Employee Relation

Employee relations is a study of the rules, regulations &agreements by which employees are managed both asindividuals and as a collective group, the priority given tothe individual as opposed to the collective relationshipvarying between companies depending on the values ofthe management.

It is concerned with how to gain people’s commitment tothe achievement of the organization’s business goals &objectives in a number of different situations.

Employee relations management is about ensuring thatorganizational change is accepted and thenimplemented.

Attitudes to work and relationships at work have certainly

changed since the late 1970s.

The reason for this have been increased competition,

reductions in international trade barriers, public sector

financial constraints, pressures for higher value-for-

money, rapidly changing & easily transferable technologies

and customer demands for products and service

increasingly customized to their needs.

Advantages of employee relation:

raising the skills of their employees

providing high quality services and products

giving excellent customer service

These in turn generate high profits, high earnings & arelatively more secure future for employees.

Employees Relations: Meaning

‘Employee Relations’ refers to the interrelationships,both formal and informal, between the regulation of therelationship principally by means of collectivebargaining. managers and those whom they mange.

Thus, employee relations have a wider scope than‘industrial relations’. The employee relations areconcerned with all aspects of the interrelationshipbetween management and employees and ‘industrialrelations’ is confined to

The ‘employee’s relations’ is usually confined to:

1. The contractual obligations between employer and

employee

2. Communications policy & practice

3. Joint decision-making

4. Joint problem-solving

5. Collective bargaining

6. Individual grievance, disciplinary policy & practice

The components of employee relations:

1. Players

2. Mechanism

3. External environment

4. Bargaining power

Employee relations systems in an organization have anumber of components. First there are the ‘players’ inemployee relations activities. These players are:

1. individual employers

2. individual employees

3. employee representative bodies (staff associations,

trade unions, work councils etc)

4. employers’ associations

5. public bodies

These players operate in a labor market in which they attempt to protect and advance their respective economic interests relative to each other.

Employees in the labor market have interest that is different from the employers, both have a common interest in the survival of the employing enterprise.

They have a mutual interest in resolving the problem because not to do so will result in mutual destruction.

The employee relations ‘players’ also have expectations of how each will behave towards the other. This is referred to as the ‘psychological contract’, a set of unwritten reciprocal expectations between an individual employee and the organization.

These are job satisfaction, career progression and reward, relationships with managers, wellbeing (employment security, skill development etc) and technology upgrading.

Second, there are mechanisms available to the buyersand sellers of labor services by which will govern theemployment relationship and at the same timeaccommodate their different economic interest. Thesemechanisms include:

consultation

employee involvement and participation

communication process

collective bargaining

legal regulation

The third component is the external environment.The selling & buying of labor services also takes place inthe context of an external environment. The Omanigovernment sets minimum standards of behavior for thebuyer and sellers of labor services.

Employee relations system is also influenced by thebalance of bargaining power at the sector andenterprise level. If a group of workers who have thepower to stop an organization’s activities are willing toexercise that power and have exercised it successfully inthe past, they will have a relatively greater bargainingpower. This is the fourth component of employeerelation.

How employee relation is viewed by:

1. Managers

2. Trade unions

3. Individual employees

4. Third parties

Managers tend to see employee relations in terms of thefollowing activities:

1. Creating & maintaining employee motivation

2. Obtaining commitment from the workforce

3. Establishing mutually beneficial channels of communication all over the organization

4. Achieving high levels of efficiency

5. Negotiating terms & conditions of employment with employee representatives

6. Sharing decision-making with employees

7. Engaging in a power struggle with trade unions.

Trade Unionists tend to see employee’s relations as:

1. Collective bargaining about terms & conditions of

employment

2. Representing individuals & groups of individuals in

conflict with their management

3. Improving the ability of employees to influence events

in the workplace

4. Regulating relations with other trade unions

Individual employees tend to see employee relations interms of the opportunity to

1. Improve their conditions of employment

2. Voice any grievances

3. Exchange views & ideas with management

4. Share in decision-making

Third parties such as Government ministers, arbitrators,judges & civil servants may see employee relations more interms of:

1. Creating & maintaining harmonious relationships atwork

2. Creating a framework of rules of fair conduct inemployer-employee relations

3. Representing the community as a whole in dealing withthe repercussions (results) of internal conflicts ofdecisions made within individual organizations

4. Establishing peace-making arrangements to deal withbreakdowns in employer-employee relations

5. Achieving a prosperous society with justice.

Reconciliation by means of Processes leading to

Agreements that reflects the balance of bargaining power

between buyers & sellers of labor as influenced by the

economic and legal policies of governments, and the

implementation of technological change.

Refer diagram.

Third-party intervention:

In situations where the employer and employees areunable to resolve their collective differences, theymay agree voluntarily to seek the assistance of anindependent third party.

