Understanding Employment Relations 2e

Chapter 1 The Subject of Employment Relations

What the Chapter Covers
This chapter introduces the reader to the subject of employment relations, and its material is presented in the following order: a definition of employment relations, which also describes some of the inherent difficulties in conceptualising an employment relationship an exploration of three alternative conceptions of the employment relationship: the legal conception, which embraces the concept of a contract of employment the industrial relations perspective and human resource management (HRM), which notes the strengths and weaknesses of these views the social exchange perspective, and an explanation of the psychological contract The chapter closes by integrating the three perspectives and explaining how the book brings them together to address the subject matter of employment relations

New Concepts Introduced in Chapter

Authority: power conferred on an individual or group as a legitimate part of the person or groups role Collectivism: a philosophical stance that recognises that some issues in the employment relationship are best dealt with on a collective basis Contract of employment: a legal agreement in which an offer of employment is made by an employer, and accepted by the employee Equity: the idea that people should be treated with parity to each other in terms of the personal costs they incur, and benefits they accrue from work. Floor of rights concept: the idea that individual rights established by law are no more than a fallback position that can be resorted to if all else fails Formal contract: the formally agreed terms of the employment relationship, i.e. the legal concept as reflected in the contract of employment Hard HRM: an approach focused on bottom line considerations in which employees are viewed in much the same way as other resources that can be used or disposed of as necessary

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Informal contract: a less formal expression of the employment relationship that reflects a degree of give and take between the parties. Individualism: a philosophical stance that reflects the idea that each employee should be treated as an individual in the employment relationship Labour process theory: a neo-Marxist perspective that focuses on employer attempts to control the labour process, and employee attempts to exercise counter-control in return Paradigm: an example or model, which is used as a standard and expresses the prevailing framework of theories and concepts Pluralist perspective: a frame of reference in which an organisation is seen as a collection of different groups, all with their own legitimate aims to pursue, and so a degree of conflict is a normal state of affairs. Power: the capacity of an individual or group to modify the conduct of other individuals or groups in a manner which they desire, without having to modify their own conduct in a manner which they do not desire Psychological contract: an (unvoiced) set of expectations that the parties have of each other, together with the obligations that they feel towards each other. Radical perspective: one that argues that employment relations mirrors the inequalities of social class, property ownership and political ideology in wider society. Reification: to treat an abstract idea as something that actually exists Relative deprivation: feelings of deprivation that arise when one individual or group feels that it has been unfairly treaded in comparison to another individual or group Soft HRM: an approach that views employees as valued assets, the appropriate use of which can lead to competitive advantage for an organisation. Trade Union density: the proportion of potential members who are actually in membership of trade unions. Unitarist perspective: a frame of reference in which an organisation is seen as one large family, all on the same side and pulling together in the same direction, and in which conflict is seen as deviant behaviour. Vulnerable worker: someone at risk of employment rights violation and that risk is exploited by an employer

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Teaching Materials in Textbook Pause for Reflection Exercises: Hints for Completing
Exercise on page 6: The Legal Conception If you have difficulty answering these questions, briefly read pages 5 and 6 of the book, then ask yourself what you understand by the phrase contract of employment. Exercise on page 10: The industrial relations perspective Try to abandon any stereotyped images that you might have, i.e. that industrial relations belongs to an earlier age, or that it has been superseded by HRM; these are only half-truths. Instead, focus on some of the features that you associate with industrial relations and how the existence of these is likely to bring about differences to the legal conception of an employment relationship. Exercise on page 16: Social exchange The questions are relatively straightforward, but it could be the case that this is your first exposure to social exchange theory. If so move to the second question and ask yourself about the differences that are likely to exist between in an economic exchange (i.e. buying a house or a car) and the relationship with a personal friend. Which of these is likely to be nearer to the employment situation and why?

Critical discussion question on page 13

The question implies that unitarism is the most common approach used by managers. While there always have been some pluralists around, the majority have tended to be unitarist. Today, when recessionary conditions encourage the use of managerial power, coupled with the growth of HRM, which is rampantly unitarist, the conditions are even more in favour of unitarism.

