Introduction And Background Of Employee Relations Management Essay

Introduction-Background

The Chipton NHS Hospital Trust – Estates Department serves a medium-sized town with a business community which has been fairly resilient during the current economic recession. Covering an 8-square miles area, the Trust provides hospital and doctor’s practices alongside other health providers locally, and is expecting severe cuts of about 10% in its budget due the recession and the Government budget deficit. There are Government expectations that targets set for the Trust to increase patient numbers, service quality, efficiency and effectiveness will be met. The Trust has responded in the past by using competitive tendering and outsourcing some service functions and offering contracts internally where better value for money is obtained by the use of in house resources. With trade-unions representing some 60% of the 1000 employee support staff within its Operational Support department, relationships with management are reasonable, and communications policies have resulted in recent positive staff feedback regarding confidence in top management. Changes are coming, and the management intention is to facilitate this with good information on these, to counter previous negative responses to enforced change. Support staff operates a shift-pattern, working in permanent groups and employee turnover is relatively stable. People management issues have arisen in the past, particularly with regard to middle-to-lower worker grades, illustrated by a tendency of some supervisors to plead lack of training in dealing with issues arising from changes which have been imposed. There is evidence that inward-looking culture had taken precedence over customer needs. Morale in the Operations department is low, contributed by ineffective line-management actions in respect of people management practices. The central HR department has delegated many critical personnel practices to line management in some areas. There is evidence of lack of management control over groups which work in isolation from each other, and an old bonus system has reinforced job boundaries, which impacts on intra-group cooperation and creates a silo-like mentality among the various sections of the Operations departments. Major changes are anticipated with a preference to favour in house services but all possibilities require to be considered, including redundancies and potentially additional outsourcing is services. Such changes require to be handled effectively to both drive the major structural and employee relations aspects of the need to meet the budget constraints. Ease of management and cost-effectiveness are overriding factors in deciding on the correct course of action.

Findings

The current economic situation and Government pressure is forcing a need to cost-effective changes to the hospital services offered by the Chipton NHS Trust Estates Department. These changes must be accomplished with the maximum cooperation of employees concerned, and must be communicated in such a fashion as to ensure cooperation of union representatives and membership. Major structural changes to work practice and organisational structure may be required, and to ensure successful implementation, these changes will require the cooperation and support of the entire workforce and their trade union representatives.

Past External Influences

Current practices within sub-departments of the Estates department are deficient and not working in a cooperative fashion, due to inward-looking attitudes, poor communication and lack of adequate line management control, exacerbated by weak central direction from the HR department. There is no perceived strategic role for HR and their influence is not effective in ensuring consistency of employee relations practices. The structure of the Estates department is complex, with multiple sub-departments, each with layers of management and supervisors. This complexity contributes to a lack of understanding of policy and practice in dealing with employee relations issues by line management, and creates barriers for individual employees in feeding back concerns and participating in helping shape proposed changes in work practices.

Future External Influences

There will be an ongoing requirement for further budgetary restraint, which implies an additional need for job flexibility, cost savings and the possibility of redundancies to ensure a more effective delivery of services to patients. Reviews of value-for-money services may include the requirement for additional outsourcing of some services currently provided in house by the Estates department. There will be increasing pressure on the Trust to achieve Government-set targets and to ensure through improved communications that necessary changes are implemented without causing employee resentment and potential resistance.

Internal Situation

Among employees of the Estates department morale is low and there is a protective mentality among groups of employees who are motivated by antiquated performance bonus practices. The Estates department is heavily unionised with restrictive job practices, and little flexibility of movement between groups, leading to a lack of a common purpose towards patient service improvement. The HR department appears to have relinquished any pretence to leadership, and has failed to ensure line management complies with accepted policies and practices. Internal communication among groups is poor and employment issues have led to unresolved people management issues, with line management citing low pay and poor training in human resource practices for their inability to resolve the issues.

There is inconsistency in how the organisation’s people management practices are implemented by line management, due to the delegation of some fundamental issues such as employee selection, discipline, grievance and communication, leading to variations between groups, with consequent impact on the concept of fairness towards all staff.

The organisation’s hierarchical structure reinforces a silo-like mentality and the multiple levels of supervisory and management layers represents an obstacle to effective communications and an opportunity for any strategic directions from Trust senior management’s intentions to be misinterpreted. The way that planned changes are communicated to employees is critical, and communication plans need to include not only methods for informing employees about what managers expect of them, but also methods to enable employees to express their concerns and needs for successful implementation (Torrington et al 2008:69).

