Theoretical Roots of Employment Relations Theory

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Employment relations can best be understood as the process of determining the interests of individuals, organizations, and groups through their representation, how those parties promote their interests, and how conflict is regulated and managed within national international, regional and organizational standpoints. However, it should be noted that this definition is not all-encompassing since various experts have disagreed on whether some deductions or additions need to be done. Frames of references as described by Alan Fox (1966) are the manner in which one views employment relations. Conflict frames of reference, therefore, mean those perspectives that attempt to demystify conflict in the workplace by establishing why it occurs, its importance, and how it should be solved. It is these differing perspectives that form the structure of employment relations theory. Analysts have identified three major conflict frames of reference i.e. Unitarism, Pluralism, and Marxism.

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Conflict frames of reference

In unitarism, it is assumed that employers are the only source of authority and that both business owners and workers have common interests. Consequently, workplace conflict is treated as an undesirable element that destructs parties from achieving their common goals; it, therefore, needs to be avoided at all costs. Nonetheless, adherents to this school of thought still do not deny the inevitability of workplace conflict. (Lewin, 2001) Unitarists, therefore, presume that trade unions are an unwarranted and competing authority that works in opposition to the legitimate authority of employers. These trade unions are also seen as external interferences and are major sources of conflict. To this end, collective bargaining as a means to resolve workplace conflicts for unitarists is not a tenable solution since most of them may actually think that conflicts emanate through this avenue. On top of that, they also affirm that collective bargaining divides interests in the workplace through institutionalization. The major advantage of this frame of reference is that it can allow for high productivity levels and can therefore boost the economy. Also, since decision-making is in the hands of one party, then it can be done quickly. On the downside, however, this system assumes that employers and employees will be rational when working together yet this is not always the case. Additionally, it largely applies to low-skilled work tasks and cannot work in high-skilled jobs. It is also impersonal and largely ignores the psychosocial needs of workers.

In the pluralist conflict frame of reference, it is assumed that employees and employers have divergent interests; consequently, there is no single source of authority as multiple stakeholders normally provide this. Pluralism advocates for acceptance of conflict as a part of workplace relations since the different sources of authority will have their own opinions and values. It is therefore productive for these parties to think of conflict as something that develops and grows the organization. (Budd, 2004) Pluralists also claim that conflicts can be prevented by the inclusion of trade unions in the decision-making processes of firms. This means that to them, trade unions are a legitimate part of the workplace and they do not cause conflicts. Adherents to this school of thought affirm that collective bargaining can be an effective way of dealing with conflicts as it creates a balance of power between employers and employees. It also adds structure to employment rules by binding them in an institutional structure; this makes conflict handling quite fair. The major strength of pluralism is that it encourages proactive stances in human resource management and also distributes authority. This implies that employees have a role to play in employment relations outcomes. This frame encourages compromise and therefore effectively meets divergent interests. Conversely, pluralism makes it difficult to fully analyze the impacts of certain activities carried out by a member of the affected body. Besides this, it also lays the ground for excessive rulemaking.

Marxism represents the other side of the spectrum; here, it is assumed that there are always tensions between capitalists and the working class with claims that workplace relations generally represent capitalist tendencies. This means that conflicts cannot be avoided because capitalists want to maximize profits through cost reduction while the working class wants fair working conditions. To this end, the conflict will only be overridden through revolutions that can lead to equal distribution of resources. Marxists claim that trade unions are essentially endowed with the task of fighting for workers’ rights and those who fail to do so are essentially disloyal to the revolutionary cause. Attempts at solving conflicts should always seek to get to the root cause of the problem; consequently, such advocates believe that collective bargaining cannot solve workplace conflicts effectively as this is merely a temporary measure that still leaves immense power in the hands of employers. (Gall, 2003) The major strength of this frame of reference is that it advocates for the rights of workers who are often placed in disadvantaged positions. However, this strength can also be seen as a weakness because it implies that change can only occur through a revolution yet chances of this occurrence in practical situations are quite minimal. Additionally, Marxists down look at the effects of other complex factors that lead to workplace conflicts and always boil it down to class struggles.

