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Understanding the Impact of Internal and External Factors on Employee Relations

Feb 5, 2023 | 0 comments

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Feb 5, 2023 | Essays | 0 comments


For an organization to succeed, it is fundamentally important to establish and grow the employee relationship. Aylott (2014) Defined employee relationship as the relationship covering the social as well as [political aspects in an organization which employees provide manual and mental labor in exchange for rewards allotted by employers.  In essence the employment relationship is a relationship that is psychological, legal and economical through which employees make use of their skills, and knowledge for the employer in return for particular financial rewards. The relationship differs on many grounds from one organization to another but is clearly defined by the contract of employment. This contract defines exactly the tasks that the employer expects to be completed and the re-imbursement that will be given to the employee for completion of the same.  For this reason, the employment relationship goes beyond the daily and day to day interaction; it becomes a legal contract which involves two parties. There is strong evidence suggesting that the employee relationship does not exist in some form of vacuum; it reflects the community and societal rules within which it operates. There exist some internal factors within the organization can affect the health of the employee relationship so can external factors. In the recent past, the employee relationship has come under close scrutiny. Organizations can no longer deny the importance of employee relations. Whether psychological, economical or even social; these categories of employee relations latch together and band to form the essence of the organization itself. There have been several changes in the world over, but the truth about employee relations remains the same. Aspects may have changed but the foundations remain strong.

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Management styles:

Managers are often on the lookout for newer styles of controlling employees while at the same time increasing income. Of course, the mangers often do not have the freedom to elect the management style that they will apply towards employee relationships. There are various strategies that managers can use to influence the employee relationships and these are:

Traditionalists: these managers are often overtly exploitive of employees, disallowing and discouraging issues such as trade unions and their roles. They invest little in improving the employee, pay only the minimum that is required and often give the employee little if any job security. These kinds of managers are mostly successful in the hotel industry. This industry is renowned for poorest employee relations and highest turnover rates.

Sophisticated paternalists: managers often treat employees in some sort of paternalistic nature. Employees are given generous contracts and job security although discourages from active trade unions and such. Marks and Spencer company is a great example of this kind of management. Employee relations are characterized with good communication and good conditions for employment.

Sophisticated moderns: these managers have the same strategy as the paternalists except they recognize and acknowledge the importance of trade unions. Many of the Japanese owned companies such as Nissan and Hitachi employ this style of management. Unions are part of management and bargaining is thought to profit all parties. This manager is more focused on fostering commitment.

Employee participation in the organization

Employee participation is defined s the degree of power sharing and regulatory ability in the organizational decision making structure. In the past, only managers and executives were involved in the decision making process. The needs of the employees in the process of decision making took a back seat. Research and long term studies quickly proved that organizations faced high turnover from these process. Modern organizations are more focused on involving and addressing the employee needs and challenges in every aspect of decision making. However, the level of employee participation varies in every organization. Increased employee participation fosters loyalty and commitment from employees and thus a more positive and healthy employee relationship.

Increased employee participation is of course often found to be similar to democracy in the work place. Rather than dictatorial decision making, democracy fosters growth of the company as all employees are satisfied and involved even in small decisions. They influence, control and exercise power in their own small realms and therefore feel more as part of the organization. Such as organizations faces low turnover and decreased costs of labor, (Corby and White 2002).

Structure of collective bargaining

Max Weber a famed sociologist in the 1930’s indicated that collective bargaining in an organization was so vital that indeed the study of industrial relations should be the study of collective bargaining. Collective bargaining often defines all sort of negotiations between employers on the one hand and on the other hand all those who are arguing on behalf of employees. There are organizations that discourage and indeed have no sort of collective bargaining, (Fitzwater 1999). While such organizations may pay employees generously and provide some form of job security this only buys them a strong short term positive employee relationship. Take for example the famed Marks and Spencer Company, employees are generously rewarded; however any form of collective bargaining is discouraged and frowned upon. The result is a high turnover rate with employees seeking out companies that may pay lower salaries but allow collective bargaining. Collective bargaining gives employees a sense of belonging and importance where they feel that their voice hold some sort of strength.


The government:

The government is often found to be at the centre of organizational operations. Governments define policies and constitutions which govern the relationship between employers and employees. Governments act as intermediaries protecting the rights both parties in the contract without neglecting any. For example, in the United Kingdom the wages council is given power by the government to determine minimum wages for various industries and sectors of the economy. In addition taxation regulations often play a major role in determining the income and benefits that employees will enjoy. Should the employee relations turn sour, it is common for both parties to turn to government bodies in an attempt to regulate, build to rectify the relationship. In some cases, the government may step in and dictate the terms of the relationship.

Power, justice and culture

Dessler (2000), Indicated that employee relations are characterized by power play and interactions within organizations.  Both parties refer to the concept of power often as being taken advantage of or taking advantage of.  Depending on the interpretation, power relations often have a connotation of justice. Justice refers to how employees and employers have felt about fairness in the organization. Whether procedural and distributive justice, they are all related to the way in which decisions are made. The treatment given to people during a specific period, affect their perceptions about the process of fairness and therefore their entire relations of the organization.

Line managers have the duty to ensure that the subordinates’ perceptions of fairness are positive for stronger employee relations. This involves communicating decisions, providing reasons for specific actions and consulting about the impact of specific future decisions with the employees in the area they manage. Blyton and Turnbull (1998), with the global markets organizations need to take into consideration the differences in national culture, their influence upon the organization’s culture or sub-cultures and therefore their implications for the organization’s policies and procedures. Differences in languages, religions, traditional beliefs, laws and even education systems will definitely mean that the organization and national cultures will diverge.

Trade unions

According to Rollinson and Dundoon (2007), the primary function of a union is protecting the welfare of the members. The membership will have to come together because they recognize they have a common interest. The union has the responsibility to identify and give common voice to the common interests. They define the nature of relationship that employers have with employees. They are often considered as the go between for both parties. They negotiate payments for the employees, leave days and even go as far as representing individual employees in disputes with the company.

The underlying purpose of trade unions from times in history is participation in the job regulation. Through the union, workers can gain more control over their own careers and working lives.  A trade union therefore translates into a continuous relationship of workers for the purpose of maintaining or improving the conditions of their own work environment.  Trade unions therefore basically dictate the employee relations which is why many organizations discourage membership to the same. In Europe for example, trade unions are quickly becoming weaker and their influence is much more degraded.


Majority of the organizations have employed labor on fixed term contracts. The organizations are, in effect, achieving flexibility by adjusting the nature and size of their workforce in line with the production and demand. These changes have caused far wide effects on the ways which employees view the relationship with the organization. The employee relations now continuously exist in a state of change moving and subsisting from very strong to sometimes non-existent. Whereas workers in the past have previously stayed with one employer for the length of their career, they are now more likely to change the employer while staying the same occupation. The length of time that an average employee stays with a given employer has declined greatly, an indication of weakening employee relations.


Aylott, E. (2014). Employee relations. Philadelphia, Kogan Page.

Blyton, P., & Turnbull, P. (1998). The dynamics of employee relations. Basingstoke: Macmillan Business

Corby, S., & White, G. (2002). Employee relations in the public services: Themes and issues. London: Routledge.

Dessler, G. (2000). Human resource management. Upper Saddle River, NJ: Prentice Hall.

Fitzwater, T. L. (1999). The manager’s pocket guide to employee relations. Amherst, Mass: HRD Press.

Rollinson, D., & Dundoon, T. (2007). Employee relations. Maidenhead: McGraw-Hill Education.

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