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Role and Impact of Employment Relationship on the overall success of an organisation

‘Employee relations’ is a modern term alternatively used for former ‘industrial relations’ in

present times. A move from manufacturing sector to service sector along with increased number

of white collar jobs in place of blue collars and trends of individual protection and rewards have

narrowed the scope of collective efforts(bargaining) and consequently lent the introduction of

employee relations term (Daniels, 2006). It seems sophistication of different writers to use

different terms interchangeably for employee relations such as Rose (2008) used ‘employment

relations’, Lewis et al. (2003) used ‘employment relationship’ while other prominent authors

(Daniels,2006;Blyton and Turnbull,2004;Hollinshead et al.,2003) seek to agree on ‘employee

relations’ notion. Moreover, employment relationship is a quite broad and complex area which

encompasses many concepts and dimensions and many external and internal factors influence the

relationship, therefore it is hard to precisely define it (Daniels, 2006). However, Lewis et al.

(2003: 6) quite convincingly view employment relationship as ‘an economic, legal, social,

psychological and political relationship in which employees devote their time and expertise to

the interest of their employers in return for a range of personal financial and non-financial

rewards’. The overall success of an organisation depends on many factors and employment

relationship is certainly the one which extensively play very vital role in the organisational

success. In order to explore the concept of employment relationship along with its implications

on the success of organisation, I intend to discuss it in three stages. In the first part of essay, the

theoretical approaches to employee relations will be discussed, a relationship between employee

(worker), his work and his expectations and role of organisation’s features on employment

relationship will be explored. Secondly, the impact of external environment and role of different

stake holders, processes and employee involvement practices on employment relationship will be

discussed. Finally, the discussion will be summarised and hence conclusion will be drawn.

Although, there are various theoretical approaches to employee relations which have been

evolved over the time. However, three basic theories i.e. Unitarism, Pluralism and some

principles of Marxism and two evolved approaches Collectivism and Individualism in employee

relations have been considered important by Daniels(2006). Furthermore, the process of change

in society in general and employee relations in particular since the mid-1960 seek to focus on

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theoretical perspectives of Collectivism and individualism, and specifically the last 20 years

have seen significant move to individualism (Lewis et al.,2003). The concept of Collectivism can

be described as group of “workers mobilising their interest through collective action” and

involves the role of trade unions as representative of employees. On the other hand Individualism

perspective of employment relationship mainly focuses on individualised rewards for employees

and seems to discourage need for collective efforts. (Daniels, 2006).In this regards, Daniels

(2006) believed that the new legislation regarding individual protection and the availability of

instant information to individuals has encouraged the trends of individualism in modern era. In

the1990, “this shift towards individual relations was most noticeable in parts of Cadbury-

Schweppes, the Co-operative Bank, in the first wave NHS trusts, and especially in National

Power”; for example Cadbury-Schweppes derecognized APEX and MSF for the purposes of pay

bargaining involving 400 clerical and administrative staff and 350 managerial staff (Bacon and

Storey, 2000).However, Daniels (2006) argued that Collectivism is not even irrelevant in today’s

time and explained that the demise of MG Rover Group in 2005 resulted in 5,000 redundancies

for workers whom all experienced ‘collective experience’. Furthermore, teamwork is bringing

employees together as ‘collective group’ and teamwork at ASDA and WS Atkins is evident of

this collective approach and higher success for organizations.

In the employment relationship the relationship between employers and employees is built and

regulated on the basis of contract of employment. The employment contract represents a

traditional and legal way of defining employment relationship. Besides, this legal contract of

employment there is a non-legal aspect (contract) of relationship as well which is built and

flourished among employees and employers upon years of mutual understanding and it

associates certain expectations from each other, called psychological contract(Lewis et al.

2003). With regards to the expectations of employee’s from their employers, they range from a

job, job security, promotion, care and high salary (rewards) to employability, flexible contract

and individual rewards whereas employer’s expectations from employees range from loyalty,

compliance, accountability, flexibility and long hours to learning ,learning to earn and clear

added value for organization(Daniels,2006).

