assignment - the future of employee relations[1]

Course: Employee Relations

Assignment No:1

Name: Karen Colburn

CIPD No: 22519390

Submission Date: September 2010

Word Count: 2774

Tutor: Mark Stuart

“I declare that the assignment The Future of Employee Relations is all my own work

Signed: Date:

THE FUTURE OF EMPLOYEE RELATIONS EMPLOYEE RELATIONS

CONTENTS

Contents............................................................................................1

Introduction.......................................................................................2

Background - The Scottish Federation of Housing Associations.....2

Aims and Objectives.......................................................................2

Methodology...................................................................................2

Findings and Analysis........................................................................3

Organisational Context...................................................................3

The SFHA December 2009 – July 2010............................................3

Taking the Temperature.................................................................4

Stakeholder Analysis......................................................................4

Review of Existing Policies and Procedures....................................4

Analysis of Survey..........................................................................5

The SFHA and Trade Unions...........................................................6

Why Employee Relations?...............................................................7

Employee Relations – Policies and Procedures...............................8

Employee Relations Good Practice & Alternative Approaches........9

Tesco..............................................................................................9

London Organising Committee for the Olympic Games and Paralympic Games (LOCOG)...........................................................9

CIPD..............................................................................................10

Conclusions......................................................................................11

Solutions to Consider....................................................................12

Recommendations...........................................................................13

Bibliography.....................................................................................14

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INTRODUCTION

Background - The Scottish Federation of Housing AssociationsThe Scottish Federation of Housing Associations (SFHA) was established in 1975 as a membership organisation to Housing Associations, Local Housing Offices and Housing Co-Operatives in Scotland.

Aims and Objectives The aim of this report is to outline the direction and content of future employee relations within the SFHA. This will be achieved by:

a) A critical evaluation of best practice and alternate approaches to employee relations in other organisations.

b) Demonstrating the importance of the role that business strategy plays in bringing about changes in employee relations.

c) Evaluate existing policies and procedures within the SFHA in terms of organisational fit, best practice and current trends

d) Making recommendations on improvements, including a cost benefit analysis and implementation plan.

MethodologyFor the purposes of this report the research carried out included both primary research, in the form of a desk top review of current policies and procedures, a review of the organisation between December 2009 and July 2010 and secondary research which included a review of a communication from the new CEO sent out to all staff following 1:1’s, reviewing current literature.

More information relating to the relevance of the research carried out can be found in appendix 1.

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FINDINGS AND ANALYSIS Organisational Context The SFHA has been through a significant period of “change” starting in July 2007 when a restructure of the organisation was implemented. This resulted in a reduction to the organisations headcount by approximately 24%. The SFHA has a current headcount of 26FTE, of which 32% have been with the SFHA for 4+ years. The turnover in the first 6 months of 2010 was approximately 10%.

The SFHA December 2009 – July 2010 At the AGM in December 2009 and subsequent EGM in February 2010, affiliate members of the SFHA publicly criticised internal management practices and the manner in which these activities had been reported to both the SFHA Board and membership body. Both meetings were heated and confrontational. The SFHA reported profits of £128,162, however this was considerably less than budgeted.

December 2009 - the CEO handed in her resignation.

For the first quarter of the new financial year the SFHA operated with an Acting Chief Executive in post. The Acting CEO took the decision not to set a new strategic direction for the organisation, believing that this should be done once a new CEO had been appointed.

March 2010 - the SFHA announced the appointment of a new CEO, Dr Mary Taylor.

March 2010 – the Finance Director resigned.

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April 2010 – negotiations with staff over the 2010-11 pay award. Custom and practice dictated that they were entitled to a Cost of Living and Incremental pay increase. SMT asked staff to accept a Cost of Living increase only. The Union and Staff Representative put forward a compelling argument to the SFHA Board. They were awarded their contractual pay award.

June 2010 – The SFHA reported a loss of £27,169 to its Board.

July 2010 – the new CEO took over the “Helm” at the SFHA.

Taking the Temperature One of the main priorities for the CEO was to “take the temperature” of the organisation through a series of 1:1 interviews (Appendix 2) with all employees of the SFHA. In doing so Dr Taylor reported back to staff (Appendix 3) her initial findings, stating that “… it seems pretty clear to me that a lot of your time must have been spent lately getting decisions made, investigating problems, avoiding ‘blame’, supporting each other and maybe just surviving. I think it is time for some dignity and respect at work as well as clear priorities.” The CEO went on to acknowledge that for some job roles were “not clearly defined”. The CEO also described the SFHA as an organisation that needs its “direction of travel” defined.

