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Chapter 19: Effective employer/employee relations
The importance of communication in employer/employee relations
Benefits:
- Implementing change: makes it easier because employees and other stakeholders understand and
- Motivation: effective communication encourages a more motivated workforce and develops
commitment to the business from employees at all levels of the organisation
...

- Achieving objectives: good communication helps to ensure that the business is well coordinated
and that all employees pursue the same corporate objectives
...


Barriers to effective communication:
- Barriers to communication occur as a result of noise i
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anything that can interfere with the receipt
of a message, including physical problems or aspects of attitude or culture that get in the way of the
communication
...

Attitudes
- Employees are more likely to have confidence in people they trust, and are therefore more likely to
be receptive, even if such communication includes bad news
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Intermediaries
- The greater the number of intermediaries, the less effective the communication system is likely to
be
...
This means the fewer
intermediaries exist
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Lack of a common language or sense of purpose
- The skills of the sender and the receiver should be appropriate for the message
...

- The terms understood by a certain group of people may be meaningless to those who do not have
this technical or specialist knowledge
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- This increasing internationalism has brought new cultural challenges to many organisations
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Communication and large organisations
- Often becomes more difficult as organisations grow
- Poor communication leads to diseconomies of scale because of reduces motivation, weak
coordination and control difficulties
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Communication overload
- More communication does not necessarily mean better communication
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- This may happen to managers wanting to be kept fully informed of the activities of all their
subordinates
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- At the same time, they may come under great stress as a result of their inability to cope
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Many layers of hierarchy
- As firms grow in size, they tend to add more layers of hierarchy
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- This slows down the decision-making process and makes it more likely that messages will get
distorted or confused
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- Decentralisation reduces the volume of day-to-day communication between head office and the
branches, and thus senior managers more time to consider long-term strategy, while empowering
local managers and encouraging them to be more innovative and motivated
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- In small organisations, this may simply involve employers providing their employees with
information and asking for their views
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- Employee representation may take many forms, including trade unions, works councils and other
employee groups
...

Employee representation and motivation
- Theories of motivation suggest that employees are happier if they feel involved and if their views
are valued by management
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Employee representation and decision making
- Problems can arise from employee representation, as involving more people in decision making
may slow the whole process down
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- Managers may resent the power and influence of workers and the amount of information they are
provided with
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- Representation can be costly in relation to setting up the process and both the actual and
opportunity cost of the time that the workers are involved in meetings
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- The role of the works council is essentially in looking ahead at the company’s plans and in
providing an opportunity to consult and gain ideas or improvements from the shop floor
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- The European Works Council Directive requires that large companies operating in two or more EU
countries must set up European works councils
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- EWCs usually meet once a year and is made up of at least one elected representative from each
country plus representatives of central management
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- Most commentators agree that the process is worthwhile and encourages two-way
communication
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Trade unions
- Modern trade unions tend to be categorised according to whether they have more open or more
restricted recruitment policies
...

- More open recruitment policies tend to be associated with larger unions that seek members
regardless of their jobs or industries, or those that recruit from a wide variety of related industries,
such as the public service industries
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What do trade unions do and how do they benefit employees?
- The main functions are negotiation and representation
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- Trade unions also represent individuals when they have problems at work
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- Trade unions also offer legal representation
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Do trade unions benefit employers?
- In general, trade unions benefit employers as well as employees:
- They provide a valuable communication link between senior managers and the workforce that
has not been filtered by middle managers
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- A strong union may encourage management to take workers’ needs seriously and may thus
improve employee morale, which in turn may have a positive influence on productivity
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- The privatisation of major utilities, reducing the number of employees in the public sector
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- An increase in the proportion of the workforce employed by small businesses, many employing
fewer than ten workers, where it is often difficult for unions to organise
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- Improved employment rights for individuals and greater employee participation in the
workplace, causing people to feel that unions are less necessary
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- The overall decline in trade union membership has reduced the power of trade unions generally
...
g
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Industrial disputes and industrial action
- Most collective bargaining takes place quietly, away from media attention
...
This can be resolved by successful
conciliation or arbitration
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- Work-to-rules, go slows and overtime bans are similar in their impact on employees and the firm:
- In a work-to-rule the workforce applies the employers’ own rules and procedure ‘to the letter’
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- An overtime ban can only be effective if a significant proportion of work in a key section is done
on overtime
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- Employers can also take industrial action by withdrawing overtime, introducing a lockout, changing
standard and piecework rates, closing the business and dismissing workers
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- Single-union agreements have sometimes added no-strike agreements
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- A non-governmental body that is fully independent, impartial and confidential
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- Only becomes involved if both sides believe ACAS can help them make progress in the dispute
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The role of ACAS can involve:
- sorting out the issues
- finding common ground between the two sides
- giving people the space to calm down and see the problems from the other side too
- having meetings with each side separately and together to discuss and explore the issues, and
then starting to negotiate a solution
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- ACAS advisors give guidance on topics such as discipline, dismissal, contracts and layoffs
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- A number of other organisations contribute to the avoidance or resolution of industrial disputes,
including the TUC, employers’ associations and the CBI, each of which is discussed below
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- The Confederation of British Industry (CBI) performs a similar role to the TUC
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- Its main functions are to:
- lobby the government in order to influence legislation and economic policies favoured by the
private sector
- promote the image of industry as a worthwhile career
- provide its members with well-researched reports, such as the CBI’s Quarterly Survey of
Economic Trends
- The CBI works with the TUC on consultative bodies such as ACAS
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- According to the TUC, a strong sense of worker participation in decisions, often coordinated
through trade unions, seems in recent years to have enhance business performance
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- This has given rise to the concept of partnership, where unions and employees work together
with an open-minded management to generate positive change and growth for the business

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