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The psychological contract of employment defined by Rousseau (1994) as “the understandings

people have, whether written or unwritten, regarding the commitments made between themselves

and their organization” (Cited by Hiltrop, 1996). Furthermore, Shore and Tetrick(1994)

explained psychological contract as“ employee’s perception of the reciprocal obligations existing

with their employers; as such, employee has beliefs regarding organization’s obligations to them

as well as their own obligations to the organization”. However, the concept of psychological

contract is considered to be subjective, voluntary, dynamic and informal due to individual

cognitive and perceptual limits and due to changes in the external environment (Shore and

Tetrick, 1994; Hiltrop, 1996). A same view is upheld by Daniels (2006), who believed that the

expectations of the employees and employers have changed over the time. However, all

prominent writers and commentators in the field of employee relations seek to develop

consensus on the point that the violation or breakdown of psychological contract results in bad

employment relationship which in turn results in “many employees experience a growing sense

of insecurity, distrust and even betrayal in relation to their employer” (Hiltrop1996), therefore,

resulting into negative impact on the success of organization. In the UK 2007, Royal Mail’s

plans of modernization and mergers of its some post offices with WH Smith stores were thought

to result in the loss of jobs for a number of employees while reallocation of duties and roles for

others. Moreover, its plans of cuts in pensions for employees and reluctance to raise the pay, all

contributed to growing sense of insecurity, distrust and even betrayal in the minds of employees

in their relation to employer (royal mail).This was example of the violation and breakdown of

psychological contract which was built up on the basis of loyalty and commitment in response to

job security and progression among employees and employers over the years. In this case,

employee relations were highly violated and disrupted thus economic success and performance

of the company and whole economy of UK was badly affected as result of various industrial

actions and strikes taken by employees (trade unions) over the above discussed issues. Source:

BBC NEWS, [Online]

In another example, The Birmingham Midshires Building Society (BMBS) was going through

the process of restructuring and downsizing from the period of 1991 to 1993 and almost a third

of senior management left the BMBS and other staff was also reduced from 2500 to 1500 by

selling part of the business. Some of the old workers were not expecting redundancies being part

of the organization for years were also made redundant and many others were reassigned jobs

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and roles with lower level of pay. Moreover, most of the remaining employees at BMBS were

close friends of fired (redundant) employees, experienced “Survivor syndrome”. This is the name

professionals used to describe the stress-related behavior and the feelings of guilt, anger and

resentment often exhibited by the remaining employees following redundancies in their

organization. In this case the psychological contract was violated and broken hence resulting in

poor employee relations and ultimately in poor performance by the remaining staff in company

in the following months. (Hiltrop, 1996).

As discussed above, many factors affect the employment relationship and Leat(2007), believes

that the nature of work and how work is organised(management) have profound effects on

employment relationship and hence in the performance of workers. Over the years different ways

of organising works have been evolved, in the early 1900’s, Taylorism, Scientific management

and Fordism were common and in present times flexible specialisation, team working and total

quality management are in place. However, different organisations use certain approaches to

organise work or use mixture of approaches and therefore no single technique (way) is out of

date completely. For example, the Warid Telecom is a multinational telecommunication

company, providing telecom services to customers in different countries and in one of its call

(customer contact) centres based in Lahore (Pakistan), where I used to work, was following the

principles of Scientific Management (Taylorism), which involve measurement and time for every

work activity and motivation of workers is associated with their earnings(Leat,2007).The work

parameters were assigned very strict time limits and measurement, e.g. maximum allowed not

ready time was 30 minutes, wrap up time was 45 minutes and call waiting time was 35 minutes

to achieve very tough target of 320 calls a day in 8 hours shift for an agent, movements and

activities of an agent during listening a call were controlled through call recordings and video

cameras. Management believed that motivation of employees can be increased by performance

related bonuses and incentives. Conversely, this type of work organisation (management)

resulted in stress, dissatisfaction, poor communication, poor ‘employment relations’ and high

turnover rate of employees ( as most of the employees left the company within six months after

joining).Moreover, the company had to spend a lot in recruitment and training of new hired staff

which undermines the success level of division. However, it will be highly suggestible for

company (management) to improve employee relations in order to succeed by developing new

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flexible work organising techniques, involving employees into decision making and by job

enrichment techniques.

