Mullins L.J. Management and organisational behaviour, Seventh edition
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review the consistency of reporting and to countersign as confirmation of approval.
Appraisal can also be undertaken by a member of the HR department, or by assessment
centres. The removal of middle levels of management, flatter structures and greater
empowerment of self-managed teams also have possible implications for who should
undertake the appraisal process.
With the majority of schemes, staff receive an annual appraisal; and for many organi-
sations this may be sufficient. However, the frequency of appraisal should be related to
the nature of the organisation, the purpose and objectives of the scheme, and the char-
acteristics of the staff employed. For some organisations, for example, those operating
in a dynamic, changing environment, more frequent appraisals may be called for. More
frequent appraisals may also be appropriate for new members of staff, those recently
promoted or appointed to a new position or for those whose past performance has not
been up to the required standard.
There is an argument which suggests that open reporting restricts managers from
giving a completely honest and frank appraisal. However, the more staff see of their
appraisal report – that is the more ‘open’ the system – the more they are likely to
accept the process of appraisal. Staff are better able to check the consistency of the
appraisal report with verbal feedback from the manager. With an open system of
reporting, staff should be given the opportunity to sign the completed form and to add
any comments on their perception of the accuracy of the assessment.
Increasing attention is being given to broader and more flexible forms of appraisal with
greater emphasis on meaningful feedback. The concept of performance appraisal has
progressed into systems of ‘
360° feedback
’ and ‘upward appraisal’. The idea of 360° feed-
back involves an appraisal and feedback from different groups within the work
situation – peers and subordinates as well as bosses, and possibly internal and external
customers. The idea is to provide a broader appraisal covering good working relation-
ship, teamwork, leadership, decision-making, and quality of service provided.
An upward feedback review system involves subordinates’ appraisal of managers. This
can help to judge, among other things, managers’ ability to accept constructive criticism.
This initially can be a daunting experience for managers and to be effective requires an
appropriate organisation culture and open management. It is also necessary to involve
an independent third person who can supply confidential feedback and comment.
Crainer refers to the need for the appraisal process to embrace the goals of the organ-
isation and those of the individual in the short and long term. Also the appraisal
process must be managed effectively. A vast number of companies have abandoned the
traditional approach to appraisals in favour of a new model which tends to be flexible,
continuous, revolves around feedback, involves many more people than one manager
and a boss, and seeks to minimise bureaucracy.
As methods of appraisal go, 360-degree feedbackisundoubtedly robust and rigorous … The
attraction of 360-degree feedback is that it gives a more complete picture of an individual’s per-
formance. Different groups see an individual in a variety of circumstances and situations and
can, as a result, give a broader perspective than that of a single boss. This, of course, relies on a
high degree of openness and trust.
42
CHAPTER 19 HUMAN RESOURCE MANAGEMENT
765
What should
be the
frequency of
appraisals?
Should there
be an ‘open’
system of
appraisals?
360° FEEDBACK AND UPWARD APPRAISAL
Potential drawbacks
Despite the apparent support for 360° feedback, Pfau et al. claim that this is a perfect
example of how too many organisations base their human resources investment deci-
sions on tradition, fads or competitor’s practices, instead of on sound financial
measures. Although adopted by a growing number of organisations, Pfau et al. report
on research studies which show that 360° feedback may hurt more than it helps and
that companies using 360° feedback have a 10.6 per cent decrease in shareholder value;
while the concept delivers valuable feedback there are serious problems relating to pri-
vacy, validity and effectiveness. However, despite the drawbacks, Pfau et al. suggest that
this does not mean 360° feedback programmes should be abandoned but that they
should be implemented for the right reasons. Companies should ask themselves what
they want to gain from the reviews. HR managers should revisit their programmes and
take the necessary steps to implement the concept in order to transform 360° feedback
into a value creator, not destroyer.
43
Butcher also reports that 360° feedback is increasingly common in appraisals and
makes sense. However, making peers review one another’s strengths and weaknesses
often leads to political tensions, particularly if bonuses or promotions are at stake.
