Effective Employee Relations in Private Sector Firms

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Human resources are the most important part of every business, and improving the company’s culture and climate may significantly increase employee morale and productivity. Employee relations, which are rather significant for every organization, are the relationships between employers and workers and among the people within a company. In today’s business world, establishing and maintaining a healthy work environment is becoming increasingly important, with more employee-friendly companies achieving the most success (Ali et al., 2018). The purpose of this paper is to analyze the key elements of employee relations, the most common issues faced by private sector businesses, and the strategies used to build and maintain positive employee relations within companies.

Critical Elements of Effective Employee Relations

Happy workers are more efficient, committed to their jobs, and loyal to the company. According to Tegze (2019), “a positive work culture results in more productivity and profitability for companies” (para. 2). Analyzing the most important aspects of workers’ relations and the ways to improve them helps to build an employee-centered, balanced, and productive working climate and increase the company’s growth and performance. Employee relations encompass the employer-employee communication, as well as the relationships between the colleagues and team members within the company. The basic legal framework for the relations between the company and its workers is usually regulated by employment agreements, non-disclosure agreements, and some other. The general principles of the work environment organization are established by the management and vary from business to business.

The key to creating a healthy work environment is in finding a balance between the company’s goals and employees’ requirements regarding working conditions. As the objectives of the company’s owners and shareholders are usually different from the demands of regular employees, the establishment of a healthy and well-balanced corporate culture can be difficult. While business owners strive for the company’s financial success and low-maintenance work process organization, employees value stability, good working conditions, career opportunities, and a friendly working environment. In order to build a successful employee relations strategy, it is necessary to find a balance between the company’s and employee’s objectives.

The key elements of effective employee relations include:

  • Open communication. Most conflicts can be prevented in an environment where employees are not afraid to share their honest feedback (DeMaria, 2018). Informing workers on what’s going on in the company, including management plans, and how those plans may affect their jobs, makes them more engaged in the business.
  • Boundaries. In order to maintain healthy relationships between employers and employees, certain boundaries should be observed, including the restrictions on close personal relations between employees, such as dating and sexual relations (Mohanty, 2018). It helps to prevent favoritism, insubordination, sexual harassment issues, and other problems, which can create unwanted tension at the workplace.
  • Involvement. When employees are involved in the company’s activities and take part in the decisions that affect work, they are more likely to be satisfied and loyal to the company. According to DeMaria (2018), there are several employee involvement activities like joint decision making and consultation that aim at enhancing decision-making processes orienting on workers’ expertise and considering their interests and opportunities. Employee involvement initiatives include regular team meetings, team-building activities, consultation committees, and brainstorms.
  • Conflict management. While conflicts between employers and employees are inevitable within any company, specific actions can be taken by managers to prevent and resolve them quickly (Managing Workplace Conflict). In a healthy work environment, conflict management is seen not only as of the managers but everyone’s obligation.
  • Safe working environment. Employees feel safe in an environment where their rights and privacy are respected, and health and safety regulations are observed. Workers need to know that if something serious happens or if they make a mistake, they are free to go to their leader and talk about that without any fear or stress.
  • Rewards and benefits system. Granting employees with bonuses, raises, and promotions is a good way to show the company’s appreciation for their efforts (Cycyota et al., 2016). When workers are treated as the company’s greatest asset, they are more encouraged to do their best.

Effective employee relations within the company are grounded on each worker’s job satisfaction. The top characteristics of a perfect job include flexible work arrangements, career growth opportunities, professional training development courses, challenging tasks, a room for taking responsibilities, a safe and healthy work environment, flexible benefit plans, up-to-date technology, and a competitive salary. The company’s ambitions to establish an ideal workplace and constantly improve work conditions help it to maintain employees’ happiness, productivity, and loyalty to the company.

