Employee Relations and Organizational Performance

Employee relations is a broad term that integrates different concerns such as collective bargaining, employment law, negotiations, and pertinent deliberations that entail work-life balance, diversity management, and fair opportunities. It engages programs and practices that make sure that workers are motivated and productive. Employee relations integrate pay-work bargain, practices in the workplace, terms and conditions of service, conflict resolution, and empowerment of workers (Ali et al., 2018). It seeks to enhance effective productivity by improving job satisfaction and employee motivation, which lead to facilitated organizational performance. The greatest objective of a successful employee relations program in an organization is the creation and cultivation of an enthused and industrious workforce. It is vital to strengthen the dynamics of employee relations since it acts as a link between workers and employers. It also encompasses the provision of the scope for the contribution of workers in management decisions, communication, strategies for improved cooperation, decreased resistance to change, and reduction of conflicts. Maintaining healthy employee relations in the workplace is essential for organizations to realize growth and success.

Impact on Performance

The concept of employee relations continues to grow and has extended to the maintenance of the workplace environment that suits the needs of workers and the management, creation of organizational culture, and conveyance of anticipations. Employees are valuable assets that form the most significant resources in an organization (Xi et al., 2017). The nature and quality of work undertaken by employees have a direct influence on the productivity and performance of an organization. All successful organizations around the globe are concerned with the welfare of their workers and most of them have implemented performance management programs as a means of reinforcing their employee relations endeavors. Performance management is a tactical and integrated practice of upholding sustained success by supporting operations of employees and improving the ability of groups and individual contributors. Although different aspects negatively affect excellent performance, which is the major aim of an organization, successful employee relations have a cushioning influence that enables a company to fruitfully address arising challenges.

People are often motivated from within, but on their employee relations endeavors, human resource managers in any organization should mull over what they can do to assist in the promotion of a favorable environment where workers thrive as a way of ensuring unparalleled performance. Good working conditions result in a high degree of employee engagement, decreased turnover, and excellent performance contrary to a frustrating workplace environment. Since organizational success is strongly associated with operations of workers, organizations that uphold a valuable employee relations plan enjoy improved performance as their workforce is highly stimulated to utilize their best efforts (Zeffane & Melhem, 2017). The management of the employer-employee relationship is crucial for business success because a motivated and productive workforce leads to enhanced employee happiness and increased profitability.

An organization cannot continually enhance mutually dependent systems and practices until it gradually improves interpersonal dealings. The quality of relationships with employees in the workplace may either have a negative or positive effect on their morale and consequent performance. How remarkably employees engage with each other, the management, other stakeholders, and the organization, particularly the immediate environment that entails working conditions and motivation programs, has a direct impact on their error rate, degree of innovation, and their level of collaboration. It also strongly influences their absenteeism, how long they are willing to remain in the workplace, and eventually, their commitment (Sahoo & Sahoo, 2019). Pleasant relations between employers and employees are crucial to both the dedication of workers and organizational performance. This is because they ensure that the tasks and responsibilities bestowed on each employee are undertaken in a manner that enables their exceptional contribution to the fortitude of conditions of service that affect them.

The aspect of employee relations has not been accorded sufficient attention and application by the management in some organizations hence resulting in their poor performance. Inadequate employee-employer relations have led to many organizations’ failure to realize their objectives. Enhanced relationships in the organization create a positive attitude in employees, which makes them appreciate the work they do and feel equipped and valued for their contribution. A worker who is complacent and feels dissatisfied with the set tasks is only at the workplace for a paycheck and cannot operate at the required rate, develops a negative attitude, and usually drags the team behind. Problems affecting the performance of an organization present great trouble for its continued existence and require the management to address underlying issues effectively (Jennings et al., 2017). One way of tackling such challenges is the creation of healthy interpersonal relations, which are fundamental because they support employees’ development of mutual understanding in their different teams, which goes a long way to making sure that the goals of the organization are attained.

Negative employee relations in an organization result in problems such as unnecessary alterations in the economic situation thus impinging on both informal and formal contracts of employment. Adjusting effectively to variations in relationships within an organization has objectionable repercussions with respect to continued competitive benefit anchored in the capacity to access and retain dedicated and skilled personnel. To evaluate the impact of employee relations on their performance, organizations should check the influence of social exchange and motivation on the contribution of employees. This offers a vital basis for the comprehension of workers’ and employers’ viewpoints to the exchange (Poon, 2019). Although numerous perspectives of social exchange exist, there is agreement among researchers that it entails a sequence of interrelations that create a compulsion to reciprocate. Essentially, three factors that are crucial to social exchange include interrelations, reciprocity, and relationship.

