HRM as a threat to Trade unions.

University Degree Business and Administrative studies

Introduction

Trade unions have existed for about 400 years during which they have ever been vital to industrial relations. In recent years, however, trade unions have experienced a trend of declining both in their membership and recognition by employers. Besides, the emergence and development of HRM have become a threat to the role of trade unions in workplace. Subsequently, the questions have raised about whether trade unions are still important in workplace in the 21st century, and if they are, to what extent they play an important role in today’s workplace.

This paper examines these questions through analysing the facts that are responsible for the declining role-playing of trade unions and the challenges that come from HRM. The paper also addresses these questions by exploring the appropriate responses of trade unions and examining their un-replaceable role in today’s workplace. Nevertheless, before analyzing these questions, it is necessary to clarify what trade unions are from a broad point of view in order to gain a better understanding of this topic. Owing to that the practices of trade unions are deeply influenced by cultures and legislations, their activities and functions differ from country to country. Thus, the discussion of this paper will focus on British context only.

Clarification of Trade Unions

To begin with the origins of trade unions, this section will discuss trade unions from the following aspects: definition, types, objectives, operations and influences.

Origins of Trade Unions

The history of trade unions can be traced back to nearly 400 years ago when such groups as the Craftsmen and the Levellers were organised to protect their own products and interests. At the end of the 18th century, the labor surplus caused by industrial revolution made the working classes increasingly dependent on their employers. It is during this period of time that the commonly regarded early trade unions (1770 — 1850) appeared, aiming to help workers with their financial concerns by providing insurance and benefits such as sick and unemployment pay. However, they failed to survive the economic depressions in the first half of the 19th century. Then their place was taken by the so-called New Model Unions, which were professionally organised to achieve 'respectability' and ‘permanence’ via centralized and decentralized bargaining within industries and firms (Webb and Webb,1920). This was the direct precursor of today's mainstream unions.

The early definition of a trade union was provided by Webbs as ‘continuous association of wage-earners for the purpose of maintaining or improving the conditions of their working live’ (Webb and Webb, 1920). With the advancement of trade unions, they have been involved in much more activity and functions than what had been defined. Hence, in the Trade Union and Labour Relations (Consolidation) Act 1992, a broader definition was offered, i.e. ‘trade unions are organised groups of employees who consists wholly, or mainly of workers of one or more descriptions and whose principal purposes include the regulation of relations between workers and employers’ (Cited in Gennard and Judge, 1999: 117).

From these definitions, it can be seen that the key function of trade unions is to regulate employment relationship. With respect to employment relationship, there are three different theoretical perspectives —unitarist, radical and pluralist (Fox, 1974 cited in Edwards, 1995: 10-11). Unitarists state that employers and employees have identical interests, and both sides benefit from their relation of exchange in the constitution of business. From this point of view, trade unions seem to be illogical and exist as a threat to the harmony of the relationship between employers and employees. On the contrary, the radical perspective argues that the irreconcilable interests always exist between employers and employees. Thus, trade unions are dysfunctional in regulating employment relations. In the viewpoint of the pluralists, there are different interest groups within the work organisation, but the conflicts between them can be settled by appropriate means to ultimately achieve common goals. In this aspect, a trade union is a pluralistic concept with an intention of protecting working conditions for their members through collective bargaining, negotiating or lobbying in order to influence the related decision-makings.

Types and Objectives

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Types and Objectives

Today’s British unions can be categorised into three main types in terms of their recruited membership — craft, industrial and general (Burchill, 1997). Craft unions represent skilled workers from one occupation, such as the NGA for printer workers, the BALPA for pilots, and the AUEW for engineers. The qualifications for such membership are determined by an individual’s occupational status and particular skills. With respect to industrial unions, any workers in a specific industry regardless of their status or skills can join them. Examples of such industrial unions are the National Union of Mineworkers and the British Medical Association. As for general unions, they recruit all workers without any restrictions across different industries. Such unions as the GMB and the Transport and General Workers Union attempt to set up a monopoly over the supply of all employees to regulate labour markets (Gennard and Judege, 1999: 123).

In the capitalism system, the managers or capitalists try to pursue maximal surplus-value by paying the possibly lowest wage, while the workers who sell their labour seek for the highest level of wage. As the response to logic of industrial capitalism, all trade unions, in spite of which type they belong to, have a primary aim at reconciling the rooted conflict. As a result, they should have a set of generic ‘permanent objectives’ related to economic, social as well as political activities. These objectives include: improving terms, conditions and security of employment, income, industrial democracy, fair shares from national income; improving social security, public services, voices to government and public control; planning of industry, etc. (TUC 1966 cited in Gennard and Graham,1999).

