The purpose of this report is to examine the impact of employee relations in the workplace. An American furniture company – Furniture-Co is planning on opening six new stores across the South West of London, employing 800 people. In order to write this report for the Chief Executive it is necessary to investigate the employee relations system in Britain and to make recommendations about which system of employee voice should be used in the new stores.
As per the policy in their American stores, it will be necessary for Furniture-Co to set up an employee forum which each of the stores will send two employees to represent the store. Any issues of concern can be raised on a monthly basis. There will also be weekly team meetings in each of the stored to keep paths of communication open, so that employees can be kept up to date on business performance as well as allowing an open forum for views, questions and concerns. The main reason why the Chief Executive wishes this report to be carried out is to make recommendations as to an appropriate and effective system of employee voice to be implemented as this is key to employee relations within the UK.
In order to complete this report it is necessary to investigate a number of factors and issues which will be raised in part one which will give an overview into the British employee relations system. This will include the historical role of the system and how trade unions have come to have such important in the employee relations system. It is important to the rest of the report that these issues be investigated and evaluated as this is the information which needs to be disseminated before the discussion can take place in part two.
Part two of the report will take the form of a discussion and evaluation of any proposed arrangements would work. It will be here that recommendations for implementation will be made to the Chief Executive of Furniture-Co. There will be a discussion with regards to any proposed employment policies and how employee voice can be used to appropriately communicate any concerns, views and questions about the organisation and its strategy. It would also be necessary to evaluate how well trade unionisation would work in the new stores and to make recommendations according to these.
Part one: Overview of the British employee relations system
Part one of this report gives an overview of the British employee relations system and how it affects organisations through the trade unionisation of the employee. The main topic which will be discussed is employee voice and how this affects all of those involved in the employee relations process. However, before this can be discussed it is necessary to provide a background to the historical role of trade unions and how they manage the employee relations system. It is also vital to discuss the trends in union density and collective agreement as well as evaluating the key causes and influences which account for the trends in union density. Once this has been completed, it will be required to have a discussion of the evaluation and to make recommendations to how Furniture-Co can take this process forward.
Historical role of trade unions in the management of employee relations
Employee relations is a term which replaced the term industrial relations. It is the relationship between employers and employees and has become extremely important in the non-industrial employment relationships within the field of human resource management. Theory would dictate two distinct concepts – the definition of human resource management which includes employee relations and the concept that employee relations deals with non-unionised workers. Kaufman (2008) believes that many academics regard trade unionism as a core subject in the field of employee relations. The concept of employee relations as field of study began as being rooted in the industrial revolution thus the name – industrial relations. . It has created the modern day global employment relationship which has initiated the free labour market. Many labour problems arose at the period of time due to social and economic changes, long hours and low wages with dangerous working conditions led to high worker turnover, social instability and strikes. The study of industrial relations was born out of a problem solving generation which rejected the theories of the time.
Kaufman (2008) believes that the field of employee relations is in decline and that there are numerous reasons for this decline. The most important reason can be seen as steady erosion in the union density of many countries. The study of employee relations is important to how trade union and labour relations are examined. Industrial relations in the 1960’s and 1970’s was notorious for disputes and walkouts, so much so that it was a problem which had been identified as weakening the UK’s economic power. The economic situation in the 1980’s and 1990’s changed the field of employee relations with recession, restrictive legislation and organisational restructuring.
Trends in union density and collective agreement
It is important to investigate the trends which have been prevalent in union density and collective agreement before a discussion can take place into Furniture-Co and the employee voice. It is important to investigate the long term trends in trade union membership. According to Brownlie (2011) in 2011 there were around 6.4 million employees who were members of trade unions in the UK. This figure was down by 143 thousand in 2010 and was the fourth annual consecutive fall. This has followed stability in trade union membership levels between the years of 1995 and 2007. The trade union density in the UK for employees had fallen in 2011 by 0.6 percentage to 26% in comparison to 2010. This meant that the total number of employees in the UK fell by a percentage of 0.3 down to 24.9 million. There had been a downward trend from the years 1995 to 2011, identifying a decline in 1995 from 32.4% to 29.8% in 2000 to 28.6% in 2005.
In comparison to the long term trends it is necessary to identify trade union members in the public and private sectors. This membership showed a rise in 2011 by 450 thousand to 2.5 million. This figure had sharply fallen in the previous three years. Public sector memberships had fallen in 2011 by 186 thousand to 3.9 million. This figure had been stable over the previous six years. The membership density of the trade union rose in 2011 by 0.2% points to 56.5% but those non-members fell at a sharper rate than union members.
It is also necessary to understand the personal characteristics of union density. It would seem, according to Brownlie (2011) that there is a higher density of female members for the tenth successive year. Most professional occupations are higher than those who come under the category of managers, directors and senior officials. In the UK those employees of UK nationality is higher than non-UK nationals.
Evaluation of key cause or influence accounting for these trends
Brownlie (2011) identifies that the membership of trade unions peaked in 1979 and declined quickly throughout the 1980’s and early 1990’s. A stabilisation of the figure was identified in the mid 1990’s and this trend continued. There is evidence, according to Brownlie (2011), that there has been a decline in the last couple of years.
