Anglia Ruskin University
Lord Ashcroft International Business School
CRITICALLY EXAMINE THE PROSPECTS FOR GREATER DEMOCRACY AND PRODUCTIVITY AT WORK
Managing Employees Relations
Table of Contents
HISTORY & WORKPLACE DEMOCRACY IN THE UNITED KINGDOM 3
DEMOCRACY & TRADE UNIONS 4
PRODUCTIVITY WITHIN THE WORKING PLACE IN THE UK 5
FIGURE 1: OUTPUT PER HOUR AND OUTPUT PER WORKER IN THE UK 6
FIGURE 2: BRITAIN’S PRODUCTIVITY IN COMPARISON WITH OTHER COUNTRIES 6
FIGURE 3: BRITAIN’S CONSTANT PRICE GDP PER HOUR WORKED, ACTUAL AND PROJECTIONS FROM 1997 TO 2015 7
UK’S PRODUCTIVITY PUZZLE 8
HOW TO SOLVE THE UK’S PRODUCTIVITY PUZZLE? 9
WILL GREATER DEMOCRACY IN THE WORKPLACE INFLUENCE PRODUCTIVITY? 9
APPENDIX 1: MEDIATION REFLECTION 12
My Reflection 12
REFERENCES (MEDIATION REFLECTION) 13
APPENDIX 2: REFLECTION ON THE NEGOTIATION ACTIVITY 14
My reflection 14
There is no exact definition for ‘Human Resource Management’ (HRM), however, it is argued to be the core principles inherently unitary, with policies and practices driven by business’s needs. The term HRM has become a coming pass expression to describe a different (to industrial relations) approach to managing the employment relationship (Rollinson, 2011). The emerge of HRM is linked to the emergence of non-unionism. With the presence of trade unions there has been a long-term impact on the strategies of managing. HRM managers will have to be more strategic and consistent in their approaches because of the challenge of trade union structures (Hogan, 2018). Furthermore, the management of employee relationship refers to managing the relation between employees within an organisation. It is done by using techniques that gather people together on a common platform and are guided in order to achieve their targets effectively (MSG, 2018 ). Knowing this, the study will explain the prospects for greater democracy and productivity at work.
History ; workplace democracy in the United Kingdom
To begin, ‘workplace democracy’ is the application of democratic principles, such as voting, public debate and referenda at the workplace (Pausch, 2013). This has been a big field of study in some industries and has become a popular form where employees have equality share in a business. It was in the nineteenth century where the idea that workers should have democratic rights and privileges at work evolved.
Since then, new technical intentions were introduced and the way factories and industries worked changed. Globalization and flatter organizational structures, improved skills and competencies have offered workers opportunities such as the participation in decision-making experiencing the democracy at the workplace. By workers having more access to information, everything has become more technological and democracy is emerging (Harrison, 1995).
Historically, in the UK, the industrial revolution began in the 1700s. The democracy workforce followed the labour movement (unions), which supported workers’ rights. Since the end of the civil war to the passage of the Wagner Act in 1935, the most significant institutional act was the struggling for freedom of expression called the labour movement. However, workers freedom was under attack: workers exploitation in laws, courts ruling, rights to quit jobs, vagrancy laws and the coercive uses of police or military and national political systems made workers powerless and mobilized the working class not responding to working people’s needs. A ruler in the Supreme Court declared that public employees would no longer be protected by the First Amendment from disciplinary actions and workers pass to have less opportunities to experience workplace democracy as the decline in organized labor controlled global firms (Hatcher, 2007).
The issue regarding democracy at the workplace and employee’s productivity was brought back in 2006 to the public’s attention with Theresa Mays speech as Prime Minister. She said that people asked her why did she put herself through it? –she responded that she did it to root out injustice and give everyone in the country a voice (Rodger, 2017). In other words, she would govern the country as a single nation and equally for all (May’s, 2016). Therefore, the concern with productivity has been an issue since the 1960s because productivity performance has been falling and politicians are concerned about the productivity performance about the UK economy.
