Labour Problems in UK Economics

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Table of Contents

Changing Nature of Employee Relations in the UK
Change of labour market structures
Employment contracts
List of References

Changing Nature of Employee Relations in the UK

Evident from previous research and casual empiricism, there has been increased tension and work strain across many work places, a problem often attributed to pay discipline and flexibility. It has often been perceived that increasing work strain is directly linked to changing working hours and the expected minimum wage.

The obvious fact is that work force occupies important part of both economical and psychological needs of the labour contract and its intensification triggers welfare effects on employees. It’s been argued that changing work intensity is likely to have substantive negative figures on productivity change.

Work force relations in the UK continue to receive intense criticism for the obvious fact that managers are unable to effectively control their employee’s performances in relation to pay, discipline and flexibility. In this paper, I intent to explain the intellectual, moral and policy arguments in relations to labour problems, job regulations and trade unions in attempt to capture the triangular relationships of the three.

Labour relations involve both work and employment relations and involves management and employees in coordination with policies of a country, for this instance the UK, dynamics of capital markets and relationship between paid work and work load. In my analysis, I will look are various research ranging from the past, present and the future of labour problems.

Labour Problems

Many organisations in the UK consider downsizing and restructuring of their work force to be “a quick fix” to their company’s inefficiencies. This strategy temporary improves the organisation’s output hence demoralizing the surviving employees.

Recent studies conducted by Green (2000, p.5) indicate that work intensification has increased competitive pressure which is often offloaded to workers. One would assume that work intensification in UK is accompanied by rising real wage which is not the issue here. Job insecurity and work intensification has also been extended to include reward system and the unexpected benefits.

With Effort intensification, workers are subjected to longer working hours with large volumes of work in the anticipation of income expansion which is never the case. Here, structural changes including facility employment to measure workers performance, motivation and discipline are inaccurately measured hence unsatisfied employees (Kersley et al 2005).

Redirecting our focus from work and effort intensification to technical change, there is a strong indication suggesting that technical change is often effort-biased. For example, technique measured by employers on employees’ performances is dominant in most work places which are attributed to decline of union influence. Companies have refused to acknowledge the relationship between company human resource policies and work effort thereby increasing job insecurity.

While human resource policies and work force skills have initiated the impact of organisational and technical change, widely seen as efficiency improvement, there is evidence that suggest that the techniques applied are effort-biased. The Standard competitive model of effort determination requires firms to turn up the wages of high effort workers contrary to the UK employment practice (Green 2000, p.7; Burchell & Wilkinson 2002, p.10).

Today’s technology has provided new techniques that efficiently evaluate both new products and more efficient production process. The new production methods include; Just-In-Time (JIT) and Total Quality Management (TQM). These two techniques have been applauded for stimulating the expansion of new information technologies and improving production process.

Though their effect is to extract greater work effort, no remuneration package has been negotiated alongside the package to award hard working employees. The techniques have improved the supervision of material flows and allocation of work schedules and enhanced management capacity.

In this case, managers have been able to efficiently allocate work hence the rise of call centres in the 20th century. While in the comfort of their office, managers can easily monitor and measure employees output accurately with the advent of new technology. Evidently, increased work flow via technical co-ordination has greatly enhanced external effects, but needless to say, labour saving technologies have failed to liberate those high effort workers (Green 2000, p.9).

Guided by the framework of employees needs and the management, basic pay remains the main component of compensations used alongside fringe benefits, cash incentives as well as some intrinsic and extrinsic reward packages. In this regard, I position my interest in labour problems in work places in relation to pay and performance.

Pay represents the most important and critical element in the employment relationship between employers and employees for a number of reasons; 1) it represents a significant part of employers costs and its used to measure performances and competitiveness which determines employees ability to recruit and retain quality labour forces 2).

Pay and performances measures value of services and performances. A great majority of employees become enthusiastic when they start a new job, but their morale sharply decline after their first few months in the company that continues to deteriorate for years afterwards.

These findings are based on a survey conducted by Gielen et al (2006) in 2001 through 2004 on 52 primary fortunate companies that stipulated that poor policies and procedures provided by managers in managing their work forces greatly increase tension between managers and the managed.

