Department of Management Sciences, College of Management and Social Sciences, Rhema University, Nigeria. |
AbstractEmployees in an organization form the most important segment of productive capacity. Therefore, effective employee relations management is essential to achieve organizational success. In modern organizations employees need counselling, mentoring, and involvement, among other intrinsic drivers to motivate and boost their morale for necessary superior performance. Managing employee relations has deep psychological perspectives and requires that management uses recognition as a powerful tool to encourage organizational citizenship behaviour, job satisfaction, and employee happiness to promote career and organizational success. The exploratory research design was used for the study involving 108 respondents. Data generated through primary and secondary sources were analyzed through descriptive and regression statistical techniques and the result showed very strong positive relationship between managing employee relations and organizational success. The study was not exhaustive; therefore, further study could examine the relationship between organizational commitment and employee performance. It was suggested that modern organizations must cultivate the culture of open communication to enhance employee motivation and performance. |
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Funding: This study received no specific financial support. |
Competing Interests:The authors declare that they have no competing interests. |
Managing employee relations relates to the processes, approaches and methods adopted by employers to deal with employees either collectively or individually. Managing employee relations is gaining increasing importance because of the central role of employees in driving organizational success. Organizational success is generally characterized by such factors as employee satisfaction, customer satisfaction, shareholder satisfaction and ultimately profitability.
According to Armstrong (2004) customer satisfaction and employee satisfaction can be achieved through organizational leadership. He emphasizes that leadership drives the policy and strategy, people management, resources and processes leading to excellence in business which is used as a basis for measuring individual as well as organizational success. Managing employee relations demands that employers must set out how objectives are to be achieved. They must also define the intentions of the organization about what needs to be done and what needs to be changed in the ways in which the organization manages its relationships with employees and their trade unions.
In the quest for organizational success, it is suggested that the business strategy to gain competitive advantage, survival and sustainability may concentrate on how this can be achieved by maximizing co-operation with the employees and their unions and also by minimizing detrimental effects on those employees and any disruptions to the operations of the organization. A primary reason for managing employee relations is to ensure that the employees’ level of commitment, responsibility, performance and contribution to the organizational bottom-line is recognizable and adequate enough to earn competitive advantage as well as overall organizational success. For example, according to Kaliski (2001) managers has basic responsibility when it comes to managing the workforce: direct employees toward objectives, oversee the work effort of employees, deal with immediate problems, and report on the progress of work to management. According to him, they must be quick to identify areas of potential problems, continually search for solutions, and be alert to new opportunities and ways to take advantage of the best ones. Very importantly, how effectively goals and objectives are achieved depends on how well the organizational goals are broken down into jobs and tasks and how well these assignments are identified and communicated throughout the organization (Ahmad, 2012; Falola, Osibanjo, & Ojo, 2014; Leithy, 2017; Wales, 2013).
1.1. Research Problem
A major challenge in managing employee relations stems partly from the confusion between industrial relations and employee relations. While these are related in some ways, they are not exactly the same, because on one hand the latter involves dealing with employees either collectively or through their unions and on the other hand, the former relates to dealing with employees either collectively or individually.
This age-long confusion often frustrates the processes of raising employee morale and therefore detrimental to organizational success. In some cases, union leaders are found to be self-seeking and display lukewarm attitude over employee issues which frequently results to disciplinary failures without any long-term positive effect upon employee behaviour. Employees should be treated as unique individuals with different backgrounds and value expectations instead of the usual omnibus approach of treating them as a bunch of economic tools through the union system by employers.
This archaic approach creates much misunderstanding between employees and their unions and consequently delays proper understanding of problems in focus without any progress toward individual satisfaction, customer satisfaction, shareholder satisfaction and organizational success. Despite some reports on human resource management practices and organizational success, there are very few new studies on employee relations and organizational success. This study is not intended to fill this gap in literature, but seeks to draw the attention of other researchers to turn toward the areas because of the increasing wave of employee turnover and organizational failures (Hom & Kinicki, 2001; Ugoani, 2016).