This controversy with democracy at the workplace opens the debate about trade unionism and industrial democracy which will lead to businesses giving power to their workers in order to increase the level of productivity. The unions are ant the collective and collaborative or shared capitalism systems in the workplace are good strategies for organisations in order to improve their productivity levels.
Democracy & Trade Unions
Democratizing the workplace has advantages which lead to a greater productivity and benefits for businesses (SIFT, 2018). However, the 2008 financial crisis lead to huge consequences that effected the UK challenge of workplace democracy and the economy decreased. This lead to a shifting on the level of productivity that needs clear solutions.
Back in Medieval times most peasants worked the land belonging to their feudal lord. They would not be paid a wage and would only keep a small amount of their outputs for themselves, they didn’t own their labour. Their existence depended entirely on their lords win. Only the lucky ones were payed a wage. Forwards to the end of 18th century, with an increased in industrialisation most were employed with wages and got compensated for their labour. However, conditions were terrible and safety standards were non-existent and ages were low. This lead to workers join together as a combination or trade union for mutual support and to strike until the employer would negotiate better payment conditions and their demand. This was a time of War and Revolution and was started to be seen as a political motive. Trade unions were an integral part of the move into socialism.
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Productivity refers to the measures of efficiency of production expressed by the ratio of inputs and outputs used in the process of production per hour. It is important because the higher productivity is, the more it can rise the living standards, as more income will improve the abilities of what people purchase such as good, services, leisure, housing, education and so on (Harari, 2017).
Productivity within the working place in the UK
Regarding the UKs labor productivity, the economy started to reveal productivity weaknesses by the early 1960s. Research suggests that the UK’s business R&D to GDP ratio is low due to the lack of finance and lack of specialized human capital constraints in comparison with other leading economies (Rogers, 2010). Since the 2008 financial crisis and recessions the poor productivity level performance continued up to the present day.
According to National Statistics, UK’s labour productivity has fallen by 0.5% below the 1994 to 2017 productivity labour average growth. This suggest that there’s no signs of the UK’s ‘productivity puzzle’ of coming to an end. The graph below (Figure 1) shows the two alternative measures of productivity; the output per hour and the output per worker (Quarter 1 1994 in comparison to Quarter 1 in 2017). It shows that the productivity in Quarter 1 in 2017 stood below its pre-downturn trend by 16.8% (Taylor, 2017).
Figure 1: Output per hour and output per worker in the UK
Source: National Statistics
The output per hour worked in the UK is 18 percentage points below the average for the remaining six members of the G7 group of industrial nations in 2014 (Haughton, 2016). The ONS said that UK was the country to hit hardest with productivity record behind the US, while other European countries are more mixed (Elliott, 2016). This is shown in the graph bellow (Figure 2).
Figure 2: Britain’s productivity in comparison with other countries
Source: The Guardian
What’s more, if the economy had maintained its 1997 to 2007 course, an hour’s work would be worth 18% more than it is. In the graph below (Figure 3) it is seen UK’s projections from 1997 to 2015. If the pre-crisis trend would have continued, UK wouldn’t be in these situations now.
Figure 3: Britain’s constant price GDP per hour worked, actual and projections from 1997 to 2015
Source: The Guardian
Furthermore, according to the debate on productivity from the Bank of England’s economists, if the UK isn’t able to lift its productivity growth and the labour market remains tight, according to the orthodoxy, the labour costs will rise which will lead to domestic generated inflation (Jackson, 2018). Besides, a researcher at the National Institute of Economics and Social Research mentioned that there are many factors to argue the in the UK’s low productivity rate such as the stagnation in wages across the north-east of the US which helped to propel Donald Trumps into the White House (Inman, 2016), as well as Brexit.
UK’s productivity puzzle
The puzzle is complex and part of the problem that has occurred is the domination of the thinking about the orthodox economics; the efficient way is the interaction of perfect competition. Along with the recession and financial crises in 2008, there are many other factors that decrease productivity. The long-standing problems such as skill shortages and underinvestment in infrastructure are other key areas as well as those related to people management. Other problems such as decline and manufacturing, financial capital, cultures of individualism and the issues around the elite education. Some of the most important issues will be further explained.
