Human resources management

‘It is clear that Britain has moved away from collective forms of industrial relations. It is not so apparent that it has moved towards a more enlightened type of human resources management(HRM)’. Discuss “No consensus exists concerning the extent and consequences of change in British industrial relations in the last decade or so. There is no doubt that there has been a transition away from the traditional system, although towards what is unclear. ” (Metcalf 1994) Collective bargaining is a method of negotiation in which employees use authorised union representatives to assist them.

This essay will explore the decline in collective bargaining. It will then examine how industrial relation’s has changed, and whether this change has been towards a Human Resource Management theory. The conclusion will be that there is evidence in favour of the essay title and Metcalf’s view. However there is also evidence to suggest that industrial relations and HRM can run simultaneously and that HRM still has room for improvement. ‘There can be no doubt about the transformation which has taken place in British industrial relations in the past decade.

‘ Michael Howard, Secretary of State for Employment, Hansard 166(39), 29 January 1990, col. 38. Before the conservative government were elected in 1979, Britain was dominated by a system of collective employment. These collective forms of industrial relations were evident amongst the whole of the public sector and covered large parts of the private sector. Now the public sector still operates a model of collective relations, but the size of this sector has been substantially reduced.

Within the far larger private sector of the British economy joint regulation is rare. (Millward et al, 2000) Metcalf (1994) identified four ways that the structure and conduct of industrial relations changed between 1980 and 1990. These changes come under the headings unions, management, bargaining and the environment. Unions represent workers by helping to negotiate wages, hours, rules and working conditions collectively for its members. For the fourteen years after 1979, membership of unions fell by a dramatic three million.

(Metcalf, 1994) Now closed shop unions; where to be employed in an industry you must join a union, are almost wiped out. Nevertheless in 1994 2/5 th’s of employees still belonged to a union, which is high relative to other countries. (Metcalf, 1994) Management’s involvement in employment relations has also changed. Evidence shows that management prerogatives were restored. Collective agreements have become more flexible, in order to develop the capacity to respond more quickly to business conditions.

Sisson & Marginson identify four possible areas of flexibility – functional, task, labour and financial flexibilities. Multi-employer bargaining has moved towards individual employer bargaining; communication directly with employees, rather than through trade union or formal works council. Payment systems moved towards merit pay – overall increase in payments-by-results (PBR), profit sharing schemes and employee share ownership plans (ESOPs).

(Metcalf, 1994) This greater financial participation of employees increases employee participation and involvement. HRM Literature sights that management has placed a greater emphasis on commitment of employees through greater participation and involvement, (Sisson, 1993). Metcalf, (1994) gives the example of team briefings, “now regularly used by nearly half of all workplaces”. Regular newsletters increased from 34% to 41% and surveys and ballots from 12% to 17%. (Sisson, 1993).

Also line managers are now spending more time on personnel matters, “senior line managers in particular can no longer afford to allow specialist personnel or industrial relations managers simply to maintain a ‘system’ for its own sake. The key decision in industrial relations must have regard to the business strategy and must be taken by line managers. ” (Sisson & Marginson, 1995) Increasing numbers of Managers have evidently been assuming responsibility for their own industrial relations, rather than relying on trade unions to do this. (Sisson, 1993)