1.2. Research Objective
This study was designed to explore the correlation between managing employee relations and organizational success.
1.3. Research Significance
Relationship between labour and management has remained like that of cat and rat in the last 100 years between 1919 and 2019 since the establishment of ILO without much success. The present study specifically addresses employee relations as the process of dealing with employees collectively or individually by employers.
The result of the study will help employers and significant others in thinking of new ways of dealing with employees with the aim of creating the platform for motivation and encouraging performance levels to enhance organizational success.
1.4. Research Questions
1.5. Hypothesis
To achieve the objective of this study, this hypothesis was formulated and tested at 0.05 level of significance.
Ho: There is no relationship between managing employee relations and organizational success.
Hi: There is a relationship between managing employee relations and organizational success.
1.6. Conceptual Framework
A conceptual framework represents the structure of the study and the hypothesized relationships with its variables in relation to the research problem. It is usually stated in a schematic form or model. Models are research tools necessary to clarify issues that would otherwise be buried in an excess of words. Conceptual models also help in theory building (Keeves, 1997). The conceptual framework for this study is shown in Figure 1.
Figure-1. Employee relations and organizational success model.
Modern employee relations management requires a refocus of management attention on critical non-financial requirements of employees to drive ultimate organizational success. In the present era of rising higher education among the youths, employees no longer care too much about financial rewards like they want recognition that matches their achievements. Organizations have used a variety of options to manage their employees over the last decades, from the most traditional pay system to broad banding system to enhance employee motivation and morale while guiding them to the most desired destination of success. However, it is now more discernable that factors like proper information for employees in terms of adequate communications are important for organizational success. For example, employees should receive adequate information about the philosophy of the organization and matters affecting their future to enable them reach personal decisions. In any organization, the positive result of having a chief executive officer (CEO) who values communications and relationships has a trickle-down positive effect throughout the organization. This is so because employees have the information they need to make better decisions, better decisions lead to a better performing organization, which in turn helps to attract and retain the best employees who have the skills and motivation to be successful in a competitive marketplace. Lattimore, Baskin, Heiman, Toth, and Van (2004) posit that better informed people out-perform uninformed people, when all else is equal. In managing employees, counselling is very important to reduce the burden of the psychologically handicapped employees and others to enable them perform at optimal levels. Recognition or appreciation for individual employee achievement in most cases provides the magic wand to boost employee morale and sometimes the gateway for managing without the unions. Successful organizations now look-up to mentoring as a powerful tool for employee motivation and high performance. Employees both new and old are encouraged to emulate successful managers in their career paths to promote both individual and organizational success. Highly qualified employees often prefer to handle their personal issues on individual basis with management, and without undue union intervention. Therefore, a situation of employment where employee’s duties and obligations are explicit and grievance management clear managing employee relations becomes less tasking, but more motivating and employees are encouraged to support organizational success. Literature holds that appeal on the psychological, social and emotional requirements of modern employees promotes better performance. For example, Merkel (1972) posits that a few farsighted employers have long recognized that grievance and turnover may all have their roots in someone’s emotional disturbance. He posits that counselling is a valuable form of employee assistance, especially for employees whose behaviour threatens to pose a problem to organizational success (Saint, Hartnett, & Strassner, 2003). Managing employee relations now requires extra attention because industrial conflicts persist over the years between employers and employees despite the attention paid to financial factors as salary and wages as motivators. While management continuous to try to promote industrial peace through cordial management-labour relations, it also believed that sustained focus at robust employee relations management by focusing attention on the non-financial drivers of performance as in Figure 1 is essential for organizational success (Ige, Adeyeye, & Aina, 2011; Lee & Bruvold, 2013; Ukeje, Abraham, & Ndukwe, 2015).
