Employee Relations and Organizational Effectiveness
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Introduction
Employees play a significant role in an organization’s operations. Building relations between the employer and employee requires an extra mile. Decisions made determine the productivity of the employee that affects the overall performance of an entity. Improving the relations between the business and employees and among employees tends to control loggerhead issues that arise during the working hours. Organizations employ different personnel based on the demand and the organizational structure. Therefore, defining the organizational structure and establishing a good chain of command constitute the going concern. Therefore, having a good organizational structure with good and reliable employees, means that the business hits supernormal profits with a short time. However, the employees are given priority due to their participation in earning the profits.
Relations pertaining to the employer and the employee require professionals to execute issues arising from the work environment (Crossman, and Abou-Zaki, 2003). Employees come together with a common goal as they form unions governed by the law. Besides having unions to advocate for better employee welfare, some people tend to engage in collective bargaining. Therefore, enterprise bargaining originates form the actions undertaken by individuals with an aim of improving their welfare while working for a company (Salanova, Agut, and Peiró, 2005).
Enterprise bargaining relate to wages and working conditions that arise when the employee feels there is a gap between him and the working environment. This form of bargaining does not involve a third party since it is a focus on the individual enterprises and the employees within such enterprises. The fair Work Act 2009 provides the grounds for the formation of enterprises bargaining (Australia, 2009). It also stipulates that once enterprise bargaining is formed then it becomes binding between the employer and employee. These means that in case of an agreement, the prerequisites have to be executed. Therefore, enterprise bargaining involves negotiation between the employer and employee by including their representatives. The essence of bargaining is to reach a goal that focuses at enterprise among. Moreover, the Fair Work Act provide the basis for enterprise bargaining and grounds upon its applications. (Brayfield, and Crockett, 1955)
Legal obligations and entitlement observed when employers and employees engage in enterprise bargaining.
Making an enterprise agreement is in line with Fair Work Act 2009, the Act provides legal frameworks upon which to consider when engaging in a bargain process. There are simple and flexible terms to observe in order to provide an inclusive agreement for the benefit of the employer and the employee (McCrystal, 2010). Therefore, considering the terms of the Act the employer and employee have a basis to bargain in good faith and create an enterprise agreement. However, in the bargaining process, the employers and employees have representatives that engage to provide a resonate agreement. According to the act, the employer notifies the employees of the need to be represented. During the bargain process the representatives engage in a negotiation process that encompasses the needs of the employees. In addition, the rights of individuals are a priority regarding the procedure. Welfare, salaries and working conditions are the main subject and reflect the intentions of the employees in the agreement process (Bray, and Stewart, 2013). The notification period of an employer to inform the employee of having representative for enterprise bargain is 14 days (Creighton, and Forsyth, 2012). Every current employee deemed to be covered by the agreement is given the notice and must be in a position to select a representative for purposes of representation. This are important issues to observe when entering an enterprise agreement that poses significant impacts to the well-being of an employee and employer (Creighton, 2011).
When entering an enterprise agreement, the agreement binds the employer and employee since it symbolizes a contract. Legal obligations are necessary to consider when making these decisions (Gollan, 2009). Therefore, the Act provides a clear indication of the inclusion of the terms as to the relationship between the employer and employee. Moreover, it is important to consider various legal issues as stipulated by the Act. When creating the enterprise agreement, the act provides that the expiry date must be included and defined. The expiry date depends on the date the Fair commission takes upon to approve the agreement (Davidow, 1977). The expiry date is a legal date that defines when the agreement will conclude. The employer and employee together with their representative have to counter check to verify that the agreement is within four years and the date does not go beyond the stipulated duration. The observation of the date will ensure that the agreement does not become null and void and that it is applicable throughout the period stated (Mitchell, Naughton, and Sorensen 1997). The legality behind the expiry is evident if the agreement is enforceable according to the Fair Work Act 2009.
When establishing the agreement it is necessary to have a dispute, resolution procedure included. The procedure stipulates the way to follow to solve conflicts that may arise. Employees will always create an environment unfavourable to the employer in cases where they feel their rights are infringed (Diamantopoulos, and Hart, 1993). Circumstances such as low pays, employee welfare and unfavourable working conditions will always lead to conflicts arising between the employer and employee. Including the dispute, procedure means that a person who is third party or mediator could be included in the bargaining procedure. The act stipulates that the person has to be authorised by the person and could be the Fair work commission or and independent person that will not favour one side. These procedures should clearly indicate how the person involved could exercise their own powers to assists the two contenders come into a conclusion.
