Topic 2 Nature of Empt Rship BUSM1084 Sem 3 2011

8/3/2019 Topic 2 Nature of Empt Rship BUSM1084 Sem 3 2011

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Topic 2The nature of the employmentrelationship

BUSM1084 Employment Relations

Semester 3, 2011



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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 pluralistorientation. Up to page 9 is presented as merelyfactual yet is really predicated on a pluralistorientation.



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Intro

• Definition of employment relations: a bridgingterm that both integrates industrial relations andHRM, and broadens the boundaries of bothdisciplines 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 employmentrelationship is an economic exchange, anagreement between employer and employee over the sale of the latter’s ‘labour power’ or capacityto work.’ (p. 2)

• ie simple economic exchange




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So, contradictionsManagement can’t treat workers as another

commodity, they need workers’ effort & creativity

Mgt must seek consent to directives

Workers resist exploitation, subordination; but alsoneed to ensure their employment and viability of

the org




This is what makes the employment relationshipinterdependent.

‘Employment relationship cannot be viewed as a

simple dialectic of (management) control and(worker) resistance. Rather, it involves “afractured interplay of control, consensus, andbargaining”.’

(Balnave, p. 3 citing Bray & Littler)




Psychological contract:• Unwritten expectations which are beyond the

legal contract of employment

• ‘the perception of both parties to the employmentrelationship, organisation and individual, of thereciprocal promises and obligations implied in theobligations

• Expectations of fairness, trust, loyalty, job securityetc




Psychological contract:‘Growing recognition among researchers that the

psychological contract of employment has brokendown in recent years’

Permanent, full-time, secure employment decliningin Australia

New psychological contract?

Contra Singapore situation?



Conflict and the employment relationship

‘The multidimensional nature of the employmentrelationship creates potential for conflict betweenthe parties’ ie industrial conflict.

Can be over:

• Wages and employment conditions

• Social and political concerns (not in Singapore)

• Managerial prerogatives



Conflict and the employment relationship

Managerial prerogative: ‘the right of managers or business owners to make unilateral decisionsabout all aspects of their business withoutinterference from government, workers or unions’(p. 5)

Term from Australian IR

Also recognised in Singapore with legal prohibitionon bargaining over issues such as hiring,promotion, job allocation, firing



Manifestations of conflict

Overt = open. Usually collective, organised. Incstrikes, lockouts, picketing, threats of plantclosures, outsourcing of tasks

Covert = not visible or public. Usually individual,unorganised. Includes: absenteeism, labour turnover, sabotage, restriction of work effort, strictdisciplinary codes linked to threats of dismissal

etc.




‘The nature of the employment relationship isclearly 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, butcovert conflict is more costly to business. Overt

conflict in decline.




Conflict displacement thesis: ‘although industrialdisputes involving collective work stoppages havedeclined, the decline cannot be equated per sewith a reduction of industrial conflict. Rather,evidence from Australia and overseas suggeststhat without the ability to voice dissatisfactionthrough collective action, workers are more likelyto resort to more covert methods, includingabsenteeism, low productivity and high labour turnover.’ (p. 9)



Frames of reference

• ‘A “frame of reference” refers to a person’sperspective on the world. It comprises theassumptions, values, beliefs and convictions wedraw on to interpret and understand the way

things are and why they happen.’• ‘important tool for understanding why peoplebehave the way they do in employment relations’.Managers’ frames of reference shape the way

they approach ER, workers’ frames influence howthey respond to authority, govts’ frames shapeslaws.



Frame of reference

• ‘there is no one way of viewing the world of work.Rather, people with make judgements on thebasis of their own assumptions and beliefs’. (p.10)

– Unitarist – Pluralist – Radical/Marxist

• Handout: Table, ‘Frames of reference inemployment relations’

• Handout: ‘Are you a unitarist, pluralist or radical?’



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 createto regulate industrial conflict, such as collectivebargaining and arbitration.

• Doubt over academic status: is it a discipline itself or a multi-disciplinary area?



Industrial relations

• Practical focus• Generally pluralist in orientation

• Focus on rules

• Systems approach popular in IR.



Systems approach to IR

• Dunlop (1958). Derived from wider systemsapproach 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 producerules that enable the system to keep functioning.



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Systems approach to IR

CriticismsDescriptive, not analytical

Radicals criticise concept of shared ideology,preoccupation with stability, status quo, disregardfor inequality.

Some parties can seek to eliminate others

Too deterministic, doesn’t 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 toSingapore?’.

Generally considered to be very relevant, asreflected in Tan text (2007, p. 4)

Topic 5 considers an alternative approach (Leggett2007) which argues that the strategic choicemodel 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 PMcontentious.

• 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 collectivism2.Commitment versus flexibility3.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

INDUSTRIALRELATIONS

HRM

Collective Individual focus

Unionised sectors Non-unionised sectors

Blue-collar workers White-collar

External forces Internal forces

Pluralist 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 theareas of practice and discipline in Australia isblurring’.

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 byIR academics to the threat posed by rise of HRMin practice and theory. ie ‘integrating industrialrelations and HRM and presenting it as the“emperor in new clothes”’(2007)



Key questions

1. Why is the employment relationship interdependent?

2. What is managerial prerogative and how far should itextend?

3. What is the difference between overt and covert formsof industrial conflict? Give some examples of each

4. How do the unitarist, pluralist and radical frames of reference differ in their assumptions about the nature of the employment relationship?

5. What is the systems approach and what are itsstrengths and weaknesses? How applicable is it toSingapore?

6. What role does freedom and choice play in theemployment relationship?

Topic 2 Nature of Empt Rship BUSM1084 Sem 3 2011

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