All entries for Thursday 30 July 2009

July 30, 2009

Human Resource Management Lesson 5

Human Resource Management Lesson 5

1. To what extent do you think that the employment relationship is necessarily based on conflict between employers and employees who have competing interests?

Since the cost of labor is one of the largest fixed costs an employer has within a company or an organization there will always be a conflict of interest between the two. On one side the employer will seek to do the same task with the minimum of labor force or to improve the processes that will lead to less need for extensive use of workforce. One such example I can draw from the recent talk with my colleagues that work at the warehouse where the new computer scanning and stock management systems have been installed. One of the senior guys working there since the late 1970-ies told me that before 1990 there were 7 guys at the warehouse having constant overtime. But since the computer and scanning of stock has been introduced there are only 3 guys working there today with hardly any overtime at all.

The uneven balance of power may lead us to believe that the owners of capital assets are the major party calling all the shots in an employer-employee relationship. This may especially be true in traditional and small businesses. However, in most countries both small and large businesses are bound to follow legal and social (sometimes even moral) obligations to their employees and the broader community. Many countries especially in the Northern Europe have powerful Trade Unions that may limit or even overturn unpopular decisions made by the management.

Coming from the Scandinavian model of conducting business, one may say that the emphasis with us is on a joint share of responsibilities for the business results between the employer and the employees. The stress is on clear lines of communication and the protection of employees as assets to the company. Being in the middle of a major reorganization as we speak, I may nothing but applaud the way the senior management has communicated the need and the rationale for this to middle- and junior management and later at the town hall meetings and information to our employees. This is a good example of what Brown (2000) calls a "partnership arrangement". In this sense the model applied is the “regulated” model typical for Northern Europe.

2.- What factors influence the extent to which the employment relationship is harmonious or conflictual?

I believe that the clear lines of communication and sharing of information benefit both parties. The air of mistrust, rumors and hidden agendas that most of us have probably experienced is reduced through such “open line” measures. The stress on employment security and the need for gearing the company machinery to work towards the common objectives is imperative for the success of any employment relationship. As Brown suggests the “consultation” is the key measure for achieving a harmonious partnership between the parties.

The extent of harmonious relations or conflicts may have many advantages or downsides. The history of employee-employer relations within a certain company may be one of them. The role the Unions have, may also have a significant impact on these relations. On a broader scale the social and economic environment of the national or global economy may have a great impact on the nature of employer-employee relations. The management style is also an important factor that influences this relationship. One should not forget the personal charisma of leaders as important factors for these relations. Applying Purcell’s Style Matrix one may say that traditional style may be in general more conflictual than a consultative style.

July 2009

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