Employee relations management has become a critical factor for organizational success because of the increasing numbers of knowledge workers in the workplace; and it is accepted that knowledge is power. According to Drucker (1993) knowledge workers are individuals who have high levels of education and specialized skills combined with the ability to apply these skills to identify and solve problems. In this situation, the nuts and bolts of management increasingly consist of guiding and integrating the autonomous but interconnected work of highly skilled people. Nelson and Quick (2003) observe that performance in organizations that hire a group of young newcomers are very different from those expressed by older employers because the workforce is more educated now than ever before. They posit that although this phenomenon has its advantages and disadvantages, for example, employees with more education demand more of employers and failure by management to meet their expectations often trigger conflict in organizations. Armstrong (2004) posits that employee relations consist of all those areas of human resource management practice that involves relationships with employees, either directly and or through collective agreements; where trade unions are recognized. He makes a distinction between moralist and unitary frames of management and submits that an alternative distinction between individualism-polices focusing on individual employees; and collectivism-the extent to which groups of workers have an independent voice and participation in decision making are acceptable and that the organization can do operate on both of these dimensions of management style to succeed. To this extent, employee relations focus on individual employees because an important aim of any organization is to succeed. Therefore, employee relations strategies seek to increase commitment through involvement and participation processes. Employee relations model as a unique management approach provides the impetus for successful organizations to manage without trade unions that often constitute the black hole (Guest & Conway, 2002). Employee relations are also defined by the employment relationships on the basis of the psychological contract. According to Guest, Conway, Briner, and Dickman (1996) the concept of a psychological contract expresses the view that at its most basic level the employment relationship consists of a unique combination of beliefs held by an individual and his or her employer about what they expect of one another (Gerhart & Trevor, 2016; Shih, Chiang, & Hsu, 2016; Swanson, 2015).
2.1. Conceptual Review
Without any prejudice to the efficacy of labour management relations in organizational success, it may well be argued that the perspective of employee relations is a paradigm shift from collectivism to individualism for employee motivation and organizational performance (Ahmad & Schroeder, 2013; Boselie, Dietz, & Boon, 2015). Enhancing employee commitment necessary for organizational success requires effective internal communications and involvement. Management has the responsibility of creating and sustaining a vibrant information flow to limit the negative effect of organization silence. Researchers suggest that perfunctory internal communications and lack of employee involvement in matters affecting them and the organization give rise to organizational silence which is detrimental to organizational success. For example, The Saylor (2012) posits that good communication strategy is crucial for organizational performance. It states that all employees in the organization should be able to understand their role in the organization. It also posits that many business failures today are attributable to the confusion caused by poor communication (Argent, 2007; Bowen, 2006). Most successful organizations today use employee counselling, recognition and mentoring to motivate employees for greater performance. Enadeghe (2003) states that counselling addresses unsatisfactory employee performance and also seeks to institute a high performance culture. Often, through counselling an increasing number of employees become willing to assume new/more senior roles within the organization that enhances productivity. He opines that recognition as part of employee relationship arrangement helps in building employee retention, loyalty, morale, and commitment which ultimately translate to increase in organizational productivity. Mentoring as an employee relations management approach basically aims at socializing newcomers (protégé) and providing them the opportunity to understand more fully and learn more comprehensively from experienced employees. Mentoring works best when it is a confidential relationship, which gives the learner (protégé) the opportunity to speak and ask questions freely about any concerns he or she may have about the organization. Two common terms used in mentoring relationship are mentors and protégés. A mentor is someone who can provide motivation, has the skills to guide a younger, less experienced colleague in his or her career development. A mentor must demonstrate the experience to offer opinion or advice regarding the problems the inexperienced employee may face at work and assist in building confidence to achieve set objectives. Mentoring provides new employees with informal performance counselling opportunities and at the same time giving them access to role models at senior management levels (Hardre, 2013). Grievance which may be defined as a real or imaginary cause for grudging or protesting about certain things like unfair treatment, perceived hatred is common in every human organization. But grievance management or resolution at the early stages stops it from becoming a trigger for industrial conflict or industrial grievance. While grievance or conflict may not be deplored because it is an inevitable result of progress and change, it must however be managed constructively so as to provide opportunities for better interpersonal relationship management in an organization. Industrial grievances can be drastically reduced where the employees and management’s rights, duties and limitations are clearly observed by both parties. Grievance can also be minimized when management places a value on employees as critical resource and not simply to regard them as mere economic tools of production to be used, exploited and dispensed with, in accordance with profitability imperatives. Grievance management at the individual level without undue recourse to the trade union often serves as a motivating factor for better employee performance and also protects the reputation of the organization (Bromley, 1993).2.2. HRM without Trade Unions