Recommendations

There needs to be an immediate and far-reaching review of employee relations strategy within the Chipton NHS Hospital Trust, led by the HR department with the full backing of top management in the Trust. Armstrong (2000:193) defines employee relations strategies as the intentions of the organisation about what has to be done and what needs to be changed in the ways in which the organisation manages its relationships with employees and their trade unions.

New work and HR practices are required, and there is currently no indication of the concept of a ‘best practices’ model within the Estates department in the current situation as it relates to HR policies and procedures. The theory of HR practices referred to as a ‘bundle’ of practices has gained support as this approach identifies a set of successful HR policies and practices that can be applied successfully to all organisations irrespective of their situation. Best practices on an individual level, such as flexible working or training and development planning, may lead to limited improvements, but little else. It is argued that making changes to individual practices will have a very limited effect whereas making changes together will have a more powerful effect. This suggests that there is a set of policies and practices that can and should be adopted by organisations, which will lead to improvements in performance. In practical terms not only must organisations become aware of these policies and practices, but they also need to have support from top-level managers to adopt these policies (Redman and Wilkinson 2006:29).

The employees and management must be made to realise that they need both sides to be committed to meeting the new targets being set. The organisational HR model which involved dual commitment, both of organisation and trade union in industrial relations is a good choice and creates a conflict-free climate where there is cooperation in industrial relations (Millmore et al 2007:437).

A partnership policy will aim to develop and maintain a positive, productive, cooperative and trusting climate of employee relations. In addition, properly articulated policies provide guidelines for action on employee relations issues and can help to ensure that these issues and dealt with consistently (Armstrong 2006:774).

The current approach to employee relations is very traditional and may not be suited to current economic circumstances.

As outlined by Armstrong (2006:774) different approaches to employee relations have been identified by Industrial Relations Services (1994) as including the traditional, and partnership approaches among others. In the partnership approach the organisation involves employees in the drawing up and execution of policies, but retains the right to manage, whereas in the traditional approach , there is a good day-to-day working relationship, but management proposes change and the workforce reacts through its elected representatives.

There needs to be a strengthening of performance management as a means of countering the role trade unions power in collective bargaining, as individual measures of performance are more likely to improve employee commitment and productivity. Performance management is a means of enhancing managerial control, particularly through performance-related pay schemes, and the individualisation of pay diminishes or neutralises the role of collective bargaining (Price 2007:441). The traditional nature of the employment relationship in free market countries has changed over recent years, with job descriptions disappearing or being diluted, so that employees can be asked to do virtually anything required by the organisation. This has been accompanied by improved performance criteria, expressed in the form of objectives and changing targets (Price 2007:441).

HR management has been seen as a moderating influence between employer and employee in the past, but this position is untenable today and HR management needs to act strategically as a major contributor to any major process and practice change required (Beardwell et al 2004:12). HR management needs to take a central role in implementing the required changes and acting as a mediator between the trade unions and the Trust management’s need to deliver more effective services within a smaller budget.

Employee relations should not be confined to unionised collective bargaining but encompass all employment relationships. It goes beyond the negotiation of pay and benefits to include the conduct of the power relationship between individual employees and their employers (Price 2007:541).

Inconsistency between what is said and what is done undermines trust, generates employee cynicism and provides evidence of contradictions in management thinking.

In the past there have been problems of consistency of dealing with employee issues among different line managers within the Estates department. Line mangers have tended to duck such issues by stating that they are not paid for or have had sufficient training in how to deal with them. Clearly defined and well communicated policies are required to ensure that line management is informed of the correct methods of dealing with employee issues, and have had appropriate training in both their meaning and how to apply them.

The HR department should seek to avoid conflicts by supporting the line managers by providing training, policies and practices which assist them in dealing with employees. They should take a much more active role in ensuring communications between management and the employees is improved, and they should strive to improve cooperative relationships with employees which recognise that staffs are stakeholders, with a common commitment to the role of the organisation. Armstrong (2006:771) argues that the HR function does not do the line manager’s jobs for them, but should provide guidance and training in maintaining formal processes. In their role as industrial relations specialists, HR practitioners may deal directly with trade unions and their representatives, and are also likely to have responsibility for maintaining participation and involvement processes and for managing employee communications.

Outsourcing should only be considered in future where it can be demonstrated that it has been successful in the past as there is a danger that any newly introduced measures to improve productivity across the entire department will be weakened by an individual area becoming more out of tune with the overall aim of the entire organisation in driving efficiencies and cost -savings.

Recommended policies and practices

Employee relations policies should be changed to reflect a partnership approach between staff and management, reflecting the new realism of the economic situation and the need for cooperation in reacting to it.