The culture of the organisation is important aspect of employment relations which contributes to

the success of an organisation. It is a “mix of the beliefs, values, mission, approaches to thinking

and understandings” (Daniels, 2006). Within organisation, culture helps employees to develop

good understanding and relationships with employers and each other; also it directs the

behaviour of employees. In the Sunday time’s survey of 100 best companies to work for 2009,

the companies’ culture is evident for good employee relations and success of organisation. For

example, Sunday times 2009 survey reveals certain aspects of culture at the ‘Cobalt Recruitment’

as follows; team mates go out of their way for each other, there is a strong sense of family as

both managing directors sit and work among employees, when work gets a little too much

employees can always down tools and challenge a colleague to a game on the Wii. This fantastic

culture at Cobalt has developed very strong employment relationship and employees feel they

can make a valuable contribution to the success of the company. Sunday Times [online]

The strategy that an organisation adopts has affects on business performance, the employees

working in the organisation and on employment relationship as well. Porter (1990) defines three

different competitive strategies, cost leadership, differentiation and focus strategy, each of these

strategies has implications regarding employee’s relations (cited by Daniels, 2006).With regards

to real time example, Ryanair is a low-cost, no frills budget airline in the Europe whose low-cost

leadership strategy can be characterised by a strong central authority(Michael O’Leary

leadership), close supervision and limited employee empowerment (Daniels,2006). The

Ryanair’s low cost model seek to focus on reducing cost by full utilisation of capacity and strong

rigid control of everything(including employees) by the Box leadership approach of Michael

O’Leary. According to O’Higgins (2007), Ryanair’s low-cost strategy has somehow lost the

sight of employees and its industrial relations(employee relations) with staff, especially with

pilots are fraught. Moreover, company has come under fire for refusing to recognise unions and

allegedly providing poor working conditions; for example, staffs are banned from charging their

mobile phones at work to reduce the company’s electricity bill (O’Higgins, 2007; Cited in

Johnsons et al. (2008)). In the continuation of this low-cost strategy the employment relationship

has been ruined to some extent at Ryanair and employees experience low level of satisfaction

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and little loyalty with company. Apparently, company is making profits however, in a poll of

4000 travellers by TripAdvisors in October 2006 revealed the facts that Ryanair was voted the

world’s least favourite airline and unfriendly staff was cited as worst part of Ryanair’s

experience (O’Higgins, 2007 cited in Johnsons et al. (2008)).So, the bad working conditions,

unfriendly attitude of staff is because of poor employment relations and all this could challenge

the success of Ryanair in long term.

In addition to internal factors there are various external factors which affect the employment

relationship in organisational context. These external factors drawn from political, economic,

technological and social environments are able to both stimulate and constrain the organisation

of subsystem work (Lewis et al., 2003). In current global economic downturn and recession

times, the discussion of economic and social factors along with their implications on

employment relationship will be relevant. Within the context of UK, the automobile industry (car

manufacturing) has been hit by a slump in demand amid a wider economic slowdown in

particular and has resulted into massive sale losses, production plant shutdowns and

redundancies for its workers on regular basis. For example, Luxury car maker Bentley after, 200

job cuts , three-day week in October 2008 and longer Christmas break has announced on 10

February, 2009 that it is cutting 220 more jobs and also revealed all staff will take a 10% pay cut.

Moreover, due to slump in demand it is going to close Crewe plant for seven weeks from this

march. However, Bentley said it hopes to make cuts through voluntary redundancies but also

warned it would not rule out any compulsory action if needed. Previously, the redundancies in

October reflected a great sense of deprivation and feelings of insecurity among employees.

Moreover, this threat of necessary action on job cuts can lead to employment relationship break

down and could result into industrial action or strikes on allegedly breakdown of psychological

contract between employees and employers. Therefore, the success of the company will be at

higher risk in future. BBC[online]

In my personal example (experience), as I work for a company called ODM Ltd., which is

expert in providing direct sales services of credit cards, and its main clients are Tesco and Argos.

Before economic down turn (recession), company was doing good business with huge volume of

customers and staff was paid basic pay plus bonuses on the activation of every card. Therefore,

everyone was happy in the company, enjoying good employment relationship and sales targets

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were easily achievable. However, due to current economic downturn and credit crunch the

attitude of customers towards credit cards has changed and they are reluctant to apply for credit

cards, resulting into significant decline in the sales. In this scenario company’s profit levels

decreased and it has refused to pay any bonuses to the staff on the activation of cards.

Consequently, the employees in the company are feeling de-motivated, suppressed, dissatisfied

and their relationship with management has been badly affected resulting into lower level of

loyalty and performance. Therefore, the sales targets are not being met largely and the overall

performance of employees and company has been adversely affected which undermine the

success scenario of company in long term.