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Case Studies
There is one case study in the chapter, Case 1.1 about public sector psychological contracts.

Supplementary Case Study

CASE STUDY 1.2: THE ENGINEERING ASSISTANTS ROLE Consider the descriptions given below of a job in a large organisation. The first, A, is an outline of the formal job description for the post, and the second one, B, describes the post holder and his experiences in the job. A: JOB DESCRIPTION Engineering Assistant, Technical Service Department, Groundwell Components PLC. Grade 10 H.N.D. Mechanical Engineering or equivalent

Job Title Salary Minimum Qualifications

Position to whom Ultimately to Technical Service Manager, but Incumbent Reports works under direct supervision of designated Technical Service Engineer Positions reporting None to Incumbent Main Duties Personally Performed 1. Provides assistance (as directed) to a designated Technical Service Engineer on selected aspects of investigations into failures, complaints and queries from customers, concerning the company's products. Answers customer's queries, verbally or in writing (as appropriate) on technical matters concerning the application and utilisation of the company's products. Visits customers on their premises and carries out investigations on-site concerning failure, application and utilisation of the company's products. Prepares reports for circulation to appropriate personnel within the company on items 1 to 3 above. Provides technical assistance to the company's sales staff as directed.
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2.

3. 4. 5.

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Other Responsibilities Equipment Cash and Valuables Vehicles Other all tools, instruments and equipment in the incumbent's charge Nil uses pool car when travelling on company business and must therefore posses clean, current driving licence the incumbent is expected to work flexibly and at times, may be required to undertake investigations on customers premises, which could involved prolonged absence for extended periods from his/her departmental location. On occasion, he/she may occasionally be required to deputise for a Technical Service Engineer, in the event of the latter's prolonged absence from duties Nil

Hazards in Position

B: THE POSITION AND ITS OCCUPANT Morris Green is an Engineering Assistant in the Technical Service Department of Groundwell Components PLC; a post he has occupied since he joined the company two years ago on 1st March 2005. The department is a fairly small one, consisting of a Technical Service Manager and three Technical Service Engineers, each of which has two Engineering Assistants reporting to him. On appointment Morris was paid monthly at the bottom point of grade 10 (25,000 p.a.) and since then he has received two merit increases, plus a total of 8 percent in cost of living rises, which were negotiated by the trade union to which most engineering personnel in the company belong. On the day he joined he was given a staff handbook, which he found useful in learning about the company and the standards it expected of its employees. Morris very quickly acclimatised himself to his new position, which he found stimulating and interesting. The man to whom he directly reports is outgoing and considerate with his subordinates, and seems to go out of his way to ensure that they have a wide variety of different jobs to do. Morris is a married man with a young child. and frequently works more than the standard 37 hours; partly for the overtime that is paid, but mainly because it is normal practice in the department to adopt a flexible approach to hours if there is a tricky problem that needs solving quickly. This flexibility he regards as part of the normal give and take in the job, and in return has always found the firm to be understanding if he needed time off for some reason. For example, his
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wife gave birth to their child about six months ago, and since was ill for some time after the birth, she needed a great deal of practical support from him at home. All things being considered, Morris is happy with his lot. The job is pensionable and secure; a thing that he particularly values now that he is a father. Indeed, he is more than content with the way the firm has treated him. For instance, about one year after he joined, his immediate superior had to undergo major surgery, and was absent for three months. In his absence Morris took over the running of the section, and without it ever being asked for, the departmental manager made sure that he was paid a monthly bonus equivalent to the difference between his salary and that of a Technical Service Engineer. Questions 1. You are a member of the Human Resources Department in the above firm, and as per the requirements of the Employment Rights Act 1996, you are about to write the letter of written particulars to Morris Green at the end of his first two months with the firm Using Exhibit 1.1 from Chapter 1 of the main text, together with details given in A and B above (as appropriate), draft this letter. 2. Using A and/or B note those points which seem to you to go beyond the formal contract, and make Morris Green's relationship with his employing organisation one that contains elements of an Informal Contract and/or a Psychological Contract.

