All entries for Wednesday 19 August 2009
August 19, 2009
The question of the relations nature between employee and employer does not have the clear straight answer. There are too many factors that influence these relations. From the first sight, these relations have contradictional nature. The employer and the employee have different targets of their activity. If the employer's target is connected with the overall organization's performance (that may be measured in different way for different types of organization like: number of units produced, revenue, gross profit, PTI, net income, or some other for governmental and non-commercial organizations for example); the employee usually interested only in his personal well-being (salary, bonuses and incentives, different additional benefits). So having different goals the employee and the employer have to have the conflict.
Looking at the history of economics we can see a huge number of the explicit display of this conflict. In some countries (like Russia) this conflict became one of the reasons for the revolution.
Nowadays, most of the employers understand that this conflict is not only socially dangerous, but also has a huge negative impact on the productivity of the personnel. As a result of that we can see the shift of the employers' position to the "win-win" solutions with their employees. As an example I can point such programs as a: profit sharing, incentive bonus the size of which depends on the employee performance, different non-monetary benefits like education (i.e. MBA), company shares options etc. All these initiatives are targeted on one single aim to motivate and to consolidate the interests of the employee and of the employer.
Unfortunately it is not possible to achieve 100% consolidation but to some extend it allows switching the conflict to consensus.
The factors that may influence on the nature of the relations between employer and employee we can split into external and internal.
External factors are:
1. Economy. The economic situation has a dramatic influence on the employee's and employer's wish to move their opposite positions towards each other. HR specialists usually point two extremums in this field: "Labor market of the candidates" and "Labor market of employers". During the economic growth times the employment rates were high. The demand for experienced employees was high and the supply of the open positions was also high. As the result, employers had to accept the rules of the employees like: high salaries, number of additional bonuses and benefits, additional security (golden parachutes) etc. At the crisis time the situation is opposite and the employees are much more flexible today in terms of compensations.
2. Legal. How far the legislation is defending the employees' and employers' rights.
3. Market environment. Under this factor I mean the labor market standard for the geography in terms of the labor relations. The example can be the difference between US and Japan.
Internal factors are:
1. Management style and level of the employees' involvement. This is definitely very important factor as if the employee is satisfied with these this may be a very strong non-monetary motivation for him.
2. Personal relations between manager and employees.
3. Psychological climate in the teams and organization overall.
These are the main factors from my point of view.