October 24, 2012

MU0012 [Employee Relations Management] Set1 Q1

Q.1 List the core issues of employee relations management? 

Ans:

Employee Relations Management (ERM) is a vital business process that manages employer–employee and employee-employee relations. It goes by the maxim that ‘a satisfied employee is a productive employee’. 

Organisations following good employee relations realise that employees are important stakeholders in the organisation. Employees who are content with their employers contribute more effectively towards the goals of the organisation.

ERM is influenced by organisational strategies, culture and other factors like employee commitment and employee engagement. Managing organisational conflicts is also an important part of ERM. ERM is facilitated by tools like Human Resource Information Systems (HRIS).

The objectives of Employee Relations Management are as follows:
• Improve the effectiveness of the workforce.
• Ensure employee satisfaction.
• Gain and retain employee commitment.
• Prevent conflicts amongst employees
• Promote retention of employees.
• Improve employee-management and employee-employee communication.

Core issues of Employee Relations Management 
(1) Conflict Management
Conflict management refers to the manner in which mangers handle grievances and disputes. According to Gennard and Judge, ‘Employee Relations aims to resolve difference between the various interest groups regardless of whether these groups comprise different categories of managers or employees. Workplace conflicts arise due to differences in perceptions, culture, employee biases, gaps in communication, and so on. A win-win approach is used to resolve conflicts. Mediation and counselling are adopted for resolving conflicts rather than using formal discipline measures. Managers are trained both to avoid and to resolve disputes.

External mediators can also be called in if necessary. Large organisations like public sector companies prefer to use internal mediators to resolve conflicts. Unresolved work place conflicts can have a negative impact on the organisation. For example, if the production manager and the quality control manager have differences about implementation of quality procedures, then the work of both the divisions is affected.


Figure for Causes of Workplace Conflicts

Conflict management skills help employees get along with the other employees, their managers and the customers. These skills help managers identify conflicts, respond to them, get better co-operation from the employees, and avoid conflicts from spreading to other parts of the organisation.

The following skill set help managers deal with conflicts:
• Conceptual skills: Managers need to first understand the causes of conflicts and the different strategies and tactics they can use to resolve the conflict.
• Communication skills: Managers require good listening skills and the ability to ask the right questions to ascertain the cause of the conflict. They must avoid harmful statements and remain rational.
• Negotiation skills: Managers need to know the policy of give and take required to resolve conflicts.

Conflicts are resolved by adopting the following strategies:
(i) Counselling: Only a few organisations have professional counsellors on their staff. Many organisations train their managers to counsel their subordinates. Often, just by employing nondirective counselling (listening and understanding), managers can help frustrated employees.
(ii) Discussions and Debates: Task conflicts are resolved by discussing or debating the options. Consensual decision is made after considering every option.
(iii) Compromise: This method tries to resolve conflicts by arriving at a solution which satisfies at least part of the requirement of each party involved. 
(iv) Using third parties: As serious conflicts have a negative impact on organisations, third parties with specialised skills are used as arbitrators, mediators or ombudsmen to resolve them.

(2) Internal Communication
Employee engagement can only be obtained if the senior management communicate frequently on a wide range of business and organisational issues. Organisations with good employee relations give a high priority to internal communication. Such organisations ensure that the employees completely understand the communications made to them.

For example, The South-West Trains Company has a very good relationship with its unions. But when the management realised that not all employees were being kept informed about the different issues, they decided to use more direct means of communication. At present, ad-hoc forums are held to get feedback from employees. ‘Time with the manager’ sessions keep the line managers in touch with the operations staff. The intranet and e-mail are used in addition to team briefings to communicate with all the employees.

(3) Employee Engagement
Mike Johnson describes employee engagement as a combination of commitment and organisational citizenship. Organisations can be successful only if the employees have a feeling of job security, respect, recognition, and purpose. Organisations that have good employee relations value teamwork and employee feedback. Engaged employees are more committed, helpful, productive and less inclined to take leave. The Figure below depicts the indicators of employee engagement.