‘People can also feel a conflict between their role as a supportive colleague and their
responsibility as a hard-nose judge. What’s more, close-knit teams may see the process
as too focused on individual achievements – basically a popularity contest in disguise.’
44
In order to establish a successful appraisal system, careful attention needs to be given
to a number of important matters concerning its introduction and implementation.
45
The purpose and nature of the appraisal system should be made clear. A success-
ful system should establish a regular dialogue and lead to an improvement in
manager–staff relationships. The system should not be perceived as something which is
the prerogative of the HR department or introduced for its benefit. Top management
should be seen to own the system and be fully committed to the concept of
appraisal. They should ensure full management consultation with trade unions and
staff representatives, and all managers and members of staff. Adequate provision will
need to be made for the proper training of appraisers and there should be a reasonable
time allowance for the activity. An effective administration system should aim to keep
form-filling and paperwork to a minimum.
The appraisal system should not be viewed in isolation but in relation to the corporate
objectives of the organisation, and designed to suit its culture and particular require-
ments. The system should be integrated with related personnel policies and practices
such as human resource planning, and training and development programmes. A start-
ing point is the process of job analysis. This identifies the purpose, and main duties
and responsibilities of each job. From the job description can be determined the
expected outcomes of the job, standards of performance and the criteria against which
the appraisal will be based. (The process of job analysis is discussed in Chapter 20.)
The system needs to be monitored regularly to ensure that appraisals are being carried
out properly and to obtain feedback from managers. The system should be kept under
continual review and, where necessary, modified to meet changing environmental
influences or the needs of the organisation. It is important to ensure that operation of
the system and the criteria used for assessment satisfy equal opportunities and all legal
requirements, for example under the Data Protection Act, the Sex Discrimination Act,
766
PART 7 MANAGEMENT OF HUMAN RESOURCES
ESTABLISHING THE APPRAISAL SYSTEM
Related to
corporate
objectives
Monitoring
and follow-up
action
the Race Relations Act and the Disability Discrimination Act. The system must be sup-
ported by appropriate follow-up action: for example, seeing that work plans or changes
in duties and responsibilities actually take place, and that suitable arrangements are
made to meet identified training or development needs.
As the main purpose of appraisals is to help staff improve their performance, an
appeals procedure should only be used in exceptional circumstances. However, in order
to help establish the credibility of the system and to maintain goodwill, it is necessary
to establish a formal procedure which is clearly understood by all members of staff.
Appeals should be made to a manager in a more senior position than the appraiser or
sometimes, where appropriate, to the HR department or a representative committee.
The appeals procedure should include provision for staff to be assisted, if requested, by
a union or staff representative.
A checklist of points to be considered in establishing an appraisal system is given
in Figure 19.4.
An outline of the performance management system at Autoglass Limited is
given in Management in Action 19.2.
Appraisal systems can be used to measure attitudes, behaviour and performance.
Measurement may be a combination of:
■ ‘quantitative’ measures using some form of rating scale, such as, for example, (1)
excellent, (2) exceeds expectiations or requirements of the job, (3) meets the expec-
tations or requirements, (4) some weaknesses in meeting expectations or
requirements, (5) unsatisfactory performance;
■ ‘qualitative’ measures involving an unstructured, narrative report on specific factors
and/or overall level of behaviour and work performance.
The use of behaviourally anchored rating scales (BARS) is an attempt to overcome diffi-
culties with conventional rating scales and provide measurement scales that are
directly related to the job being appraised. A sample group of managers/supervisors are
asked to identify, independently, several key behavioural aspects of the job in question.
The responses are then collated and returned to the same or a different group to agree
examples of good, average or poor performance and to allocate a scale point for each
example. Those examples which are consistently rated at the same point on the scale
can then act as ‘anchors’ and provide behavioural examples for each point on the
scale.
