“ir and hrm: working in harmony for improved...

“IR AND HRM: WORKING IN HARMONY FOR IMPROVED

LABOUR MANAGEMENT CO-OPERATION”

DANNY ROBERTS, CD, MPhil (Govt)Director, HLS Trade Union Education

Institute, Consortium for Social Development and Research, Open

Campus, UWI

Presentation Framework

• Examine:

1. General perceptions of IR and HRM

2. The Environment and IR and HRM (both the general and tasks environment)

3. Scholarly definition of IR and HRM

4. IR & HRM: Contextual framework for co-existence

5. Some concluding remarks

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General perceptions of IR and HRM

• Generally perceived to be a conflict between Industrial Relations and Human Resource Management

• IR is said to becoming irrelevant, particularly with the decline of trade unions and a focus on individualism

• Emphasis on wages and salaries• Too conflict oriented• IR is a subset of HRM



• HRM practice is said “to utilize human resources as a means of achieving competitive advantage”

• Its aim is not to secure compliance but to win commitment

• Employee resources are worth investing in – training and development assumes a higher profile

• Focus on flexibility and the reward of individual performance

• HRM is linked to strategic objectives of organisation24/05/11 Danny Roberts 4


• Argue the HRM is anti-union. Established models of HRM are found in non-unionized workplaces

• Union officials in Canada noted that “management attempts towards employee involvement, and demand for greater flexibility in work arrangements are nothing but a ‘misguided desire for a union free environment’”



• In Britain unions view HRM as “a set of policies, practices...designed essentially to ‘individualise’ industrial relations, and thus circumvent the unions and weaken individual membership commitment and loyalty to the union”


The General and Tasks Environment

• To appreciate the role, purpose and relevance of IR and HRM we have to look at the influence of the external environment

• Every company is now open to global competition - provides for new competitors, customers, suppliers and shape social, technological and economic trends

• The scientific and technological advancements which have been made globally



• Important sociocultural characteristics -- consumer markets influenced by geographical distribution, population density, age, education levels

• To maintain global competitiveness and increase productivity organisation has to be flexible in terms of employment, job function, pay and working time

• Require a flexible, educated and skilled workforce



• Globalization has forced companies to be flexible in relation to forms of employment, job function, pay and working time --- regarded as core tenets of HRM

• Flexibility and skills of the workforce must be improved to obtain higher levels of competitiveness

• Context in which we talk about ‘the new workplace’– how we shape and manage our internal environment



• New workplace will have to be governed by two elemental and traditional factors:

• 1. employment relationship• 2. labour problems• It is the management of these two issues that

will provide the backdrop for our examination of IR and HRM


Scholarly Definitions

• “Industrial Relations” has developed both a broad and narrow meaning. Originally, the term included the totality of relationships and interactions between employers and employees.

• This included all aspects of the employment relationship.



• “Industrial relations” emerged as an academic field of study in the 1910s as a result of the growing labour problems.

• IR focused on studying the problems and exploring alternative methods of resolving them

• In IR three types of solution were identified by social scientists.



• (i) “employer’s solution” – personnel management; (ii) “workers’ solution” – trade unionism and collective bargaining; (iii) “community solution”- government enacted social legislations (e.g. Social security, minimum wage).

• IR therefore broadly conceived to cover all three types of solution to labour problems.



• Since mid-20th century attempt to give IR a more restrictive focus, equating it with unionised employment relationships.

• This view limited industrial relations to the study and practice of: collective bargaining, trade unionism, and labour-management relationship.



• “Industrial Relations” broadly defined “deals with the relationship encountered by working people in their working lives.” [Green (1992)].

• Salamon (2000) “Industrial relations encompasses a set of phenomena, both inside and outside the workplace, concerned with determining and regulating the employment relationship.”



• Industrial relations --• Essentially collectivist and pluralist in outlook;• Concerned with the relationships which arise

at and out of the workplace;• Involves the processes through which these

relationships are expressed (collective bargaining, worker involvement in decision-making, grievance and dispute settlement).



• Focuses on the management of conflict between employers, workers and trade unions.