It can take three forms:

Conciliation

Mediation

Arbitration

Conciliation:

In conciliation, the role of the third party is to keep two sidestalking and assist them to reach their own agreement.

Conciliation is a dispute resolution mechanism whereby theparties to a dispute (including future interest disputes) agreeto utilize the services of a conciliator, who then meets withthe parties separately in an attempt to resolve theirdifferences.

He does this by lowering tensions, improvingcommunications, interpreting issues, providing technicalassistance, exploring potential solutions and bringing about anegotiated settlement.

The conciliator acts as a link between the disputing parties.

The conciliator does not impose any action or decision on theparties.

Mediation:

Mediation is a way of dealing with dealing with conflict or disputesthat aims to enable the parties involved to reach an agreement thatsatisfies everyone.

A mediator listens to the arguments of the two sides and makesrecommendations on how their differences might be resolved. Theparties are free to accept or reject these recommendations.

The process is totally voluntary and no one can be forced to takepart.

Mediators are impartial and won’t take sides, make judgments orlay blame.

The mediation process is totally confidential and no informationgiven by either party will be shared unless permission is given.

Any agreement reached can be informal and voluntary or theparties can choose to make it formal by having a legal documentdrawn up based on agreements reached in the mediation.

Arbitration:

Arbitration removes from employers & employees control over thesettlement of their differences.

The arbitrator hears both sides case and decides the solution to theparties’ differences by making an award.

Both parties having voluntarily agreed to arbitration are morally obliged,but not legally bound, to accept the arbitrator’s award.

In Oman, Article 96 of Labor Law states that unsolved disputes could referto arbitration. The arbitration will be composed of:

1. A representative of H.M. who has no connection with the two parties

2. A representative of the employer member

3. A representative to the board appointed by the minister

4. A secretary to the board appointed by the minister.

The board has the right to call a witness, appoint experts, and inspectplaces & documents and so on. The decision reached will be binding onboth the parties.

Industrial sanction:

The use of industrial sanction is generally a lastresort because it is costly to both sides to imposethem on each other.

The main sanctions available to the employer are:

1. closing down the factory

2. relocating operations to another side

3. dismissing employees who participate in industrial

action

The main industrial sanctions that employees can impose on employers are:

1. a ban on overtime

2. working to rule

3. imposing a selective strike

4. calling an all-out strike

Employee Involvement and Participation

Employee involvement

Employee involvement covers a wide range of practices.These are initiated by the management and are designedto increase employee information about, &commitment to, the organization.

Employee involvement concentrates on individualemployees & is designed to produce a committedworkforce more likely to contribute to the efficientoperation of the organization.

By introducing employee involvement mechanisms,management seeks to gain the consent of the employeesto its proposed actions on the basis of commitmentrather control.

Employee participation

Employee participation concerns the extent to which

employees are involved with management in the

decision making machinery of the organization.

This includes joint consultation, collective bargaining

and worker representation on the board.

It is management who makes the final decision as to

whether employees are to be involved and to participate

in management decision making.

The decision whether to accept or reject the views of the

employees rests with the management.

The aim of employee involvement & participation:

Increasing international competition and technological change in the last 25 years have meant that higher skills and far

greater flexibility are required of the employee. In this changed environment, a commitment strategy towards the

workforce is required. A commitment strategy involves dispensing with whole layers of management and minimizing status

differentials so that control depends on shared goals and expertise rather on a formal position that carries influence with it.

Under an employee commitment strategy, performance expectations are high, to emphasize continuous improvement and to

reflect the requirement of the market place. No organization in today’s modern world can perform at peak levels unless each

employee is committed to the corporate objectives and works as an effective team member.

There is clear evidence that employees want to be part of a successful organization which provides a good income and an

opportunity for development and secure employment.

The involvement of and participation by employees in any organization should aim to:

● generate the commitment of everybody to the success of the organization

● enable the organization better to meet the needs of its customers and adapt to changing market requirements

● help the organization to improve performance & productivity and adopts new methods of working to match new technology

● improve the satisfaction employees get from their work

● provide all employees with the opportunity to influence and be involved in decisions which are likely to affects their interests.

Management must also demonstrate a commitment to its employees in terms of:

● Job security

● Pay and other employment conditions (single status)

● Access to training and retraining

● The provision of a safe working environment

● A balance between the work and the employees’

wellbeing

An Industrial Relations Services Survey (1999) of 49 organizations’ experiences with employee involvement practices over the period 1992 – 1999 reported that:

● around three quarters believed it had enhanced employeecommitment & motivation

● approximately six in ten said the quality of products manufacturedhad improved

● Over half claimed there had been advances in labor productivity

● just under a half believed that their employees’ job satisfaction hadincreased

● the same proportion claimed that their organizational profits orperformance had increased.

● one third said that involving employees had reduced absence rates.