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Useful Sources of Additional Material

Books and Journal Articles Ackers, P (2002) Reframing employment relationships: the case for neo-pluralism, Industrial Relations Journal 33(1): 2-19. An useful paper, which contains interesting ideas about the limitations of the industrial relations perspective, but which also argues for its continuing relevance, so long as it is subject to an essential re-focus to reflect current conditions. Budd, J.W. (2004) Employment with a Human Face: Balancing Efficiency, Equity and Voice, Cornell University Press, Ithaca, NY. A highly engaging text that advances the theory and thematic dimensions of the study of employment relations, using the efficiency-equity-voice framework. Cullinane, N. and T. Dundon (2006) The psychological contract: a critical review, International Journal of Management Reviews, Vol 8 (2), pp.113-129. A review of the literature and debates concerning the psychological contract and its role in understanding the employment relationship. Fox, A. (1966) Industrial sociology and industrial relations, Donovan Commission Research Report No. 3, London: HMSO. A by now classic paper produced for the Donovan Commission, which argues for many of the ideas that became the orthodoxy of the industrial relations perspective in the 1970s and 1980s. Keenoy, T. (1997) Review article: HRMism and the language of re-presentation, Journal of Management Studies 34(5): 825-41. An interesting paper that is highly critical of the ideas underpinning human resource management. Nolan, P (2004) Editorial. Shaping the future: the political economy of work and employment, Industrial Relations Journal 35(5): 378-87. A review article that documents emerging trends in the nature of work in organisations and comments on the increasing degree of the increasingly casual nature of work. Rousseau, D. (1995) Psychological Contracts in Organisations: Understanding the Written and Unwritten Agreements London: Sage. A book that gives a thorough exploration of the psychological contract, and its implications for the employment relationship. Sisson, K. (2008) Putting the Record Straight: Industrial Relations and the Employment Relationship, Warwick Papers in Industrial Relations No: 88, Industrial Relations Research Unit, University of Warwick (available: http://www2.warwick.ac.uk/fac/soc/wbs/research/irru/wpir/). A readable and thoughtprovoking assessment of a range of theoretical and conceptual developments in the field of industrial and employment relations. Walton, R.E. (1985a) Towards a strategy of eliciting employee commitment based on policies of mutuality in R.E. Walton and P.R. Lawrence (eds), HRM Trends and Challenges Boston: Harvard University Press. A book chapter, which at a theoretical
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level, explores the necessity for firms to construct a sound psychological contract with their employees, where they intend to adopt the human resource management paradigm. Walton, R.E. (1985b) From control to commitment in the workplace, Harvard Business Review 63(2): 77-84. A seminal and oft quoted paper that sets-out its authors views on the need for a change in the relationship a firm has with its employees. Web-based Materials For those who enjoy exploring study materials on the internet, given below are a number of potentially useful websites that give further information on the topics and issues covered in the chapter. http://www.eiro.eurofound.ie/2002/07/feature/TN0207102F.html A very useful paper that gives extensive details of the characteristics of industrial relations across selected European countries http://smallbusiness.findlaw.com/employment-employer/employment-employerhiring/employment-employer-hiring-contract-provisions.html A useful introductory paper that lists ten things to think about when drawing-up a contract of employment. . http://www.contractoruk.com/ir35/ir35_substitution_control_mutuality_of_obligation.html A basic, but useful paper that deals with some of the requirements that need to exist for a person to be considered (in legal terms) to be an employee, and thus be eligible for a contract of employment. http://www.eto.org.uk/twork/contract/ An interesting paper that deals with the matter of contracts of employment for teleworkers. These are people who are employed by a firm, but who work from home. http://www.highbeam.com/doc/1G1-19137711.html Summary of an article from the Administrative Science Quarterly journal (Robinson, S., 1996) which deals with the implications of trust and the ramifications of breaches of the psychological contract. http://www.cipd.co.uk/subjects/empreltns/psycntrct/psycontr.htm CIPD factsheet which provides a succinct definitions and summary of the psychological contract in employment relations

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Multiple Choice Questions

Try the following multiple choice questions to test your knowledge of this chapter. You should note that each question has only one correct answer, and this is one of the four alternatives (a), (b), (c) or (d) listed below the question. When you have answered the questions move to the grid at the end of the chapter to see the correct answers. This activity contains 12 questions.

