Government plays an important role in shaping industrial relations. According to Salamon (2001), one of the government’s responsibilities is to settle the high unemployment level. Hence, government always protects the right of employees through the rules and regulations. By enacting the law, it provides alternative to the employees to from a union for collective bargaining and ‘permit unfair dismissal claims by those dismissed for participating in lawful industrial action’ (Gennard, 1997) in order to reduce the unemployment rate. Gennard (1997) also emphasized that government encourages the employees to be represented by a union as this is their democratic right and not for the employers to deny it. Therefore, it should be a legal obligation for employers to recognize a union for collective bargaining on the issues of pay, work hours, vacations and training.
Management is also an important factor in shaping industrial relations. Maslow (1954) stated that job security has long been understood in motivational theory as an employee motivator. Jiman Lee and Deog-Ro Lee (2008) also found that management’s efforts to provide job security are positively related with the company’s performance and industrial relations quality. Therefore, there is a need for management to provide job security in order to maximize the productivity and uplifts the industrial relations quality. The best alternative to maintain industrial relations is through two ways communication as it ‘reduces task uncertainty and increases the trustworthiness and reliability of management’. (Schweiger and DeNisi, 1991; cited by Jiman Lee and Deog-Ro Lee, 2008) The management could take this opportunity to collect feedbacks and suggestions from its employees and fulfill their requirement rationally.
Management could practice two ways communication to tighten the relations with its employees as well as to increase the employees’ loyalty towards company. In addition, ‘information sharing through communication is considered a key factor in facilitating organizational learning, with the subsequent effect of an increased competitive advantage.’ (Jiman Lee and Deog-Ro Lee, 2008) It benefits management in many ways.
The way management shape industrial relations
There are several issues concerning management‘s staffing process. For instance, the economic, political and social issues affect management significantly in staffing process.
The economic issue
The economic condition has the biggest effect on management staffing policy. For instance, during economic recession, the sales volume dropped sharply as the demand for goods has decreased. The profit for most of the companies has also dropped due to the deteriorating sales volume. Some companies that are lack of financial reserve however, are encountering difficulties in paying the employees’ wages. As a result, the management has no choice, but to reduce the employee’s pay. At the same time, according to Salamon (2001), the management would prefer short term profit maximization rather than looking for investment in new machinery and ideas. The management would like its employees to work overtime in order to keep the business survive. This is the point where the conflict occurs.
‘Money has the power to motivate people as well as generate anxiety and unhappiness in those who do not have it’. (Furnham, 1996; cited by Lee and Lim, 2001) Once the employees’ pays have been reduced, they will definitely refuse the management’s requirement to work overtime as they are lack of motivation. The management will need to look for the best alternatives to solve this issue in order to keep the business survive. However, the management in public sector and private sector solve this issue with different styles and strategies.
In public sector, management will most commonly seek for the help of government. These corporate are normally schools, airports and hospitals. Due to its important functions and contributions to the citizens, the government would have to keep these corporate survive in order to protect the benefits of its citizens. In this case, the government will subsidize these corporate by paying a part of the employee’s salary. This is the way for management in public sector resolves the economic issue concerning pay.
Conversely, in private sector, the management could only seek for the bank loans and pay the salary to its employees in order to recover their motivation and run its day-to-day operations fluently. However, some companies fail to get loan because of its size. Hence, the way they resolve this issue is to dismiss some of the workers according to the evaluation of work performance. To sum up, the job security in public sector is more than the private sector during economic recession period. This is due to the support and subsidization form government.
The political issue
The political condition is also another issue that will affect management in the labour process. The changes in employment law by government affect management in its business plan. Gennard (1997) stated that, government prohibits employers from competing on the basis of a pay reduction strategy. Instead Gennard (1997) also emphasized that, the government advice to the employers to seek competitive advantages by enhancing the quality of inputs they recruit. For example, by introducing new technology, improving labour utilization and upgrading the skills of the workforce.
As a result, the enactment of new regulations will indirectly influence the management‘s previous plan. This is because of the government’s intension to allow the employees to join a trade union and not to be discriminated by the employers. In addition, government ‘obligates employers to recognize trade union for collective bargaining purposes where a majority of the relevant workforce vote to be represented by a union’. (Gennard, 1997)
Therefore, the management is required to focus more on the benefits of employees such as pay, leaves and training and development for skills enhancement. Compare with olden days, the management need more capital to train its employees and invest for new plants and ideas in order to gain competitive advantages. This is the issue brought by the political condition where the cost for running a business has much been increased. The management will need to look for a better option to resolve this problem.
The management’s styles and strategies in solving this particular issue for both public and private sectors are almost the same. Due to there is an employment act regarding the employees’ right and benefits, the managements are forced to follow it. The management will normally offer more company’s shares to the public in order to obtain the capital for investment on new plants and ideas as well as to train its employees and form a highly productivity team in order to increase the company’s competencies.
The social issue
The society has a very strong impact in influencing management in staffing process. ‘Society is a very important stake holder in relation to the human and social implications of excellence models. The excellent organization tends not only to avoid negative impact on the physical and social environment, but also to generate positive value, especially for the local community’. (Tito Conti, 2002) Therefore, the management should deals with the social issues well in order to create positive images for its company.
These issues are commonly related to the ‘growth of female employment, and its importance of industrial relations, is closely bound up with changing social patterns and expectations in respect of education, work and family arrangement’. (Salamon, 2001) Hence, the management should base on the qualifications and performance and avoid sex discrimination in recruiting and selecting employees.
The rapid changing social patterns have become one of the important factors for management to pay attention and bring it into the plan. This is because the educational level has been promoting the living standards and the lifestyle of people. The enrichment of knowledge as a result, informs the employees to know better their own right as an employee from the employment act.
The management styles and strategies in resolving social issues for both public and private sectors are based on the perception of the community. The management will behave accordingly to at least the extent they are expected to behave by the society as to build up a positive reputation for instance, the social responsibility as a contribution to the society in order to keep the existing customers or attract the customers those who are not satisfied with the competitor’s way of resolving social issues. Furthermore, this will enhance the industrial relations as the management treat its employees equally or base on their performance rather than the age, sex and race. It will then directly uplift the motivation of the employees as they have been given a fair working environment to compete against each other for career development. The performance and productivity of the company will also increase due to the high employees’ motivation.
Conclusion
As a conclusion, industrial relations help to maintain industrial peace, resolve conflicts and disagreement and preserve company’s reputation. It encourages employees and employers to come closer to each other to removing misunderstanding and redressing grievances by going through the negotiation process. The objective of industrial relations is to create a peaceful atmosphere in open mind to achieve equilibrium in the benefits of both management and employees. It improves the performance of a company, provide job security to its employees and create a positive goodwill of a company. To sum up, it benefits a company in many ways. An excellent company should not only focus on its customers but also focus on the benefits of its employees as good industrial relations is a key factor that will lead to long term success.
Reference
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