Operation and Influences

Trade unions operate in the capitalism countries through various approaches to achieve their objectives. The most common method is negotiation of collective agreements with employers, which specify wages, hours, working conditions, and benefits in great detail. Furthermore, they exercise their power via other selective or collective industrial actions, such as striking, boycotting certain work, banning overtime or working to unilateral rules. In addition, trade unions are linked to political parties such that they usually have a voice in the enactment of labour laws.

However, Flanders (1975) argued that trade unions are job-conscious rather than class-conscious organisations, therefore, they are more effective in defending sectional economic interests instead of the whole interests of working class. For individual workers, trade unions have greater influences on protecting their rights at work than that on supporting their economic activities (Flanders, 1975). Moreover, holding strong influence over political policies, trade unions are the ‘principal mechanisms’ to regulate tripartite relationships among employees, employers and the state. Overall, trade unions can be best regarded as ‘economic, social and political agents’ (Gennard and Graham,1999).

The Extent of Importance in Today’s Workplace

This section examines the extent to which trade unions are important in today’s workplace. First, it analyses the current problems trade unions have been facing both internally and externally. Particularly, the challenges that came from HRM and that have weakened the importance of trade unions are addressed. Secondly, the significant role of trade unions in today’s workplace, despite of all the existing problems, is discussed in detail.

Problems and Challenges

Decline of Trade Unions

The union membership and union recognition by employers are two key indicators to reflect the power of trade unions and their position in workplace. Since 1979, however, both trade union membership and recognition have been falling. According to the statistics, the trade union membership in the UK peaked at 13.4 million members in 1979 (Burchill, 1997: 43) whereas the number reduced to 7.6 million in 2002 (National Statistics). Similarly, trade union recognition also declined from 66% to 45% between 1984 and 1999 (Cully 1999).

The decline of trade unions can be attributed to a number of factors, which have threatened the traditionally vital role of trade unions in workplace. One of the reasons is the significant changes in employment structure. After the World War II, the number of women at work, part-time workers and non-manual employees all increased. Nevertheless, these increasing groups are usually regarded as having less willing to carry out collective action. In addition, the privatisation has weakened the important position trade unions have ever held in public sector.

In terms of ‘business cycle’, the trade union membership fluctuates with market prices, wages and unemployment (Waddington and Whitson, 1995). In this respect, the high rate of unemployment between 1979 and 1986 contributed to the decrease in the number of union members, while the increases of wages, at least for the white-collar workers in recent years, might have reduced their incentives to join trade unions.

Moreover, the government policy between 1979 and 1997 not only was unsupportive of trade union activities, but also had directly weakened the collective bargaining power of trade unions. Meanwhile, yet, Thatcherite ‘enterprise culture’ facilitated the introduction of new management concepts, such as HRM, TQM and JIT (Ackers et al, 1996: 5). These new management concepts have greatly challenged the functions of trade unions. In parallel with these concepts, the term ‘employee relation’ took the place of ‘industrial relation’, placing emphasis on ‘individualism’ rather than ‘collectivism’.

Last but not least, the pressures from intense competition due to globalisation and economic recession have led to de-recognition of trade unions by employers. Instead, managerial strategies, particularly HRM strategies have been increasingly encouraged in the UK. More and more employers adopted flexible policies through employee empowerment, involvement and participation to directly communicate with their employees, hence established a good relationship with them.

Threat of HRM

HRM sees employees as individuals but having common interests with employers, and attempts through formulated policies to generate employee commitment to managerial goals, to achieve flexibility with stress on total quality, and finally to integrate policies with strategic business planning (Millward, 1994 :3). As a consequence of advocating HRM concept in parallel with support by Conservative governments, a large number of non-union organisations emerged during the 1980s and early 1990s, such as Marks & Spencer, IBM, Hewlett, Gillette and Nissan (Legge, 1995: 36-7). These companies have some similar characteristics — laying emphasis on working environment, market demand, profits sharing, employment security, competitive pay, provision of promotion opportunities, training for employees, employee empowerment and employee involvement in decision making.

Apparently, a lot of attention has been paid to meet employee’s individual need through these practices, thereby, which tends to de-motivate employees to take part in trade unions. Therefore, HRM seemed to be a threat to the existence of trade unions in workplace in terms of regulating employee relations. Taking it seriously, Williams (1997) argues that trade unions have been the victims of de-collectivisation when employers redistribute their power to HRM to regulating employee relations so as to prevent the renewal of collective power of trade unions.

The Significant Role of Trade Unions in Today’s Workplace

HRM Limitations

Although HRM has gained considerable attention by employers today, it has inevitable limitations which have constrained its implementation in workplace. There are two models of HRM — ‘soft’ and ‘hard’ — which are widely used in today’s organisations. ‘Soft’ HRM treats employees as valued assets and intends to achieve competitive advantages through employee high-commitment and flexible workforce. As far as ‘hard’ HRM is concerned, labour utilisation and cost efficiencies are stressed with a focus on integration of HR into business strategies.