Pay and performance are important in work places as they stimulate labour productivity by collecting information about worker’s abilities and efforts that can be used to induce them to apply maximum efforts in executing their duties. Controlling performance is also important as it helps managers screen workers performance and recruit the most able workers.

When incentives are in place, employees will be more focused on activities that are more rewarding and ignore those that are not. At-least according to research conducted by Gielen and his colleagues (2006), use of performance-related pay in Netherlands increased by 39% in 2001 from 30% in 1995. Gielen and his colleagues (2006) analysis affirms that pay performance increases labour productivity due to the incentive effect in place, balances and provides sustainable economic development.

Change of labour market structures

In contrast to the emphasis that inefficiencies of labour process is the main source of effort intensification, the change of market structures does not accurately represent the intensification of product market competition, the disassociations of labour unions and the existence of power shifts in work places.

Studies conducted by Green (2000, p.15) dispute that work effort has pressured firms to reduce costs and increases work forces resulting to increased pressure on employees and reduced unions legal powers. We understand that unions play a crucial part in ensuring employees welfares in work places are taken into considerations, and their disassociations would have negative impact on the labour force.

In the lean mean production, firms are forced to streamline their production and downsize their work force, a strategy that reduces payroll costs. While it may seem to work for some Europe countries, it has proven to be ineffective in countries such as the United States as many complain that is does not effectively account for how the increasing wages alongside work intensification relate. Employee oppressions are often associated with greater effort and lower wages (Blyton& Turnbull 2004).

Managers Perspective

Managers need to control pay performances so as to achieve equity, efficiency and macro-economic stability. On equity pay determination, managers try to increase wages of lowest pay workers so as protect real wages. While on efficiency aspect, managers try to link wages to productivity, individual performance, and employees’ application of skills to a variety of tasks.

And lastly, Gielen et al (2006) argues that high minimum wages could have negative impacts on employment levels that could adversely affect macro-economic stability by increasing inflation levels.

Employment contracts

The capacity of employers to monitor employees’ conformity against employment contracts has constituted additional consequences in the new productions techniques and management methods. This is to mean that computerisation of workflows, like that experienced in call centres enables managers to effectively allocate work tasks and monitor their executions while measuring employees work rates.

The two techniques, TQM and JIT, have enabled managers to easily trace the deficiencies in work quality on individual work stations with the aim of raising efficiency by removing poor practices and eliminating low effort workers. Another model known as the efficiency wage model, credited to reduce supervision, companies implicit ways to improve employees welfares on emphasis on wages and effort intensification should be taken into account.

It has also been argued that efficiency wage models increases job loss due to machine replacements in turn reducing wage replacement ratios and market uncertainty. Britain for example has experienced decline in replacement ratios for the last two decades since its implementations (Green 2000, p.18).

Previous research conducted by Barham & Begum (2005, p. 6) in 2003 estimates that costs associated with employee absence in the U.K totalled to £11.6 billion excluding indirect costs. The huge numbers of sickness absence overburdens the management with the cost of managing absences and trainings hence negatively affecting the organisation’s output.

Recent research show that employees in the UK were more likely to take sickness leave in the week of financial intermediation followed by other industries such as the health and social work whiles the workforce in the hotel and restaurants experienced low sickness absence leaves.

The research also indicated that public sector industries experience lower sickness absence rates compared to the private sector due to the well structure policies put in place. The lower numbers in sickness absence rates in the private sectors may also be attributed to lower provision of sick pay compared to public sectors. Statistics also indicated that employees working lower hours a week are more likely to take sickness absence compared to employees who put in less time (Barham & Begum2005, p.10).

Pollert and Charlwood (2009, p.343) argue that more generic factors in work places are those that are stress induced attributed from abuse and exploitation by employers.

Of particular interest, the research continues that low skilled paid and low skilled workers representing the majority of migrant workers were subjected to a number of abuses including dismissal of pregnant women and disabled employees, non-payment of wages, bullying linked to discrimination, maternity denial rights, late or non-payment of wages and non-compliance of national minimum wage and non payment of statutory sick pay among others (Salin 2003, p. 1215: Hoel & Beale 2006, p.240)

In response to a survey conducted by Green & Donna (2004) to measure employee skills levels alongside their performances, it was concluded that different perceptions of the skills used in work places were attributed from qualification held by employees, their problem solving skills and planning skills.