One of the main reasons why there is low productivity in the UK is due to the limitations of skill shortages and education. As a survey by the British Chambers of Commerce said, only one out of ten school or graduate leavers will be ready for employment. Some company’s surveys say that 50% of young people don’t even have basic skills such as communication skills (BBC News, 2014).
Not to mention, business surveys question if there is a shortage of jobs or a shortage of people capable to do them? (Lawton, 2015). For businesses, aptitudes issues can diminish their capacity to react to client needs and remain in front of their competitors, to embrace new technologies or to completely use existing hardware or methods for getting things done. What’s more, the quality of management and leadership will also impact productivity. Are all managers socially and interpersonally skilled? Research suggests that the UK has poor management practices which effects negatively the productivity (Jacobs, 2016).
Furthermore, another issue that leads to low productivity is the standard model of work and the financial issues. Why would a person work six-day in a semi-skilled job if by working a couple of hours in a supermarket, for example, will make them earn almost twice the amount? (Somerset, 2015).
How to solve the UK’s productivity puzzle?
A recent study suggests some different productivity lessons from different countries around the world that can be taken into consideration in order to increase productivity in the UK. For instant, a way to rise productivity could be by eliminating the ‘long-hours’ culture, in other words, do less to get more. Germany in comparison to the UK productivity is higher and only works for 35 hours per week, whereas in the UK people work from 45 to 60 (Jacobs, 2016). As Netherlands, Dutch have longer holidays and less working days, but still leads them to higher productivity than the UK. In addition, Sweden is considering the legalisation for a 30-hour week as more people with skills are needed it might be good to consider having fewer people doing more work. Lastly, Norway is the most productive country in the world due to having engagement leadership and autonomy collaboration which can also increase productivity.
Will greater democracy in the workplace influence productivity?
Industries and services are losing in the battle of competition, jobs are lost and that will have an impact on tax revenues. For individual’s enterprises however, poor productivity performance can demine the capacity to expand will be undermined. Very often employees don’t feel good at work and have no autonomy which makes them feel with no voice at all. All these lead to low productivity in the working place. So, how could democracy shape productivity?
Conforming to the NHS, organisations will not be productive unless the people aren’t productive, and for those to be productive they must be engaged. This means that in order to be more productive, it is important to feel motivated, listened and respected in order to be more agile, innovated and capable of finding solutions to problems; empowerment and autonomy is crucial. The UK’s record on the employee engagement is very low, only 58% of the workforce is engaged which explains the low productivity (Jacobs, 2016). This is a reason why productivity does matter in order to an organisation work.
Further, would ‘shared capitalism’ work in the UK? Yes! Taking John Lewis as example of the best store in the world, giving workers a larger financial stake will grow in popularity and this seems to be productive. Workers share their profits at the same time productivity boosts and pay (Bryson, 2008).
Would productivity increase with better collaboration? Yes! Simplifying the way in which people work together can be efficient. By improving collaboration, the enhance revenue opportunities, boost competitive advantages, product development, time to market, shorten sales and boost profits will improve (CISCO, 2018).
To conclude, in order to get employers to work better it is important to have good mechanisms and management of the relation between employers and organisations. It has been shown throughout the essay that workplace democracy is important in order to achieve this. One of the ways is to have trade unions and involving more the employees. Workers participation is important and will produce a positive, especially if workers share benefits of higher productivity. As discussed previously, we have seen the low productivity at the UK and have suggested some solutions in order for this problem to improve. Furthermore, it could be said that democracy and productivity working together will complement each other. It is a challenge to ascertain ways of spreading the practises mentioned, concretely to help the British economy and widely.
Appendix 1: Mediation reflection
This activity was about watching a video where a mediation case took place. We have concern about how problems occur in the workplace and how mediation is a tool to help to solve problems out. Further on, I will discuss how my learning will be moved into the activity within the HR work practices.