The identification of falling trade union membership in the UK from 1989 to 2011, can account for these trends is the churn of the workforce as older employees retire and younger employees enter the workforce. This can be seen in the figures from the 1990’s to 2007 were particularly stable levels of trade union membership amongst the employees and those in employment. Another cause can be seen as the effects of recession on the membership of trade unions. The recession of 1989 – 1992 and the current recession shows that membership has fallen but figures fell significantly more in 1989 – 1992. Figures which have been identified by Brownlie (2011) show that the decline in membership between 1989 – 1992 was 1.7 million while the current recession (2008 – 2011) has shown a fall of 7% with 482 thousand.
Current levels of union density in London
It is important to discuss the current levels of union density in London. This is important to this report as Furniture-Co wish to expand their business in London by six retail units so there would be a need to cover this in the report to the Chief Executive. Region wise, London has one of the smallest density in the UK. London and the South West have the lowest density (London – 20.6%, South West, 20.7%). Within the UK membership levels have declined in England by 535 thousand, while Scotland (95 thousand), Northern Ireland (17 thousand) and Wales (8 thousand). London has density levels of under 25%. Overall trade union presence has fallen, with Wales having the largest percentage of employees with a trade union presence. London also had the smallest collective agreement coverage at 24.2%.
Part two: Discussion and evaluation of how well the proposed arrangements would work
This part of the report will look at the evidence which has been presented and to evaluate and discuss the proposed arrangements. Within this context it is necessary to understand the concept of employee voice and how this impacts on the performance of the organisation as a whole. There has been numerous studies undertaken on union and non-union voice, these can be seen in the academic work of Benson (2000), Dundon et al (2002), Gollan (2001), Lloyd (2001) and Pettinger (1999). The voice of the employee has been challenged through recognition and representation from the unions. There is a massive gap between the actual and desired level of employee representation and the gap has been narrowed due to the growth of non-union as well as the direct forms of employee representation.
Freeman & Medoff (1984) state that the union is a mechanism which is key to the improvement of performance of the employee, that it has the ability to stabilise the workforce and reduces inequality in the economy. However, through the focus of human resources management and its successful emergence has placed more emphasis on the sharing of information, employee participation and collective decision making, according to Benson (2000). In addition, Guest (1987) believes that the role of unions is unnecessary and ambiguous with the emergence of human resource management practices.
In this context, Furniture-Co need to make recommendations through the use of employee voice but it is dependent on the representation which it wishes to use. The necessary identification of a union or non-unionised employee voice is applicable and should be further investigated. There would be benefits to both voices but these should be managed according to the business environment. Employee voice should be defined as the ability to express complaints/ grievances and the ability for the employee to participate in the organisational decision making process. The ability of the voice to take a joint role in consultation allows both the employer and employee to recognise the necessity of the performance of the employee. If Furniture-Co is to be successful it is implicit that the voice of the employee cannot and should not be ignored. Furniture-Co has already acknowledged the need for employee voice but it is how this voice will be best perceived within the organisation and how it can be taken forward.
The recognition of the voice of the employee can affect the performance of the employee through their quality of production and it could also help counter problems which may arise. Dissatisfaction which can arise in the organisation could be directly resolved through employee voice. It has been established that dissatisfaction and employee turnover (Spencer, 1986) has been directly related to how the employee is empowered by their voice. If an employee can voice their opinion they are more likely to remain in their current position.
Recommendations which can be made to the Chief Executive in relation to employee voice would be the suggestion that they attempt to keep it non-unionised. Once unions are involved there can be complex issues with HR policies and wages etc. Such issues which could be made are the pay rates, the pension scheme, hours of work, and training. However, with these issues there a generous package which includes a higher than average starting wage of ?8.50 an hour (?2 more than the average), all staff having access to the pension scheme, a standard 37.5 hours per week working hours and all staff will be provided with training at the start of their employee with further opportunities.
As far as non-unionised employee voice can be identified, this seems to be the approach which would be favoured by the organisation as it is already set up in their American stores. Joint Consultative Committees are one form of this process which would be beneficial to the organisation due to the fact that the stores would send two representatives to the monthly meeting to air any grievances or successes which they have identified. This also allows for collective bargaining within the organisational context.
It is important that any suggestion for employee voice can allow the employee to voice their opinion in a transparent environment. In order to use this effectively within Furniture-Co, it is necessary that trade unions are kept out of the organisational process. As this organisation is private sector, there is no obligation in the UK for the organisation or its employees to join a union. If the organisation adopts the policy of non-unionisation one major flaw may be that there is no outside authority to lend their advice to any internal disputes. These disputes may be handled appropriately within the organisation it may sometimes be better to have an outside body to help control any disputes which may break out. The Chief Executive has expressed that the model they wish to follow would send two employees from each store to a monthly meeting and this could be better operated through non-unionised employee voice.
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Appendix One: Meeting Log
Appendix One: Meeting Log
Team NumberDate of Meeting (Monthly/ Day)
Meeting LocationNo of Group Members
All Members Must Sign off to Verify Attendance. Each Delegate Should Sign in the Boxes Below
Month One/ Date
Sign BelowMonth Two/ Date
Month Three/ Date
Sign BelowMonth Four/ Date
Month Five/ Date
Sign BelowMonth Six/ Date