Since the onslaught of Industrial Revolution, the whole trend of labour relations has changed, from domesticity to whole range of Industries. Labour is a background of any Industry, small and big and to keep the labour force motivated has always been priority of Human Resource Department to bring their company or Industry at par with global scenario. These thoughts created a concept of Employee relations, which has become a priority area in Industrial arena.
Whenever we talk of Employee relations and labour, the only one thing that comes in mind is labour unrest and their continuous ongoing squabbles between them and management, whether it is for basic salary or work environment. From the time, the world saw the mechanization in every arena of our social, political and economic fields; there has been continuous change in the field of Employee relationship. Many nations like U. A. E. is turning its economy from Industrial production towards the service based Industries.
(Stensgaard, 2007) The oil crises in 1970 reduced the domestic manufacturing sectors and along with that increased the unemployment rate. Slowly and slowly, small businesses equipped with outmoded plants and operated by semi-skilled or unskilled workers began to erupt on the economic scene. All through 1979-97 period, free market economy and economic policies initiated by conservative governments gave further impetus to small firms.
(Matlay, 2002: 2) With increase in Small Scale Industries in various economies of the world, employment rate also increased but along with that there was also increase in labour problems, and from the side of Employees, it is most important to keep labour motivated and satisfied. The need of this dual relationship gives result to phenomenon, which is known as Employee relationship or what we know as Industrial Relationship and for every manager there is an obligation to maintain the balance of this relationship in his Industrial setup.
In developing countries, rise of population growth, less number of jobs in industry, unsuitable economic policies led to the increase in unemployment and underemployment. This also forced the labor force to be employed in low-productivity jobs, which is the characteristic feature of Small Scale Industries and weak labor unions too had an adverse affect on the earning capacity of labors. The employee relations as defined by The Chartered Institute of Personnel Development (2005) is; “…the relationship with individual employees.
” (Stensgaard, 2007) And according to the European Association of Craft Small and Medium sized Enterprises “trust and respect between the employer and workers are an essential element in the effective business practices of the employer and creating a working environment in which both the worker and the employer can prosper. ” (UEAPME, 2002). This implies that employers have understood the need for keeping the employees satisfied to get the employees maximum involvement and output and thus their commitment and engagement is being considered as necessary criteria to get maximum out of them.
Good employee relationships can only work in the organization whereby there is well organized working environment having on one hand, built-in indispensable features of Human Resource Management such as laying of proper objectives, evaluation of performances, initiation of training, appraisals, and bestowing time to time rewards to the deserving employees and also to keep in point the importance of the psychological contract.
(UEAPME 2002). Incorporation of these features result in creating the company work force of par excellence resulting in the establishment of psychological contract, rise in level of employee commitment and contentment, which finally leads to the growth of Industry. Small Scale Enterprises do not go into very formal obligations but in these trust plays a very important role.
Studies conducted by Ram in 1940 on clothing Industry brought about the crucial aspect that small businesses are one of the many very dangerous, defenseless and autocratic workplaces especially in the British economy but the detailed investigation about detailed features of Industrial Relations in small clothing firms, such as direct supervision and control in highly competitive environment defied Rainnie’s pessimistic view. (Matlay, 2002: 5)
Wages given in Small Scale Enterprises are generally lower than what are paid in larger firms. This wage gap also contributes towards adverse employer-employee relationship. Wages are also different in different occupations and different in different hierarchy. Managerial level earns higher wages than the businesses with less than 25 workers. The workers in Small and Medium Industries are also not provided with sufficient health coverage. Small firms feel burden when faced with the health, safety, and environmental regulations.
Very small majority of Small Scale Enterprises have human resource department on staff and have less disciplinary procedures. In Small Scale Industries, the Cost Based form of management also got popularity, whereby managers have to be more concerned with individual performances of employees. In this system, which began to be known as Taylorism- a particular work is divided and each employee is assigned the task according to his or her specialization in which they have to accomplish it ceaselessly day in and day out.
