Employee Relations
The situation is complicated by the fact that, in the overwhelming majority of business organizations today, managers and administrators are employees. They do not own the company, but merely manage it for the stockholders. Senior managers may own stock—but so may production workers, secretaries, and janitors. Executives can be hired and fired like everyone else. The true employer is the board of directors elected by the stockholders to oversee the business. In community hospitals, school districts, public interest organizations, government agencies, or membership associations, of course, there is no question of management ownership.
A DANGEROUS ATTITUDE
It is easy, and perhaps all too common, to view employees as a cost in a line-item budget determining the price of a product or service. This attitude fosters the idea that the less an organization has to pay its employees, the lower the price of the product or service and, therefore, the more competitive the product or service can be in the marketplace.
This one-dimensional view of the labor force provided fertile soil for the tremendous growth of unions, which fought to have labor seen in a multidimensional view. Throughout the decades, unions forced their way into the smallest and largest companies. They won concessions on wages, safety, medical benefits, and vacation and retirement benefits, to mention just a few. Unions became as big as big business. Their influence was reflected in national and state laws as well as in volumes of judicial and regulatory decisions.
The 1980s, however, saw a tapering off of union influence. Union membership dropped; part of this drop is attributed to the significant population move from the unionized Northeast and Midwest to the Sunbelt, which has significantly fewer unions. The impact of foreign competition—foreign cars, for example—as well as the exporting of jobs to countries where labor is cheaper are two other trends that have had an impact on the labor market.
And recently unions have been fighting for their very existence. Right-to-work laws have been passed in 22 states. These give an employee the right not to join a union or pay dues even if the workplace is unionized.
Another major change in the employer–employee relationship is automation. The computer radically changes the role of the individual in many workplaces. The individual now competes with the robot for a place in the assembly line; in most instances the individual will lose the contest. If the computer and the robot take on most of the heavy work in the steel mill, most of the positions on the assembly line, and much of the information gathering and dissemination usually associated with general office work, what is left for the current and future individuals who would fill those jobs?
The trend is to a downsizing of the work force and to a service-oriented economy. This movement creates major reshuffling of jobs and people, with all the emotional stress attendant on such upheaval and readjustment. Layoffs and restructuring of organizations also weaken the loyalty of workers, which can affect morale and productivity. Mergers and acquisitions can have the same effect.
Then there are legislative influences, such as NAFTA, the North American Free Trade Agreement, which allows organizations to move their production facilities around the continent, avoiding regulations and higher employee-benefit costs that impact pricing and profits.
Thomas Friedman, in his book The World Is Flat: A Brief History of the Twenty-First Century, writes at length about a variety of ways employees are being squeezed, including the two most prevalent: outsourcing and offshoring. Says Friedman, “No matter what your profession—doctor, lawyer, architect, accountant—if you are an American, you better be good at the touchy-feely service stuff, because anything that can be digitized can be outsourced to either the smartest or the cheapest producer or both.”
During this significant time of transition, employer-employee relations change, but they are no less critical than in the past. Indeed, most people would argue that they are now more important than ever.
In a very real sense, frontline workers are the organization. They produce the product, provide the service, operate support systems, count the money, deal with customers, work with vendors—in short, they drive the activities that make the organization function.
BENEFITS OF EMPLOYEE PARTICIPATION
Because they are accountable to the board—the real and legal seat of power in most organizations—executives have responsibility as “the employer.” Others, those needed to carry out the operations, become “the employees.” Yet, if there is one significant trend in successful organizations worldwide, it is the melding of interests and heightened cooperation between management and employees. Recognition of several benefits from a united effort has brought this “workplace democracy” about:
1. As the founder of Honda puts it, just as cars are gauged by horsepower, so organizations can be gauged by “mindpower.” If only the CEO thinks about possible improvements, there is one mindpower. If only management, maybe 100 to 500 mindpower. But if everyone is encouraged to think about the company and his or her work in it, and then make suggestions, an organization can have 20,000 or more mindpower.
2. In a highly competitive economy, successful organizations are those that deliver customer delight. But customer delight depends on employee satisfaction; that is, dissatisfied employees are unlikely to delight customers, because their own irritations or feelings of abuse will get in the way. (The next time a retail clerk fails to give you delightful service, remember that he or she is probably the lowest paid, least valued, least trained worker in the store—and most likely part-time to boot. Yet the retail industry expects such employees to conduct the most important job, serving customers.) Success involves everyone—those who make the policies, those who design and produce the product or service, the sales personnel, janitors who keep the premises attractive, secretaries who answer the phone, and so on.
3. To build trusting relationships with customers, shareholders, communities, government, and other stakeholder publics, organizations need to speak with One Clear Voice. Management cannot say one thing in official pronouncements from the ivory tower and then have employees telling another story to the people with whom they interact. Achieving one voice requires shared values, which arise when employees are encouraged to participate in organizational decision making.
The benefits of mutually satisfactory employee-employer relations are significant. There are fewer work stoppages, less absenteeism, higher productivity, and fewer errors. Sometimes the benefits are symbolic, as when the employees of Delta Air Lines gave the airline an airplane during tough economic times. In a similar case, the 480 employees of Piggly Wiggly Carolina, a Charleston, South Carolina, grocery store and distributing business, conceived and organized the $40,000 “Rig for the Pig” campaign. Ninety-eight percent of the employees participated, voluntarily contributing two days’ pay. In the end, they raised $7,000 more than was needed to buy the tractor-trailer truck they gave to the company.