• Relationships and processes are influenced by the govt. and its agencies through laws, policies, institutions and programmes;

• IR policies, legal and institutional framework are developed through bipartite and tripartite consultation and co-operation.



• IR outcomes are a series of rules which apply to work. Establish employment conditions covering hours of work, leave, social security, termination of employment.

• Rules define the roles and responsibilities of the parties, individually and collectively, through labour agreements, legislations, decisions of courts and arbitration, enterprise work rules.



• IR plays a crucial role in labour market by intervening to ensure: (i) the right to participate in broad decisions which affect employment relationship issues; (ii) the function of freedom of association and collective bargaining redress the balance of power between “labour” and “capital”; (iii) to prevent labour exploitation (sweated and child labour).



• IR is “an academic subject and field of study broadly defined to include the study of all aspects of the employment relationship, including labour economics, labour history, personnel/human resource management, organisational behaviour, collective bargaining, industrial/organisational psychology and industrial sociology.”

Robert’s Dictionary of IR



• IR remains the collective aspects of relations between workforce and management. Spans the dual problem of social welfare and social order

• Where relations at the workplace are good, company prospers. Where relations are bad, company suffers.



• IR has become multidisciplinary – draws on law, economics, history, sociology, psychology, organisational behaviour.

• IR is multifaceted – covers subjects ranging from individual relationships at the office to matters of national and international importance.



• Human Resource Management (HRM), concept which came of age in the 1990s.

• Multidisciplinary and interdisciplinary elements combined.

• HRM linked to strategic management – since competitiveness linked to quality of workforce



• HRM involves “all management decisions and actions that affect the nature of the relationship between the organisation and its employees.” (Beer et al, 1984).

• According to Michael Poole in HRM: Critical

Perspectives on Business & Management (2002), rise of HRM is based on the following:



• i) Globalisation – concerns about motivation and commitment of workforce;

(ii) Shifting power balances in IR system – reducing influences of govts. And trade unions;

(iii) technological changes – required changes in skills and aptitude to work;

(iv) diverse workforce – cultural diversification, internationalization of capital, workplace.



• “ the activities within a given firm that deal with the recruiting, selecting, appraising, rewarding and developing of employees (including managers), as well as negotiating with labour unions. Our subject matter is those activities that relate to people within the firm, rather than activities that deal with finance, engineering, marketing or accounting." Peterson and Tracey in their book ( Systematic Management of Human Resources, 1979)



• "those policies and practices, applied within the firm, which constitute a break with the past, and which are often associated with words like commitment, individualism, competence, empowerment, motivation, satisfaction, flexibility, culture, performance, assessment, appraisal, reward, teamwork, involvement, cooperation, harmonization, quality, learning, and loyalty, as applied to the management of employees."


Scholarly Definition

Human Resource Management• Essentially a bipartite process, not involving

the State;• HRM is focussed at the enterprise level and

seeks to align the interests of managers, and workers around corporate objectives;

• Co-operation is designed to achieve competitive advantage in the marketplace;


Scholarly Definition

• The values underlying HRM policies and practices are essentially individualistic;

• Primary concerns are worker commitment, efficiency, innovation, workplace flexibility;

• Focus on staff selection, training, motivation, and intrinsic and extrinsic rewards to improve performance.



• “HRM presents a challenge to IR because it can operate to undermine the role of trade unions at enterprise level by emphasizing the primacy of the relationship between managers and individual workers.” (Industrial Relations and Globalisation: Challenges for Employers and their Organisations, David Macdonald)


Contextual Framework for co-existence

• Let’s examine some hallowed, normative principles that should guide working relationship in the new workplace

1. Fundamental principle that labour is embodied in human being and is not a commodity

2. Stability, efficiency, productivity, competitiveness3. Human values – equity, justice, fairness4. The dignity of work and those who perform it



5. Sense of ownership, genuine and meaningful consultation and communication

6. The building of trust between the partners

Both IR and HRM find consensus in these principles. But for the varying, something conflictual perspectives

of IR and HRM to be removed ---

(a) some theoretical misconceptions have to be debunked

(b) new and different practices have to be adopted



The notion that workplace relationship is based on “perfect unitarism” is utopian

