HRM IIB

The Three Perspectives on Industrial Relations and Management Style of IR

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Overview of the Lecture

Explain the three views on industrial relation: Unitarist perspective Pluralist perspective Radical perspective

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Introduction

In developing a theory of industrial relations various approaches or perspectives have been identified.

Important to remember that these are analytical categories and not predictive models.

No single perspective is “correct”, they all emphasise a different aspect of IR.

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Introduction

Unitarism emphasis the organisation as a coherent team united by a common purpose.

Pluralism sees the organisation as an amalgamation of separate homogeneous groups within some kind of dynamic equilibrium.

Radical perspective is based on class analysis and class conflict in society.

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Unitarism

In terms of this approach the organisation is seen as a single entity, with a single authority and a loyalty structure.

The organisation has a common set of values, interests and objectives shared by all members of the organisation.

Managements right to manage is seen as legitimate and rational.

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Unitarism

Any opposition to managements right to manage is seen as irrational.

This view sees no conflict between employers and employees since both are partners to the common aim of production and profit.

All employees strive for greater productivity in order that all can share the rewards.

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Unitarism

This means that each worker does his or her best, accepts their place in the hierarchy and follow the appointed leader.

Conflict is seen as irrational and antisocial. Conflict is seen to be caused by agitators. If conflict exist it is the fault of employees and

not management.

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Unitarism

Trade unions are intrusions from outside competing with management for the loyalty of workers.

Trade unions has a negative effect on the prerogatives of management.

Trade unions redirect the loyalty of employees away from management.

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Unitarism

Many businesses promote unitarism because: It legitimises managements authority. It emphasises managements right to rule. Employees promote the interest of

management. That any challenge to management is

misguided and subversive.

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Pluralism

This perspective sees the organisations as being composed of individuals who come from a variety of distinct sectional groups with each having its own interests, objectives and leadership.

The organisation is seen as multi-structured in terms of groups, leadership, authority and loyalty.

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Pluralism

The organisation thus has to manage tension and competing claims in order to maintain a collaborative structure.

Conflict is accepted as inevitable due to the existence of different interest groups.

Conflict is limited due to the interdependence of parties for economic survival.

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Pluralism

Unions and management will use interactive mechanism to settle disputes.

Negotiations and collective bargaining are important mechanisms for the settlement of disputes.

Employers recognise trade unions as part of the labour scene.

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Pluralism

Trade unions recognise managements role within the enterprise.

Management do not place restrictions on what is being negotiated and bargained for.

Trade unions are recognised as organisations capable of communicating workers needs and aims to management.

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Pluralism

Pluralism recognises that the organisation is in a dynamic state of tension due to competing interests.

Institutions and processes must be in place in order to manage the conflict.

Due to the interdependence of the parties destructive conflict is to a large extent avoided.

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Radical Perspective

This approach has its source in the works of Marx.

Class conflict is the source of change in society.

Class conflict arises out of the distribution of and access to economic power.

Principle conflict is between those who own capital and those who supply labour.

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Radical Perspective

Societies, social and political institutions favour capitalist.

Working class have unequal access to educational, economic, political, and other social institutions.

Social and political conflict is an expression of the underlying economic conflict in society.

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Radical Perspective

Organisations reflect wider society and the division is between owners and non-owners of the productive system.

Management’s main aim is profit, and control over work is enforced by management towards that aim.

Industrial conflict is a natural part of the system.

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Radical Perspective

All conflict stems from the division in society between those who own and manage the means of production and those who sell their labour.

Conflict is thus natural to the capitalist system and gets reflected in the organisations.

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Radical Perspective

Trade unions are seen as part of the class struggle.

Trade unions should link their activities to political parties to achieve fundamental change in society.

Collective bargaining is seen as a way of co-opting trade unions into the capitalist system.

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Management Strategy

Why should management have a strategy?– “That which differentiates management, as a group,

from other roles in the organisation, is that, through formal authority structure of the organisation, they represent, make decisions and act on behalf of the organisation as an entity” Michael Salamon

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Management Strategy

Employers like unions are major actors in IR:– Shape the path of IR within firm and nationally

IR strategy is connected to:– Union strength– Political and social objectives of unions– Need to regulate conflict– Sensitivity to market competition

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Management Strategy

British studies have shown:– Firms have no IR strategy– Management tends to react rather than deal with

issues proactively– Fire-fighting tactics the norm in IR

Constraints and choices influences strategy:– Constraints: limitation on power, resources– Choices: cultural values of management

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Management Strategy

An organisational value based on Unitarism will lead to a IR strategy that:– Suppresses unions – leads to conflict– Avoids unions thru comprehensive HRM also leads

to conflict

A strategy based on Pluralism:– Union accommodation – collective bargaining– Union cooperation – participation, development

