Management of Employee Relations - Essay Example

Management of Employee Relations Managing employee relations is a very sensitive issue. Managers need to deal with the employee’s issue very carefully and cautiously. Gone are the days when employers treated their employees as slaves. Human relationship management has seen tremendous changes in the recent past. The dictatorship attitude which managers or rather the employers had changed with the clutter of companies spurting across sectors all over the world. Anybody with good job skills is one with wings, free to fly to shores that are greener. This trend started to develop even faster with the advent of globalization. Globalization has brought sea change in the way companies operate and more specifically with regard to how companies treat their employees. So, the world witnessed boom in various sectors with some sluggish period every now and then but the employees continued to enjoy their dream run with their jobs, and organizations until the recent recession. Yes, the recent global meltdown or in other words the recession has abruptly changed the employee, employer outlook. So, this paper will analyze how the current economic downturn has given more power to the managers when they negotiate with their employees, giving them certain options which can bring out clear perspective about manager’s equation with labors. Economic Recession and its impact on businesses In this globalised world, an economic problem in one country will not get restricted to that country, but gets spread to other countries. This is what happening today, with the economic recession starting in United States of America, is having a very negative effect all over the world. The economies of most of the countries in the world are directly and indirectly dependent on the U.S.’s economy and with liberalization happening everywhere, the negative effects in USA will be felt everywhere, with businesses worldwide facing the negative impact. Many companies are suffering losses and as a result of it several companies are opting for retrenchment strategy. Cost cutting would have to eventually result in job cutting. Lay offs have become a common thing these days with companies. Fewer job requirements and constant lay offs irrespective of the sector made employers to be choosy about the kind of employees they want and more dominant in deciding the compensation package for them. Many reputed organizations have quietly cut the salaries and other fringe benefits to their employees. Employees are forced to take it, as they don’t have any option although it will have negative impact. People are the most valuable asset of any organization, and as many have found to their peril, exaggerated redundancy of staff or the mismanagement of people leads to certain disaster (Dicker, 2003, p.3). Managers have upper hand these days and really have become dominant. Instead of thinking about how to optimize productivity and thereby effectively overcome financial problems, managers look at the easy way out. (Clark and Lorsch, 2008, p.105) Manager’s Upper hand Managers now have plenty of options in their hand. They exercise various options according to the situation in hand, all in their favor. In fact it is a kind of retaliation that managers take on the poor employees who now have become ‘toys’ in their hands. When negotiating with their employees there are some critical issues that concern both like salary, work timings, leave options, promotions, stiff targets and bench marking etc. In each of the above mentioned areas managers dictate terms to their employees throwing value systems to the wind. Proper value systems should be created. “Common values and standards allow people at the front lines to make consistent decisions, even under pressure” (Kanter, 2008, p.44). Compensation package Compensation package with several companies were touching the roof before the recession. “If employers wish to purchase high-quality labour services, in terms of skills, attitude, etc, they may offer a package of financial rewards that is more than its competitors.” (Gennard and Judge, 2002, p.23). But, it took a nose dive, once recession started creeping in. In an organization, the workers would do their duties for personal motivations like salary. Salary will only accentuate motivation and commitment, leading to job satisfaction and resultant high productivity. “Salary strategies and job enrichment strategies were positively related to job satisfaction. Job enrichment strategies and job stability strategies were positively related to employee commitment” (Arocas & Camps, 2008, p.27). Before recession there was a fear among managers that poor salaries may result in minimization of employee commitment as well as employee turnover. But, now they could reduce the employee turnover as a result of the global meltdown. So the managers now know that if an employee leaves the job he will go jobless as other companies also can’t employee them. So we can say that managers have a monopoly in fixing compensation packages and employees can only try and negotiate which at the moment won’t give a positive result. Work timings Every liberty that employees used to enjoy with regard to work timings has gone out of the roof. The concept of flexible timings and work at your own convenient time has been discarded by the companies. As usual employees are given strict timings and also they have to work over time many a days with out being paid extra. These days managers don’t even ‘spare’ the women employees. When questioned they blame it on the recession. This results in a lot of stress. Organization needs full utilization of their workers to reach their targets and to increase productivity. But, with stressed mind, the employees will be hard-pressed to use his/hers physical and mental part, to work effectively for the organization. “Today, stress-related disability claims are the most rapidly growing form of occupational illness” (Casico, 2005, p.587). But, the fact is, it is not always possible to work in a stress free environment, particularly in today’s competitive world. Leave options Every organization has to give its employees a certain number of leaves. Now as managers are forced in to cost cutting mode they don’t allow their employees to use their full quota of leaves. Even such things are negotiated at the time of an employee joining it. There are cases now, that the holidays of even the highest member in the hierarchy is cut to bare minimum and it is obvious that the employees at the lower cadre has to suffer a worse plight. “Smart companies know how to manage the tension between celebrating and looking hungrily for next celebrations” (Graham, 2008, p.123) so it the question of how smart the manager in getting the job done. Promotions Based on the employees performance in his or her job promotions are given. The excellence levels of the employees can be kept at optimal levels, only if the employees are rightly and ethically rewarded. That is, allocation of rewards, incentives, promotions and also recognition to the deserving and apt employees is an important