The theory of employee relations

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21 November 2015

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Employment relations


       Conventionally, employees are deemed to strike for various reasons. From scholarly works, a strike is defined as suspension in production as the workers and their employers engage in the possible way of dividing the surplus that has been achieved within their relationship. (Metcalf and David, 1993) From modern perspective, strikes involves at least one of the arguing parties having some private information that they do not want the other party to get hold of about this suspected surplus. In empirical perception, strikes are generally considered to be rare. From the findings of economists; they have concluded that strike cases are usually rampant during the business cycle peak, and strikes duration is considered to be limited when the economy is strong. Strike activities are evidently influenced by legislative environment, particularly that legislation that restricts use of replacement of workers (Blyton and Turnbull, 2004).

       An employee’s labor value is greater compared to the wage provided by the employer, that is after considering the relationship of employment. This in return provides an opportunity for rise of surplus that is to be divided among the employee and the employer. Thus, a strike is considered as the act of suspending production as the two sides gets into an argument on how to divide this surplus amicably. The guardian, “yes striking is a human right,” this command is given by the international treaties voluntarily accepted by British successive governments; this same treaties are being bound by the United Kingdom (The Guardian, 2011).

       According to the guardian, British government has been directed by the international community on human rights to relax the already existing restrictions and cease treating lawful strikes as a breach rather than suspension of employment contract to the employees. If the British law intersect with the international obligations, then it would not be easy for the bully employers to unilaterally suspensions of the striking employees (The Guardian, 2011).

       Mills and Quinn (1982) In an ideal competitive situation, employment surplus is not real: individual employers compete with other employers, who are concerned with biding salary and wages to the point when it matches employee laborer value, also the individual workers will too compete with other fellow workers who tend to bid their remunerations until they meet the one that has been scheduled by the respective employers. From this assumption an employee who tends to strike they are immediately replaced by other equivalent works who meet the demands of the potential employer (Brenner, Aaron, Benjamin and Ness, 2009).

       The worker who is willing to take this bid takes the day. This situation also happens to the employers, also employers who try to reduce the worker’s salary and wage; they will receive a set back as the potential workers will move to the employer who is ready and willing to provide that remuneration that the worker is willing to work for. Through this, the workers are thus able to replace their former employers with other favorable employers giving out competitive prices (Zeidler and Frank, 1968).

       Lambert and Bartlett (2005) Evidently, it is true that strikes will happen if and only if there is an extra income from production that both the employer and the worker see that it is worth fighting for, hence strike will never occur in a noncompetitive market of labor. Despite the strikes being human rights, they also need to be viewed with a credible mind. Through a sound mind one is able to make a viable decision that will solve the whole mess amicably. This will need personnel who will explain the likelihood of a strike occurring and then recommending means of settlement, thus there could not be any wastes brought about by strikes (Hicks paradox of 1932). Critically building on Hicks paradox, we are enabled to suggest that the two parties are fighting for some crucial information that each want to keep especially the employer. Apparently the associated wastage realized through strikes is considered a cost of trying to obtain this information especially on the part of the employee as they initially lack this important information that they know will relieve them the bondage of underpayment (Rosenbloom and Joshua, 1996).

       To have a clear understanding of these analogies it is important to get a glimpse of what the workers strike theories hold for better explanation. There are various theories that will help to give a reason as to why really workers in the essential services need to go on strike for their grievance to be hard, by either group understanding or through their respective Unions. Unions go on strike when they are sure that the employer is to meet their demands without undergoing any financial crisis. These theories are crucial as they are the ones that give these unions a bargaining ground as illustrated below (Barrett and Boyd, 1914).

Institutionalization theory

       This particular theory is attributed two gentlemen Hartman and Ross according to Bean perspective (Bean, 1994) the theory asserts institutional mechanisms of negotiating, such as common bargaining protocols helps to reduce the supposed conflicts that are bound to occur due to the strike. Olafsson (1982), perspective about the theory, suggest that for highly developed industrial systems relations are commonly associated with reduced conflict levels.

       Some countries that believe in this theory have been associated with reduced strike conflict level these countries include: Norway, Sweden, and Denmark are some of the singled out as the unique examples the countries that have developed industrial peace model, associated by centralized movement of labor, they also have comprehensive means of negotiations, and lastly they have the legal regulations that are effective in controlling strike activities and disputes procedures.