In employee relations the trade unions are the organizations which play very vital role in the

regulation of employment relationship. ‘A trade union is any organization, whose membership

consists of employees, which seeks to organize and represent their interests both in the

workplace and society and, in particular, seeks to regulate the employment relationship through

the direct process of collective bargaining with management’ (Salamon,2000). Moreover, the

section one of Trade Union and Labour Relations Act 1992, provides the current definition of

Trade union as “an organization whether temporary or permanent, that consists wholly or mainly

of workers whose main purpose is the regulation of relations between these workers and

employers or employer’s associations” (Lewis et al., 2003).With regards to the structure of trade

unions Daniels (2006) believed that the traditional classification of trade unions are company

unions, craft unions, occupation unions, industry unions and general unions. However, Lewis et

al.(2003) argued that after trends of union mergers, technological and industrial changes and

shift from collectivism to individualism have resulted into the decline of trade unions and in its

membership in recent years. With regards to trade union’s function it is considered to be very

broad and dynamic and Salamon(2000) defines the broad function of trade union in terms of

power, economic regulation, job regulation, social change, member services and self-fulfillment.

In this regard some of the trade unions have got affiliation with representative bodies; for

example in UK Trade Union Congress (TUC) is the representative body of the trade union

movement and it describes itself as ‘the voice of Britain at work’. It provides an important means

to lobby government about union, employment, economic and social issues. Source: TUC

website [online]

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However, the function of trade union in regulating employment relationship along with its

implications on organizational success is point of focus here. Although, Clegg (1979)

summarized four principal ways as collective bargaining, employer regulation, trade union

regulation and statutory regulation in which employment relationship is regulated. However,

Lewis et al.(2003) argued that possession and use of power by either employees(trade unions) or

employers(management) is the lifeblood of employment relations and this is nowhere more

evident than in Collective Bargaining which is exercise of power sharing between employers and

employees about the conduct of employment relationship. The collective bargaining utilizes the

process of negotiation between representatives of management and employees (trade unions) for

the purpose of employment regulation and results in an agreement which may be applied

uniformly across a group of employees (Salamon, 2000). It has been widely recognized that

Collective bargaining is a key method used by trade unions to protect or improve the interest of

their members ( Thornley et al.,2000 cited by Lewis et al., 2003).Therefore, collective bargaining

through the collective involvement and power sharing among employers and employees( trade

unions) results in improved employment relationship and hence in increase level of performance

for the organization by reaching at collective agreement in most of the times. Conversely, lack of

coordination, collective bargaining breakdown and disagreements among two parties (employers

and trade unions) may result into industrial action taken by union members, resulting into poor

employment relationship and may threat(affect) the success of organization.

For example, in January 2004, the workers in Land Rover at Solihull(West Midlands) came on

dispute for the purpose of Pay rise. They argued that their colleagues working in Jaguar owned

by the same parent company Ford are earning more and gave threats of strike (industrial action)

over the pay issue. However, by effective negotiation through the process of collective

bargaining, Amicus (union) supported by Transport and General Workers' Union reached an

agreement with Land Rover regarding 6.5% pay rise over the two years. The dispute was settled

through effective negotiation resulting into positive employment relationship at Land Rovers.

Therefore, workers (employees) were expected to work hard with full loyalty to contribute into

the future success of company. BBC[online]

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Second, example could be that of Nissan, a Japanese company started production in the UK in

1984. It agreed to single union deal and proceeded to work with trade unions in a range of ways.

Therefore as a result of collective bargaining through effective negotiation between management

and union a deal came in the form of reducing the 39-hours week to 35 hours, whereby

employees take an extra two week’s holiday each ear, at a time that suits the organization. This

was regarded as joint effort towards employment relationship improvement (regulation) and

contributed to the success of company at that time. Source: (Daniels, 2006)

In another example as discussed above; in the UK 2007, Communication Workers Union(CWU)

came to dispute(disagreements) with Royal Mail over its plans of modernization and mergers of

its some post offices with WH Smith and its reluctance in pay rise. This took form of many

strikes (industrial actions) by the workers all over the country and the business was badly

disrupted, resulting into bad employment relations and losses for company. BBC [online]

In broader context of employee relations the employee involvement and participation are very

important as they regulate and reinforce employment relationship. However, Salamon(2000)

suggests that there has been definitive move towards employee involvement rather than

participation, partly driven by more strategic, integrated and managerial approach to the

management of people(cited by Daniels,2006).Moreover, in employee relations and involvement

the role of Management(or leaders) and subordinates(employees) is very important as different

employee involvement practices can only be implemented with regards to certain management

and subordinate styles. Therefore, in this section the role of management and employees in

implementing different employee involvement techniques and its impact on the success of

organization will be discussed. Employee involvement has been described by Salamon(2000) as

