EFFECT OF EMPLOYEE RELATIONS ON ORGANIZATIONL PERFORMANCE
Maintaining healthy employee relations in an organization is a pre-requisite for organizational success. Strong employee relations are required for high productivity and human satisfaction. Employee relations generally deal with avoiding and resolving issues concerning individuals which might arise out of or influence the work scenario. Strong employee relation depends upon healthy and safe work environment, cent percent involvement and commitment of all employees, incentives for employee motivation, and effective communication system in the organization. Healthy employee relations lead to more efficient, motivated and productive employees which further lead to increase in production level. Over 40 percent of the companies listed in the top 100 of Fortune magazine’s “America’s Best Companies to Work For” also appear on the Fortune 500. While it is possible that employees enjoy working at these organizations because they are successful, the Watson Wyatt WorldwideHuman Capital Index study suggests that effective human resources practices lead to positive financial outcomes more often than positive financial outcomes lead to good practices.
1.1 BACKGROUND OF THE STUDY AND ORGANIZATIONAL PROFILE
Employee relations had its roots in the industrial revolution which created the modern employment relationship by spawning free labour markets and large-scale industrial organizations with thousands of wage workers. As society wrestled with these massive economic and social changes, labour problems arose. Low wages, long working hours, monotonous and dangerous work, and abusive supervisory practices led to high employee turnover, violent strikes, and the threat of social instability. Intellectually, industrial relations was formed at the end of the 19th century as a middle ground between classical economics and Marxism, with Sidney Webb and Beatrice Webb’s Industrial Democracy being the key intellectual work. Industrial relations thus rejected the classical econ. Institutionally, employee relation was founded by John R. Commons when he created the first academic industrial relations program at the University of Wisconsin in 1920. Early financial support for the field came from John D. Rockefeller, Jr. who supported progressive labour-management relations in the aftermath of the bloody strike at a Rockefeller-owned coal mine in Colorado. In Britain, another progressive industrialist, Montague Burton, endowed chairs in industrial relations at Leeds, Cardiff and Cambridge in 1930, and the discipline was formalized in the 1950s with the formation of the Oxford School by Allan Flanders and Hugh Clegg. Industrial relations were formed with a strong problem-solving orientation that rejected both the classical economists’ laissez faire solutions to labour problems and the Marxist solution of class revolution. It is this approach that underlies the New Deal legislation in the United States, such as the National Labour Relations Act and the Fair Labour Standards Act.
1.2 STATEMENT OF THE PROBLEM
In recent times, while most workers are on job, they do not produce more simply because of the un-healthy relationship they have with their fellow colleagues and employers. A recent study conducted by Blyton (2008) revealed that employees do not put up their best performances at workplaces when they are un-happy with management, government, or even their fellow colleagues. Bad employee-employer relationship results in strike actions and lockouts. All these actions taken by employees to display their grievances only do the organization harm than good as productivity will be reduced drastically.
By many accounts, employee relations today are in crisis. In academia, its traditional positions are threatened on one side by the dominance of mainstream economics and organizational behaviour, and on the other by postmodernism. In policy-making circles, the industrial relations emphasis on institutional intervention is trumped by a neo-liberal emphasis on the laissez faire promotion of free markets.
1.3 RESEARCH OBJECTIVES
The objectives for this study are:
- To identify various employee relations practices, and its effect on the productivity of an organization.
- To identify the challenges faced by employees at work places.
- To identify ways of enhancing healthy relationship between employees and employers in an organization.
1.4 RESEARCH QUESTIONS
The following questions were used to achieve the above objectives:
- What are the various employee relations practices in your organization, and how do they affect productivity?
- What challenges do you face in your organization?
- In what ways can healthy relationship be enhanced between employees and employers in an organization?