Policies and procedures which may be introduced must comply with legislation, covering acts such as the Equal Pay Act 1970, the Employment Rights Act 1996, the Employment Relations Act 1999, the Sex Discrimination Acts of 1075 and 1986, the Race Relations Act 1976, and others (Martin and Jackson 2002:63).

Improvements are required in the employee relations climate in order to achieve cost savings and efficiencies as their cooperation will facilitate the introduction of change. There needs to be an ethical approach with mutual involvement and a management willingness to consider employee views. According to Armstrong (2006:780) improvements to the employee relations climate can be achieved by developing fair employee relations policies and procedures and implementing them in a consistent fashion. In addition, while the idea of a job for life is no longer realistic in today’s world, an attempt should be made to be transparent about the need for redundancies and to maintain full employment policies.

A new approach to collective bargaining should be undertaken, based on new style agreements. New style agreements are described by Farnham (2000) as being founded on those negotiating and dispute procedures which are based on mutually accepted rights of the parties expressed in the recognition of the agreement. This approach is intended to resolve any significant issues between the parties by regulations, with arbitration being used to resolve any outstanding differences. Bratton and Gold (2001:353) relate that an NHS Trust in Chertsey signed an agreement which avoids and possibility of industrial action through the use of conciliation and binding arbitration. In this procedure, one side of a dispute is allowed to opt for conciliation if there is no agreement in the course of conventional negotiations, and during conciliation industrial action is suspended. If conciliation fails to bring the two sides together, then binding arbitration comes into play if both sides agree for its use. The aim of the partnership method is to reduce the possibility of disrupting service to patients.

Flexible practices need to be encouraged to change the way in which human resources are utilised. Structural changes are required in the Estates department organisation, with a re-organisation of inter-departmental boundaries to encourage flexible working. As described by Torrington et al 2008:60) this could include new departmental boundaries, relocation of parts of the organisation, encouraging greater staff flexibility and interchange ability, increasing training and appraisal of staff, which would be accompanied by developing the use of performance management appraisal techniques in line mangers.

The number of levels of management and supervisory roles within the department requires to be reduced and the organisation flattened to improve communication and make it a two-way process.

A new set of practices is required for communications of matters relating to employees, and good practice is to allow employees a feedback mechanism to express their views. This would clarify the existing situation around grievance and disciplinary procedure being interpreted in differing ways. According to Cole (1997:335) good communication practices include the use of employee pay-packets to notify important developments affecting the whole workforce or a major segment of it, and notice boards to communicate the information to a wide audience. An employee handbook detailing non-urgent information can be used to cover information such as sickness arrangements, health and safety at work, rules of conduct such as smoking and gambling, disciplinary and grievance procedures, so there is no confusion. E-mail may be used in today’s organisations.

Policy and procedures for handling redundancies are required in the event that, despite all efforts to introduce flexibility, improve communications and involve employees, redundancies may be inevitable to cut costs. The redundancy procedure should examine alternative courses of action, involve consultation with employees representatives and observe legal rules relating to consultation which must take place with either trade unions, elected workplace representatives or individuals (Gennard and Judge1999:341).

There are tangible and financial benefits from developing best practices in human resources (Swart et al 2005:33). Once best practices have been developed and applied this enables a company to reconfigure the way in which it is organised. These reorganisations would then enable the department to be more focussed on its objectives, and allow it to exploit its human resources to best advantage to meet the targets set by management.

Conclusions

The key aspects currently affecting the external and internal forces bearing on the organisation are the result of traditional practices of employee relations and a hierarchical structure which tends to make job roles inflexible. This works against and inter-departmental cooperation between the sub-departments of the Estates section of the Trust. The HR department is ineffective at strategic and line management level, and employee communication is poor. The lack of a fit between Trust management strategy and employee policies and practices, coupled with poor communications is being challenged by the need for Government-imposed cost-saving measures and targets.

Key aspects of the findings are that the organisation of the Trust is faced with significant challenges due to the economic depression and must find ways of reducing the costs and improving the efficiency effectiveness of the Estates department. The organisational structure is hierarchical, offering opportunities for poor communication and promoting a silo-like mentality. Morale is low and the HR department has relinquished some of its responsibilities to line manager also complain of inadequate training to deal with employment issues. This is compounded by lack of cooperation between groups and a lack of flexibility in job roles.

Key aspects of the recommendations are that there needs to be a strategic initiative taken which has top management support to drive HR policies and practices which fit with management objectives. HR needs to develop inclusive policies and practices and ensure they are communicated throughout the organisation and that they are observed by line management. A more ethical approach needs to be taken to employee relations to ensure all staff is made to feel jointly responsible for the organisation’s successful reaction to economic depression and that where possible redundancies are avoided. Job flexibility needs to be encouraged and to facilitate this, and a flatter organisational structure is required.