A social exchange relationship is initiated when one party such as the employer conveys benefits to another, for example, employees. When the recipient reciprocates and a sequence of benefit exchange arises, a feeling of shared obligation is generated in a situation of effective employee relations for the improved performance of the organization. Over time, the rapport emanating from successful employee relations is typified by a situation where employers and employees trust one another to return vital benefits (Veena et al., 2019). In such a condition, employers motivate workers who in turn increase their productivity, and organization performance is upheld. Trust is necessary for enduring employee relations since it eliminates the inherent risk that benefits offered may not be reciprocated. Therefore, effective employee relations require recurring reciprocation of benefits where employers and employees conform to the policies of engagement.

Human relations theory underscores the requirements and benefits of employee dealings in line with organizational performance. According to the theory, positive employee relations decrease organizational tension hence making it possible for employers and workers to attain self-realization in the workplace. Since employees are considered qualitatively superior to other resources utilized in the operations of an organization, their enthusiasm and well-being are paramount (Abdullah, 2017). If employees lose job satisfaction, are lessened to operating as extensions of machinery, or become overworked to an extent of inhibiting their ability to create and innovate, they find approaches to weaken techniques of control that ensure enhanced organizational performance.

The main goal of human resource management should be manipulation of workplace relations in a means that enable employees to gain job satisfaction. Organizations operating on this foundation are anticipated to identify the rights of workers to contribute to decision making toward different managerial endeavors. Successful organizations are also anticipated to take an active role in the development of the skills of their personnel as a way of expressing their dedication to the welfare of employees (Sahoo & Sahoo, 2018). In such approaches, the objective of successful organizational practices to employee relations is to decrease internal tensions through the creation of a sense of fulfillment felt by workers. This is realized through endeavors that engage employees in the setting and regulation of work.

Employment should be viewed as an exchange where the management of an organization provides inducements in reciprocation for the contribution of employees. From the perspective of the organization, the contribution of employees should be adequate to warrant inducements, which ought to as well be attractive to elicit outstanding contributions. Mohanty (2018) affirmed that the exchange situation should be continuing but contingent upon workers realizing some element of imbalance in their favor. Such a situation translates to workers getting fulfillment that is necessary for enhanced performance. Successful employee relations resolve organizational tensions by developing a psychological deal anchored in cooperation. In such an occurrence, ensuing choices are hinged on the assumption that the power uniting organizational executives and employees is far greater than the one seeking to divide them. Organizational management has the responsibility of extending such unifying control through the establishment of working conditions that promote commitment to operate collaboratively for the benefit of all stakeholders.

Organizations seeking to uphold effective employee relations are anticipated to consider the issue holistically. This makes sure that collaboration between workers and management is facilitated by the creation of a unifying culture, valuable and pervasive leadership, and a vivid visualization of organizational goals. Through employee relations, organizations solve arising conflicts by forming small workplace social groups, creating open lines of communication, and encouraging shared understanding that the gain of all is easily achieved through working jointly and avoiding tensions (Mohanty, 2018). Shared management approaches in the form of organizational teams, in addition to performance assessments, merit-associated reimbursement, and encouragement of individual commitment are practices that support successful human relations for enhanced organizational performance.


Employee relations incorporate pay-work bargain, practices in the place of work, terms and conditions, conflict resolution, and motivation of workers. It seeks to augment productivity through improving job satisfaction and the motivation of workers, which lead to facilitated organizational performance. Ensuring healthy employee relations in the workplace is vital for organizations to uphold growth and success. Workers act as valuable assets that form the most considerable resources in an organization. Organizations cannot continually improve jointly dependent systems and practices until they gradually develop interpersonal dealings. Employment should be perceived as an exchange where the management of a company provides inducements in return for the improved performance of employees. Organizations seeking to support effective employee relations should consider the subject holistically to make sure that the creation of a unifying culture, valuable and perceptive leadership, and a vivid understanding of organizational goals realize collaboration between workers and management.


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