The employment relationship is an exchange relationship between labour and capital that tends to be unequal - Essay Example

?Human Resource Management The employment relationship is an exchange relationship between labour and capital that tends to be unequal. Discuss. Employment relationship is the individual or collective context within which interactions between unionized or non-unionized employees exist with employers in an organization. Employees must be made to feel as team members regardless of their status and level in the company. Employment relations involve regular interactions between the employers, employees, governments and trade unions. Employment relationship can be viewed as a legal notion applicable in many nations that refer to the relationship between an employee and employer. The relationship leads to the creation of reciprocal rights and obligations between the employee and the employer. Employment relationship is the vehicle through which employees gain access to their rights and benefits associated with employment in areas of social security and labour laws. The relationship represents the point of reference in the determination of the extent of the employer’s rights towards their employees. The three recognized characteristics of employment relationships are indeterminacy, unequal and dynamic. Discussion The current profound changes occurring in the employment sector have given rise to hybrid forms of employment relationships that do not satisfy the conditions required of productive work relations between employers and employees. Although this has led to an increase in the flexibility of the labour market, many workers have ended up acquiring unclear employment status, denying them the protection related to the employment relationship. A study published in 2000 established that the employment relationship is proving durable in many industrialized countries contrary to earlier studies that supposed the concept has led to increased flexibility and less stability (Wachter, 2004, pp. 166-170). The widespread emergence in new forms of employment is has lead to the visible changes in work arrangements and flexible work arrangements. Clear understanding of the nature of the employment relationship requires thorough recognition of the characteristics underlying employment contracts. Employment relationship is characterized by antagonistic tendency encompassing a dispute between the employer and his or her employees. The employees possess an abiding interest to ensure the success and the viability of the firm while guarding against the excessive demands placed upon them. The three recognized characteristics of employment relationships are indeterminacy, unequal and dynamic. Indeterminacy focuses on the logic that a labour contract involves the exchange of money for the capacity to deliver the service required by the purchaser and not material goods and services. This implies that those employers wishing to secure the value of the purchased labour must ensure willingness on the part of the employees (Edwards 2003, p. 14). They force the employees strain to achieve the required standards even if they are not willing. The second aspect on employment relationships is that they are unequal. This is because many workers have no choice other than engaging in paid work; their choice for potential employers is limited. On the other hand, the employers have considerable resources that give them power to replace the unwilling employees with other workers or adoption of a more reliable technology. Although the employee influence varies overtime and between contexts, the overall employment relationship is characterized by subjugation of the employee to the employer. Finally, the employment relationship can be dynamic whereby it can be driven by both conflict and cooperation at different degrees. Many managerial strategies are characterized by deployment and management of workers to maximize production and generate surplus (Edwards 2003, pp. 16-17). Some of these challenges are minimized through the adoption of employment contract. An employment contract is a largely a relational and less formal. Relational contract is informally agreed terms of codes of conduct and conditions that controls the transaction between the employer and the employee. The relational terms that can be contained in an employment contract includes level of physical or mental effort to be devoted to tasks, and appropriate behaviour towards workers among other terms. Formal contract employment terms include wage rate and holiday entitlements among others. Employment is a legal concept used in labour law in the attribution of rights and responsibilities among the bargaining parties, that is, an employee being employed by an employer. Employment contract is characterized by social sub ordination and relationship of economic dependence. The relationship between the employer and the employee is likened to that between the bearers of power and the one without powers. It is an act of submission in the inception and subordination in operation (Baker, et al., 2002: p. 51). The legal framework provided by the labour laws act to counteract the inequality of the bargaining power which is inherent in all employment relationship. Employment relationship is controlled by key institutions that include the government, trade unions and the employer organizations (Dolvik and Waddington, 2004: pp. 9-40). The government has an obligation of creating an enabling institutional framework that balances the enterprise flexibility and worker security to satisfy the changing demands of the global economy. The government is concerned with the formulation of regulations necessary for creation of a balanced environment that ensures fairness in taking care of the welfare of both employers and employees. The legal framework governing the employment relationships should be considered as a crucial national policy that takes into account the flexibility and security in management of labour market. Trade unions are viewed as coercive organizations that use their illegitimate collective power to pressurize employers to concede with the employees’ demands on improved pay and working conditions. According to Manning (2003, pp. 105-111), this contributed to distortion of free market operation of market forces leading to adverse economic conditions such as greater unemployment and higher inflation. Most trade unions’ objectives have led to the souring of relationships with governments. For example, during 1990s, the British conservative