The question now is whether management can manage without trade unions? The answer is yes! But it is necessary to state that managing without trade unions can best be achieved in a workplace situation where the employees feel satisfied in the employment relationship. Satisfaction with the employment relationship often manifests through less grievances, disciplinary measures and high levels of employee loyalty and commitment that result to organizational success. Discipline as a formal managerial control device describes those measures or sanctions used to penalize, and thus control and influence employee behaviour. This basic purpose of discipline is to regulate employee behaviour so as to direct it toward the best interests of the organization and its objectives. It is obvious that without discipline no organization can succeed. It is the major mechanism that sustains any corporate organization. Disciplinary triggers are greatly reduced when management and workers understand their basic rights, duties and obligations. According to Abiodun (2003) management and workers constitute the major stakeholders in the work-place. They are like two sides of the same coin, different yet inseparable. They, therefore, have joint interests in the continuous survival of the organization. Despite their vested interests, their expectations from the organization may be different. In this circumstance, it is in an effort to manage these differences, in order to ensure that they do not tear the organization apart that a system of rights, duties and obligations of both parties must be developed. He posits that although the distinction between management and workers does exist, very frequently, management is reduced solely to the chairman, managing director and the very top officials of the organization. Management therefore, refers to the people engaged in the professional administration of the enterprise. These could range from the governing body or board of directors (BODs) to the managers in charge of running the enterprise. Management constitutes the alter-ego of the business. According to him, it refers to what Lord Justice Denning referred to in Botton Engineering Company Limited versus Graham and Sons Limited case as “the directing will of the company who control what it does”. Today, the complexities of modern business coupled with the constraints of time, information and skills often necessitate the delegation of powers and duties to the middle management cadre and the supervisory staff. Management, therefore, refers to more than just the managing director and the top executives. Like management; there is no unanimity about who exactly is a worker or employee. However, The Labour Act, and the Workmen’s Compensation Act define the term but such definitions are not of general application. However, in this context, Uvieghara (2001) defines a worker as any person who has entered into or works under a contract with an employer. Whether the contract is for manual or clerical work or is expressed or implied or oral or written and whether it is a contract of service or a contract personally to execute any work or labour. But this does not include: any person employed otherwise than for the purposes of the employer’s business, or persons exercising administrative, executive, technical or professional functions as public officers or otherwise, among others. Again, to douse the likely confusion that can arise from this broad definition, he further clarifies that a worker is a person who has entered into the contract of employment may be (a) either for manual labour or clerical work, (b) express or implied (c) oral or written, and (d) a contract of service or a contract personally to execute any work or labour (Onwe, 2014; Razi, Ramzan, Ali & Hassan, 2012). Thus, while the employee has the right to his wages, the employer has the duty to pay him. Also, where the workers have the duty to perform a particular task, the employer has the right to demand performance. Because every organization wants to succeed, the main duty of management is to manage the organization efficiency. And to be able to perform these duties, management must retain some basic rights including: right to engage anyone whom it believes would be able to contribute to the growth and development of the enterprise, to decide in its sole discretion, all matters connected with the organization’s functions, right to promote employees for valuable services to the organization, and management’s right to maintain order and to discipline the workforce cannot be subject to negotiation, among others. A grievance procedure is however, expedient, provided that management has the final say (Aturu, 2005). A paradigm shift toward emphasis on training and career development and management to providing secure and satisfying work from the traditional aspects of pay and compensation provide important plank in managing without trade unions. These basic HRM techniques for increasing employee commitment through involvement and communication processes that provide a route for organizational success without unions cannot be over emphasized (Guest, 1997; Guest, 1999; Guest, 2001; Marchington, 1995; Okorie, 2000; Podsakoff & Mackenzie, 2007; Ugoani., 2019; Wang, 2004).
