Simulation Portfolio

UTS BUSINESS SCHOOL UTS CRICOS PROVIDER CODE: 00099F

21720 HUMAN RESOURCE MANAGEMENT

WEEK 11

EMPLOYMENT RELATIONS AND THE FUTURE OF WORK

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THIS SESSION • Defining the Employment Relationship

• Theoretical Perspectives and Values

• Conflict and Power in the Employment Relationship

• The Role of Trade Unions

• The Future of Work and HRM

WHAT IS THE EMPLOYMENT RELATIONSHIP?

“An employment relationship is created whenever one person sells his/her labour to another person or organisation and thereby works on behalf of that other person or organisation” (Bray et al 2014, p.13)

THE CREATION OF THE EMPLOYMENT RELATIONSHIP

Market transaction: an employee agrees to work for an employer and the employer agrees to pay the employee a wage in return for work.

Employees essentially sell their promise to work in the future and their ability to work – rather than their completed labour.

THE ONGOING NATURE OF THE EMPLOYMENT RELATIONSHIP

The market transaction is only part of the story: the relationship is usually ongoing.

Production relation—an on-going interaction between employee an employer in respect of how, when and under what circumstances work is done.

Employers must ensure that employees deliver on agreements by being as productive as agreed on and with the promised skills when they enter the workplace.

APPROACHES TO THE EMPLOYMENT RELATIONSHIP I Neoclassical economists are interested in ‘market transaction’—neglecting what happens within the firm.

The production relation remains a black box.

Employees free to negotiate with employers about employment contracts, representing mutually agreeable terms and conditions.

Assumes that workers and employers are equal in terms of economic power, legal expertise & protections, and political influence.

The egoist theory of the employment relationship.

APPROACHES TO THE EMPLOYMENT RELATIONSHIP II Human Resource Management – psychology and organisational behaviour, combined with an emphasis on strategic fit HRM strategy and business objectives

Dual focus of the ‘unitarist’ approach:

• universal psychological needs of employees for happiness, interaction and intellectual stimulation at work, which management needs to satisfy, and

• management initiatives and organisational policies that enhance employees’ job satisfaction, motivation, work performance and organisational commitment.

Conservative and pro-management.

UNITARISM Assumes that an organisation is an integrated entity with a common purpose and a shared goal

Industrial conflict is seen as temporary and created by troublemakers, poor management or bad communications

Trade unions seen as unwelcome intruders who upset the unified and cooperative structure within the organisation

Management should provide strong leadership and good communications to gain commitment of employees

Role of employees is to be loyal to organisation and management, recognising their common objectives

Unions compete with management for the loyalty and commitment of employees

APPROACHES TO THE EMPLOYMENT RELATIONSHIP III

Marxism – focus on class struggle and control.

Assumes two defining features of the employment relationship under capitalism:

• the machinery, technology and the materials necessary for production of goods and services are owned by one class

• production requires labour, which capitalists must buy in the form of labour power.

Radical and anti-management.

RADICALISM Fundamental conflict: workers and employers

Derives from unequal distribution of income and wealth in a capitalist society

The state must protect the interests of those who own the means of production

Employees are vulnerable as individuals, this leads them to form worker collectives and unions

They can challenge the control of management and the distribution of national product

Class struggle: bourgeoisie vs. proletariat

Capitalists control the means of production

Proletariat does not own capital; only its labour

The roles of institutions are explained by the roles they perform in the ongoing class struggle

APPROACHES TO THE EMPLOYMENT RELATIONSHIP IV

Employment relations – adopts analytical tools from (neo-)institutionalist theoretical tradition.

Attitudes and behaviours of employees and employers can be understood by focusing on the rules that regulate the employment relationship.

The definition of employment relations :

“…the study of the formal and informal rules which regulate the employment relationship and the social processes which create and enforce these rules.” (Bray et al 2014)

Pluralist: worker and employers have common and conflicting interests in their relationship.

PLURALISM Organisation comprises many different interests and aims Power is diffused: no party dominates the other Nature of employment relationship: • Open-ended • Indeterminate • Creates antagonism

Role of state: Impartial guardian of the ‘public interest’. Protect the weak, restrain the strong

Management should not expect obedience, but reconcile conflicting opinions

Trade Unions are legitimate representatives of employee interests at work

Workers have a right to challenge management, both have a responsibility to seek compromise

Conflict is inevitable because of different interests but can be overcome

The Role of Management

• To convert purchased labour power into productive

labour is a central issue for management.

• Management’s role is to combine resources to achieve

organisational objectives.

• How to ”extract” productivity from purchased labour:

structures of control and conflict of interests

• Use of specialists by the organisation to manage

employees and their unions.

CONFLICT AND POWER

The indeterminacy of the employment relationship establishes a potential source of conflict between employees and employers within the workplace.

Parties to the relationship must: • Come to an agreement over the price paid or

promises made during the market transaction

• Agree on the effort to be expended or the skills that are applied within the workplace.

This demonstrates the importance of power in the employment relationship.

RULES AND THE EMPLOYMENT RELATIONSHIP

The rules that regulate the employment relationship are central to our approach to employment relations.

A rule is a principle or condition that governs conduct and action (in relation to work or the workplace)

By studying rules, we can understand behaviour and decisions of individuals, groups and societies.

Industrial relations systems create a collection of rules to govern the workplace and work community.

WHO MAKES THE RULES? 1. Unilateral rule-making

Creation and enforcement of rules by a single party (e.g. managerial prerogative).