strategy to keep the motivation and excellence at higher plane. “Provide appropriate financial incentives and rewards, and non-financial praise for the employees’ achievement” (Armstrong, 2004, p.336). Rewarding the deserving and ‘success achieved’ employees will stick them to the organization and importantly will motivate them to exhibit excellence. Now ever since the recession turned its ugly head on the companies, promotions have also become rare. Employees are given stiff targets which at times are extremely crucial to meet. Apart from cuts in promotions several organizations even scrapped training programs for their employees. Training budgets are put on hold. Managers say when employees are lamenting everywhere with pink slips and escorted out of the office under an hour the possibility of training is literally ruled out. Fringe benefits Managers as leaders have strong assumptions or views about the nature of the world. They will, therefore, be quite comfortable in imposing those views and personal cultures, on their coworkers and employees to form a work culture, according to the situation prevailing in the internal as well as in the external environment. Employees now have to travel in lesser class. No fancy cars from the company and cut in the entertainment or other company reimbursable expenses. No family vacations and paid holidays. Even some companies talk about the negative performance of their employees as an excuse to layoff. Analysis The aspects that are mentioned above concerns both the employees and the employers. What ever is the situation and however is the external environment the employers should always have a smooth relationship with their employees. Managers taking undue advantage of the current situation can back fir on them any moment. The organizations that really have a problem because of the economic down turn can communicate their inability to pay more compensation to their employees. It is possible only by proper communication. Having an amicable solution to the HR problems would help the organization and its employees to feel better and safe. Human resource is one of the precious resources of the organization and it has to be managed effectively. “The HRM perspective stresses that each activity should form part of the whole process of people management.” (Price 2002, p.17). No organization would like to loose its quality employees. The so called recession has forced some managers to take undue advantage of the situation but it is not good to do so. Many organizations even today have not touched the employees’ salaries as part of their retrenchment strategy. They look at other options to cut costs and manage recession. Several multinational companies have successfully done it to perfection. Organizations at this stage should take care of the welfare of the employees. Any activity such as unreasonable targets should be completely avoided as nobody gains anything out of such tactic. Managers should be more broad minded and empathetic with the problems of the employees. Salary cuts are okay if the company is considering this option instead of layoffs. The company is a liberty to cut fringe benefits of its employees as it is understandable but other options that managers’ exercise in the name of recession is unpardonable. Managers should also realize that recession is not eternal. Things are going to change in the near future and when things are bright they need bright people. Once the organizations let go the quality people it is never possible for the company to get them back. So it is in the interest of the employers that such practices should be discarded once and for all. When companies complain about lack of employee loyalty and trust they should also set examples. The real test comes at times of difficulty and not when days are shiny. Also, a company instead of cutting costs can even become a niche player by being innovative in its HR approaches. "To gain or keep a competitive edge, managers have renewed their emphasis on innovation, shifting away from relentless focus on controlling costs" (Draft, 2004, p.4). These days not only employees’ even customers look at ethical values of the organization. “Consumers are choosing more than product and employees are choosing to work for companies with stronger values” (Czinkota et. al, 2005, p.611) clearly convey the message to the companies. As a manager, being nice to employees at this time of crisis is necessary. Managers should not be mere managers but they should transform themselves as leaders. “Recognise their responsibility in humanisation of organisational environment to make the employees feel that the organisation where they work and spend a large part of their working life is theirs and realise that it is their second family and that they are taken not of, valued and cared for” (Rao, 2004, p.330). So, the most important thing is that managers should not take undue advantage of global recession. Instead help people in the organization to understand the situation better. Always demanding and dictating the terms will only result in the degradation of respect, one have for their leader or manager. When the company is doing well, the managers can play a domineering role, when there is a concern that people were getting complacent. If this done, the dreaded complacency will not enter the organization. But, when the company is in difficulty like the current economic crisis, the manager should avoid dictating and punishing the employees. Instead, the managers can become strong and supportive father figure, pointing out to the employees that things were not as bad as they seemed, and that the company had great strengths, which will ensure future success. With this attitude and optimal strategies, managers with the aid of the employees can increase productivity and once gain earn good profits. “In the past, many managers did exercise tight control over employees. But the field of management is undergoing a revolution that asks manager to do more with less, to engage whole employees, to see change rather than stability as natural, and to inspire...people, to create a truly collaborative and productive workplace (Daft, 2004, p.4). Unison of workers into teams, with an urge to usher an organization into top echelons will be successful, if the manager is able to optimally handle the crisis situations. If the managers with their effective managerial skills, efficiently and positively handles the crisis scenarios with the aid of employees, performance of the organization can be optimized manifold and the organization would have a ubiquitous presence all over the world References Armstrong, M, 2004, How to Be an Even Better Manager: A Complete A-Z of Proven Techniques, London: Kogan Page Arocas, R & Camps, J, 2008, ‘A model of high performance work practices and turnover intentions’, Personnel Review, 37, 1, 26-46. Clark, C R and Lorsch, W J, 2008, Leading from the Board Room, Harvard Business Review, 86, 7. Casico, W., 2005, Managing Human Resources: Productivity, Quality of Work Life, Profits. 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