Industrial Relations

EMPLOYER AND EMPLOYEE RELATIONS:

Managers need to ensure that there is a sound relationship between employer and employee. Poor working relationships might result in conflicts between employer and employee thus affecting the business negatively.

Negotiations and collective bargaining

Negotiation is a bargaining process between 2 or more parties in an attempt to reach a mutual and acceptable understanding. The goal of negotiation is to create a ‘win –win “ situation for both parties involved. For example employees may promise higher level of productivity if they are rewarded financially.

Some people may not wish to negotiate alone thus they appoint intermediaries called agents such as a lawyer or trade union.

‘collective bargaining' describes the process of negotiation between management and trade union. The negotiations are more likely to focus on terms and conditions of employment such as wage rates, hours of work and working conditions.

There are 3 levels of negotiations :

1.Management negotiations - refer to the day to day negotiations concerning concerning the internal affairs of a business. An example would be management and their surbodinates establishing new production targets.

2.Commercial negotiations - take place between different organizations. An example would be a business negotiating delivery times and prices with its suppliers.

3. International negotiations - are an extension of commercial negotiations which involve consideration of cross border cultural and language differences.

The negotiation process:

1. Preparation.

• Identify objectives and issues that can or cannot be compromised

• Gather all necessary facts and information

• Prepare best alternative

• Consider consequences of not making a deal

 2. Proposal 

• Put forward the case , preferably in priority

• Listen to the proposal of the opposition

• Ask questions for clarification of proposals

3. Debate

• Each party discusses the points in their case

• Find inconsistencies in arguments

4. Bargaining 

• Discussions to find a mutual outcome

• Convincing the other party to compromise

• Aim to make rather than to win a deal

5. Closing

• Choosing a forward strategy

• Final offer from each party is proposed

• Formalize and summarize agreements

6. Review 

Review each stage of the negotiation process to see what went well and what could have been improved.

Factors affecting the strength of bargaining process 

• Skills and experience of negotiators

• Number of employees in the trade union

• State of the economy

• Demand and supply for labour

• Govt involvement

Methods through which to achieve individual and group objectives 

• Increased pay

• Improved fringe benefits

• Better working conditions

• Training and development

• Enhance terms of employment

Reasons why workers demand a rise in pay 

• Cost of living

• Benchmarking

• Increased profit through contribution

• Productivity of labour has increased

• Increase staff turnover

Main types of trade unions

1. craft unions – people with particular skills or crafts such as engineers or printers

2. General unions- very large members ( uk’s transport and general workers union).

3. Industrial unions- members from same industry irrespective of their skills , qualifications , ranking or nature of work.

4. White collar unions- clerical , administrative and professional .example teaching and banking.

Aim of trade unions 

• Improving the conditions of work of its members such as working hours

• Providing members with necessary legal advice 

• Providing financial support to members who may have been unfairly dismissed 

• Supporting the right of its members to have continuous professional training and development

Trade unions and individuals can use the following methods to help achieve their objectives:

• Negotiations - individuals employees are unlikely to be in a position to negotiate well with management.

• Go-slows - under this form of industrial action, employees work at the minimum pace allowable under their employment contract .

• Work to rule - this occurs when employees do the absolute minimum required according to the rules set by the employer. Workers adhere precisely to all rules and regulations in order to slow down production and to reduce productivity. For example staff may refuse to answer telephone calls during lunch breaks.

• Overtime bans - this refers to a directive from employees' representatives to its members to disengage in any overtime activity.

• Strike actions – refers to the refusal of employees to work. This is usually the result of major industrial unrest such as pay disputes.

A walk out is often used in conjunction with strike action. This happens when workers collectively leave (or walk out of) a meeting or place.

METHODS USED BY EMPLOYERS TO ACHIEVE THEIR OBJECTIVES

Employer objectives may include: 

• Lower costs of production in order to remain competitive

• Improved levels of productivity

• Lower rates of absenteeism and staff turnover

Employer and management can use the following methods to help achieve their objectives:

• Negotiations - Negotiations differ from other forms of conflict management and conflict resolution in that they do not require the involvement of third parties to establish win win situation.

• Public relations - is the function of a business that deals with comments, complaints and criticisms from general public.

• Threats of redundancies - some negotiators will use tactics to put pressure or threaten employees. For example staff may be threatened with being fired.

• Changes of contract - it may be legally possible to change people’s contracts of employment.

• Closure - one way that management can deal with strike action is to close the business - final resort when unions reject the employer’s final offer.

• Lock-outs - a lock out occurs when an employer stops employees from working. This is different from a strike where it is the employees who refuse to work.