Table of Contents Q. l) Use your understanding of employee relations to answer the following questions: (i) Critically examine the factors at play which determine the pay and conditions of ??? London underground train drivers Top company executives Investment Bankers Introduction “London tube drivers to strike on Boxing strike cause festive chaos”(metro. co. uk) are Just few of the headlines that have spread over leading newspapers in the I-JK.
Since the late 2008, when recession took over the I-JK economy, the people have been dealing with various adversities which have made life very difficult for workers working in various sectors. In a world where the national average wage in the I-JK is around 26,000 pounds, London tube drivers have agreed a 10,000 pounds increase in their salary which takes their overall pay scale to a whopping 52,300 a year from an already mountable sum of 314th of the UK population is envious with the fact that investment bankers get paid large sums of money in bonuses and other incentives.
Barclays paid around 265,000 pounds bonuses which is astronomical amounts of remuneration compared to rest of the UK population. Then there’s top executive on the other hand who claim their position is a very ritical one as they’re involved in significant decisions regarding the economy, have two factors such as pay and behavior should be controlled to establish a successful economic structure. Unitarist, Pluralist and Conflict Perspectives Organizational behavior can be assessed through various perspectives.
Firstly, having to build cohesive unit with group members and maintaining a harmonious relationship within peers. Managers have the power and authority to control the activities and to foresee that all employees work towards the same goal for the organization (cipd. co. uk,n. d). In terms of tube drivers; they feel their pay rise is justified and all of the workers push towards achieving their goals. This explains the unitary approach shown by the London underground drivers concerning the pay increment. Pluralist approach looks to end the political warfare and management ownership. Ed rose,2008 p27-29). Freedom to express and establish their own values and norms, pluralist perspective believes in power in the society and allocating responsibility. This approach exists in our modern day society that helps us understand employee relation. Conflicting views believes in change in he social aspects through conflicts. For things to change, conflict is necessary to take things ahead. Class conflict is created through the inequality of economics sovereignty within the society. (P Lewis,M Sanders,A Thornhill,2003; pl 7-21).
Dunlop’s Model of Industrial Relations Jim Dunlop in the year 1950 established three agents or actors which are located within an environment confined by various aspects such as technology, product markets, labor and distribution of power. this aspect have an effect on individual and the work surroundings (industrialrelations. naubribub. com, n. d). The guidelines and process is important in understanding the normality of the economy and to analyze the pay determination. There are various markets that operate in those sectors. Hence, it is also significant to understand the mechanism.
An ideology is created through industrial relations. It also shares body of beliefs and ideas concerning the roles of the actors and the interrelation which helps bind the system together. Jim Dunlop argued that, ” the establishment of procedure and rules is the center of attention of an industrial relation system, the establishment and administration of hese rules is the major concern or output of the industrial relations subsystem of industrial society (Barbash, J, Barbash, K, 1989; pl 57) Train drivers are backed by very strong and efficient trade unions.
They are responsible in helping them raise their wages. Tube driver’s salaries are very high. If we assume to have tube driver wage is in an equilibrium stage, then in relation to the supply the demand for drivers should be high. But the fact is those drivers are not dictated by force but are relatively based on administrative decisions. CEO’s have a very big task of running an organization. They have to make key decisions which equire many attributes and certain qualities. Because of the experience they possess and qualification they hold, there is a restriction as to the supply of CEO’s in numbers.
Hence, their salary increases. Gospel and 5) describes collective bargaining a process by which trade unions and similar association representing group of employees negotiate with employers or their representation with object of reaching collective agreements (M Leat, p:38). As far as individual bargaining is concerned, there are certain needs or demands that need to be well as politically strategic process. Trade unions use three factors to achieve their eeds and want to improve and better the working sector.
The three factors are as followed; Collective bargaining Legal enactment Mutual insurance Mutual insurance helps workers that are out of work by providing them with funds. They also help in providing travel allowances. Legal enactment is also known as statutory regulations. Through legal enactment, rules regarding the employment can be made. Collective bargaining is more concerned with securing a good grounding in terms of employment through the combination of various employees. Trade unions are perfect example as they use their collective force to gain a better ground on hings.
In order to create a working relationship, responsibilities and services must be agreed which is referred to as conjunctive bargaining. Productive agreement is basic requirements for unions and companies to go into in order to maintain a stable working relationship and to avoid any difficulties that may arise in the future. Conjunctive bargaining provides both parties with the minimum terms of agreement to resolve their conflicting interest (Ed Rose,p:281). Conjunctive, which is formed of ‘co’ and ‘Joint’ in context to bargaining relation, says that both parties should be on the same page and support each other.
According to Chamberlin and Kuhn, there are certain dangers possessed by this method. For managers, the role or function to manage disappears. Hence, for trade union, manager’s presence is irrelevant. There is a sense of Job security among employees. (Ed Rose,p:282) Integrative bargaining attempts to seek mutual understanding by bringing together various parties with similar interest. This generally results in a win-win scenario. Integrative bargaining can bring management and union together through which significant progress can be made.