Research is the process of arriving at dependable solutions to problems through planned and systematic collection, analysis and interpretation of data.
3.1.Research Design
The exploratory research design was used for the study. A combination of quantitative and qualitative techniques can be used in exploratory research. This method is historical in nature and does not often require a large sample or a structured questionnaire. The strength of qualitative research technique lies in its capacity to provide proper insights, rich details, and thick descriptions. Richness is provided by paying close attention to concept, context, and process (Abebresebe & Smith, 2014).
3.2. Sources of Data
Data were collected from secondary and primary sources such as books, journal articles, annual reports, government reports, newspaper reports, personal interviews, observations, among others. Secondary data are information collected previously for some other purpose other than the research project at hand whereas primary data are information collected and assembled especially for the research objective at hand (Aakar, Day, & Kumar, 2004). Each data collection method has advantages and disadvantages. However, according to Nelson and Quick (2003) the best approach is using multiple method of collecting data because it offers the researcher a chance to cross-check the information obtained through the various methods.
3.3. Population, Sample and Size
The population comprised of all employees in First Bank of Nigeria Limited. The sample was selected through the purposive method, while the size was determined by the sample ratio c (Obodoeze, 1996).
3.4. Study Area
The study was conducted in South East Nigeria composed of five states out of thirty-six states in Nigeria. It is assumed that the opinion of the people in this zone is representative enough of the opinion of the people in Nigeria based on the 1/10th principle (Ezejelue, Ogwo, & Nkemnabe, 2008).
3.5. Model Specification
Model specification is the expression of a relationship into precise mathematical form. According to Koutsoyainnis (1977) economic theory does not indicate the functional form of any relationship. This means that economic theory does not state whether a relationship will be expressed in linear form, quadratic form, or in a cubic form. On the basis of these, it was decided to specify the relationship between organizational success and employee relations as:
Where
OS = Organizational Success.
CO = Communication.
CG = Counseling.
RE = Recognition.
ME = Mentoring.
bo = Common error term.
b1, b2, b3, b4 = Coefficient attached to explanatory variables.
t = Time period.
u = Stochastic error term.
3.6. Data Analysis
Data were analyzed through descriptive and regression statistical methods. The Ordinary Least Square (OLS) technique was adopted for the regression analysis. The OLS is a method used to estimate the unknown parameter in a linear regression model with the goal of minimizing the differences between observed variances in a dataset. The method was not used because of its simplicity only, but also due to its unique properties of linearity, efficiency, sufficiency, least variances, unbiasedness and least mean errors. The F-test and t-test were used to determine the overall adequacy of the regression model using the E-view Statistical Package (Edmondson & McManus, 2007).