The evidence of adopting ‘soft’ HRM can be easily found in most companies’ mission statement and formulated policies. In reality, however, the ‘hard’ HRM is experienced frequently by employees (Truss and Gratton, 1994). In the last two decades, economic recession, rapid globalisation and intense competition have impelled organisations to pursue cost effectiveness and ‘flexibility’ to obtain strong competitiveness. In order for that, a series of HRM activities have been carried out to facilitate organisations to adapt to the certain circumstances, including downsizing, lay off, weakening welfare and pay cut. However, these HRM practices have been bringing about job insecurity and employee disloyalty to the organisations.

Overall, HRM appears more rhetoric than reality (Legge, 1995) for its implementation in some aspects may weaken or even destroy the proper relationship between employers and employees.

Responses and Importance of Trade Unions

On the one hand, with respect to employment relations, trade unions have been getting space for existence in workplace from the constraints of HRM. On the other hand, actively responding to these conditions, they have encouraged a ‘new realist’ agenda to show ‘a softer, more friendly image’ to employers and employees (Ackers et al., 1996), which to some extent are helpful for trade unions to remain their important role in workplace.

Trade unions have promoted co-operative partnership with employers via a single union agreement to influence the attitude of employers towards managing with unions. The single union agreements were established based on the recognition of the organisations, hence, the partnership bargain could facilitate organisations to achieve their objectives.

In the first place, the modern organisations need flexibility to respond to rapidly changing customer demand and intense global competition. The partnership bargain of trade unions can help the organisations to attain the flexibility. For example, Nissan has signed a single union agreement with the AEU. It set up a ‘company council’, involving Nissan managers as the Chair and Secretary, and workforce representatives from different section of the plant. Thus, the representatives could negotiate with the management around the same table, which saved time and resources for the organisation. Furthermore, the ‘council’ functions in a consultative forum, an authority in grievance procedure and negotiation on pay and working conditions. Through such cooperation, organisations could gain high employee morale and commitment, and subsequently received the creative ideas brought by these employees on rapidly changing customer demand and for competing with global rivals. As for employees, they could obtain not only job security, but also the opportunity to really participate in shaping their jobs away from command and control management styles. In addition, trade unions in partnership organisations have an increasing role in delivering skills and training. The TUC has trained 5,000 Learning Representatives who have a responsibility for negotiating training and learning opportunities with their employers, and providing advice, guidance and support to workers (TUC, 2002). It is clear that through trade unions the employees can have more chances to learn new skills as to do more interesting work and get better pay while employers can get more well-trained or multi-skilled employees to help the organisations to achieve flexibility.

Secondly, partnership between management and unions can have a beneficial impact on companies' financial performance. A study undertaken by Alex Bryson and David Wilkinson of the Policy Studies Institute in 1998 has proved the positive relationship between the partnership and financial performance (Bryson and Wilkinson, 2002). Based on the analysis of the data from the interview with 3,000 managers and nearly 30,000 employees, they made a general conclusion that ‘in modern, productive workplaces, trade unions make an important contribution’ for most of the organisations who have adopted the partnership approach have created a favourable industrial relations climate, which is beneficial for the organisations to improve their financial performance.

Thirdly, trade unions have made a great progress on protecting employee rights at work. Trade unions have their political relationships with government, and they still have strong power to influence the enactment of labour law to ensure every employee can have equal rights in workplace. As TGWU argue, employment rights should cover a wide range of issues as dismissal, discrimination of sex and race, maternity and paternity rights, paid holiday, the minimum wage and normal working hours, and these should be applied equally to full-time or permanent and part-time or temporary employees (TGWU 1993 cited in Ackers et al., 1996). Despite that the political context in the certain period was not favorable, trade unions have been still successful in resolving these issues. For instance, in 1997, the incoming Labour government promised the ‘fairness’ in workplace the unions advocated (Blyton and Turnbull, 1998).

To sum up, although trade unions have been facing with many challenges in recent years, they have made appropriate responses to maintain their important role in today’s workplace in terms of achieving flexibility, enhancing financial performance as well as protecting employee equal rights.

Conclusion

Due to the changes of the composition of workforce, economic conditions, the political environment, and the threat of HRM, trade unions have suffered a decline in membership and recognition in the last two decades. Nevertheless, the role and influence of trade unions in workplace have kept a remarkable stability (Godfrey and Marchington, 1996). Furthermore, acknowledging today’s reality, they have adopted an individualistic approach to union membership in workplace through cooperation with organisational management and single-union deal with employers. These timely responses helped them maintain their important roles in the workplace.

Realising the challenges and difficulties which still exist for trade unions, they can be expected to continue promoting partnership and to make both employees and employers to understand the significance of being involved in trade unions in the process to achieve high performance. It is suggested that trade unions, in cooperation with other management concepts, could make great contribution to organisations’ prosperity as well as optimum, in terms of social, financial and political, satisfaction to workers.

References

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