1.5 SIGNIFICANCE OF THE STUDY
This study seeks to bring out the various employee relations practices which South Akim Rural Bank has undertaken to increase its productivity and contribute its quota in the economic development of the communities which it operates, and the country at large. This study will therefore help enlighten management of various organizations of the various effects of relationship practices between employers and employees in an organization. The study will also bring out specifically, the employee relations practices which the bank has been able to make available to its employees. It also seeks to bring out the level of encouragement and motivation the bank has given to its employees to work effectively, among others. The importance of this study is therefore to highlight the various employee relations practices and how it affects the productivity of an organization. This study will go a long way to illustrate how organizations should treat employees’ in-order to increase productivity.
1.6 SCOPE OF THE STUDY
The scope of the research will be limited to South Akim Rural Bank at the New Juaben Municipal Assembly in the Eastern Region of Ghana. The research will rely on the bank for vital information as well as information from secondary source. The research will take duration of four months to complete.
1.7 LIMITATION OF THE STUDY
The researcher encountered a limitation in regards to availability of information. Thus due to the institutions working ethics, the researcher could not get access to vital information since it was treated as confidential and the targeted respondent’s number was not attained since some employees were on leave. Inadequate funds and availability of time also became a limitation.
1.8 CHAPTER SCHEME
The project will be organized around following chapters;
Chapter one gives an introduction to the research work. It gives the basic information about the company and the research being undertaken. This chapter therefore consists of the background of the study and organizational profile, statement of the problem, objectives, research questions, significance of the study, scope of the study, and limitations encountered by the researcher.
Chapter Twoconsists of the literature review and the theoretical framework
Chapter three gives details of the research methodology. The research methodology represents the various ways and methods which the researcher used in order to gain his information.
Chapter Fourgives the analysis and interpretation of the information gathered by the researcher.
Chapter five gives the findings and conclusion of the researcher. Here, conclusions will be drawn based on the findings and their implications will also be given.
The relationship between the employer and the employee is important, therefore business owners need to pay attention to this relationship if they want their businesses to grow and succeed (Bhattacharya et al. 2012). There are a number of employee retention strategies that business owners can utilise in order to maintain the good relationship they have with the employees. Several source including Kleinalten-kamp and Ehret (2006), Strohmeier (2013), and Yan and Stafford (2011) outline relationship strategies targeted at workers might include amongst others motivating, providing incentives, delegating important responsibilities, being open and transparent, team building, and so on.Burns (2012: 186-196) declared that good employer-employee relations are essential for different reasons. These reasons might include:Employees who are inspired to work produce better and more results.The level of competency of the staff increases because of their drive to become better.Customer service is improved because employees who have good relations with their employer are usually viewed as good customer consultants. Institute of Leadership and Management (2007) outlines a number of issues that can cause the downfall of the employer-employee relationship. Some of the issues include:The High Rate of Inflation The increment of the inflation rate in an economy results in an increased standard of living Berument et al. 2011: 149). When this happens,workers start to demand higher salaries to complement the increased cost of living. This situation possesses the potential for the breakdownof the employer-employee relationship.Lack of Trust and Respect According to Hunt et al. (2009: 71-77) trust and respect are earned by an employer through open communication, consistent feedback and delegation of responsibilities to the staff. An employer who fails to abide by these elements of trust and respect will eventually also put a negative strain on the relationship. Globalisation provides the platform for changes in work processes, management style and technology (Spence 2011: 28). Business owners should always monitor the global economy to ensure they are up to date with current global trends of relationship management. A business that fails to do so is faced with the potential of losing their work force. Labour laws were designed by the South Africa government to protect workers against unfair treatment by their employers (Cazes et al.2012). Every employee eventually become saware of these. It is important for the employer toensure that they comply with these laws or face penalties and a demise of the relationship they have with the staff.Daft and Marcic (2010) advise business owners to never allow a negative relationship to exist between themselves and their staff. If this happens, the productivity levels of the organisation decrease. The employees are the ones who have direct contact with the customers and go an extra mile to be helpful. When they are happy, a good relationship between themselves and the customer is created and maintained.When they are unhappy these employees often direct their unhappiness at the customers.Interpersonal Skills as the Basis for Building and Maintaining Relationships To build strong relationships in the workplace, business owners need to develop their interpersonal skills. According to Nkosietal.(2013: 10-20), interpersonal skills will make it easier for the business owners to manage relationships and succeed in business. Some of the interpersonal skills include:
- The ability to understand other people’s behaviors and interpret them correctly (Gilley 2006: 5). The business owners must aim to recognise and correctly in-terpret the feelings, thinking, and behaviour of another person. Gilley states that this is done in an effort to discover their fears, failures, successes and actions The ability to manage impressions and present oneself competently to others (Chiaburu and Stoverink 2013). Success in business today depends on building successful relationships. Knowing how to present yourself professionally gives you a powerful edge over the competition. Business owners must have a combination of confidence, competence, attitude, manners, and communication.These are enhanced by a polished executive image; knowing what to do, how and when to do it.
