Page 172 - DMGT106_MANAGING_HUMAN_ELEMENTS_AT_WORK

Managing Human Element at Work

Notes 7.4 Sound Labour Relations at the Enterprise Level

In the final analysis, the quality of relations between employers and employees in an
enterprise depends on the policies, practices and procedures which exist at the enterprise
level to deal with both individual and collective issues, and to promote labour-management
cooperation. There are, therefore, numerous enterprise level mechanisms in different countries.
Their effectiveness is to an extent conditioned by the particular corporate culture or philosophy
relating to the management of people. The development of enterprise level industrial
relations facilitates, as it did in Japan, adjustments to structural changes. Indeed, it is a way
of reconciling the need for enhanced management flexibility with the need to ensure that
employees’ concerns are taken account of and their cooperation obtained without which
successful change would hardly be possible.
7.4.1 Human Resource Management Policies and Practices

The elements of a sound industrial relations system are closely linked to a progressive
human resource management policy translated into practice. Harmonious industrial relations
are more likely to exist in an enterprise where human resource management policies and
practices are geared to proper recruitment and training, motivational systems, two-way
communication, career development, a people-oriented leadership and management style,
etc. Many of these human resource management activities have an impact on the overall
industrial relations climate in an enterprise. So long as human resource management policies
and practices are not central to corporate strategies and human resource management
departments are seen as only providing “services” to other departments, such policies and
practices will remain outside the enterprise’s main culture and will be a “deviant” culture.
Some of the best managed enterprises tend to integrate human resource management
policies into their corporate culture and strategies.
Since the 1980s the emphasis in theory, and in the practice of some companies, has been on
strategic human resource management i.e. viewing human resources as a competitive
advantage, so that human resource policies need to be integrated into corporate strategic
plans. This transformation in the USA, for example, provided the following lessons:
(i) Adversarial workplace relations are not in the interests of either employees or the
enterprise.
(ii) Competitive strategies based on low costs and low wages result in a high incidence
of labour management conflicts, a low level of trust, and are impediments to innovation
and quality.
(iii) Strategies based on technology and traditional industrial relations approaches only do
not result in high levels of performance, which can be achieved by integrating
innovations in human resource management with new technologies.
(iv) Some forms of employee involvement such as Quality of Worklife and Quality Circle
initiatives do not transform organizations or sustain themselves, without employee
involvement at all levels of decision making, including strategic decision making.
The practice of human resource management did not match the theories expounded, though
in the 1990s more progress has been made in narrowing the gap between theory and practice.
In the large Japanese enterprises the manufacture of quality products and productivity
improvement have, for a long time, been viewed as being dependent on a “people-centred”
approach. This is reflected in their policies relating to recruitment, education and training,
multi skilling, job groupings, merit rating, and pay systems.

7.4.2 Worker Participation and Employee Involvement
It is important at the outset to separate several issues relating to participation, communication
and consultation: The principle of communication; the methods or means to give effect to

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