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Management Strategy

Bendix:– Identifies various styles of IR management

Fox developed 5 types of relationships:– Traditional unitariast by both employers and

employees– Management is resistant to unions and wants to win

at all times– Sophisticated modern: both parties adopt a

pluralist perspective

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Management Strategy

– Both parties accept each other collective bargaining is institutionalised, procedures established to regulate behaviour

– Sophisticated paternalistic style: management wants a pluralist approach but employees adopt a unitarist approach

– Paternalism prevails and employees are motivated by good human resources management

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Management Strategy

– Conflict & challenge style: management stuck in unitarist style and employee are pluralist. Employees place demands and management refuses to acknowledge such demands

– Standard modern style: ambivalence on both sides. Management is aware of pluralist approach but adopts a unitarist style. Employees occasionally make demands but don’t rock the boat

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Management Strategy

Purcell: 6 possible managerial styles:– Traditional style, also autocratic unitarism.

Management wants to maximise profits and labour costs are kept low.Employees have no job security, management is autocratic and conflict is suppressed

– Paternalistic style: company cares for the employee who knows his place in the hierarchy, communication and motivation but no unions

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Management Strategy

– Sophisticated human relations style: unions are actively avoided but there is promotion and development of the individual thru sophisticated HRM such as higher wages, training & development and good communication

– Bargained constitutionalism: accept unions to contain conflict, bargaining on narrow range of procedural issues

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Management Strategy

– Management retain its right to manage make decisions, unions treated fairly if remain within constitutionally established relationship, unions help maintain discipline and order & reduce conflict

– Modern paternalistic style: effort to build constructive relationship thru consultation, briefing groups set up to deal with IR as well as operational issues – paternalistic in style in that management share to gain commitment

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Management Strategy

– Sophisticated consultative style: management shares all aspects of organisational training with unions, but reserves the right to make final decisions, uses teambuilding, quality circles, profit sharing and share ownership schemes

M Finnemore: using same research has reduced the typologies to 4 models

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Management Strategy

Autocratic Unitarism and union suppression– Company looks to maximise profit– Labour cost kept to a minimum – no unions– Management controls the emplm. relationship– Unions are aggressive org. and against the co.– Strategy to suppressive union development

Used extensively in SA during apartheid and with collusion of police

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Management Strategy

Sophisticated paternalistic unitarism and union avoidance:– Use sophisticated HRM systems to undermine

union support– Aggression and confrontation is avoided

Strategies used to discourage unions:– Wages higher than market rates– Investment in training and career development

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Management Strategy

– Stabilise employment and avoid retrenchments– Communication and information sharing– Effective grievance procedure– Weed out workers who are pro-union– Social functions to develop company identity– Elite core of permanent workers with benefits– Peripheral group of casual & part-time workers– In-house workers association for consultation

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Management Strategy

The above mentioned strategy has been used effectively in the USA

Unionism has been in decline and 15% of the workforce is unionised

Strategy might not work in SA because of strong tradition of unions

Companies may not have resources to implement benefits to satisfy employees

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Management Strategy

Adversarial pluralism and collective bargaining:– Since 1970 companies have to deal with the reality

of trade unions in SA– Due to vulnerability to strikes, consumer boycotts

and international pressure companies had to accept the presence of trade union

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Management Strategy

In this strategy the company:– Accepts the freedom of association– See unions as a necessary interest group to the

workplace– See shop stewards as a way of communicating with

workers– Accept the rights of unions to bargain collectively

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Management Strategy

– Uses collective bargaining on a win-lose basis– Accepts the right to strike and lockout– Emphasis is on workplace rule and procedures to

regulate conflict– Use labour law to enforce compliance to procedures

and agreements– Attempt to restrict range of items to be negotiated– Maintain prerogative to run the business

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Management Strategy

Consultative pluralism – employee participation and cooperation– Groups have different interest at the same time

there is a common interest in the survival of the firm– Employee participation and union/management

cooperation seen as creating a stable business environment

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Management Strategy

– Business objective of profit is maintained– Satisfaction of employees are assured– Emphasis on WCM and strategic planning– WCM produces goods at a price and quality that is

competitive on the world market– Calls for flatter org. and workers who are

accountable for their own performance– Core jobs add value and other jobs are peripheral:

part-time, casual

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Management Strategy

– Emphasis is on development of HR thru education, multi-skilling, and career paths

– Less top down supervision and greater worker control

– Full information disclosure and joint decision making with the unions

– Implementation of performance based incentive schemes

– Unions adopt flexible accommodation

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Management Strategy

Historically in SA as unions developed, companies:– Used aggressive union bashing tactics– Unions responded by using legislation to protect

rights– Collective bargaining arose but emphasis on rules,

procedures, legal enforcement of agreements, adversarial bargaining

– Subsequently participation and cooperation

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Next Lecture

History and development of industrial relations in South Africa.