Employee Relations Problems

As the objectives of the company’s owners and personal goals and expectations of workers are generally different, there is always a potential for conflict within any company. Unresolved conflicts can result in poor performance, an increase in absenteeism and employee turnover, and also in the dysfunctional behavior of some members of the workgroup (Regalia, 2017). Several types of common workers relations issues can be distinguished:

  • Conflicts. Any conflict arising at a workplace is a clash of interests between either employers and workers or within a team. Unresolved conflicts lead to a high level of stress and divert employees’ attention from the job. If the conflicts are left neglected, they can escalate into large problems, such as discrimination and harassment issues, and greatly damage the company’s image (Managing Workplace Conflict). Disagreements can happen in any working environment, and some disputes between workers or even with a business owner may occur frequently. It is essential for maintaining the health and success of a company to find effective ways of managing conflicts. One of the main problems occurs when the two arguing parties do not talk to each other and discuss their issues, and the dispute can become much worse (Ugoani, 2019). Moreover, this may affect the company’s morale and success and the termination of employees.
  • Lack of motivation. Poor motivation leads to high turnover, lower levels of engagement, and poor productivity. Companies have to constantly provide new sources of motivation for workers so that they do not lose their initial enthusiasm.
  • Payment and working conditions issues. Delays in payments and pay disparity cause anxiety and the feeling of uncertainty and decrease the workers’ level of job satisfaction (Obamiro & Kumolu-Johnson, 2019). The employees may start disputing the number of working hours, insist on overtime, and ask for increasing wages.
  • Discipline problems. Failure to adhere to a schedule, insubordination, unsatisfactory performance, and unacceptable behavior of some workers can cause internal problems and lower the morale of the whole department.

Strategies for Dealing with Employee Relations Issues

No company is safe from workers’ relations problems; however, most of them can be prevented or quickly resolved by introducing a well-thought-out employee relations strategy. Its aims usually include promoting dialogue and cooperation, focusing on the company’s mission and values, inspiring and rewarding workers, offering opportunities for career development, promoting healthy work and leisure balance, and addressing workers’ needs (Lewis, Thornhill & Saunders, 2003). The employer’s main task is to develop a workspace culture designed to prevent conflict among employees built on several underlying principles:

  • A well-defined workers relation policy is a set of clearly written rules describing the company’s HR philosophy designed to make sure that employees understand the company’s message and vision, and how their job aligns with this mission.
  • Positive environment. Creating a positive work environment includes promoting a positive approach to problem-solving, focusing on positive behavior and outcomes, and workers’ motivation (Tegze, 2019). A good organization’s policy has to make sure that its workers are not overly fatigued because of having too many overtime shifts.
  • Building trust. Trust may be defined as believing in another party continuing to adhere to rules of reciprocity and fairness, even in circumstances when it may be more beneficial for it to do otherwise (Samawi et al., 2018). In terms of employer-employee relations, building trust means practicing consistent and transparent communication within the company.
  • Strong management. With managers being the critical link between the company and workers, businesses must pay the utmost attention to the process of hiring the right people for the job (Veena et al., 2019). A successful manager should be trained in how to communicate effectively, give and clarify assignments, respond to employees’ suggestions, deal with conflicts, know the strengths and weaknesses of their workers, and manage their time wisely.
  • Employee reward and recognition. Recognizing workers’ efforts and presenting them with monetary and non-monetary rewards is essential for increasing employees’ productivity and loyalty to the company. They can include promotions, salary raises, additional vacation opportunities, gift certificates, free professional development courses, certificates, and cash bonuses.
  • Careful hiring. A key strategy to prevent workers’ relations problems is to organize a well-thought-out recruitment and selection process, carefully assessing the person’s qualifications and personal qualities to hire people who are right for the job and can be an asset to the team (Osborne & Hammoud, 2017). New employees should be introduced to the company’s policies and rules, their responsibilities, and their coworkers to make them feel welcome and prevent any misunderstandings.
  • Conflict management. Conflicts cannot be ignored, as they usually bring forward the issues that may otherwise have been neglected. Healthy workers relations management ensures that when disputes arise, they are handled in a reasonable and mature way. In order to solve a conflict, its underlying reasons need to be determined, and both parties’ concerns have to be clarified. The final decision should be unbiased, mutually satisfying, and consistent with the company’s policy (Managing Workplace Conflict). Although conflicts are generally thought to have a negative effect on the job environment, a properly managed and resolved conflict can be beneficial for the company.


Maintaining healthy employee relations is essential for any business that strives to achieve success. An effective workers’ relations strategy involves conflict management, employee motivation and involvement initiatives, constant improvement of working conditions, the protection of workers’ rights and privacy, open communication, and a safe working environment. Successful employee-employer relationships are based on transparency, trust and mutual respect, ensuring that they are happy, productive, committed to their jobs, and loyal to the company.


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