CASE STUDY

New developments in the industrial relations and human resource management have moved management and employee bargaining down to the level of the firm. In doing so they have generated a growing level of interest in the conduct of employment relations, not just at the level of specialist managers, who have traditionally had the responsibility for dealing with issues in this area, but across management as a whole. There is thus a growing need for managers to place more emphasis on achieving a greater symmetry between commercial objectives and employment practices

Defining Employment Relations In so doing, it is first useful to look at what constitutes the definitional characteristics of the term employment relations. And to this it can only be said that considerable and on-going debate has been over the meaning of the term (see: Teicher, Holland & Gough, 2002, p. 3). One needs only ask scholars in related fields such as industrial relations, human resource management, industrial psychology, industrial sociology, labour economics, labour law and labour history to appreciate how the term employment relations is used in a variety of ways and contexts. The American HRM literature, for example, frequently refers to it when describing the corpus of HRM functional activities and associated interactions that exist between individual employers and employees at the level of the workplace. Used in this way it is typically held to describe something quite different to older forms of personnel management and industrial relations (see, for example: Beardwell & Holden, 1994).

The British HRM literature, however, tends to apply a wider meaning that goes beyond the workplace, covering in its most extreme manifestation the type of interactions that can take place between the state, employer associations and organised labour. Employment relations conceived in these terms not only involves the micro-level relations that take place between individual managers and employees, as is predominantly the case in the American use of the term, but also the macrolevel interactions that take place between extraneous institutions set up to govern such relations (see, for example: Gennard & Judge, 2002). The notable thing about references made to wider institutional settings in the British usage is that these are areas that have traditionally fallen within the province of industrial relations scholarship. What most British literature in fact does is use the term in two senses. It uses it first as a normative and unitary concept to describe the functional activities and interactions of HRM. In other words, it replicates the orthodox American usage. The employment relationship in this usage is simply the sum of prescribed functional activities and interactions that are expected to manifest themselves in the form of collaborative interactions between managers and employees, in the flexibility, skill and loyalty of employees, in the absence of workplace conflict and trade unions, in the high performance outcomes of firms, and so on.

The literature uses the term secondly as a positivist and pluralist concept when describing the existing institutional and regulative settings in which the functional activities and interactions of HRM take place. This second usage is a simple recognition that trade unions and state intervention in the form of substantive labour laws and industrial tribunals are an inescapable part of the British workscape a part not so apparent in the United States (and so also the American literature). Applied in this way the employment relationship takes on a different meaning that acknowledges the plurality of group interests and the potential for workplace conflict, the manifestation of which is typically revealed in dispute settlement and negotiatory procedures that determine the formal rules and regulations, informal customs and practices, which govern the relationship. This dual use of the term is apparent in much of the wider (West) European literature. Early chapters dealing with the functional activities of HRM invariably portray the employment relationship in terms of its unitarist and normative characteristics, whilst later chapters (usually only one or two at most) are typically devoted to trade unions, industrial courts and legal matters, where the employment relationship is portrayed more in terms of its pluralist and positivist attributes.

This duality is hardly surprising. Most (West) European countries have legally protected trade union movements that cannot be easily ignored or suppressed. What is surprising is that this duality is rarely acknowledged, which may have something to do with the seeming paradox any such recognition would seem to present. How, for example, can an employee be committed to the objectives of an organisation (a core functional outcome expected of HRM practices) and at the same time be a member of a trade union? Or how can the functional flexibility of a firm (another expected outcome) be squared with multi-unionism and associated skill demarcations that often exist between jobs and union territoriality? (Legge 1995, p. 247). The answer to these and similar questions has so far involved little more than changing the definitional criteria of employment relations to suit the particular subject matter being discussed. This is a wholly inadequate use of the term, and this is not the place to resolve the problem. For present purposes we can simply define the functional activities and associated interactions of HRM as constituting the employment relationship, but only in so far as the sum of such actions occur in workplaces where there are no dual loyalties and internal conflicts, and where there is little or no outside interference in the way a firm decides to manage its employees. In workplaces where these characteristics are in evidence, by definition the functional activities and interactions can only be held to operate within a pluralist frame of reference (see below). In such cases, the employment relationship can again be taken to include all the functional activities and associated interactions of HRM, but under such circumstances the outcome of such activities and the behaviour of those involved are regarded as being contingent upon the influences and constraints imposed by internal and external institutions set up to regulate the relationship. Seen in this way we can move to suggest that because the terms and conditions of employment for the vast majority of British and European workers are regulated through the agency of trade unions, industrial tribunals, industrial courts, and the like, that it is a pluralist frame of reference and meaning of the term employment relations that is most pertinent. This being the case, it is from the field of industrial relations scholarship that the remainder of this paper is principally drawn.

QUESTION 2 (15 Marks)

Macro environmental factors influence the labour employee relationship. Discuss the economic perspective and how it relates to some macro factors in the labour employee relationship.