The enterprise agreement involves terms that constitute flexibility. Legal inclusion of agreement terms binds the employer and the employee. However, flexibility included allows the employer and the employee to negotiate when need arises. These terms allow for individual flexibility arrangements to capture or focus on the employers and employee’s needs. When these clauses exist among in the agreement, they provide grounds for negotiation with the intentions of matching the employer and employee needs.
The legality of enterprise agreement requires the enterprise agreement to contain a consultation term. An agreement needs to include the efforts or contributions of an expert with the aim of giving the best results. The term legally allows the employers to engage the employees regarding important issues. Employers may want to confirm or enquire from the employee about the changes in the work environment. These impacts may cause major changes that affect them in the work place. With the term inclusion, the employees may have a representation in the consultation. Therefore, with such a consideration, a legal obligation is vested on the employer and the employee and must submit to the terms of the agreement.
In addition, the legal obligations imposed by the agreement define the kind of person to include as a representative. Therefore, the Fair Work Act 2009 identifies the following as the bargain representatives. The representative is an employee that will be covered by the enterprise agreement (Henning, 1999). This means that the person will have to act in good faith as he or she is a beneficiary of the bargain agreement. A trade union inclusion or consideration would be necessary if the union consists of a member that will be covered by the agreement. Furthermore, a trade union that represents more than one member may be included as a representative. A trade union that has applied to the Fair Work Commission qualifies to be a representative of the employee. Moreover, the employer or employee may authorise a person in writing to be a representative during the bargain process in order to come up with an enterprise agreement.
However, the bargain representatives are legally bound and the law provides that any benefit accruing to the representatives needs disclosure (Rimmer, 1998). The group or organizations representing the employees have to disclose any benefits that may accrue financially. The benefits are deemed to accrue because of engaging in the proposed bargain agreement. As a requisite, the employer or trade union has to create a disclosure document and provide the same to the employer that has a responsibility of giving it to the employees.
The employer, employee and representatives must observe the requirements of enterprise bargaining. Their inclusion in the process requires the bargaining to be in good faith. However, it is important to observe the legal needs as stipulated in the Fair Work Act 2009 (Chapman, 2009). The bargaining representative has to observe the relevant rules otherwise that the act may not apply. The union or employer has to attend and participate in meetings organized at reasonable time to contribute in the process of enterprise bargaining. In the meeting, the union represents the employer and the employee with regard to issues of concern (Coulthard, 1996). The representative has to disclose relevant information, information that will assist in making decisions and reach a consensus. Representatives have a role to play in the meeting: their presence means that they have to respond to proposals as raised by the other parties (McGrath-Champ, 2003).
Problems associated with measuring labour productivity
Business performance determines the success of the business. A business that continuous in operation and maintains in a competitive environment attracts the attributes of good management (Abdul Kadir, Lee, Jaafar, Sapuan, and Ali, 2005). The life of the business lies in the hands of the management. Meaning, if people responsible for management do not engage in activities that will support business growth, then the business performance reduces. Decrease in performance may lead to bankruptcy and later to winding up. The organizational structure contributes to organization’s success. A good structure depicts the functions of each employee in the business and holds the employee liable (Enshassi, Mohamed, Mustafa, and Mayer, 2007).
A good employee completes the equation of equivocal performance. Labour is considered as a factor of production. The human resource manager has a task of ensuring that he employs the best staff to provide labour (Greenley, 1995). However, employee’s performance depends on the organization’s management and consideration of the employees. An employer meeting employee’s demands stands a chance of having good performance. Therefore, many problems arise when measuring labour productivity.
The aggregate ratio of the output to the input measures productivity. Economic growth, competitiveness and living standards constitute variables used to measure productivity. As a partial productivity measure, labour productivity has a number of indicators. Considering labour productivity, there is need to consider the economic growth and social development (Harris, and Todaro, 1969). Therefore, to effectively measure labour productivity, we need to consider the volume of output with the corresponding input. Hence, labour productivity is equivalent to the volume output divided by the input in use. Factors affecting labour productivity revolve around the amount of output and input required. The input in this case is labour while the output is in volumes (units of products and services). Problems associated with measuring productivity vary depending on the nature of job (LANGFIELD and Madden, 1998).
Nature of the job is a factor when measuring productivity. The products of most jobs are in the form of goods and services. The goods may be tangible but services are not. Quantifying amount of services rendered requires a person to use estimates based on predetermined procedure (Gomez-Salvador, Musso, Stocker, and Turunen, 2006). As an employee working in the product or service industry it is important to know the level of production and contribution made towards the company. Considering the need to quantify the amount of work done, it becomes difficult to equate the amount of work to labour employed. This is the main factor affecting the measure of labour productivity (Schreyer, and Pilat, 2001).