1. Which of the following is noted in your text as a current condition that makes it difficult to be specific about the nature of the employment relationship within organisations: a. the nature of work within modern organisations b. a major reconfiguration of the labour market in most industrialised economies c. a blurring of traditional boundaries between workers and their employing organisations d. all of the above 2. Which of the following is NOT one of the three major assumptions that underpin the concept of a contract of employment a. that the relationship between employer and employee is an individual one, made between two parties of equal bargaining strength b. that there is an imbalance of power between the two parties c. it consists of a promise to work (or be available for work) for which payment is promised d. since there has been a free exchange of promises, the two parties have reciprocal, but different rights and obligations 3. According to your text which of the following is true?

a. someone who accepts an offer of employment, whether or not the offer is in writing has entered into a binding contract of service b. contract of employment only exists where an offer of employment has been made in writing and is accepted in writing c. both (a) and (b) are true d. neither (a) nor (b) are true 4. Which of the following is NOT one of the sources from which the terms of a contract of employment can be derived? a. b. c. expressly agreed terms collectively incorporated terms distributive justice terms
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d. 5.

terms implied by common law

Which of the following are sources from which the terms of contract of employment can be derived? a. b. c. d. custom and practice rules works and organisational rules legislative terms (statute law) all of the above

6.

Bain and Clegg (1974) argue that industrial relations is concerned with: a. b. c. d. the making and administering of rules that regulate the employment relationship in unionised firms, regardless of whether these are seen as formal or informal, structured or unstructured the making and administering of rules that regulate the employment relationship in non-unionised firms, regardless of whether these are seen as formal or informal, structured or unstructured the making and administering of rules that regulate the employment relationship, regardless of whether these are seen as formal or informal, structured or unstructured none of the above

7.

Your text argues that the mainstream school of industrial relations is underpinned by a philosophy that is:

a. b. c. d. 8.

pluralist unitarist non-interventionist radical

A criticism of the industrial relations perspective is that it: a. b. c. d. is too heavily in favour of trade unions focuses primarily on the institutions of job regulation and conflict resolution to the exclusion of all else is anti trade union ignores legal influences on the employment relationship

9.

Which of the following is a key characteristic of Human Resource Management (HRM), as defined by Hendry and Pettigrew (1990)? a. b. a unitarist philosophy a pluralist philosophy
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c. d.

the matching of human resource activities to a clearly defined business strategy an emphasis on extracting the maximum amount of effort from employees, for the minimum level of rewards

10.

Storey (2001) distinguishes between two variants of HRM, which are: a. b. c. d. soft and hard manipulative and consensual traditional and innovative none of the above

11.

Which of the following is NOT one of the five shared properties of social exchange relationships given in your text? a. b. c. d. costs and benefits unvoiced expectations and obligations procedural justice unequal power

12.

Schein (1980) draws attention to the existence of three types of contract in the employment relationship, which are: a. b. c. d. formal, informal and psychological legal, illegal and taken-for-granted high-trust, low-trust and transactional close, distant and exchanges

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Answers to multiple-choice questions Question Number 1 2 3 4 5 6 7 8 9 10 11 12 Answer D B C C D C C B C A C A Level of Difficulty Difficult Moderate Difficult Easy Easy Difficult Difficult Moderate Easy Easy Easy Moderate Page Number 4 6 7 7-8 7-8 11 12 13 13 13 15-17 18

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