It could be argued that the SFHA has been suffering from “… inconsistency between what is said and what is done undermines trust, generates employee cynicism and provides evidence of contradictions in management thinking” (CIPD, 1994)

Stakeholder Analysis

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In order to understand the context in which the SFHA operates a stakeholder analysis was carried out (Appendix 4). The analysis determines that both internal and external stakeholders have a high degree of influence over employee relations within the SFHA. The external stakeholders, such as the Government, Trade Union, European Union and Affiliate Members can have a direct impact on shaping employee relations within the SFHA.

Review of Existing Policies and ProceduresAccording to Gennard and Judge “The outcome of the employee relations game is the establishment of rules, regulations and agreements by which employment relations are governed”. (Gennard & Judge, 2005) Furthermore they identify two types of agreement “substantive rules” (covering pay, hours, paid holidays, shift premiums, etc) and “procedural rules” (setting standards of conduct expected of both employers and employees for resolving differences). The SFHA has in place policies and procedures which cover both substantive and procedural rules including:

Pay Grading and Job Evaluation Annual & Public Holiday Entitlement Disciplinary & Grievance Redundancy Union Recognition Agreement (attached as appendix

5) Health and Safety Training and Development Equal Opportunities Standards (for example absence reporting

procedures)

In addition the SFHA makes provision for:

Family Friendly Policies Flexible working arrangements

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Staff Appraisals Retirement Policy Health and Safety

The policies and procedures in place in most cases meet or exceed legislative requirements, are based on good practice and are where appropriate support the organisational objectives. All organisational policies are reviewed at regular intervals.

Analysis of SurveyA survey (Appendix 6) was carried out to gain the views of a sample of staff (approximately 17.8%) within the SFHA. The survey covered a number of areas. However, those areas specific to this report are:

Staff Satisfaction Communication Job Roles Appraisal Relationships with Line Manager Employee Relations Workplace Environment Pay Strategy & Commitment to the organisation

Overall the results demonstrate there is a commitment to the organisation (80%) and an understanding of the long-term strategy of the SFHA (80%). There are however, aspects of this survey that raise questions about communication, relationships between line managers and their team, work life balance and the working environment. More specifically there is evidence that the SFHA needs to review the policies and procedures of the organisation, improvements are required on employee engagement and what this means to the SFHA and 60% felt the SFHA had to review current consultation arrangements.

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The SFHA and Trade UnionsThe SFHA has in place a recognition agreement with UNISON. The terms of this recognition agreement state that the SFHA must consult with the Union over terms and conditions of employment.

The recognition agreement was negotiated in 1995, at a time when the majority of the workforce were members of the union. At the time of writing this report, that figure was approximately 1/3. The recognition agreement excludes negotiation with non-union members. This fall in membership of the union is not specific to the SFHA figure 1 below shows a fall in union membership to 27.4% in 2008 a drop of only 0.6% on the previous year, however as the table clearly shows there has been a significant decline in union membership year on year since 1982.

Fig 1. (BERR, 2009)

Why Employee Relations?The research carried out above highlights a period of turmoil, change, restructuring and instability for the organisation. More focus has been given to the “bottom line” than to employee relations and engaging with staff. Research highlights the importance of employee relations in engaging with employees, Gennard & Judge state that employee relations is “…concerned with how to gain, in a number of different situations, employees’ commitment to

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the achievement of the organisation’s business goals and objectives. It is about changing attitudes so that the organisation establishes rules, regulations and agreement which enable an organisation to implement organisational change successfully” (Gennard & Judge, 2005).

The argument for employee relations is given further credibility when considering the viewpoint of the CIPD that “The achievement of business goals and financial returns is increasingly dependent on delivery by front-line employees. Hence, the emphasis on employee engagement as a key part of the employment relationship has increased. ‘Engagement’ has been described as a combination of commitment and organisational citizenship.” (CIPD, 2010).