Figure for Employee Engagement Indicators

People management and development activities like training and job design contribute to employee engagement. A positive psychological contract with the employees enhances performance. HR professionals are employee champions and focus on the needs and aspirations of the employees. 

Employee involvement can be achieved by the following practices:
• Having formally designated teams
• Having regular team briefings
• Undertaking performance appraisals
• Using problem-solving groups
• Involving employees in decision making

Dell is a computer manufacturing company and has been ranked among the top ten companies by Fortune magazine. It aspires to be a ‘great company and a great place to work’. It focuses on the team and individual contributions to the team. Line managers interact with individual team members. All employees are judged on the basis of how they interact with people and their technical proficiency. Quarterly results meetings are held across the business and senior managers answer questions posed to them. Managers share results with the team and develop team action plans. ‘Tell Dell’ surveys are held every six months. These surveys help in finding if the managers give regular feedbacks, manage people properly, set a good example of ethical behaviour and so on. Thus Dell engages its employees by constant employee involvement.

(4)Career Management
Career development of employees is organisationally supported, manager facilitated, and employee driven. The career management process is based on the establishment of specific goals and objectives.

The career management process commences with the formulation of specific goals and objectives. The goals can be of the following kinds:
• Short-term goals: These are goals to be achieved within the next 1 to 2 years. These are more specific and easy to formulate.
• Intermediate goals: These are goals to be achieved in the next 3 to 5 years. These are more difficult to formulate as compared to short-term goals.
• Long-term goals: These are goals to be achieved after 5 years. They are more fluid and very difficult to formulate.

Figure for Employee Career Development

As the nature of the work changes employees may have to modify and update their goals. The above Figure  shows the employee career development cycle where managers guide, motivate and provide opportunities to employees in every step towards developing career. Organisations exercising good employee relations have an environment in which employees take control of their own development and maintain their employability. Such organisations ensure that employees are given fair career advancement opportunities. Discriminations are not made on the basis of race, gender or ethnic group. The framework of such organisations enhances employee potential.

(5)Commitment
Employee commitment can be defined as the psychological bond of the employee with the organisation and the degree to which the employee identifies with the organisational goals. Employee commitment is an important factor that determines the success of an organisation. 

Employee commitment is influenced by the following factors:
• Organisational Values: Organisational values influence employee behaviour. If the organisation values employee participation, the employee feels more committed to contribute to the success of the organisation.
• Relationship with Supervisor: If the employee has a good relation with the supervisor, it improves commitment. A supervisor has to share information, provide timely feedback and reward good performance.
• Job Nature: When the job satisfies the employee, commitment increases. Employees given routine or repetitive tasks with no challenges to stimulate them have their levels of commitment decreases. Entrusting employees with responsibility and giving them more autonomy increases commitment.
• Organisational Justice: When employees work in a fair and just environment, their commitment increases. Promotions and wage increments need to be awarded in a fair and transparent manner. Employee grievances also need to be addressed and conflicts resolved immediately.

Increasing commitment is a business necessity. The benefits of gaining employee commitment are as follows:
• Organisational performance is improved.
• Employee motivation increases and this increases productivity.
• Profits increase as sales increases
• Employee retention is increased.
• Cost savings is enabled. Training costs of new employees gets reduced.
• Conflicts in the organisation reduce.

(6)Talent Management and Retention
Successful organisations have an effective employee retention strategy in order to maintain their growth and leadership. Organisations which do not give priority to retaining employees lose them to their competition.

It is much easier to retain satisfied employees than recruit newcomers. Training newcomers to become productive is very costly and requires more effort and resources. Talent can be retained only by enhancing employee motivation and job satisfaction. Figure shows a diagrammatic representation of the factors affecting employee retention.