Agreement leads to cost efficient production which increases productivity. This results in wages being increased because of the rise in profits. On the other hand, CEO’s and investment bankers implement an I-win you- lose policy and try to seek an advantage over others. Bargaining power is the driving force which includes threats, bluffs and counters tactics that consequently determines outcomes. Q. 2) To what extent may large differences in pay within an organisation impact upon employee morale and employee relations?
If so what can be done to address the issue? Illustrate your answer with examples. Employee morale and employee relation are two key terms that needs to be understood to determine the differences n pay in organization. Employee relation is defined as the relations that exists and are shared between the employees in a work environment or any organization. According to Gospel and Employee relation is a social, economic and political affiliation through which mental and manual labor are bartered for dependent on employee morale. It is the heart beat of any company.
The relationship between employers and employees is very much dependant on employee morale. Efficiency in work can be achieved if the ambience is made better and happier. Overall employee morale means satisfactions in work among employees. In recent times, CEO’s pay has had a drastic increase compared to normal average employees. The amount accounted to 27 per cent rise in relation to 2 per cent gained by the workers (bureau of labor statistics, n. d). During tough economic times, the answer to the question about such large pay packages is very hard to understand.
According to Micheal Faulkender from the University of Maryland, the one reason could be the huge amount of compensation packages the CEO’s get. These CEO’s don’t deserve the amount that they’re getting and all pay condition should be based on merit (pbs. org,2012). HP paid 10 million dollars to hire its chief executive but only after 11 months was forced to pay 23 million dollars as packages and severance. Until and unless the government starts acting and come up with strict regulation, large companies will be entitled to pay the big CEO’s large sums of money and very less to the average workers.
They should be paid on performance not on the basis of largeness of firms. 40 per cent of the pay is accounted by the firm size whereas Just 5 per cent is based on performance ( Tosi H, Katz and Gomez- MeiJal, Werner S,2000; p 301-339). There exists discrimination towards the people working in ordinary osition. Evidence has shown that the highest paid CEO’s are not top performers. Therefore, the criteria on which they get paid have never been based on pay and performance (Nystrom P, Soofl E and Yasai-Ardekani M,2010; 13(4): 782-805) Dual Labour Markets These market are divided into two groups. irst one being the primary labour market is exemplified by Job security, benefits, huge incomes and very good chance of moving upwards. this can be further categorized into two groups. Workers that advance in their work position due to years of service which are know as primary workers or long term workers. hen there are blue collar workers that are in skilled labour which are referred to as lower primary workers. Secondary Labour markets refers to workers that have little Job security and very low income. ( Beer, P. D. , & Schils, T. 009;p81-84) Senior management has a huge hand in deciding the pay for top executives which has a strong influence regarding differences in pay. To stop creating social tension and causing massive havoc, large firm should cut out on paying huge amounts of money for nonperforming executives instead focus on the employees who are on a bottom level compared to them and who work extremely ard for their salary. One party that can play a defining role are the shareholders, they can exercise control over pay conflict and manage the human resource much more efficiently.
If not acted upon, this might lead to various problems such as employee absentees, lack of motivation etc. there are various ways through which workers willingness to work and maintain a consistent level desire can be maintained. One is by setting up a employee engagement plans. Individuals can shine in their desired field by practicing equity theory which can help bring organization and management together. Global financial civil war might embark in he future creating financial meltdown. Hence, this financial situation or disparity to protect the core values of the company.
Balance of brain brings balance of power. Like the battles for natural resources existed within, there’s a more strategic battles that has been supplemented by the ones with talent (economist. com, 2006). The obsession about global talent lies with literally every companies these days from hotel chains to credit card companies. It is no longer confined to companies such as general electric or Goldman Sachs. References Rose, E. (2008) Employment Relations. 3rd ed. Harlow: Pearson Education Limited, p. 7-29 Rose, E. (2008) Employment Relations. 3rd ed. Harlow: Pearson Education Limited, p. 81-282 Lewis, P. , Thornhill, A. , & Saunders, M. (2003). Employee relations: understanding the employment relationship. Harlow, England, Financial Times Prentice Hall, p. 17-21 Leat, M. (2001). Exploring employee relations. Oxford, Butterworth-Heinemann, p. 358 Barbash, J. , & Barbash, K. (1989). Theories and concepts in comparative industrial relations. Columbia, S. C. , University of South Carolina Press, p. 1 57 Tosi H, Werner S, Katz and Gomez-Mejia L (2000). ‘How Much Does Performance Matter? A Meta-Analysis of CEO Pay Studies’ Journal of Management 26(2): 301-339 The Economist (n. . ) The battle for brainpower. [online] Available at: http://www. economist. com/node/7961894 [Accessed: 29 Mar 2013]. Beer, P. D. , & Schils, T. (2009). The labour market triangle: employment protection, unemployment compensation, and activation in Europe. Cheltenham, I-JK, Edward Elgar, p. 81-84 Newshour, P. (1996) In a Weak Economy, Why Is CEO Pay on the Rise? I PBS NewsHour I Oct. 4, 2011. [online] Available at: http://www. pbs. org/newshour/bb/ business/July-dec11/ceopay_10-04. html [Accessed: 31 Mar 2013]. Nystrom P, Soofl E and Yasai-Ardekani M (2010).
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