The human resource manager is responsible regarding measuring labour productivity. We could consider this as a factor that trails hand in hand with performance. Employee productivity is key to any organization and creates the relevance of gauging the extent of each employee’s contribution towards the growth of the company. Large organization devises means to ensure that all employees in the database are evaluated to measure their contributions (McGowan, and Andrews, 2015). This has been facilitated by the growing technology and new development in the information technology world. Responding to employees needs and employers wants becomes a nuisance in the progress of the company. Employer’s demands may affect the process of measuring labour productivity. Some employers especially, those that are getting into the market do not want to talk about employer performance measurement. The measurement method employed proves to be expensive making some employers try avoiding measuring employee performance (Anitha, 2014). The reality is that the measuring the employees value towards the firm gives the organization room to improve performance. Through the exercise a business can learn about the employees and encourage them regarding the same.
Furthermore, performance of an employee is affected by various factors. Lack of motivation, low salaries, lack of skills and experience, lack of empowerment, poor work planning, design changes, lack of labour safety, and poor working conditions are a challenge towards labour productivity. These factors require the personnel responsible to identify and analyse each by employing a cause and effect methodology (Ahluwalia, 1991). They determine performance and constitute factors that are associated with measuring labour productivity.
Lack of motivation is a factor that can affect productivity. Employees require motivation to execute their tasks confidently and comfortably. Motivation takes different forms capturing the acts of promotion, gifts, and salary increments (Whitehouse, 2001). Vroom supports that a motivated employee always yields results. Relating motivation to performance, then quality and quantity becomes an issue to the business. The quality and quantity constitute problems that relate to labour productivity (Luthans, Norman, Avolio, and Avey, 2008). The question is on the variable to consider, is it quality or quantity. When focusing on motivating individuals based on quantity, quality becomes an issue. The quality of the products and services may be compromised as employees target large volumes of goods to stand a chance of reward. A business operating in this form stands a position of making losses and affecting the performance. Compromising quality means that the business produce focuses on the quantity alone (Whitehouse, and Frino, 2003.). This makes it difficult to measure labour productivity.
Besides motivation, poor working conditions and planning are major issues when it comes to measuring labour productivity (Chapman, and Al-Khawaldeh, 2002). Working conditions is a vulnerable factor that requires attention as we maintain performance. These conditions in most cases relate to the rules and regulations enforced by the management, the management’s view towards the employees and considering employee’s concerns. It is a fact that employees want to work in a free environment, a place where they can interact and have breaks during the day and during the leave period. This constitutes the employees welfare that is the most critical in the 21st century (Chen, Tsui, and Farh, 2002). The relevance of having good working conditions is evident in the actions and performance of the business. On the other hand, planning as a factor of performance is a tool involving the availability of organization resources.
Planning requires one to efficiently and effectively utilize the available resources for the benefit of the business and employees. Planning is a core function adopted by every organization with prospects on being a leader or provider of products and services. Without considering planning, it means the system has a failure. The outcome will depend on the applicability part of the issues affecting the business (McLaughlin, and Coffey, 1990). Therefore, failure to plan will have an impact on productivity. This makes it difficult to measure labour productivity. Most of employees experience different challenges that differ from one individual to another. These challenges include low source of income or salary at the end of the month of a particular employee in which that amount is less and cannot sustain their needs. These reduce the motivation of those employees at work to perform well and also they are stressed wondering on how life is difficult however, their physical body is at work but their thought is elsewhere. The production of a company can be low due to corrupt employees, instead the company to employees enough man power the just employ few employees and multi-task them at the end of the day there are fatigue and their loss morale on that job. Those employee who are corrupt their usually have interest of make cheap money on their own benefits but their do not concern other colleagues and the future of the company.
If the company employs unqualified personnel automatic, the level of production will be low due to incompetence skills from those employees that leads to poor quality of those products. Employees who have not trained in a particularly profession automatic they lack knowledge on how to go about that some situation, the appropriate procedure to be followed and how to produce the best outcome depend on that competence. Mismanagement of resource by the employees also contributes to low production because every employee just misuses those resources in the on pressure without any restriction or any one concern about that. Resources are the raw material that are necessary for a particular activity to take place, for instance no resource no work, because this resource must be there so that employees to use it to facilitate their daily activity .This resource may include capital and land. For example at a particular at company, the manager misuse funds to pay his/her employees salary, what thing will happen to the whole company? First of all the employees they will strike demanding for their salary, for those few days which will lead to the company to produce less than expected amount product and experience losses
Bias is a problem experienced in organization with formal or non-formal set ups. The problem has been an issue over years and in most organizations (Oulton, 1998). The employees face a difficult time to make a decision that will prove correct. Bias in this case aims at the top personnel with the junior staff. The management may be siding with an employee and declare the performance (Guthrie, Barnett, and Polvere, 1996) Such act is considered unprofessional and harms people most. In that regard, it is the responsibility of the management to create an environment where every employee has to be respected. The human resource mostly abuse their powers and tend to side with one party (Bryson, Charlwood, and Forth, 2006). Therefore, bias constitutes the problems that make measuring of labour productivity difficult.
