Term Paper on "Performance Management Conflict Within the Employment Relationship"

Term Paper 7 pages (2018 words) Sources: 20 Style: Harvard

[EXCERPT] . . . .

Performance Management

Conflict within the Employment Relationship

The following analysis is meant to support the statement that "conflict is inevitable within the employment relationship." The essay will analyze the causes of organizational conflicts between employers, employees, trade unions and state, supporting the analysis with several examples. Also, the essay refers to the unitary, pluralist and radical approach regarding conflicts within the employment relationship.

Almost any organization must confront itself at some point with one ore more conflicts. Usually, the main "actors" of the employment relationship conflict are the employers on the one hand, and the employees on the other hand. In addition to this, conflicts can be "fueled" by the other two parties of the employment relationship: the unions and the state. Conflicts appear between employers and employees because of the differences in their opinions, necessities, and possibilities. Employers would prefer that their employees work as much as possible, as good as possible, and not request high wages. On the opposite side we have the employees, who would preferably work less, get higher wages, and would work in an adequate environment. Therefore, given the differences between the parties involved in the employment relationship, it is inevitable that conflicts appear sooner or later.

Causes of conflict

Within the employment relationship, conflicts may be determined by a series of factors. Given the effects that conflicts generate, conflicts may be functional or constructive. They appear as a consequence of idea confrontations between the employers and the employees, providing possible solutions in order to increase performance. Constructive conflicts are extremely numerous. They are generated by multiple causes, and at the same time are favorable for stimulating innovation, creativity, change, and adaptation. They can be controlled, they ensure personnel motivation, eventually leading to a creative and productive behavior within the company (Gordon, 1996).

This type of conflict can be found in any great company's development strategy. Managers in companies like Toyota, Coca Cola, create constructive conflicts using several methods. For example, they encourage employees to have different opinions and to compete with each other, rewarding them. This strategy of creative conflicts is usually applied in the promotional strategy for the company's products and services.

Another type of conflict very likely to emerge in any organization is the interpersonal conflict. It appears and it amplifies between two or several individuals within the same group, or different groups, formal or informal. It is generated by rules, personality differences, or differences regarding values, interests, or attitudes. For example, Pirelli Cables Australia Limited had to deal with such a severe conflict over ten years ago. However, due to implementing TQM programs, the company managed to surpass this negative situation (Dawson, 1995). In this company's case, TQM programs focused on revising existing organizational attitudes and belief system.

Robert E. Callahan signals another very important type of conflict: the conflict between groups. It appears frequently between groups with different interests and objectives. They are usually very complex, given the causes that generate them and also the effects they might produce. Most of the times, these conflicts lead to increasing the group's cohesion and the loyalty within its members (Callahan, 1986). This type of conflict usually characterizes the relationship between unions and employers on the one hand, or between unions and the state on the other hand. Such conflicts are extremely numerous in any economy, no matter its degree of development. For example, the Department of Industrial and Employment Relations in Malta dealt with 372 cases between 2000-2004. The Department resolved 294 cases (approximately 80%) of all the trade disputes. Several global (multinational) companies have signed agreements with the Union Network International (UNI) on behalf on their unions that represent the companies' employees all over the world. For example, the most representative companies to have entered UNI are: Carrefour, Euradius, Falck, France Telecom, H&M, ISS, Metro, NAG, Nampak, OTE, Portugal Telecom, SEcuritas, Telefonica, UPU. The agreements cover the telecomm sector, the commerce sector, and the property services sector.

In order to improve the relationship between employers and employees and to diminish negative conflicts that emerge between them, many companies have adopted the partnership approach. One of these companies is Smorgon Steel in Australia (Roberts, 2006). Partnership practices at Smorgon Steel have significantly improved the company's performance. The partnership concept refers to formal agreements between employees and management, providing for the joint regulation of workplace procedures, employment provisions, and dispute resolution. Partnership relies entirely on trust between the employees and their employers, and on sharing interest and goals, so that mutual gain can be maximized and that conflicts can be resolved easily. Partnership has been proven to increase productivity, the employees' benefits and trade union's organizing ability. Also, partnership is based on reciprocal commitment and obligations between the employees and employers.

Somorgon Steel Group was established in 1983, and now it is Australia's second largest manufacturer and the largest supplier of steel products. The company has three operating divisions in Australia and New Zealand, all of them with important market share in key product segments. Given the fact that the company activates in a very competitive environment, Smorgon Steel had to reduce the number of its employees, from 9,914 in 2000-2001, to 5,975 in 2001-2002. Between 1983 and late 1990s, the company confronted with a negative industrial situation. This situation was generated by four factors: multi-unionism, culture of distrust, informal relations, and the lack of leadership. First of all, the conflict was generated by multi-unionism, since the company's employees were represented by three trade unions in the beginning. These trade unions had conflicting goals and ideologies that generated persistent friction and problems in their relationship with the company's management. The unions pursued different objectives and different means of attaining their goals. This situation created communication problems between the employers and their employees, which finally led to distrust and dishonest behavior between the parties. Second of all, the culture of distrust made human resources initiatives very difficult to implement within the company. Third of all, the conflict was amplified because of informal relations. The informal workplace relations policy applied by both the management and the trade unions generated severe difficulties in implementing strategic and operational objectives. Finally, the lack of leadership significantly influenced the conflict's development. There was no initiative from the company's management or its trade unions for overcoming the industrial conflict through mutual understanding.

The effects were the following: the company's performance was mediocre, the employee turnover and absenteeism level were very high, industrial conflict and disruptive production were persistent, the production level was extremely low, and there was no employee involvement in formulating workplace initiatives.

All these effects led to the necessity of a partnership approach. As a consequence, the company's three trade unions and its management started to be more cooperative. New trade union representatives were elected. The new representatives were more open to consultations with the company's management. Given the fact that multi-unionism was not a good practice, the three trade unions have united, forming a single trade union: the Australian Workers Union. This new trade union's engagement led to a comprehensive benchmarking program, based on training and salary structure. The company associated with a German firm for the employees' training. The training process significantly improved the employees' performance, but also their understanding of the business. Also, an annualized competency-based salary classification structure was implemented, after consultations between the company's management and the trade union.

According to Steven P. Robbins conflicts within the employment relationship are generated by communication, structure, and personal behavior factors (Robbins, 1993). Most of conflicts are linked to communication related issues, since communication has an important role within the interpersonal or inter-groups relationships. In situations where individuals or groups have very different education levels, or come from different environments, semantic difficulties may generate different interpretations of the same message. In other words, each individual or each group interprets the message through his education or experience. This is the case of multinational companies that open subsidiaries in different regions of the world. Not knowing the country's language, culture and traditions may lead to severe conflict between the employees and employers. At the same time, communication might be altered by the informational flow, given the fact that each hierarchical level may perceive and interpret information in a completely different way.

Employees manifest their disagreements with the management in several ways. Strike is the most common of them. Many companies had to face strikes from their employees, and one of these companies is Gate Gourmet. The company sacked 670 workers disputing over working practices and pay. The company hired workers from Eastern Europe, with lower pay and lower work conditions. The company's employees that took part of the strike were sacked. Gate Gourmet is considered to be an anti-union American multinational corporation, managing the labor process through power and authority.

Perspectives on frames of reference

The nature of workplace rules can be analyzed through three different perspectives: the unitary perspective, the pluralist perspective, and the radical perspective.

The unitary approach assumes that both the employers and their employees… READ MORE

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