Figure for Factors Affecting Employee Retention

The following are some of the strategies that organisations adopt to retain their employees:
(i) Employee Motivation with Learning: Employers encourage learning in the organisation. They sponsor employees when they undertake any enhancement courses after agreeing with the employees that they would continue to work for the organisation for a specific time period. These employees can return to the workforce with better qualifications and hence perform better.
(ii) Use Money as a Motivational Tool: Money is a complex factor and its influence on employee retention cannot be defined easily. But it is a fact that money represents purchasing power and employees who earn more are more satisfied than other employees. 
(iii) Brand Building: This is a long-term approach and aims at attracting the best of talents. It requires consistency in operations and good organisation culture to enhance the image of the organisation.

(7)Training
Many organisations have a policy of personal development of employees. Training programs are undertaken by organisations when the results of a performance appraisal indicate that training is essential. Training programs are also undertaken to enable employees to undertake new roles which require more skills. 

The training programs undertaken by an organisation deal with the following:
(i) Communications: People with different languages and customs are employed and they need to be trained in interpersonal communication.
(ii) Computer skills: These skills have become very essential even for routine administrative tasks.
(iii) Quality initiatives: Implementation of programs like Total Quality Management, Quality circles, benchmarking require training of employees in quality procedures, concepts and standards.
(iv) Customer service: Employees need to understand and meet the needs of the customers to stay competitive.
(v) Human relations: Employees are trained to avoid misunderstanding and conflicts and build interpersonal relations.
(vi) Safety: Employees are trained in safety measures especially if they handle heavy equipment, work in hazardous conditions or deal with hazardous chemicals.
(vii) Ethics: Organisations today are more socially responsible. Hence employees are made familiar with the corporate values and morals.
(viii) Sexual harassment: Employees are made aware of what constitutes sexual harassment in order to avoid such behaviour.

Training and development activities contribute to the personal development of the employee and enhance employee engagement. The benefits of having training programs in an organisation are as follows:
• They enhance job satisfaction and improve employee morale.
• They make processes more efficient thus increase productivity and profits.
• They increase employee motivation.
• They improve the corporate image of the company.
• The organisation becomes more capable of adapting to new ideas and technology.
• The organisation has more innovative strategies and ideas.
• They increase employee retention and reduce turnover.

Hence having training programs in organizations is very important. Training programs show the employee that the organisation is truly interested in the personal development and skill enhancement of the employee. The employee in turn becomes committed to the organisation and helps the organisation to achieve its goals.

(8) Benefits Administration
Employees are the most important asset of an organisation. Organisations that practice good employee relations management have many benefits programs in order to attract and retain employees.

The problems in implementing an efficient benefits program arise due to the following reasons:
• The employer is unable to collect key information and verify them.
• The employee is unable to access information about the different benefits program. This increases job dissatisfaction and turnover.

You now know the advantages of implementing a good benefits program in an organisation. Automated benefit systems help both the employers and the employees. Good benefit programs enhance employee retention.

(9) Employee Self-Service
Employees feel empowered when organisations have employee self-service modules to manage personal data. The accuracy of employee information is improved with the introduction of such modules. The administrative workload of the HR staff is also significantly reduced. The following list enumerates the features of an employee self-service module:
• It facilitates creating and updating personal details like name, address, telephone numbers, etc.
• It maintains passwords for security of information.
• It maintains information about emergency contacts, beneficiaries, and dependents.
• It facilitates enrollment in benefits programs. 
• It allows updating of tax related information like exemptions and savings details.
• It allows viewing of salary details like gross pay, deductions made, and net pay.
• It maintains bank related information for direct deposits of salary and reimbursements.
• It allows employees to apply for leave and check for leave balance. Employers can review the leave details of the employees.
• It allows employees to submit details about expenses.
• It allows internal and external job applications. It also permits checking of job application status.
• It facilitates viewing of training program details and enrolment.
• It maintains health and safety records.

The employee self-service module enables employees to manage their personal data. The accuracy of the data improves and the work of the Human Resource staff is also made easier.

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