The perspective, in a globalized world, which continues to be fundamentally mis-specified because of the emphasis on the role of the organisation and management

A re-definition of the term ‘management’ away from the notion of a superior-inferior relationship between management and workers



• Frances Coke, in Cowell & Boxill’s Human Resource Management: A Caribbean Perspective , page 13 said:“every definition of management which has become legendary places managers and workers in a context which implies that one is active and the other passive. Managers must lead, guide, motivate, coach, train, reward, punish, rehabilitate workers, while the latter repose as passive beneficiaries of all these wonderful activities



Managers should no longer operate as “industrial monarchs” with the right to hire, fire and pay as they see fit

Both management and workers have an equal and legitimate right to seek to protect what they perceive as their interests and to secure their objectives

Without collective organisation and representation, employees are unable to influence and regulate the employment relationship



The willingness of management to accept employee influence, whether through collective bargaining or other forms of participation, in areas previously regarded as ‘managerial prerogative’

Unions to accept joint responsibility in areas where they have previously preferred to reserve their right to challenge management’s decision



An acceptance by workers that in the final analysis, after the consultation, the decision rest with management --- management decisions not based on a majoritarian principle

Trade union representation should not be seen as a licence or right to be obstructionist and confrontational

Industrial action, although necessary, should be an act of last resort



• Examine the world’s most successful company against the background of the normative principles, and the focus of IR and HRM in the context of ---–

(a) the employment relationship

(b) the labour problems which are evident in the pluralist as against the unitary model of workplace relationships



The world’s most successful company ---a. Unionizedb. Organisational behaviour is based on the

‘collegial model’c. Invest corporate profits in its employeesd. Get work done by stop watching the clocke. Its CEO says “the key to management is to get

rid of the mangers” --- on his first day as CEO he fired two-thirds of the top management



• SEMCO SA, a Brazilian company run by Ricardo Semlar... Revenue grew from US$4 million in 1982 to US$212million in 2003.

• During the economic crisis of the 1990s the management met with workers and agreed to –

1. Cut in salary, and an increase in profit-sharing to 39% of net income

2. A 40% salary cut for managers3. The right of workers to approve every

expenditure at Semco


Concluding Remarks

• John Purcell in The challenge of human resource management for industrial relations research and practice, said that ---“The danger of descriptions of HRM as a modern best managerial practice is that they stereotype the past and idealize the future”

Ms. K. Legge in Human Resource Management: A Critical Analysis noted the following...


Concluding Remarks

• “The use of the label HRM is no more or less than a reflection of the rise of the ‘new right’...our new enterprise culture demands a different language, one that asserts management’s right to manipulate, and ability to generate and develop resources... The language of ‘tough love’ seeks to co-opt the assent of both those who suffer as well as those who may benefit from its effects.”


Concluding Remarks

• If genuine participation is to take place and workers feel a sense of equal value at the workplace , then HRM can no longer be represented as --- “both the product of and cause of significant concentration of power in the hands of management” [Purcell, op. cit, p.517]

• In his 1991 doctoral dissertation, Field of Dreams from the University of Oxford, H. Newell said...


Concluding Remarks

• Bruce Kaufman in The theoretical foundation of industrial relations and its implications for labour economics and human resource management, [Industrial and Labour Relations Review, Vol. 64, No. 1, October 2010], said that ---

• “IR encompasses all aspects of work, the structure, management and governance of the employment relationship, and the quality of work life, as well as all the behaviours, outcomes, and problems that arise from employment.”


Concluding Remarks

• Once we are able to see HRM as a sub-set of IR, and remove the perceptions and perspectives that negatively impact both, there should be harmonious co-existence , with the IR solution to workplace competitiveness seen as substantively the “re-balancing of the institutions of capitalism in order to bring about more stability, efficiency, justice and human values to the employment relationship.” [ Kaufman, ibid, page 76]


THANK

YOU24/05/11 Danny Roberts 46

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