Relevance of theoretical roots of employment relations in the twenty-first century

Indeed, conflict frames of reference still find relevance today as they did a century ago. This is especially so in New Zealand; one only has to study newspaper headlines over the past few years to see why. The country is yet to deal with consistent issues that keep cropping up in various industries. For instance, power struggles between employees and their employers are still prevalent today. Additionally, tensions have been witnessed between efficiency of productivity and impartiality in resource allocation. Worker exploitation is still a reality today as it was in the 1900s and so is the importance or influence of the government in employment relations. (Ramsussen, 2009)

A case in point was the controversy surrounding the Employment relations law reform legislation during its discussion in 2003 and 2004. The latter law revealed how pluralism is quite prevalent in New Zealand’s employment relations. Employers were deeply concerned about the ability of this reform to grant trade unions immense power as voiced by the Employers and Manufacturer’s Association, Business New Zealand and other collective management authorities. These groups felt that employees should be granted the choice to decide on how employment relations should play out. Consequently, they felt that the Bill would hamper growth and development in organisations throughout the country. On the other side, employees through their trade unions in education and health asserted that there were good faith provisions in this legislation and that those could undermine the rights of workers. These unions affirmed that if employers were to go through an objective test in order to determine what a fair employer would have done to an employee upon dismissal, then chances are that employers would have an upper hand. The government was trying to act as a reconciler by introducing clauses and other measures that would strike middle ground. (Rasmussen & White, 2004) This situation illustrates how multiple stakeholders exist within the workplace and how their differing views are bound to result in conflicts – all major principles of the unitarism conflict frame of reference.

One issue that reflects some elements of the Marxist frame of reference is the nursing shortage that has pervaded the health sector for a long time. Between 2001and 2004, a number of studies and reports highlighted the nursing problem pervading health institutions. Several reasons were given for these problems and they included; poor pay relative to other professions, lack of workplace reforms in the health sector, lack of adequate funding for health as a result of poor balances in taxation and expenditure, skill shortages as well as lack of health reforms for over a decade. At that time, the New Zealand nurses organisation- NZNO – made several strides in advocating for the rights of nurses by expressing their concerns and pushing for collective agreements for multi employers in areas such as South island. (Chalmers et al, 2004) Perhaps most importantly, this issue brought to the fore issues of inequality for workers in the health sector. In other words, these trade unions were articulating a wider agenda that is common to the Marxist school of thought. Marxists affirm that conflicts in the workplace reflect a wider societal clash and they believe that unequal power relations could be causing this. Most of the nursing unions made a case against inequality in the health sector with a lot of attention given to the fact that nurses are treating unequally for the work they do. It is also interested to see the link between arguments brought forward by adherents to this school of thought and that made the nurses’ unions. These unions affirmed that the crisis in nursing was not just caused by inequality between workers and management but also by state perpetuation through its unfair health policies. Marxists tend to believe that the state contributes to inequality through propagating the interests of the dominant group.

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Conclusion

Employers and business owners tend to rely on employment relations theory to justify their employment practices with most of them favouring unitarism. On the other hand, unions and employee representatives tend to use these theories to justify their actions as was the case with NZNO; theirs is often a Marxist agenda. Consequently, parties utilise their own conflict frames of reference to assess actions of others and this may cause differences. Stability in the employment relations system would therefore be enhanced if parties had common frames of references.

References

Rasmussen, E. and White, R. (2004). Employment relations law reform bill. Web.

Chalmers, K. & Alastair, G. & Rasmussen, E. (2004). Nurses and employment relations. Web.

Fox, A. (1966). Industrial sociology & industrial relations. London: HMSO

Ramsussen, E. (2009). Employment relation in New Zealand. Auckland: Pearson publishers

Lewin, D. (2001). HR & IR views on workplace conflict. HR management review 11(4), 453

Budd, J. (2004). Employment through a human face. NY: Cornell press

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Gall, G. (2003), Marxism & industrial relations. Oxford: OUP

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BusinessEssay. 2021. "Theoretical Roots of Employment Relations Theory." December 8, 2021. https://business-essay.com/theoretical-roots-of-employment-relations-theory/.

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