2. Bilateral rule-making

Joint creation and enforcement of rules by two parties (e.g. collective bargaining).

3. Multilateral rule-making

When 3+ parties jointly make and enforce rules (e.g. Fair Work Commission with employers and unions).

Authorship of rule-making is vital: indicates where the power lies, has consequences for chance of acceptance.

Trade Union: Definition “A Trade Union.....is a continuous association of

wage-earners for the purpose of maintaining or

improving the conditions of their working lives” Sydney and Beatrice Webb (1919)

• Critics: unionism creates unfair monopolies, prevent the operation of the labour market

• Supporters: unions can correct the power relationship between employers & employees

Two Faces of Unions Freeman & Medoff (1984) identify two roles of unions:

1. The Monopoly Face of Unions: uniting individuals to improve conditions and wages beyond decisions by management and the market.

2. The Collective Face: ‘Employee Voice’ provides an alternative to exiting the employment relationship.

SOME MORE STATS ABOUT UNIONS…

The number of union members in Australia has declined from around 2.5 million in 1976 to 1.5 million in 2016.

During the same period the union member share of all employees (or union density) has fallen from 51 per cent to 14 per cent.

Young workers are much less likely to be union members than older workers

Casual and/or part-time employees are less likely to be union members than full-time workers and permanent employees.

Industry union density is strongest in Education and training and Public administration and safety.

Source: https://www.aph.gov.au/About_Parliament/Parliamentary_Depar tments/Parliamentary_Library/pubs/rp/rp1819/UnionMembership

WHY IS UNION DENSITY DECLINING?

• Changing Public Perceptions of unions Less popular and less relevant to employees

• Changes in Structure of Employment Less jobs in union heartland; from manufacturing to service-based, increased jobs in non-unionised areas

• Management Practices Anti-union attitudes and activities

• Government Policies Unions “dozed off” during the period of the Accord; dismantling of arbitration system; current anti-union rhetoric and law are making organising hard

• Actions of Unions Failure to maintain effective workplace networks

Women and Men: Union Membership (Sydney Morning Herald –2014)

The Future of Unionism

• Union renewal strategies;

• Responses to the changing nature of work;

• Break-down of traditional political alliances;

• Emergence of new forms of collaboration

• Australia’s first digital union • $10 a month • Access to online tools

THE CHANGING EMPLOYMENT RELATIONSHIP The employment relationship comprises a set of overlapping contracts: the legal contract, the social contract and the psychological contract.

• Legal: terms and conditions of work and workplace relations

• Social: the mutual expectations and obligations that employers, employees and society at large have for work and employment relationships

• Psychological: reciprocal expectations of individual employees and their individual managers ... beliefs about fairness, trust and worthwhile employment relationships

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• Part-time work has grown, and many part-time workers are underemployed and work very short or irregular hours.

• Casual employment has also grown, especially for men.

• Self-employment is more common, especially part-time,

unincorporated, solo entrepreneurs.

• Earnings for workers in insecure jobs are low, and have declined in real terms.

• Fewer workers are protected by enterprise agreements

(especially in the private sector), while reliance on modern

awards for minimum wages and conditions has expanded.

• Temporary foreign migrants make up a larger share of the total potential labour force, and face especially insecure and

exploitive conditions.

• Young workers have faced the effects of labour market

insecurity most forcefully

https://www.futurework.org.au/the_dimensions_of_insecure_work

Over a third of today's workforce — more than 56 million people — is of the millennial and post-millennial generation, or Generation Z. By 2025, this group will make up nearly 75% of the workforce.

Nearly two-thirds of millennials take interest in an organization's corporate social responsibility. In other words, an increasing number of millennials believe that organizations have a moral obligation to give back to the society in ways that create an inclusive environment for everyone to participate and thrive

While many companies are adopting diversity, inclusion is what millennials are rooting for.

Employee resource groups are taking the lead and pushing diversity to the next level. This will bring more innovative ideas and unique models within organizations.

If the leadership team becomes more open to learning and bringing in innovative ideas from millennials, those ideas will help organizations to expand.

business.uts.edu.au https://www.forbes.com/sites/forbeshumanresourcescouncil/2018/05/09/diversity-and-inclusion-matters-to-the-workforce-of-the-future/

POSITIVE ORGANISATIONAL BEHAVIOUR

> The study and application of positively oriented human resource strengths and psychological capacities that can be measured, developed, and effectively managed for performance improvement in today’s workplace’ (Luthans et al., 2007, p. 11)

It is positivity wrapped up in capitalistic, SHRM approaches…

POB emphasises the ‘psychological capital’ of employees.

PsyCap: feelings of hope, resilience, self-efficacy and optimism.

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WHY IS POB CHANGING HR POB creates predictable outcomes… which is weird! A person’s level of psycap predicts their:

- Absenteeism (R= -11% - this can be a huge saving when you think about it) – Avery et al. 2011

- Work Stress (R= -.21%) – Farr-Wharton et al. 2016 - Psychological Well-being (R= .59%) – Farr-Wharton et al. 2016 - Performance (R=.41&) – Brunetto et al. 2016

It is still about outcomes – but it is about an investment into people and processes, rather than a backward and rational map from the end product!

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https://www.pwc.com/gx/en/services/people- organisation/publications/workforce-of-the-future.html

NEXT TIME (17 MAY): Readings: None

Lecture: Revision

Simulation: Done!

Tutorial: None – will create a practice exam instead!

business.uts.edu.au