There has been transformation in labor movement in the past two decades. The previous traditional labor, also known as industrial relations system, transformed into a contemporary employment relations system. In the industrial or labor relations system, workers and their representatives, and employers interacted directly or indirectly with the government to set the basic rules used to govern work relationships. Labor or industrial relations system was a product of the industrial revolution. The transformation from industrial revolution resulted in the establishment of collective labor relations and emergence of trade unions which acted as workers representatives. An industrial system depict the interaction of the major actors in it and include the employer, the state, employees, and trade unions. Employees can be represented or not represented in trade unions. Industrial relations system embraces various kinds of worker participation, collective bargaining, and techniques of resolving both individual and collective disputes. The industrial relations system not only incorporates societal values but also societal techniques. Societal values include sense of group solidarity, freedom of association, and pursuit of optimum profits. Societal techniques include work organization, dispute resolution, consultation, and methods of organization.
Traditionally, industrial relations systems were organized according to each nation. However, the industrial relations system is no longer defined by the national lines due to increased variation of practice among countries and the rise of an increasingly globalized economy driven by global competition. According to Stroby (2011), industrial relations, as well as labor markets, have undergone dramatic changes in the last 20-30 years. Stroby further pointed out that the traditional modes of collective bargaining have been growing weaker due to the de-institutionalisation and individualization of the labor market as well as the trends toward decentralization. For example, in the European countries, there has been declining direct governmental regulation on the regulation of industrial relations. Instead of collective bargaining, the trend has been handling of collective bargaining at the company level as opposed to sectoral level.
Evidence suggest that while some actors in the relations have been ceding power, others have been gaining. It has been observed that the number of white collar jobs in industrialized economies have been growing while the number of blue collar jobs have been declining. Unlike their blue-collar counterparts, the white-collar employees have less commitment to their trade unions. As a result, the reducing number of blue-collar employees result in a weakening trade union membership while the increase in white-collar job has led to an increase in the power of the employers. Trade union density has been used to tell the degree of union power in a given country. Previous studies revealed that when number of union membership in labor movement falls, there are difficulties associated with effective bargaining and organization. In Australia, studies have shown that there has been declining trade union density in the last two decades. Statistics indicate that while union membership comprised 40.5% of Australian employees aged 15-64 In 1990s, the percentage had drastically declined to 24.7% by the year 2000 (Waddoups,).
The need to bring reforms in the employment relations has dominated the Australian economic and political debate for the last two decades. There has been an attempt to decentralize the employment relations system by deregulating the labor sector with the objective of increasing flexibility in labor markets (Campbell & Brosnan, 1999). A from mid 990s, there has been efforts to individualize employment relations and thereby suppress trade unions involvement. In the last two decades, the government has been gradually reducing its influence in labor issues. Further, there has been a growing debate to negotiate with trade unions with the objective of convincing the trade unions to lessen their wage demands and on the other hand, the government come up with social and economic reforms (Lansbury, 2000). The government has continued to also increase labor flexibility by allowing agreements which are not union-based in the workplace. Employment relations during the time were decentralized. By supporting individual agreement rather than collective agreement, the government seemed to empower the employers and weaken influence of trade unions. The passing of the Workplace Relations Act of 1996, was a further departure from the traditional industrial relations system characterized by trade union to a situation where employers were encouraged to enter into either individual contract or non-union agreements with their employees (Wooden, 2001). This a further evidence that the influence of the trade union has been waning over the last two decades while employers power has been rising.
New developments in the industrial relations as well as in human resources management has seen management and employee bargaining moved to the firm level. Current commercial managers place more emphasis on striking a balance between employment practices and commercial objectives (Abbot, 2006). These new developments are tied to some assumptions.
Certain assumptions have been identified as well as theories and concepts which help in understanding the transition from the traditional industrial relations system to the contemporary employment relations one. This include unitarism, pluralism, and radicalism/corporatism. When these theories are applied, different conclusions can be arrive at on the management of labor. For example, theories informed by pluralist assumptions are different from those informed by unitarist assumptions. Although theories might be far from truth, they provide a way of organizing past happenings into some workable sense. Unitarism, pluralism, and radicalism/corporatism have proven very valuable for making sense of happenings in the employment relationships in the contemporary work settings.