46
Appraisers can then use the BARS as guidance against which to assess the
expected behaviour of each person being rated. The number of categories in the rating
scale will vary according to the particular nature of the job, but usually number
between 5 and 9. There may also be a varying number of behavioural examples for
each point on the scale. The disadvantages with BARS are that they can be time-con-
suming and costly to construct, and require careful and detailed training in their
correct use. They are also more likely to be appropriate only in larger organisations.
Another appraisal system is that of ‘achieving objectives’. With this system, the manager
agrees with members of staff set objectives at the beginning of the appraisal period. The
‘SMART’ approach to objectives setting is based on Specific, Measurable, Achievable,
Realistic, and Timebound examples. The appraisal is then based on the extent to which
these stated objectives have been achieved. This method provides for participation by
staff and also allows for at least some degree of self-appraisal. This method can be related
CHAPTER 19 HUMAN RESOURCE MANAGEMENT
767
Appeals
procedure
METHODS OF APPRAISAL
Behaviourally
anchored
rating scales
(BARS)
Achieving
objectives
768
PART 7 MANAGEMENT OF HUMAN RESOURCES
Figure 19.4 Checklist for appraisal scheme
(Reprinted with permission from Professional Manager, May 1994, p. 24, published by the Institute of Management.)
Ask yourself as
an executive
1 Why do you need to have an appraisal scheme?
2What methods are managers in your company
already using to assess their staff?
3Are the purposes of the scheme:
● to improve performance in the present job?
● to reward performance in the present job?
● to spot or develop those with potential for
promotion?
● to reward those with potential for promotion?
4What methods are managers in your company
already using to assess their staff?
5 What say have people covered by the scheme had
in its design and procedures?
6
How often should appraisal take place? Will this
frequency vary with different levels and types of staff?
Assessing past
performance
7 Can performance on the job be fairly assessed in
your company?
Should it be measured against:
● targets pre-set by the employee?
● targets pre-set by the boss?
● targets pre-set by both together?
● obvious personal qualities such as drive?
● obvious successes or failures?
8 Does the performance assessment point to
training needs? What action is taken to meet these
needs?
9 What are the most reliable indicators of likely
success:
● personality?
● past performance?
● any others?
10 Who is best to assess an employee’s potential:
● current boss alone?
● employee and employer together?
● and/or some other person, e.g. personnel
officer?
11 Does the potential assessment highlight
development needs?
Appraisal
and salary
12 What criteria are used for salary changes in your
company? Are salary increases awarded for:
● average past performance?
● exceptional past performance?
● high future potential?
Ask yourself as
an appraiser
13 Do I fully understand the appraisal scheme?
14 Am I giving undue weight to recent or memorable
events?
15 Am I being influenced by personal likes or
dislikes?
16 Am I expected to interview my staff? If so am I
fully prepared for the interview and the possible
outcomes, e.g. their responses to my comments?
Ask yourself
as an appraisee
17 Do I feel that I am being asked questions about
myself or my work and past performance on the
job?
18 Have I had an opportunity of helping to set the
work targets that I have been asked to meet?
19 Do I believe that I would work more effectively if
I did have such an opportunity? Why?
20 Is there any connection between:
● my past performance and any increases in my
salary?
● my past performance and any training courses
that I am asked to attend?
● the work that I perform and my personal aims
and ambitions?
✓ ✓
✓
✓
✓
Appraisal which consists simply of the employer’s opinion of an employee is likely to be subjective, and
biased by whether the boss likes or dislikes the person. But, since decisions regarding pay, prospects
and promotion often rest on it, it is important that any assessment should be fair, and seen to be fair.
This checklist includes points to be borne in mind when designing or taking part in an appraisal
scheme.
therefore to a system of Management by Objectives (discussed in Chapter 7). A major
consideration with this method is the extent to which circumstances beyond the control
of the individual, such as changes in environmental influences, make the achievement
of objectives unrealistic. Objectives need to be continually reviewed and revised in accor-
dance with changing circumstances. Comparison with achieving objectives may not, by
itself, provide a detailed assessment of performance. Therefore, some appraisal schemes
combine this method with the use of rating scales.