Here the worker has to time and again subject himself to assessment and production standards without giving any attention to their contribution and providing any opportunity for their development. The employees were always accounted for any time wastage and any compromise on quality, which left no scope for psychological contract. Taylorism is a Scientific method of management that appeared in early 20th century and was a brainwork of Fredrick Winslow Taylor. (Stensgaard, 2007)
Many reformers were seeking for the progressive movements in the corporate structure to improve the conditions of middle classes and employers and when in the end of 19th century, corporations were consolidated, the trend started to spread the professional management and management consultants overriding the thoughts, which was conceptualized during Robber Baron age fulfilling the needs of corporate world. Taylor was born in 1856 in a wealthy Philadelphia family, but later, he took up work in metal products factory where he worked as a foreman.
Seeing the working conditions in the factory and the most efficient workers working at a snail’s pace, Taylor proposed number of solutions with the help of which a worker can give the quality product in minimum time and will in return receive higher wages, which would again induce the workers to increase their efficiency. Taylor also paved a new path to reduce the class struggle and self interest group politics. (The Wall Street Journal, 1997: A17)
In employee relationship, the job quality is also the most important criteria, which is related to higher wages, better benefits and support programs etc, and is a way towards good employee relations. (Pohlmann, 1999). The research conducted by Pohlmann reveals the fact that around 93 per cent small business owners are satisfied with their employer-employee relations. Their result shows that employees are more satisfied with their job than employees in larger firms. (Pohlmann, 1999).
The presence and absence of Union is also a contributing factor in determining the employer-employee relationship in Small Scale Industries. Union on sites creates a negative impact in the employer-employee relationship, as there is always a chance of labor unrest providing set back to work. Employee support initiative in the form of providing care to their children or family members is also another contributing factor to determine the employer employee relationship. (Pohlmann, 1999) The employer employee relationship between firms also depends on market situation of the firm.
The market upheavals determine the wages and benefits to the employees, which in turn determine the work environment in the firm. (Edwards, Gupta & Tsai, 2005-2006: 2) The Variable Payment Systems (VPS) started in Industries and enterprises have always been a cause of concern for trade Unionists and collective bargaining. Discretionary bonuses or individual appraisal pay marked the feature of Variable payment systems, and initiation of these systems in Enterprises reduces the significance of trade unionists which in turn create suitable ground for good relations between employees and employers.
But this system is also not lacking in drawbacks as employees are always under the scrutiny of management regarding their rigorous target setting and monitoring. The VPS came into existence since late 1980s when trade unions were being under threat of de-regulation, rationalization and the termination of multi-employer bargaining. (Edwards, Gupta & Tsai, 2005-2006: 5) In early 1990, the whole system of payment changed from service relation to performance base. The whole pay scale depends on scale position and performance. The higher performers who were being paid low progressed up on the ladder scale and vice versa.
This performance method of payment rather than merit basis began to be considered as way to maintain conducive working environment that not only give boost to the employees but also lead to the over all growth and productivity of Small Scale Enterprises. In low inflation scenario of economy, this system appears conducive for the growth and development. (Edwards, Gupta & Tsai, 2005-2006: 6) In any Industry whether small or big, conducive environment for the growth of employees and the Enterprise is very important. To maintain this, the need is to make the efforts on the part of the management.
As Fredrick Winslaw Taylor in his Principles of Scientific Management, mentioned in the speech of President Roosevelt, pinpointed that in the past, the idea that resounded was “Captains of industry are born, not made” and the theory has been that if one could get the right man, methods could be safely left to him. Taylor also mentioned, “In the future it will be appreciated that our leaders must be trained right as well as born right, and that no great man can (with the old system of personal management) hope to compete with a number of ordinary men who have been properly organized so as efficiently to cooperate.
” (Eldred) Now this is being achieved by providing conducive environment for the employees to grow, which is a true essence of employee relationship.
Basefsky S. & Sweeney S. 2006. Employment Relations in SMEs: The United States. ilr. cornell. edu [Online] Available: www.skope.ox.ac.uk/