● 30% believed switching to more participative workingarrangements had improved their capacity to attract and retainemployees.

Employer Association:

An Employers association is defined as any organization whosemembership is composed of employers & whose purpose includes theregulation of relations between employers & their employees or tradeunions.

Major functions of employer association:

1.The direct negotiation of collective agreements with trade unions.

2.Assisting its members in the resolution of disputes: it assist theirmembers to resolve disputes by negotiating & operating on theirbehalf a dispute procedure with recognized unions.

3.Providing general help & advice to its members on industrialrelations matters.

4.Representing its members’ views & interests to government & otheragencies: they present evidence to governmental inquiries &provide the employers representatives on a range of bodies such asindustrial tribunals & ACAS.

Methods of gaining employee cooperation:

Employee cooperation, involvement & commitment is essential for the improvement of business performance.

1. Representation /Participation

2. Consultations:

3. Team working

Teams working together have the following benefits: Increase job satisfaction Increase motivation & loyalty to the organizations & Ultimately improves business performance

4. Employees share ownership.

This method has the following advantages-Motivate staff & encourage them to work harder because they will receive a part of the profitReduce possible conflict between the workforce & top management.

5. Quality circle

Quality circles have the following advantages:

It increases workers motivation

It raises quality awareness which affects the value of end product

Job security: here, to make employees work harder & to increase their loyalty to the organization, employers

should offer jobs which are to some extent guaranteed for the foreseeable future. The main advantages of this

approach for gaining employee cooperation are that no job is guaranteed due to economic trends & fluctuations.

A grievance is a complaint by an employee that somethingin the management’s behavior has breached his or heremployment rights and that he or she is unhappy about it.It may be real or it may be the result of a misconception or amisunderstanding. In either case, settling it quickly andeffectively is important.

A grievance may be felt by a group as well as an individualand in case if left unresolved, it may develop into a majorcollective dispute involving a trade union. All employeegrievances have the potential to damage the quality of anorganization’s employee relations, quality of life of itsemployees and thereby its competitive position.

The purpose of grievance procedure

1. ensure that fair and consistent treatment of employees

2. reduce the risk of unpredictable action

3. clarify how grievances will be dealt with

4. maintain a good employee relations environment

5. help the employer to avoid disputes

In managing employee complaints, management is guided by a number of principles, such as:

1. Fairness,

2. Consistency,

3. Representation and

4. Promptness.

Trade Union

A trade union may be defined as any organization, whose

membership consists of employees, which seeks to organize

and represent their interests both in the workplace and

society and, in particular, seeks to regulate the employment

relationship through the direct process of collective

bargaining with management.

Functions of a trade union

1. Power

2. Economic regulation

3. Job regulation

4. Member services

5. Self-fulfillment

Trade Union – Oman

The Omani labour law issued by Royal Decree No. 35/2003

is regarded as the first step paving the way for the

formation of trade unions in the Sultanate of Oman. This

law granted the workers in the private sector

establishments the freedom to form among

themselves representative committees aiming at

enhancing and protecting their rights and interests in the

workplace.

In 2006, the Omani Labour Law was modified by Royal

Decree No. 74/2006 issued on 8 August 2006. The

amendments allowed the formation of trade unions aiming

at protecting the interests of workers, defending their

rights, promoting their social and material status and

representing them in all matters related to their

wellbeing in the workplaces.

These modifications also stipulated the establishment of the

‘Genera Federation of Oman Trade Unions’ to be the

formal body that will represents the workers of the Sultanate

in front of the official authorities and in the local, regional

and international events and meetings.

Objectives

Representing the workers of Oman in all relevant matters in front of the official

authorities.

Representing the workers of Oman in the local, regional and international

conferences or forums

Enhancing the skills and abilities of the workers, developing their professional

levels and improving the work conditions to ensure a decent work environment

and achieve stability in the work places.

Promoting the values and concepts of work and its fundamental role in achieving

the social and economic development in the Sultanate.

Supporting the efforts to Omanize jobs and occupations in the Sultanate.

Improving the social and cultural standards of the workers and raising the level of

awareness on the importance of occupational health and safety.

Fixing the maximum amount of annual membership fees for the trade unions and

federations affiliated to the General Federation of Oman Trade Unions.

The role of Federation of Oman Trade Unions

It provides assistance and support to complete the requisite procedure for

forming trade unions across the Sultanate. Till January 2011, there were 85

trade unions across the Sultanate with the highest in commerce and

industry at 19 and 16 in oil and gas.

Contributes in the resolution of a number of issues arising between trade

unions and employers.

Receiving complaints of workers from different private organizations and

adopting necessary legal procedures in coordination with the competent

authorities.

Assisting trade unions in signing collective work agreements between the

representatives of employers and workers.

Reviewing some articles of the labor law and discussing them with the

concerned authorities and submitting relevant recommendations.