A variant of the ‘meeting objectives’ method is proposed by Stein. A good appraisal
system could be the key by which companies get the most out of all their staff without
making them feel exploited.
47
Stein puts forward an approach based on the use of a
performance ‘agreement’ or ‘contract’. Members of staff create a succinct document,
agreed with their superior, which sets out the individual’s proposed contribution to the
business plan of the organisation. This document provides an agenda which can be
referred to during the appraisal period and modified as necessary. This agenda serves as
the basis of the appraisal judgement. Instead of rating performance in terms of a tradi-
tional five-box scale, as A, B, C, D or E, the question is simply: ‘Has the plan been met?’
This approach turns the appraisal system into a dialogue. The extent to which staff
meet their contract also gives an indication of whether the business plan is realistic.
The effectiveness of any appraisal system relies heavily on the quality and reliability of
assessment. Variations in the consistency of reporting standards can quickly lead to a
feeling of dissatisfaction and injustice. There are many potential sources of rating
errors including, for example, perceptual distortions such as stereotyping and the halo
effect, discussed in Chapter 11. Where a senior manager has the opportunity to con-
firm the ratings and countersign the appraisal this may help to identify inconsistencies
and those appraisers who appear to be too generous or too critical in their assessments.
However well-designed the appraisal system, it is not possible to apply a completely
objective approach to every unique situation. The system should therefore always
allow for at least a degree of discretion and personal judgement. The reporting system
should give the appraiser an opportunity to record formally any necessary qualifica-
tions to the given ratings.
As managers advance up an organisation they may become less expert in the day-to-
day operations of their department/section and become more dependent on the team.
‘Successful managers know how to get results out of others – they are not necessarily
experts in their fields.’
48
In such cases subordinates may be their own harshest judges
and this places emphasis on the importance of self-appraisal. The appraisal may tend
to concentrate too much on feedback on past performance and especially the recent
past. The lapse of time between events which occurred early in the reporting period
and completing the appraisal may lead to a distortion in the overall flavour of the
report. Although reviewing past performance is an integral part of the appraisal system,
it is even more important to concentrate attention on the changes required to bring
about an improvement in future performance.
The elimination of bias
Tackey refers to the importance of eliminating bias in performance management. ‘The
evaluation of the performance of individuals in the workplace is fraught with difficul-
ties even at the best of times. The difficulties are compounded when there are
allegations of bias in such evaluation; and magnified out of recognition when the
CHAPTER 19 HUMAN RESOURCE MANAGEMENT
769
Performance
‘agreement’ or
‘contract’
POTENTIAL PROBLEM AREAS
alleged bias has racial undertones.’ Many problems with performance management sys-
tems arise from the application of the systems rather than inherent deficiencies in the
systems themselves. For example it is important to understand whether certain behav-
ioural descriptions are used more frequently to describe different groups. Questions
also arise about issues of assessing actual, as opposed to perceived, performance and
whether there are differences in perceptions of organisational and managerial support,
career progression etc., that may help explain ‘poor’ performance of minority ethnic
employees. Success in general career development programmes for different organisa-
tional groups is more likely only when there is immense commitment in the top
echelons of the organisation to equality of opportunity.
49
Finally, it is particularly important that a formal appraisal system does not result in
managers failing in their responsibilities for reviewing performance on a day-to-day
basis. Appraisal should not be limited to a formal event occurring once or twice a year
770
PART 7 MANAGEMENT OF HUMAN RESOURCES
Regular review
of performance
Continuous measurement
Many organisations set aside specific periods to
review employee performance – normally once or twice a
year. These are the formal review periods.
In some organisations these review periods are dreaded because
employees believe they are designed to identify mistakes and then the
information is used against them when it suits their bosses or
their organisations.
The philosophy behind employee performance reviews is to minimise or
eliminate employee weakness and capitalise on their strengths. Apart from being
a measurement tool it is a development tool, allowing skills gaps to be identified
and employees to be given the opportunity to gain new skills for the benefit of
the organisation.