‘a range of processes designed to engage the support, understanding, optimum contribution of all

employees in an organization and their commitment to its objectives’. The employee

involvement involves both downward practices from management to employees and upward

practices from employees to management and can be applied at individual or group level (Rose,

2008). As part of employee involvement Rose (2008) note that downward communication is

used mainly in the form of company news (newsletters, journals), employee handbooks,

employee reports and team briefings to educate employees so that they more likely to coordinate

with management, resulting in improved performance. Moreover, Daniels (2006) note that the

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successful companies have very effective communication process in place as this consolidates

employee relations.

With regards to practical example, ‘Shine Communication’ is a public relations company which

uses very effective downward communication system for employee involvement. It has been

made possible by means of providing ‘employees hand books’ on joining company, which

clearly states organization’s background, products/services and its objectives and purpose.

Moreover, notice boards, bulletins, briefing notes, and newsletters are mainly used by this

company to keep update the employees. Management at Shine Communications put greater

emphasis on ‘cascading information down the line to shop floor’(Rose,2008) by using team

briefings in which employees are informed about high level strategic decisions, targets are

identified, progress reports made and point of action is developed. The management style in this

organization is that of sophisticated paternalists which make all this happen by recruiting

likeminded people. Moreover, the employee’s style is that of informative subordinate in this

regard. However, this management and subordinate styles are well collaborated in this regard by

the means of effective downwards communication (employee involvement) and employee

relations have been consolidated as employees feel involved and management shares strategic

information with them. Therefore resulting into greater employee’s satisfaction, performance and

success for company as this company is one of the 100 best companies to work for. Source:

Sunday Times [online]

The second practice of employee involvement is upward communication (involvement) from

employees to management which normally consists of attitude surveys, suggestion schemes, task

based involvement, financial involvement and quality circle etc. (Rose, 2008). In suggestion

schemes, an employee passes a suggestion of improvements that could be made to central person

this suggestion is assessed and some form of rewards is offered for this suggestion (Daniels,

2006).Moreover, Rose(2008) believes that through suggestions employees contribute ideas,

concerning the improvement of working methods, cutting cost of production and other aspects of

improvements in organization. With regards to this type of employee relations and involvement,

the democratic leadership style and collaborative subordinate (employee) style are suitable as in

these styles, the management seeks to take open suggestions and opinions from employees who

are ready to contribute their opinions in the form of group and they play significant role in

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building good relationship with each other for the purpose of high organizational performance.

For example, at BMW plant in Oxford (2002) the suggestion scheme worked well with

employees and they came up with fantastic ideas and suggestions of improvement, which

contributed to more production than expected and in cost reduction. (Daniels, 2006).Hence by

means of suggestions (employee involvement), employee relations and involvement consolidates

and the overall performance of organization can be improved.

There is another form of employee involvement in upward communication practice known as

task-based involvement that encourages employees to extend the range and type of tasks they

undertake. It involves Job redesign, job enrichment, job enlargement and team working;

however, I will focus upon Job enrichment here. Job enrichment is a way of redesigning jobs to

provide greater participation, greater involvement in a way that job itself produces internal

motivation and job satisfaction (Cotton, 1993).Moreover, cotton(1993) notes that jobs can be

enriched by increasing the autonomy, responsibility and feedback of employees(workers).In a

similar view Geary(1994) states that in most advanced form ‘team working’ refers to the

granting of autonomy to workers by management to design and prepare work schedules, to

monitor and control their own work tasks and methods, to be more or less self managing(cited by

Rose,2008: 386).Expanding jobs vertically through job enrichment gives ‘employees

responsibilities and control that were formerly reserved for management’.(Robbins, 2005,

Pg216).Therefore, employees tend to be more motivated, responsible, and loyal with their works

that improves commitment level and relationship with management. By the help, of this method

the performance of worker can be increased and organisation enjoys higher success level. This

type of employee relations and involvement can be best anticipated and regulated by Laissez-

faire leadership (or consultors management style) and by collaborative subordinate (employee)

style, as Laissez-faire leadership (management) give full authority and responsibility to workers

to decide about their job changes and collaborative subordinates(workers) have ability to

introduce and discuss within group the new ways of doing job.(Daniels,2006). For example,

