) Term from Australian IR Also recognised in Singapore with legal prohibition on bargaining over issues such as hiring, promotion, job allocation, firing

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Manifestations of conflict
Overt = open. Usually collective, organised. Inc strikes, lockouts, picketing, threats of plant closures, outsourcing of tasks Covert = not visible or public. Usually individual, unorganised. Includes: absenteeism, labour turnover, sabotage, restriction of work effort, strict disciplinary codes linked to threats of dismissal etc.

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Manifestations of conflict
The nature of the employment relationship is clearly reflected in these manifestations of conflict. Although employers hold the balance of power, employees bargain with their compliance, commitment and work effort. (p. 7) In Aust, overt conflict attracts more attention, but covert conflict is more costly to business. Overt conflict in decline.

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Manifestations of conflict Conflict displacement thesis: although industrial disputes involving collective work stoppages have declined, the decline cannot be equated per se with a reduction of industrial conflict. Rather, evidence from Australia and overseas suggests that without the ability to voice dissatisfaction through collective action, workers are more likely to resort to more covert methods, including absenteeism, low productivity and high labour turnover. (p. 9)

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Frames of reference
A frame of reference refers to a persons perspective on the world. It comprises the assumptions, values, beliefs and convictions we draw on to interpret and understand the way things are and why they happen. important tool for understanding why people behave the way they do in employment relations. Managers frames of reference shape the way they approach ER, workers frames influence how they respond to authority, govts frames shapes laws.

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Frame of reference
there is no one way of viewing the world of work. Rather, people with make judgements on the basis of their own assumptions and beliefs. (p. 10) Unitarist Pluralist Radical/Marxist Handout: Table, Frames of reference in employment relations Handout: Are you a unitarist, pluralist or radical?
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Industrial relations
Diverse views of its scope and content Always focused on institutions of job regulation; the role of trade unions, employers and the government, and the institutions they help create to regulate industrial conflict, such as collective bargaining and arbitration. Doubt over academic status: is it a discipline itself or a multi-disciplinary area?

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Industrial relations
Practical focus Generally pluralist in orientation Focus on rules Systems approach popular in IR.

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Systems approach to IR
Dunlop (1958). Derived from wider systems approach derived from structural functionalism then in vogue in American sociology ie actors, contexts, inputs, outputs central function of IR is the determination of workplace rules System comprises: actors, contexts, ideology, web of rules Actors interact in various contexts to produce rules that enable the system to keep functioning.
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Systems approach to IR
Criticisms Descriptive, not analytical Radicals criticise concept of shared ideology, preoccupation with stability, status quo, disregard for inequality. Some parties can seek to eliminate others Too deterministic, doesnt allow for actors strategic choices

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Systems approach and Singapore

Note that one of the key questions for this Topic is How applicable is the systems approach to Singapore?. Generally considered to be very relevant, as reflected in Tan text (2007, p. 4) Topic 5 considers an alternative approach (Leggett 2007) which argues that the strategic choice model has greater utility explaining evolution of Singapore IR.

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Challenges to traditional IR
Tendency to focus on industrial, unionised, male, manual workers ignores shift to services sector, non traditional employment Too prescriptive; no general theory Radical critique of pluralist assumption of shared power Lack of historical perspective

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HRM
Established in US in 1980s, slightly later in UK, Aust and Singapore Formerly known as personnel management Exact nature of HRM, and differences from PM contentious. More strategic than PM which was administrative and low status

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HRM
People a source of competitive advantage Connection between HR and org performance Integration and fit with business strategies Strong culture Common interests Cooperation, unitarist approach Soft and hard

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Limitations of HRM
Normative HRM criticised for its unitarist approach. HRM obscures reality of employment relationship Focus on enterprise level rather than societal, labour market Contradictions: 1.Individualism versus collectivism 2.Commitment versus flexibility 3.Strong culture versus adaptability Is it really new or old wine in new bottles? Deliberate, useful ambiguity?
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Case for integration of IR, HRM

Key differences between them Some authors say they are incompatible

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Differences between IR, HRM

INDUSTRIAL RELATIONS
Collective Unionised sectors

HRM
Individual focus Non-unionised sectors

Blue-collar workers External forces Pluralist

White-collar Internal forces Unitarist

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Integration of IR and HRM?

Or are they two sides of the same coin? Balnave argues that they both remain important in terms of their distinct approaches to the employment but the differences between the areas of practice and discipline in Australia is blurring. Need a more holistic, inclusive, dynamic approach: employment relations

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Employment Relations According to Balnave: ER a legitimate bridging term that reflects the overlapping concerns of HRM and IR ER broadens the boundaries of both disciplines ER encompasses a wider range of stakeholders and environmental factors

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Conclusion

But ER still controversial. According to Stone, ER is merely a response by IR academics to the threat posed by rise of HRM in practice and theory. ie integrating industrial relations and HRM and presenting it as the emperor in new clothes(2007)

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Key questions
1. 2. 3. 4. 5. 6. Why is the employment relationship interdependent? What is managerial prerogative and how far should it extend? What is the difference between overt and covert forms of industrial conflict? Give some examples of each How do the unitarist, pluralist and radical frames of reference differ in their assumptions about the nature of the employment relationship? What is the systems approach and what are its strengths and weaknesses? How applicable is it to Singapore? What role does freedom and choice play in the employment relationship?
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