Having employed over 100 employees and with a possibility of future expansion, the business owner has decided that he would want to engage his employees more in the running of the company using the employee relations techniques. This is aimed at ensuring that employees perform at their most efficient optimal levels. This report is thus aimed at focusing on the various issues that ensure employee relations is handled well in solving conflicts once they arise and to avoid disputes from degenerating into serious matters in the future (Armstrong, 2006:167).
These enterprises have employees of not more than 250 ,while small enterprise have less than fifty employees the medium sized enterprise have not more than 250 employees. The Small and medium Enterprises have played a very big role in the growth and stability of the economy as it consists of over 90% of all operating firms and they contribute to the creation of employment for over 65 million people. They have contributed to over 40% of the Gros Domestic product (GDP) in the United Kingdom and at the same time they have led to the growth of economies, increase in competition and innovation for the firms (Armstrong, 2006:167).
Benefits employee relations
Employee relations ensures that all stakeholders in the business are involved in the decision making process. This is because it entails involving all the parties together by building team work, cohesiveness and solving problems together. Employee relation is also important in reducing conflicts within the organization. All organizations have different people from different religion, age groups, and races and therefore differences are bound to arise and to be able to reduce these problems employee relations is important. The business owners are seeking for new ways that they can win the confidence and commitment of employees and also ensure that employees are satisfied with their jobs. They also seek to motivate the employees, reduce the rate of absenteeism, reduce the rate of labor turnover and eventually gain a competitive edge over their competitors. A more participatory management style would make the business achieve all these issues (Gennard and Judge, 2005:302).
The issues for employee relations in Small and Medium Enterprises (SMES)
The small and medium sized enterprises are faced with many issues such as lack of harmonization, tension between control and consent, loose structures of governance together with lack of professionalism in the human resources processes. Most of these firms do not have clear guidelines as to what is expected of employees. Thus we find that most employees will do what they think is right as there are no proper procedures to be followed (Murphy, 2002:10)
Constraints for SME
The economic meltdown is a major concern for the SMEs today and the effects of this recession has led to the businesses adopting cost cutting strategies in areas of human resource training, practices and the development policies. The banks have also affected the operations of these businesses as they charge very high