Where there is an agenda within an organisation to raise the awareness of employee relations, the business benefits must be demonstrated. According to an analysis of the WERS Employment Relations Survey 2004 the evidence suggests “…that it is not the HR practices that are driving the good financial performance”. (Michie & Zubanov, 2008). This statement, particularly in a period of slow economic growth, could give pause to HR professionals who need to demonstrate value for money.

Employee Relations – Policies and ProceduresThe evidence creates a strong business case for organisations to have a robust set of policies and procedures directly linked with Employee Relations. It has been identified that they should consist of both substantive and procedural rules.

Defining the contribution HR can make to employee relations Michael Armstrong states “HR specialists can contribute to the development of a positive and productive employment relationship.” (Armstrong, 2006) Armstrong cites areas of importance such as:

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Recruitment Induction Performance Management Learning and Development Understanding of expectations Two-way communications Transparency HR Policies and Procedures covering

o Grievanceo Disciplineo Equal opportunities o Promotiono Redundancyo Development o Reward o Employee Relations

In their factsheet, Employee Relations: An Overview, The CIPD cite areas such as employee engagement, employee voice, the psychological contract, teamwork, work/life balance, performance, communication, managing conflict and learning development as areas of importance with regards to employee relations. The CIPD conclude that “Our research underlines the continuing significance of good employee relations. With the decline in union membership and collective bargaining, employers need to put more effort into managing the relationship with individual employees.” (CIPD, 2010)

Changes to union membership, employer attitudes, employee awareness and the effect of both the British Government and the EU have on legislation are all affecting employee relations. According to the Future of Work Research Programme “…we could be witnessing the appearance of a genuinely new kind of employment relations…” (Taylor, 1998)

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Employee Relations Good Practice & Alternative ApproachesThere are a variety of external organisations that influence the SFHA. Decisions taken at EU, local government and ministerial level can have a huge impact on the pace of work within the SFHA as well as impact on HR Practices. Many organisations are identifying ways in which they can change the way in which they manage relationships with employees, samples of these are provided below.

TescoIn the mid 1990’sTesco recognised the importance of gaining employee commitment. They achieved this through “the process of involvement and communication”. (Margaret Inman, 2010). Rather than dissolve the recognition agreement with the Union, who were seen as “adversarial” Tesco’s revised the agreement to create a basis for partnership working.

London Organising Committee for the Olympic Games and Paralympic Games (LOCOG)The Olympic Games in 2012 are dependant on LOCOG planning, organising and delivering a memorable event (Case Study attached as Appendix 7). LOCOG have worked in partnership with their stakeholders to set out a clear set of values by which they will deliver an inclusive event. LOCOG define their values as being “interconnected” with their vision as cited by The Times 100 “To achieve our vision we must be inspirational; To do this we must be open and respectful; Only by working as a team can we deliver something truly distinctive” (The Times 100). LOCOG are in no doubt of the importance of good relations with employees and whilst they recognise that some areas of the Event Management may require an “autocratic” approach, they see no reason why this cannot be inclusive by allowing people to “contribute ideas and discuss best solutions” (The Times 100).

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CIPDGood employee relations are important to the CIPD and their HR Practices should identify them as leaders in their field.

According to their annual report (appendix 8), the CIPD saw a decline of 51% on their commercial profits, resulting in the necessity of making 41 posts redundant in 2009. The report makes mention of collaborative working, communication, ‘Time-Out’ sessions with managers, being an equal opportunities employer, unplanned turnover reducing from 16% to 13%, staff satisfaction being at 82% , the importance of not only L&D aligned to the strategic direction, but also of the provision of a personal development allowance, performance reviews and the health and well-being of staff. The CIPD state that “Staff also believe that the work they do is valuable and worthwhile, interesting and fulfilling, that managers support them and, more so than last year, staff are encouraged to put forward ideas to improve the way we do things”. (CIPD, 2009).

CONCLUSIONS

The research creates a compelling argument with regards to the benefits of organisations recognising the importance of good employee relations and aligning their

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policies and practices with organisational objectives. There are tangible benefits involved for organisations such as:

reputational benefit cost saving – where following good practice reduces

the costs associated with legal advice and tribunals

Employees at the SFHA are on the whole committed to the achievement of organisational objectives. However, that is not necessarily reflective of the relationship between employee(s) and employer.