Unitarists base their arguments on certain values and assumptions which presume that conflict in the workplace is not an unavoidable characteristic of relations between employees and managers. Unitarists argue that although conflict in the workplace may occur between the employees and the managers, such conflict is an aberration in a relationship that has a higher likelihood of cooperation. Proponents of this theory see employees and managers as having a mutual interest in the survival of their organizations. The mutual interest they have is such that an occurrence of conflict is unlikely to degenerate to a point which it will negatively affect the organizations performance. In circumstances where divisions or differences exist, unitarists believe that the causes are attributed to poor communication, deviance of dissidents, personality disorders, and inappropriate promotion and recruitment practices (Trebilcock, n.d.). To ensure that such differences do not degenerate into anything which affects the organizational performance, unitarists believe that the management ought to pay careful attention to eliminate sources of potential conflict. For example, they suggest that the management must ensure that the promotion and recruitment process is not only fair but also equitable. Further, it has been suggested that communication systems ought to be in place to inform the workers of where their true interests lie. Individuals who are found to be difficult to handle or those prone to personality conflicts are either dismissed or suppressed. Unitarists also contend that the organization is promoted among the workers as the only source of authority. However, any potential sources of authority in the workplace such as trade unions or shop stewards are eliminated.
Unitarists values and assumptions have played a significant role in scientific management theory, human relations theory, and human resource management. The scientific management theory holds that the managements employment relations choices are based on certain assumptions. This includes an assumption that employees are immature in the workplace, they are likely to avoid it as much as possible and have limited as well as self-centered time-horizons and aspirations. In this setting, an organization is concerned about suppressing internal tension by employing direct and rigid control of employees activities at the workplace. In human relations theory, it is presumed that organizational tension is contained when individuals achieve self-fulfillment in the workplace. In this theory, employees rights are recognized, and they have a say in the manner in which they are governed. The aim of this approach is to reduce internal tension by promoting workplace satisfaction (Trebilcock, n.d.). Proponents of human relations theory argue that organizational tensions can be eliminated by promoting a psychological contract on this basis of cooperation. Workplace relations in such organizations are regarded holistically. To ensure this happens, there is a promotion of strong and pervasive leadership, unifying culture, and clear vision of the organizational goals. The overall objective is to eliminate internal tensions by collaborative workplace practices.
Unlike the unitarists, pluralists values and assumptions are based on the argument that workplace conflict is unavoidable (Trebilcock, n.d)). They argue that business organizations are highly complex and that they comprise different interest groups and where the employees and management are part of the group. Employees and management subscribe to different objectives and values. In this theory, there is an assumption that there is a potential conflict between management and the employees over the allocation of rewards and organization of work tasks. Proponents of this theory argue that conflict in the workplace is necessary since it helps in addressing grieves. Workplace conflicts also give managers a chance to come up with an innovative solution for resolving workplace conflict.
Pluralists acknowledge competing sources of authority, which can be either trade unions or shop stewards. Pluralists accept legal rights of employee rights to bargain collectively and when it is not possible, trade unions act on their behalf. There are two theories which are consistent with pluralists viewpoint: systems theory ad strategic choice theory. Proponents of system theory view industrial relations as a sub-system of the larger social system. The industrial relations system is viewed as a self-adjusting system which tends to achieve a state of equilibrium. Systems theory presumes that work to be governed by regulations as well as formal and informal rules which comprise performance, recruitment, wages, holidays, hours of work, and so forth. Proponents of this theory asserts that the individual actors in the system try to determine these rules and that their establishment is affected by the actors operational environmental context (Trebilcock, n.d.). On the other hand, the actors share an interest in the process of maintaining conflict resolution and negotiation. Strategic choice theory presumes that there are three changes which determine the way managers handle industrial relations issues. First is contained in the decline of trade unionism, bargaining processes which have been increasingly decentralized, new developments in the human resources management practices. All these have resulted in the redistribution of the way decision-making processes over workplace relations. This has also caused the diminishing of traditional industrial relations and paved way for line managers and human resource power in dealing with employee issues. Second, there has been a growing...
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