       Hale (2008) from the study of conducted by Harmatan and Ross determined the factors that influenced strike activities in countries of study. The study found that the countries that have stable labor unified movements that are recognized and willingly accepted and with intensively developed common bargaining protocols are the ones that experience industrial peace. Hartman and Ross concluded centralized bargaining systems minimize levels of industrial conflicts in the field of essential services delivery. This is due to the claim of the two that employers and workers organization are at a point to put real behavioral limits within their respective members.

Implicit or Relational contract theory

       Implicit or relational theory, asserts that there exist a contract between worker’s and employer Unions, the theory is based in an infinitely recurring practice with imperfect monitoring. Kelly (2002) has it that, conflict is unavoidable results of informational asymmetries. The various resolutions of conflicts, strikes slow down, dismissal, low morel, and resignations are not essentials by themselves ingredients of this theory. For instance the strikes will seem to have a zero impact generally under particular configurations, as the conflict is present, but assumes another form.

       Blyton and Turnbull (2004) indicates that the high efforts and the high pay initiatives agreements between unions and the respective employer is possible to be supported “Public Perfect Nash” equilibrium of a recurring event. If these particular players are deemed to be patient enough, just at the cost with random reversions for inefficient series of actions, through which strikes and inflexible wages, or outsourcing and slowdown is bound to take place. This theory suggest that at equilibrium, the respective unions goes on strike simply when the provided wage has been considered to be too low and the exact state nature reality, considered information by the employer to be private and has never been revealed to the workers’ union. Hence, this behavior is turned to be rational in a recurring interaction framework; this eventually causes necessary cooperation in the good times.

Principal Agency theory

       Johnson and Ashenfelter model suggests that strikes happens only when the salary expectations of the file and the rank do not meet at a common ground with what the prospective employer is ready to pay their staff. In case the union directors present a low salary contract for reviewing. In the situations when the file and the rank’s wage expectation are high, then the rank and the file are regarded with an attempt to selling out to that responsible management. When the above mention statement happens, instead of risk dissension the workers union leaders would prefer to strike internally (Blyton and Paul, 2004).

       The major aim of an internal strike is to convince the employees belonging to the union that the wage they are expecting is not possible. According to Hale (2008) “the basic function of a strike is to square up the membership’s wage expectations with what the firm is willing and ready to pay the workers” the implication the theory is that the union’s salary demand should come down during a strike time. From another perspective this theory receives some critics on the ground that the wage needs are merely based on factor of conjecture, instead of being derived from the bargaining process (Metcalf and David, 1993).

The theory of private information

       As it has been outlined from the above discussion, the employer usually holds some crucial information that normally interests the worker about their working conditions, especially the payment part. This theory thus states that strikes are illustrated well by this private information in regard to the critical aspect important in reaching an agreement, for instance the firm’s willingness for payment (Metcalf and David, 1993).

       Why do the workers have to strike? According to the theory of private information, workers only go on strike because this is the only credible means through which they are able to communicate the so called private information. The theory also claims that a company with great willingness to compensate their workers does it with high salary without the employees going to a strike. However, this is also true that the company with low interest of settling the worker, they end up paying the workers low wages because they are ready receive the strike and its impacts. The theory is crucial in the application in strikes when is considered to be bilateral monopoly setting, through this the employees’ union and the firm bargain with information that is asymmetrical, or when the informational conflict is between leaders union, file, and the rank. Form this theoretical information is worth noting that private information is never verified at low cost among other theories.

       Employees do not strike only for economic reasons; they can also strike in demand of working conditions improvement, or with aim of mutual aid, and protection of the workers in another union. This statement elaborate a factor called job satisfaction within the employees which can be defined as that emotional condition that come as a result of appraisal of an employee’s job. The statement suggest workers develops negative of positive attitudes towards their work or specific sections of the job mainly through, an internal state of mind of respective individuals, generally it is that consideration of our belief, behaviors, and our feelings. When job satisfaction is positive, this can result from favorable working terms workers are considered to be active. Workers activeness is determined from the output of production, motivated workers produces quality services because they are able to utilize fully their potentials. Unmotivated workers results in under production as they are not willing to utilize their potentials for the benefit of the employer.