The HR Policies currently in place within the SFHA are based on good practice, and were developed with the organisational strategy in mind. However, one of the fundamental objectives of the organisation was to improve the “bottom-line” through commercial activities. Despite the best endeavours of employees to contribute to the financial success of the organisation, high levels of spending on consultants appointed by the CEO resulted in lower than expected profits reported in 2009 and a loss reported in 2010.

In reviewing the HR Policies, the SFHA failed to realise the importance of both other elements of employee relations such as engaging with staff and effective communication.

The organisation is a driver of good practice within the Housing Sector. There is a strong argument that the SFHA should be a leader in the sector of good business practice across all areas of the organisation. The SFHA has on hand talented individuals who can assist in driving forward innovative ways in which the organisation can manage the relationship with employees.

The SFHA has the ability to draw on good (and bad) practice within the sector. Then, using this information to

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influence the manner in which Employee Relations are managed within the sector.

Solutions to ConsiderThe SFHA must consider the options that are available to the organisation; these options should be one or more of the following:

Stand still – make no change to the current practices of the organisation

Develop a visioning group which consists of both employees and the union to identify current employment policies and practices and whether there is a need to improve on them

Develop a visioning group from within the key stakeholders and develop an Employee Relations Policy which aligns with good practice and organisational strategy, is innovative and can showcase the SFHA as a leader in the housing sector.

Develop a staff consultation policy and recognition agreement which embraces all staff.

Ensure that the organisation “buys-in” to the need for change and understands the benefits to the business.

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RECOMMENDATIONS

The recommendations drawn from this report that the first priority of the SFHA is to develop a step change plan which will embrace the following:

1. Identify and agree the scope of work required with Managers, ensuring that the business benefit is clear. Gaining their “buy-in” to promoting the need for change.

2. Develop a staff consultation policy and recognition agreement which embraces all staff.

3. Develop a visioning group from within the key stakeholders and develop an Employee Relations Policy which aligns with good practice and organisational strategy, is innovative and can showcase the SFHA as a leader in the housing sector.

Whilst it is recognised that normal practice would be to choose one element as a recommendation as opposed to three. The three recommendations which have been identified, whilst intrinsically linked are also individual recommendations and could be adopted as such to either improve or promote the current practices within the organisation. The timescales, estimate of costs, resources required and justification for the above recommendation can be found in appendix 9.

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BIBLIOGRAPHY

Armstrong, M. (2006). Managing the Employment Relationship. In M. Armstrong, Human Resource Management Practice (pp. 219 - 220). London: Kogan & Page.

BERR. (2009, April). Trade Union Membership 2008. Retrieved September 2010, from www.berr.gov.uk: http://stats.berr.gov.uk/UKSA/tu/tum2008.pdf

CIPD. (2009, November). Annual Report 2008 - 2009. Retrieved September 2010, from www.cipd.co.uk: http://www.cipd.co.uk/about/areport

CIPD. (2010). Employee Relations: an overview. London.

CIPD. (1994). People Make the Difference. London.

Gennard, J., & Judge, G. (2005). Employee Relations. London: CIPD.

Kersley, B., Alpin, C., Forth, J., Bryson, A., Bewley, H., Dix, G., et al. (2005, July). Inside the Workplace. Retrieved August 2010, from www.berr.gov.uk: http://www.berr.gov.uk/files/file11423.pdf

Margaret Inman, N. O. (2010). Unlocking Human Resource Management . London: Hodder Education.

Michie, J., & Zubanov, N. (2008, March). WERS Employment Relations Occasional Paper, HRM PRactices, Organisational Outcomes & Performance . Retrieved September 2010, from www.bis.gov.uk: www.bis.gov.uk/files.file44947.pdf

Millward, N., Bryn, A., & Forth, J. (2000). All Change At Work? London: Routledge.

Taylor, R. (1998). http://www.esrcsocietytoday.ac.uk/ESRCInfoCentre/Images/fow_publication_1_tcm6-6059.pdf. Retrieved September 2010, from www.ercsociety.today.ac.uk: http://www.esrcsocietytoday.ac.uk/ESRCInfoCentre/Images/fow_publication_1_tcm6-6059.pdf

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The Times 100. (n.d.). www.thetimes100.co.uk. Retrieved September 2010, from The Times 100: http://www.thetimes100.co.uk/case-study--london-2012---achieving-vision--145--353-0.php

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assignment - the future of employee relations[1]

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