Trade unions and employers association views on enterprise bargaining and productivity growth as asserted by Fair Work Ombudsmen
Trade unions and employers association have views relating the Fair Work Ombudsman. Engaging in an enterprise bargaining has endless fruits beginning from the employee’s then the employer’s side. The inclusion of representatives in the bargain process creates an environment that leads to unbiased decisions made. Therefore, the aim of trade unions and employers association has a common goal of providing a fair environment for employees and employers to interact regarding business matters (Del Gatto, Di Liberto, and Petraglia, 2011). The role of the of trade unions evidenced in the Fair Work Act aims at protecting the employee while the employers association aims to be on the side of the employers. Therefore, unions work hand in hand to resolve issues that are affecting the employees (Koopmanschap, Burdorf, Jacob, Meerding, Brouwer, and Severens, 2005).
The statement provided by the Fair Work Ombudsman supports the benefit accruing from enterprise bargaining. Increased productivity consequently affects various variables within the business environment (Nordhaus, 2001). However, productivity depends on the employee. The management and employees have an obligation to fulfil towards the organization. Provision of favourable working conditions contributes towards employee productivity. Besides, working environment, a supportive management always constitutes the highest percentage of employee delivery. The working conditions vary and include the surrounding work environment, available of resources and continued support from the management (Bolozky, 1999). Observing these issues means that, the employee and employer may be in terms with the current conditions as the levels of productivity increase. Providing a better working environment and improving on working conditions means that the business is in a position to improve productivity. However, several factors constitute the argument behind productivity. When observing the factors, it is necessary to combine their effects and check on synergy. The Fair Work Act identifies productivity as the outcome or good relations between the employer and the employee (Dowrick, 1993).
There is a link between enterprise bargaining and productivity growth. The perspective depicted in the statement explains the existing link. Having a flexible organization and solving employees problems contribute to productivity growth (Charlesworth, 1997).
Resulting from increased productivity is high wage. Employees stand a chance of benefiting from the positive results of performance (Bennett, 1994). Understating the operations of the business will give an outflow of the organizations undertaking. This requires employees to increase their contribution towards aligning the performance of the business. In circumstances where there is increased productivity, the result is accompanied with goodies for the employees. The wages reflect the impact of productivity (Briggs, 2001).
Trade unions and employers association bargain for better working conditions that is an inclusion in the statement provided. Improved working conditions and productivity relate and the beneficiary is the employer. When employees’ wages are high and the work seems to be satisfying, there is a sense of belonging instilled in the employees. Employees feel motivated and triple their input. The impact is synergy that defines the organizations objectives. With the strategic plan in place, the employees and employer work under the conditions of enterprise agreement to achieve stipulated goals. Strategizing on how to improve employee’s relations is key to the trade unions. The unions devise means to use when engaging the employers. Hence, the impact of employment on the economy is significant as the impact of money on the employee. In addition, enterprise bargaining is the main method to improve the employees working conditions.
A section of the employers exploits the employees. These types of employers never bother about the working conditions and welfare of their employees. Trade unions chip in to sort these issues and try to make the work environment favourable where the employees can execute their functions in an efficient and effective manner (Macdonald, Campbell, and Burgess, 2001). Bringing together the employer and the employee creates room for understanding each party’s problems and demands. This is why the representative exists and has to be one covered by the enterprise agreement. When they listen and sort issues together, it means that productivity will increase leading to the increase in profits and wages for the employees (Bennett, 1994).
Trade unions have performed a greater role in improving the employee’s welfare and standards in the work environment. The unions have participated in establishing a favourable environment where the employees can work without fear. Generally, between satisfaction and the employer lies the representatives selected to represent employees in bargaining forums and create a foundation for success. The improvements experienced in organizations have opened room towards building a significant brand for the employees and the employers. They contribute in covering the faults but reveal the stars within the organization. Performance of businesses is pegged on employees performance hence this is the chapter that constitutes the legal and binding conditions to execute functions according to the law inclusive of Fair Work Act 2009 (McGowan, and Andrews, 2015).
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