III. The ability to communicate and get your message across (Jones and Sinnett 2011).Good communication skills will enable business owners to convey important in-formation. They should never be tongue tied, know what to say, and say it.
- The ability to persuade others and influence their behaviours, attitudes, opinions and beliefs (Kehoe and Wright 2013).Business owners are encouraged to use the authority and systems they have in their organization to persuade and influence staff to work efficiently and effectively to ensure that the organization goals are met and good relationships are maintained.
V. The ability to use power (Pfeffer 2009).Business owners must use the power they have to influence staff but must not act in an intimidating manner.Job Satisfaction Job satisfaction has been outlined as a difficult entity to define even in simplistic operational terms. Schults and Schults (2002) referred to job satisfaction as the positive feelings and attitudes employees hold about their jobs. This depended on many work-related factors, ranging from the sense of fulfilment workers get on their daily tasks and many more. Yang et al. (2011) states that personnel factors can also affect job satisfaction. These factors include age, health,and length of job experience, emotional stability, social status, family and other social relationships. Their motivations and aspirations and how well these are satisfied by their work also affect their attitudes towards their jobs.Daft and Marcic (2010) describe job satisfaction as an accurate indicator of good relationships between the employer and the employees.This is because a satisfied worker usually has good relationships with the employer.Previous research from Jeon and Choi (2012) pointed out that employees who were happy with their jobs are the most likely to satisfy customers and manage good relationships with them. This may suggest that treating employees well puts them in a better frame of mind to treat customers well. Lusch and Vargo (2006)were of the opinion that customer service and employee satisfaction were closely related to each other. Customers, for example expect outstanding customer service. Employees want recognition and compensation that relate to the achievement of customer service goals. Customers want to deal with knowledgeable customer-contact personnel who can make decisions. Employees want to be led, inspired and recognised. This study encourages business owners to continuously make efforts to satisfy their employees as they are the ones who contribute the most to production, sales and customer satisfaction. The owners should make efforts to understand what satisfies their staff and continuously check whether the business processes and management are in line with what the employees want. The owners must find their own method to measure job satisfaction either by having one on one session with staff, distribution of questionnaires, and so on.As far back as 1989, Bennet stated that job satisfaction was not easy to measure because there was no standard measurement criterion for business owners. Some firms issue questionnaires to employees asking them to list in rank order the tasks that they find particularly boring and/ or unpleasant. Equally, employees might be invited to comment on the working conditions they regard as most attractive (security,good working conditions, responsibility, control over work, etc.). Results from such surveys may help in providing to the employees whatthey need in the organization in order to be satisfied.The factors that affect job satisfaction vary from one worker to another and from day to day,but include the following:The nature of the work (the tasks involved,and the interest and challenge the job generates).The level of compensation The perceived fairness of the promotion system within a company The quality of the working condition Management style Social relationships in the workplace Along with contributing to a general senseof personal well-being, job satisfaction is per-ceived to be linked to a positive work attitude and increased productivity.