government used repressive legislation to undermine the legitimacy and power of trade unions. Trade unions serve a crucial role in maintaining employee welfare and any alteration in their activities affects the employment sector. For instance, the 1979 to 1986 decline in trade union membership, in the United Kingdom in led to rapid growth in unemployment (Blyton and Turnbull, 2004). The trade unions yearn for recognition that enables them to possess a bargaining power among employers. The increased strength of unions is, however, trimmed by the government through rationalizing their collective and bargaining power. In response to trade unions, the employers have their own legal body that solves any disputes that arises from trade unions and the government. The enactment of labour laws favouring the welfare of the workers have been highly criticized by the employer organizations who posit that the increased labour market regulation damages economic development. Most employer organizations boost the control power of the employers towards their employees. When trade unions are extensively strong, the employer organizations may choose to recognize one non hostile union to help them pre-empt the incursion of more unfriendly employee unions. Pluralism acknowledges the existence of divisions within the workforce and the organizations. The pluralist concept analyzes work and the employment relationship in theoretical perspective. The concept focuses on the inherent conflict of interest between employees interacting in an imbalanced labour market. The relationship is viewed as emanating from the bargaining problems between the participants and the competing interests. The employment outcomes are dependent upon environmental elements that determine the varying bargaining powers of the stakeholders. Modelling the employment relationship in pluralist perspective leads to challenges associated with distribution of resources including rules governing the interactions between employees and employers. The pluralist perspective encompasses institutions such as corporations, labour unions and public policies. Additionally, individual union leaders, employees, managers and owners are viewed as human agents rather than economic, rational agents (Leidner, 2006: pp. 452-461). Marxist perspective alludes that most economic inequalities are visible in industrial relations context; between employers and employees. This perspective assumes that economic inequality arises from capital owners and labour suppliers. The nature of the society political and social institutions is derived from the basic inequality. The perspective postulates that inequality is maintained by selective access to life opportunities like education and employment. Maintenance of inequality requires continued economic growth that guarantees profitability and capital accumulation. This also explains why most employers would pressurize their employees to produce surplus. In the process, the worker also benefits from the capitalist goods and services through overtime payments and purchase and consumption of the capitalist’s goods and services. This leads to the creation of a mutual bond between the worker and the capitalist. The capitalist enhances this mutual relationship through advertising to promote consumer demand. Unitary perspective places emphasis on the possibility of harmony and common objectives. Any conflict at work is associated with trouble makers and ignorance (Leidner, 2006: p.451). Identity and Work). Therefore, the concept emphasizes unity and notions of leadership rather than power. The perspective posits that the employment relationship should be characterized by teamwork and the spirit of unity. Any troublemakers and deviant parties should be sanctioned while ignorance is curbed through training and proper communications. This perspective condemns and bans any strikes with strict punishment befalling those who participate in them. However, the perspective is viewed as an extension of management bureaucracy by trade union activists. Application of such perspective in an organization destroys any positive relationship between employers and employees as its principles are used to control and manipulate the workforce. Conclusion Employment relationship is characterized by power imbalance, which is why the concept cannot materialize without employment contract. In the labour contract, the worker trades his or her ability to accomplish an assigned task, which should be translated into actual labour in the course of undertaking it. Expectations on performance standards are portrayed during the production stage. The indeterminacy nature of employment relationships makes the employees to be coerced in most situations other than undertaking self motivated tasks and responsibilities. The unequal nature of employment relationships leaves the employees with no choice but to engage in obligations for payment; not willingness. The deterioration in the power imbalance in employment relationships is portrayed by the existence of trade and employer unions purposely formed to solve the inevitable disputes. This suggests that formal contracts are the only remedy through which fairness can be ensured in such relationships. References Baker, G., Gibbons, R. & Murphy, K. (2002) Relational contracts and the theory of the firm, Quarterly Journal of Economics, vol. 117, no. 1, pp. 39–84. Blyton, P. & Turnbull, P. (2004), The dynamics of employee relations, Management, Work and Organisations Palgrave Macmillan. Dolvik, J.E. & Waddington, J. (2004) Organizing marketized services: are trade unions up to the job? Economic and Industrial Democracy, vol. 25, no. 1, pp. 9-40. Edwards, P. (2003) ‘The employment relationship and the field of industrial relations’, in Edwards, P. (Ed) Industrial relations: theory and practice, Oxford, Blackwell. Howell, C. (2005) Trade unions and the state: the construction of industrial relations institutions in Britain, 1890-2000 Princeton University Press. Leidner, R. (2006) Identity and work, in Korczynski, M., Hodson, R. and Edwards, P. (eds.), Social theory at work, Oxford, Oxford University Press, pp. 424-63. Manning, A. (2003) The real thin theory: monophony in modern labour markets’, Labour Economics, vol. 10, no. 2, pp. 105–111. Wachter, M.L. (2004) “Theories of the Employment Relationship: Choosing Between Norms and Contracts,” in Kaufman, B.E. (ed.), Theoretical perspectives on work and the employment relationship, Champaign, IL: Industrial Relations Research Association. pp. 163-193. Read More