The outcomes of strikes in the essential services sector

       Despite of strike being a human right through which they can air their grievance, strikes are associated with adverse effects that come aftermath the strike has taken place. The results can either be positive, that is the demands of the workers are met and sometimes the results will be negative not favoring the claims of the striking workers. So the striking workers are always prepared for any of these twoutcomes in their efforts to manages and influence the consideration of their needs being addressed with human touch from their employers through the union or at times through the individual employees alone.

       Considering the 1919 the General Winning strike according to the, it resulted to adverse effects. Among them, the metal workers were compelled to go back to work without a dime increase in their pay that they were demanding, this sounds like they just wasted their time. The employees had to be sent to jail, the foreign workers were deported, and hundreds of others had to be demoted. Seven ring leaders of the strike received a two years conviction for conspiracy of trying to overthrow the government. Apart from these negative results still something good came out of it. Eleven of the labor candidates who won the seats out of these four of them were the strike leaders.

       The General Winning Strike made strike in Canada to receive a collective ground for bargaining after almost 20 years. This suggests that within these 20 years the working condition in Canada was compared to hell since both the unions and the workers had no power to bargain for their wage increase even when there was a surplus with the scope of production. Though this the economy of Winnipeg greatly went down for a long time. This also resulted in a social stratification that is the north was classified as the working class and the south as the Troy state

       Another area of essential service sector let us consider the teaching sector. Brison, David and Smith (2006) form the reports that evaluated the impacts of the Ontario teachers’ strike of 1975 to early 1976. Studies were in the respective schools lagged behind because they started just after the end of the strike and also there was lack of cooperation from the teachers. Though the study conducted found no effect that was no effect on the change of student grades. The other study in the same subject also came out with different suggestions, concerning student’s attitudes towards their teachers. Surprisingly the strike did not affect the attitude towards their respective teachers.

       From the third study that was concerned with the school attendance resulted into a null hypothesis. The rate of learner’s dropout was evident from the results that were obtained especially from grade 9 to grade 13. The study concluded that a strike has an impact on student dropout and also on movement to postsecondary education. Ahmed and Syed (1989) Cumulative the strikes are regarded to have negative outcomes on the academic performance of the students especially in the senior grades, particularly in learning such subjects like science and mathematics where learning involves summation of knowledge. Even though the strikes did not have any focus on teachers’ effects from external sources it is realized that after the strike event the teachers became less idealistic in regarding teaching profession as a calling but rather a job just like any other (Matheson and Victor,2006).

Recommendations and conclusion

       From the above reviews, there is a revelation that there is a strong relationship between strikes actions and job satisfaction. In the countries that have high job satisfaction, strike incidences are limited or never exist and the reverse is true for other countries. The studies show that low industrial conflict levels are associated with greatly developed industrial relation systems. Among the recognized countries experiencing the benefit of industrial peace are Finland, Sweden, and Norway since that have unified and stable labor movements, in addition to these they also have a collective platform of bargaining that are accepted by the employers.

       This hence recommends that each country must try to have greatly developed systems in the industrial relations, also should have a well designed collective bargaining policies which has to be recognized and then accepted by the works across the labor sector and also the government and the employers must accept these terms. There is a need then for the country to have constant to review conditions of the worker to match the current economic situation with this review the workers and the employers will not engage in a fight for the surplus production.

       The authorities also have a moral responsibility of ensuring that there are annual forums that joins the employer and the workers with their respective ministries to discuss the current issues affecting the various parties with the hope of addressing this issues at the preliminary before cropping up to create unwanted strikes. Timely strikes aversions are crucial, since it helps to reduce the possible social, political, and economic results of the strike. This calls upon the government responsible ministries to be aware of the challenges that the workers can face.

       Unions should act strongly to fight the policy of temporal workers replacement. Replacing workers reduce the strength of having a common bargaining for their demands. Once the employer has replaced the striking employee, production process goes on as usual hence thinking about the servicing worker who is on strike will be a thing that has been put aside for a while.


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"The theory of employee relations" StudyScroll, Nov 21, 2015.

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