Its evident that skills are reasonably a good match between perception of job managers and those of employees and the biasness in the work place exist in a situation where employees may be deemed to posses higher skills compared to their line managers.

This theory is consistence with the hypothesis that stipulates that skills are socially constructed, and therefore managers are often the male workers and the females are perceived to be employees and there is often a tendency for the boss to underestimate the skill levels of people working under him.

Due to this shortcoming of the labour employment theories, skills have been over the years proven to be a barrier to progress in work places. Such shortcoming may first be attributed from inability to accurately measure employee job skills and pay determinations across different genders. Labour markets should therefore provide accurate measurement of skills in the determination of job description and the associated reward packages.

Job skills measurement requires both complexity and sensitivity but even with the understanding of both employee and employer perceptions in different settings, experts have not yet discovered better modules in evaluating jobs. Job knowledge often improves with longer acquaintance, and employees in this case have better knowledge of jobs than their line managers hence perception bias (Green & Donna 2004, p.65; Noon & Hoque 2001).

The relationship between the managers and the managed is more problematic. Labour problems are linked to management and policies and practices of managers. The focus on executive management tends to overlook management objectives and often concentrate on activities at managerial level or even in their line of supervision, overlooking the societal and institutional environment. This particular module failed to put into consideration the goals of employment relationships and its dynamics for managing tensions in work places.

Today’s employment relationships are often characterised by cooperative motto of ‘win-win’ solution. Conflicts such as strives and absenteeism have significantly increased in today’s workforce compared to a decade ago. The typical stereotyping of male employees being the bread winners has long been outdated and the distinction between white and blue collar jobs has become distinct (Barham & Begum 2005, p.10; Noon & Hoque 2001).

In this regard, Gielen and his colleagues (2006) analysis highlight the benefits of pay and performance to include;

They help an organisation achieve is business objective
Enhances employees compensation through improved performance
Attract and retain competitive staff
Rewards good performance without necessarily increasing labour costs
Reduce redundancies in times of economic downturn through flexible compensation packages
Orientates organisation performance towards quality and productivity
Managers flexible reward packages are able to absorb downturns and reduce labour costs.

Pay performances has not been without controversies. First, it has been claimed that cash compensations as motivation packages have a limited time-span. In this regard, workers have not completed welcomed the strategy due to;

Managers’ ability to measure performances and compensation criteria are not adequately understood, accepted or even communicated to employees.
Some organisation have inappropriate appraisal systems that contract with objectives of the reward system.
Managers fail to provide regular feedback on employee performances
Wrong quantum of pay that determines performance criteria
Managers inability to provide both intristic and extrinsic rewards criteria
Lack of regular evaluation of pay performance scheme
Unrealistic goals set by managers (Gielen et al 2006).

Trade unions

Unions have particularly known to have the utility function that seeks out to improve the welfare of employees. It is assumed that unions in the United Kingdom have more bargaining power and it is for this reason that we assume their association in labour relations would improve the wage bargaining power.

Contrary to that belief, unions bargaining power in the UK have been shocked into weaker stance since the 1980s. Unions wage differentiation has fallen steadily and workers rights have not been attended to effectively. It is for this reason we believe that unions should take a more active role in workers welfare by raising their performance and effort and provide more active voice for workers (Green 2000, p.17).

Collective bargaining has stimulated the recognition of fundamental social rights embodies in labour legislation. Change of focus of industrial relations from collective bargaining to labour rights has attempted to address the inequalities and discrimination including those affecting the minority group such as women, reasonably in Britain, with its increased cases of Employment Tribunal cases (Edwards 2003, p.4).

System of employee representations has radically fallen over the years due the failing membership of trade unions. Today, there exist only two product of employee representation known as the ‘Unite and Unison’, representing over 40 percent of UK membership and also extended its linkages to international borders.

Tentative research reported by Green (2000) concluded that unions have transformed their policy orientations and even recruited some employers to represent the gap between their own structures and employee participation. The UK has also incorporated European law such the collective channels independent of the employer, European Works Council and statutory mechanism into its trade union policies to improve the employees’ welfare.

But needless to say, employees with work force problems have been turning to private organisations such as the Citizens’ Advice Bureaux and local community group for dispute settlements. One may be deceived to think the transformation of policies and practices of employers may improve labour union policies which is not the case here.

