Human Resource strategy

Trade Unions (TU) is essentially pluralistic in outlook, it covers not only the relations between employer and employee, but also the relations between employers and unions and between them. TU theory, practice and institutions traditionally focus more on the collective aspect of relations. This is evident from the central place occupied by labour law, freedom of association, collective bargaining, the right to strike etc. Human Resource Management (HRM) deals with the management of human resources, rather than with the management of collective relations.

Also TU has a large component of rules, which govern the employment relationship. These rules may be prescribed by the State through laws, by courts or tribunals. HRM differs in this respect that it does not deal with such procedures and rules, but with the best way to use the human resource through, for example, proper selection and recruitment, training and development, motivation, leadership and intrinsic and extrinsic rewards. It has policies designed to maximise organisational integration, employee commitment, flexibility and quality of work.

Within this model, TU have, at best, only a minor role. HRM strategies to secure individual commitment through communication, consultation and participatory schemes underline the individualisation thrust. Nowadays almost all the companies at the HRM policies came first often encouraged by the values of a powerful Chief Executive Office (CEO). In many cases, remaining non-union has subsequently become a policy goal. Personnel policies must be sufficiently good and sufficiently integrated by line management practice to avoid giving grounds for union organising.

In this case most of the companies paid above average rates. They also provided mechanisms for individual expression of grievances and were likely to monitor reactions to personnel policies through the communication system. All of these practices are to be found in a company like IBM which provides the best known model of HRM but which is also the “ultimate non-union company”. However not all companies could pay above average rates and there should be a role for union involvement in HRM, companies (such as the General Motors, Bosch) which have involved unions in the move towards HRM.

For example, unions can play a role in dealing with grievances, which seem almost inevitable with repetitive production line work and persisting pressures to increase productivity. Another way to handle this conflict situation (Bosch) to draw up an agreement with only one TU to cover all jobs in a factory and this is called “single union agreement”. Important part of this issue is employee loyalty and commitment. It concerns commitment to the goals and values of the organisation, and to contribute to its success on the one hand, and commitment to the TU on the other.

It is at this point that it becomes a critical factor. In principle there should be no antithesis, because trade unionism should not be conflictual in approach and attitude. Furthermore a worker who is committed to the organisation is unlikely to become involved in “industrial relations” or any type of collective activity which might reduce the quality and quantity of their contribution to the organisation. In many countries employers and employees are perceived as two interest groups with generally opposing interests and as belonging to different classes.

In the past the relevance of employees to enterprise and national competitiveness was less significant, but the level of employees education and skills has never been as important as it is today. Unions may have to recognise that collective bargaining may need to be redesigned to cover a lesser quantum of pay increases than in the past, and that they should seek to be involved in the flexible and skill-based elements of pay.

This would involve a greater emphasis on enterprise level negotiation. Some countries may go to legal machinery such as labour court, arbitration, which are external to the enterprise. But the relevance of unions would also have to be in the area of conflict avoidance, and not only in the area of conflict resolution. TU should move towards a much greater concentration at enterprise level and promotes harmonious relations at that level.

The trend towards flexibility in place of standardisation is also a strategic move in the sense that it is designed to increase competitiveness and the ability to respond rapidly to change. The possibility of HRM and IR having a parallel existence is more likely in large enterprises where direct communication with individuals is more difficult. In this connection it may be instructive for management to consider whether a union-free environment is necessary for effective HRM.