Employees should look forward to review periods so that they can highlight their
achievements and capabilities. Potentially, there could be benefits all round if
they are arranged more frequently on an informal basis.
The concept of continuous improvement is regarded as a powerful tool for
building ‘best practice’ organisations. It provides a bridge between formal
reviews and should take place in the form of mentoring and coaching.
Because employee performance is so crucial to organisational
performance, it may well be too late for the business if feedback on
under-performance is only reported in the middle or at the end
of the year.
In my experience not many organisations are adequately
geared to measuring employee performance on
a continuous review basis.
Make decisions/
Take actions
Set objectives/
Involve employees
Monitor,
coach,
counsel
Review/Appraise
Evaluate/Analyse
Provide
feedback
Figure 19.5 Continuous measurement diagram
Reprinted with permission from Sultan Kermally, ‘Appraising Employee Performance’, Professional Manager, July 2002, p. 31, published by the Chartered Management
Institute.
but should be a continuous process of monitoring, feedback and review. There should
be regular communications and contacts between managers and staff, and discussions
of problem areas and plans for the future.
According to Kermally many organisations still do not fully understand the impor-
tance of measuring employee performance effectively. ‘Managers need to value and
measure the contribution of those that work them for in order to understand how
people contribute to organisational success. For this reason, it is also imperative that
performance reviews and measurement are undertaken continuously.’
50
(See Figure 19.5.)
Butcher also refers to the importance of a continuous feedback. ‘This is another point
about appraisals that often gets lost in all the form-filling: they’re pointless if they’re
not part of a culture of constant feedback, a formalising of conversations that happen
on a day-to-day basis in corridors or taxis or over lunch.’
51
On a more general level, Juncaj questions whether performance appraisals work.
Though they are generally accepted and entrenched everywhere, some quality experts
are championing the end of appraisals. The way workers are evaluated is changing and
HR professionals are creating a kinder, gentler performance appraisal process. This
includes increasing the frequency and breadth of supervisor feedback to employees and
developing simpler, less subjective methods to assess and measure performance. ‘Two
divergent camps have emerged in a serve and volley debate over the merits of perform-
ance appraisal. There is the revolutionary approach, but most companies are choosing
the evolutionary one, convinced that the perceived flaws and failures of the appraisal
can be fixed over time.’
52
Sound HRM policies help to foster good employment relations. Broadly defined,
employment relations is concerned with the relationships between the policies
and practices of the organisation and its staff, and the behaviour of work groups.
The traditional view of ‘industrial relations’ has often been associated with institu-
tions and rules relating to employment, and in particular with the activities of trade
unions and their officials. Trade unions may be seen as existing, primarily, to promote
the best interests of their members, and to improve their quality of working life and
general standard of living. Through the process of collective bargaining, trade unions
endeavour to improve their members’ terms of employment and conditions of work.
Institutions and the process of interactions among them are clearly important but
good management–staff relationships are not limited to trade unions and employment
legislation. They also entail broader informal and social relationships, and the impor-
tance of the role of management.
53
For this reason the term ‘employment relations’ is
now usually more favoured.
CHAPTER 19 HUMAN RESOURCE MANAGEMENT
771
The end of
appraisals?
The last quarter of the twentieth century generally saw the decline of traditional industries
and the enormous growth of the service sector and New Economy. Now some well-estab-
lished modern industries are finding the going tough. Yet the hard messages of
competitiveness remain – companies and their workforcesmust offer that little extra to sur-
vive and win in the global economy. This is where good employment relations play a vital
role. When employers, employees and trade unions or other employee representatives work
together in a relationship of mutual trust the benefits are enormous. Difficulties can be dis-
cussed and sorted out before they become problems, productivity and profitability can be
increased with greater rewards for the workforce. The key to this advantage is partnership.