The UK labour union international linkages of product markets, product organization and supply chains have proven it difficult to identify owner of capital and companies as employers of labour. And also, since shareholding represent dominant part of ownership; companies have turned it into complicated equity ownership relations making it totally impossible to know what employees or companies own (Green 2000, p.5; Rose 2008).

Organisations in the UK are employing maximum efforts in ensuring the achievements of diversity in their workforce are achieved by conceptualization of equity in its legislation.

With the British legislation in place, one may assume workers will be treated the same, which is not the case here, race and sex discrimination have continued to be embodied in the symmetrical social problems to the extend that few minority of the social group like the women and BM workers are discriminated against compared to white and male workers.

Although the legislation has positively impacted the disadvantaged groups, the effects of past discrimination have been ignored. Another shortcoming of the British legislation is that its application is limited to only few instances.

For Example, hardworking employees are only compensated for through extra training and improvement of their current position while concept of equality has not been applied sparingly in different groups such as the male, white and heterosexual norms. The new legislations should recognize and value work group differences (Dickens 2007, p.465).

Conclusion

Changing economic and social context of employee relations has accelerated labour problems in workforces resulting to poverty, inequality and social exclusions. The UK government continues to seek ways to bridge this gap by reconstructing a concept of citizenship and social inclusion through the implementation of new policies that will attract more people in employment relationship, increase employment rates and prolong working lives.

Effective government policies will increase employment opportunities, productivity and competitiveness of work force. Clarke et al (2002, p.6) adds that growth of individualism and consumerism have weaken the collective bargaining at work weakening the appeal of trade unions (Clarke et al 2002; Noon & Blyton 2007).

List of References

Barham, C., & Begum, N., 2005, ‘Sickness absence from Work force in the UK’, labour Market Trends, 149,1-10

Burchell, B., Lapido, D. & Wilkinson, F. (eds.) 2002, Job Insecurity and Work Intensification. Routledge, London.

Blyton, P. and Turnbull, P.J. (3rd ed.) 2004, The Dynamics of Employee Relations, Palgrave Macmillan, Basingstoke.

Clarke, L., Donnelly, E., Hyman, R., Kelly, J., McKay, S., 2002, ‘What’s the Point of Industrial Relations?’ British Universities Industrial Relations Association., 5, 1-11

Dickens, L. 2007, ‘Thirty years of equality legislation in Britain’, British Journal of Industrial Relations, 45(3), 463 – 494

Edwards, P. (2^nd ed.) 2003, Industrial Relations Theory and Practice, Blackwell, Oxford.

Gielen, A., Kerkhofs, J., & Jan, O., 2006, ‘Performance Related Pay and Labor Productivity’, Institute of Labor studies, 5455, 1-17

Green, F. 2000, ‘Why has work effort become more intense?’ Industrial Relations Journal, 43(4), 1-48.

Green, F., & Donna, J. 2004, ‘Assessing skills and autonomy: the job holder versus the line Manager’, Human Resource Management Journal, 13, no.1, 63-77

Hoel, H. and Beale, D. 2006, ‘Workplace Bullying, psychological perspectives and industrial relations: towards a contextualised and interdisciplinary approach’, British Journal of Industrial Relations, 44 (2), 239 – 262

Kersley, B., Alpin, C., Forth, J., Bryson, A., Bewley, H., Dix, G. and Oxenbridge, S. 2005,’ Inside the Workplace, First Findings from the 2004 Workplace Employment Relations Survey (WERS 2004).

Noon, M. and Blyton, P. 2007, The Realties of Work: Experiencing Work and Employment in Contemporary Society, Palgrave Macmillan, Basingstoke.

Noon and Hoque 2001, ‘Ethnic minorities and equal treatment: the impact of gender, equal opportunities policies and trade unions’, National Institute Economic Review, 176,105 – 116

Rose, E. (3rd Ed.) 2008, Employment Relations, Financial Times Prentice Hall, Harlow.

Pollert, A. and Charlwood, A., 2009, ‘The vulnerable worker in Britain and problems at work’. Work, Employment and Society, 23(2), 343 – 362

Salin, D., 2003. ‘Ways of explaining workplace bullying: a review of enabling, motivating and precipitating structures and processes in the work environment’. Human Relations, 56(10), 1213 – 1232.

Click Here To Order Now!