Mediation is a completely voluntary and confidential form of resolving workplace disputes between people (ACAS, 2018). It is a type of elective debate determination including an autonomous outsider, a go between, helping the gatherings to convey and consult with each other to attempt to achieve a common assentation that the gatherings can live with (DMS, 2014).
The video shows an example about how mediation can be looked at and how it feels like. In this case, it is seen from the perspective based on a real-life personal issue out of a workplace, which lead to building up tension between two members in a company (ACAS, 2018). A mediator was called when they realized that the issue had been going for a long time and was causing damage and profitability to the company.
The issue is between Katie, being upset with Paul, a new employee of the business. Katie argues that she dedicated a lot of time organising a welcome barbeque social party for Paul, but he didn’t appreciate it, which started the issues. Furthermore, Paul felt uncomfortable attending the event, but didn’t advise about his absence because he felt intimidated by Katie. Some other issues such as, different ways of communicating and use of technology or working skills differences were brought up.
Mediation resulted to be effective; after all, lead up to Katie and Paul wanting to solve their issues by making a joint effort. As seen in the video, mediation is a good tool to resolve problems in the workplace if both parties communicate and negotiate leading to a mutual agreement, which will come along with substantial advantages.
Nonetheless, it can likewise happen that interventions (mediation) are not perfect approach to get the reality of the situation. Intervention has no formal guidelines and go between utilize a few instruments that may help re-establish harmony, yet are restricted to what they can do. On the off chance that intercession isn’t effective and the gatherings don’t mastermind an assentation, they should experience the tedious and expenses of the procedure, which prompts an exercise in futility and cash (FindLaw, 2018).
References (Mediation reflection)
ACAS, 2018. ACAS Working for everyone. Online
Available at: http://www.acas.org.uk/index.aspx?articleid=2825
Accessed 13 03 2018.
DMS , 2014. DMS Mediation. Online
Available at: http://www.dealmediationservices.co.uk/what-is-mediation/
Accessed 13 03 2018.
Findlaw, 2018. Whats your legal issue?. Online
Available at: http://adr.findlaw.com/mediation/what-are-the-disadvantages-of-mediation.html
Accessed 13 03 2018.
Appendix 2: Reflection on the negotiation activity
What issues and behaviour do you expect to see at the meeting?
This activity was a role play based on a disciplinary case study. The case demonstrated an issue between a supervisor and one of his employees. The purpose was to illustrate how the meeting would be discussing the issues and behavior.
Joe Abbott, the refuse collector, left his work earlier than he should and then tried to catch up with those hours without authorisation. Therefore, there are communication challenges; Joe might feel a lack of support and that his supervisor is unapproachable.
On the other hand, the supervisor punished Joe immediately by taking off the gang and removing his bonus payment. Accordingly, there’s a lack of management procedure. It is crucial to take things in stages before chaos is created. We can also observe a history of distrust. Normally, a good manager would try to understand what is going on in the employer’s life if there is a problem going on. So, we see a clear issue around communication, respect and authority, rules and procedures which don’t seem to be in place, issues on absence and attitude, as well as issues related to money and job security.
The aim was not to ignore the dynamic that exists in the conflict. We see that the procedures are violated, managers seem not to follow the procedures and these should also be trained properly. As it is a complex case, it requires someone trained and neutral to handle with the problem and do some investigation.
This activity taught me about many different points that take place in organisations. In order to discuss Joes case, for instance, flexibility could be opened to discussion – when we talk about conflict at work, we talked about strike at work and in response to that we see how important is it to have regulations for conflicts. We see there was an absence of rules and transparency about how jobs should be carried out and it was on their interest to defend their working positions. Disciplinary and grievance procedures are needed.
In conclusion, I believe that the meeting will be complicated due to the reasons exposed. However, I learned about how the behaviour of people can change depending on the circumstances and how important is it to managing those cases and try not to reach certain stages. Also, the importance to have the right person for the right positions. Having a bad manager for example, can lead to tension and unwanted problems. For this reason, it is important to identify problems and find the best ways to approach them making sure all parties are happy.