Rita Donaghy, Chairperson of the Advisory, Conciliation
and Arbitration Service (ACAS)
54
EMPLOYMENT RELATIONS
The nature and content of an employment relations policy will be influenced by such
factors as:
■ the type, nature and size of organisation;
■ its structure and methods of operation;
■ the nature of staff employed;
■ arrangements for collective bargaining;
■ the structure and strength of trade unions;
■ preference of the parties for freedom of action from outside influences; and
■ the philosophy of top management and their attitudes toward the management of
employment relations.
To understand any employment relations situation it is necessary to take account of
the institutions and parties involved, and their ideologies and motives. It is necessary
to consider not only the legal dimensions but also the behavioural dimensions (dis-
cussed below). Consideration should also be given to European Union Employment
Strategy, and employment policies and guidelines.
55
A CIPD ‘position paper’ suggests that all employers should now be undertaking an in-
depth review of their employment relations approach. It suggests that while the
damaging effects of poor relations have been radically reduced, many organisations are
failing to secure the positive benefits that are available from improving them. The
paper goes on to draw attention to the importance of employment relations.
Organisations which out-perform their competitors do so because they apply a coherent set of
people management and development practices appropriate to their needs. IPD research has
demonstrated the positive link between managerial strategies on employment relations and
employees’ identification with, and support for, performance improvement and organisational
change. Successful organisations are increasingly those which have a constructive relationship
with employees and a management approach which enables them to develop and draw on the
full potential of their people.
56
The paper goes on to suggest that:
Good people management practices, a positive psychological contract and a supportive organisa-
tion culture lead to commitment, job satisfaction and a willing contribution from employees. These
characteristics positively feed through to higher productivity and profitability. (See Figure 19.6.)
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PART 7 MANAGEMENT OF HUMAN RESOURCES
Employment
relations
policy
The importance
of good
managerial
strategies
People management
practices
• job design
• skills development
• involvement
climate
Organisation
culture
supportive to
employees
Productivity
Profitability
Agility
Commitment
Motivation
Willing contribution
Satisfaction
Positive
psychological
contract
• trust
• fairness
• delivery of the
deal
Figure 19.6 Employment relations and business performance
(The material is taken from Employment Relations into the 21st Century: An IPD Position Paper and reproduced with the permission of the
publisher, the Chartered Institute of Personnel and Development, London, SW19 4UX, December 1997, p. 5.)
New kind of employment relations
According to an ESRC publication in the Future of Work Programme we could be wit-
nessing the appearance of a genuinely new kind of employment relations across a
widening range of private sector companies based on principles of industrial partner-
ship. Research evidence suggests that there is a clear change taking place in employer
attitudes with a greater willingness among many companies to at least tolerate the
prospect of having to deal with trade unions. In part, this reflects a growing belief
among a number of employers that trade unions are much more sensitive to the busi-
ness needs of enterprises than they ever were in the past and are more willing to
co-operate with management in developing and helping to enforce workplace reform.
In any analysis of the transformation of Britain’s employment relations we cannot
neglect the changing nature of work. The influence of technological innovation, work
restructuring and job redesign are all helping to reshape shopfloor attitudes among
managers, unions and workers. The underlying shifts in labour markets with the
modest but important relative growth in the number of those employed in part-time,
temporary and contract work are also helping to determine the evolution of our
employment relations in new ways.
57
In the search for effective employment relations and a common commitment to the
goals of the organisation, consideration should be given to contrasting approaches
which present two major ways of perceiving work organisations; the unitary perspec-
tive and the pluralistic perspective. While neither of the approaches can be seen as
‘right’ or ‘wrong’, these contrasting views will influence the nature of employment
relations and the management of human resources.
With the unitary perspective the organisation is viewed as an integrated and harmo-
nious whole with managers and other staff sharing common interests and objectives.
There is an image of the organisation as a team with a common source of loyalty, one
focus of effort and one accepted leader. Conflict is perceived as disruptive and unnat-
ural and can be explained by, for example, poor communications, personality clashes
or the work of agitators. Trade unions are seen as an unnecessary evil and restrictive
practices as outmoded or caused by trouble-makers.