Laser UK( subsidiary of Laser ,French based finance company) is a leading provider of

innovative credit and customer programmes, and its call centre based in Solihull, best describes

the practice of Job enrichment. It has introduced the job enrichment programmes by allowing

call centre agents the discretion to choose the time of when to perform a particular task(work

scheduling), giving freedom to each agent to personally decide on how and in which order a

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customer’s query should be responded, giving authority to agents to check their own work and

improve their call standard rather than being told what to improve on and finally encouraging

workers to learn new skills – deal with a new type of query which they would not normally deal

with, hence allowing them to enhance their personal capabilities. After the implementation of

these employee involvement techniques Laser UK has considerably seen improvement in

performance and have achieved higher success rate. Source: (Manager at Laser).

The Quality circles are used as part of employee involvement and Daniels(2006) define Quality

circle as a group of employees(work group) who meet regularly with the purpose of identifying,

analyzing and improving issues relevant to organization and this group operate without guidance

of management. Moreover, Rose(2008:386) notes that ‘Quality circle is concerned with the use

of problem solving techniques in order to reduce waste, improve performance and quality,

increase competitiveness, promote self-development and group identity, and to encourage

communications’. Therefore Quality Circle way of employee involvement has been very

effective in Japanese automobile manufacturing companies’ context and they have succeeded

quite convincingly in reducing cost structure and improving quality. The major car

manufacturers like, Honda and Toyota have had quality circles in place and they have been

consistently able to improve their performance. However, Rose(2008), notes that Quality circles

are least favorably rated and least successful in the West because the problems associated with

them include the effects of transporting a Japanese-derived ‘culture-bound’ concept(that is

successful within Japanese companies) to western organizational context which lack in quality

ethos and group-based quality management. For example, Ford launched quality circles across its

plants in UK in 1981 with some success but unions resistance mounted and they withdrew their

support from this (short pilot project). Source: (Oliver and Wilkinson, 1992, p.169; cited by Rose

(2008:387))

The last practice of employee involvement that I would consider here is financial involvement

which seems more sensitive and effective involvement. With reference to financial involvement,

Cotton(1993), notes that it incorporates the idea or approach of employee ownership which can

be further expressed in terms of profit share scheme, employee share option scheme and share

ownership. For example; Cotton(1993) explains that Quad/Graphics is a printing company in US

in which employee ownership practice is in place as employees own 37% of the company

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through an employee ownership plan. Moreover, employees have shareholders meeting each

year to elect board of directors this gives them feelings of ownership and much of the profits go

back to employees indirectly. This company is enjoying success as everyone in the company act

like owner and shows full loyalty. In another example, Daniels (2006) explains that in British

Gas a set percentage of 3 percent of group profits is paid to employees, once the threshold profit

level is achieved. Moreover, Cotton(1993) notes that the research on employee ownership

scheme yields very positive results on the performance of organization and on the attitudes of

employees.

In, conclusion this essay analyzed and evaluated different ways in which employment

relationship can affect the overall success of organization. In, first part the concept of

employment relationship (employee relations) has been explored and some understanding been

developed by looking into its different theoretical perspectives. The relationship among worker,

his expectations and nature of work has been discussed by looking into the concept of

psychological contract and management techniques of work. It was clear from the discussion that

the breakdown of psychological contract between employees and employers can result into bad

employment relationship and in decreased level of success for organization. It revealed the fact

that management of work or organizing work in a strict way can put employees into stress, and

performance can be badly affected, while organizing work in flexible way can improve employee

relations and results in greater productivity. Moreover, different features of organization

including culture and strategy have been explained regarding their impact on employment

relationship and success of organization. It was quite obvious from discussion that the healthy

culture of organization is evident of good employment relationship and success of organization.

Secondly, the impact of external environment, different stake holders, processes and employee

involvement techniques on employee relationship and the success of the organization have been

investigated. It was quite clear that the external environment in which organization operates,

different stake holders who have direct or indirect stake in the organization, processes (collective

bargaining, negotiation) and employee involvement practices play very vital role in the

regulation of employment relationship and hence contribute to the success of organization.

Finally, it would be highly recommendable on the basis of above discussion and analysis that

organizations must focus on developing effective employee relations and involvement practices

in order to succeed or effectively compete in this era.

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