Personnel policies and managerial development can be seen as reflecting a unitary
ideology. Horwitz, for example, suggests that the unitary perspective views company
and trade union loyalty as mutually exclusive. He raises the question of human
resource management (HRM) as a reformation of a unitarist managerial ideology.
Developments in HRM, in seeking to optimise co-operation and organisational loyalty,
can be seen as imposing new forms of control. A managerial approach to facilitating
organisational goals and the direct involvement of employees furthers a unitary per-
spective and can mask an underlying distaste for unionism.
58
An alternative view suggested by Fox is the pluralistic perspective which views the
organisation as made up of powerful and competing sub-groups with their own legit-
imate loyalties, objectives and leaders.
59
These competing sub-groups are almost
certain to come into conflict. From the pluralist perspective, conflict in organisations is
seen as inevitable and induced, in part, by the very structure of the organisation.
Conflict is not necessarily a bad thing but can be an agent for evolution, and internal
and external change.
CHAPTER 19 HUMAN RESOURCE MANAGEMENT
773
UNITARY AND PLURALISTIC PERSPECTIVES
The unitary
perspective
The pluralistic
perspective
Restrictive practices may be seen as a rational response from a group which regards
itself as being threatened. The role of the manager would be less commanding and
enforcing, and more persuading and co-ordinating. Fox suggests that the pluralistic per-
spective is a more realistic frame of reference. He argues the importance of viewing work
situations through the different groups involved rather than attempting a wished-for
unitary approach. According to Horn, ‘these views were widely acceptable, particularly
to trade unions, who saw this as legitimising their intervention into an increasing range
of managerial prerogative areas’.
60
There are, however, relative shades of unitary and
pluralistic perspectives, and both can co-exist within the same organisation.
For example, Tyson suggests that:
The normative tradition within personnel managementisbased on a need to ameliorate the
worst aspects of domination in the employment relationship. Frequently the welfare tradition rep-
resents a unitarist solution to this problem. By contrast, the industrial relations tradition offers
pluralist solutions, through procedures and joint consultation.
61
A central feature of effective employee relationships is managing through people and
regulating the employment relationship.
62
Whether as individuals or members of a
group, the actions and decisions of people are governed by a set of underlying rules. In
the work organisation these rules are implemented within a structured hierarchy of
authority and responsibility. But regulating behaviour between people at work is a
complex process. Effective employment relations are founded on a combination of
legal and behavioural dimensions. The legal dimension embodies observance of
employment legislation, the formal contract of employment and codes of practice. The
behavioural dimension embodies recognition of the individual, the social responsibili-
ties of management and the psychological contract (discussed in Chapter 2). (See Figure
19.7.) Social responsibilities extend beyond terms and conditions of the formal con-
tract of employment, and give recognition to the social and human needs of people at
work including greater emphasis on creating and integrating a work/life balance. The
recognition of social responsibilities should form an integral part of corporate strategy
and regulating the employment relationship.
Legal dimensions
The work organisation has to operate within a system of legal rules and regulations.
Legal dimensions regulate the relationship between employers and employees, provide
individual rights for employees and strengthen the position of trade unions.
Legislation and codes of practice lay down rules which govern patterns of behaviour to
ensure that ‘managers act reasonably in the circumstances’. Some managers view these
rules with trepidation and avoid taking necessary action to discipline employees.
Others are unaware of the rules or choose to disregard them, terminating contracts
without due cause.
Either strategy is likely to result in behavioural problems among employees who will
perceive avoidance or over-reaction as dysfunctional. A proper knowledge, understand-
ing and respect of the law, coupled with appropriate managerial action, can turn a
potentially difficult situation into an opportunity to motivate staff and improve organ-
isational effectiveness.
Although it is not the purpose of this book to consider detailed aspects of
employment law, it is important to recognise the legal framework within which
organisations function and which affects employment relations.
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PART 7 MANAGEMENT OF HUMAN RESOURCES
REGULATING THE EMPLOYMENT CONTRACT