S/N |
Description | Category | Total |
Percentage |
1 |
Sex | a) Female b) Male |
40 68 |
37.04 62.96 |
2 |
Education | a) Diplomas b) Degrees c) Others |
25 50 33 |
23.15 46.30 30.55 |
3 |
Age | a) 18 – 45 years b) 46 – 55 years |
80 28 |
74.07 25.93 |
4 |
Experience | a) 5 - 20 years b) 21 – 35 years |
62 46 |
57.41 42.59 |
5 |
Status | a) Low b) Middle c) High |
35 43 30 |
32.41 39.82 27.77 |
Source: Fieldwork (2019). |
S/N |
Restatement of research questions |
Scores |
Ʃx |
n |
X |
Decision rule @ 3 points |
||||
SA |
A |
N |
D |
SD |
||||||
5 |
4 |
3 |
2 |
1 |
||||||
1 |
Counseling influences positive employee behaviour. | 60 |
20 |
1 |
2 |
25 |
412 |
108 |
3.81 |
Accepted |
2 |
Employee communication is imperative to good management. | 50 |
30 |
2 |
3 |
23 |
405 |
108 |
3.75 |
Accepted |
3 |
Involvement cannot raise employee morale. | 10 |
20 |
3 |
4 |
71 |
218 |
108 |
2.02 |
Rejected |
4 |
Mentoring enhances employee performance. | 45 |
25 |
2 |
1 |
25 |
397 |
108 |
3.68 |
Accepted |
5 |
Recognition does not boost employee satisfaction. | 25 |
10 |
4 |
5 |
64 |
251 |
108 |
2.32 |
Rejected |
Source: Fieldwork (2019). |
Variables Coefficient Std. Error t-Statistic Prob. | ||
C OS CO CG RE |
1.256340 -0.008047 -0.007751 3.106338 0.005916 |
0.021830 -2.817381 0.0247 0.013814 -0.444842 0.6062 0.027825 -0.253050 0.6119 0.640203 6.215070 0.0000 0.007812 -1.615818 0.1528 |
R-squared Adj. R-squared S.E. of regression Sum squared resid Log likelihood F-Statistic Prob (F-statistic) |
0.820245 0.756576 115.3640 312375.6 -190.3424 16.35295 0.000000 |
Mean dep. var 348.4276 S.D. dep. var 260.3742 Akaike info criterion 11.57239 Schwarz criterion 12.98465 Han-Quinn Criterion 12.82006 Durbin-Watson Stat 2.294165 |
4.1. Discussion
Managing employee relations to achieve organizational success requires good management qualities anchored on employee counselling, mentoring, grievance management among others. These are among the important factors employees require to gain necessary competencies and experiences to make necessary contribution to enable an organization achieve its set objectives. When employees are recognized and rewarded for a certain level of performance they become more motivated to demonstrate organizational citizenship behaviour (OCB) in increased frequency to accelerate organizational excellence. Quality HRM practices play critical role in managing, attracting, creating and retaining high quality employees required to take the organization to the height of success. For example, Hassan (2013) posits that OCB is a major factor for enhanced organizational performance. He emphasizes that training, performance appraisal; promotion practices have positive and significant relationship with organizational performance (Bishop, 1987). Danish and Usman (2010) stress that reward and recognition are essential ingredients in effective employee relations management. In the same vein, Luthans (2000) opines that recognition is a powerful tool in successful employee relations management (Fareed, Abidan, Shahzad, Amen, & Lodhi, 2013; Pratheepkanth, 2011; Sarwar & Abugre, 2013). Employee commitment and mentoring are important employee management tools that help to douse grievances and conflict between employees and employers. They add up to intrinsic rewards that encourage employee performance (Qureshi, Zaman, & Shah, 2010; Ugoani., 2019). Managing employee relations has deep psychological perspectives therefore; competent individuals were selected to participate in the study. As in Table 1, out of the 108 participants, 68 or about 62.96 percent were male, while the rest were female ranging in age between 18 and 55 years. They held various academic qualifications such as diplomas, degrees, among others with different levels of industrial work experiences; and within the low, middle and high employment status. Their responses were central to the patency of this investigation. As shown in Table 2 (1) the respondents accepted at 3.81 points that counselling is necessary in employee relations management. This supports the view of Enadeghe (2003) that counselling helps in career management (Boehm & Lyubomirsky, 2008). In Table 2(2) the respondents accepted at 3.75 that employee communication is imperative for good management, and rejected at 2.02 that involvement cannot raise employee morale. Mentoring was accepted as an important employee relations management instrument, while it was rejected at 2.32 that recognition does not boost employee satisfaction. This agrees with the earlier assertion of Bishop (1987) that mentoring is an important element in employee performance, and also the views of (Luthans, 2000) that recognition is a powerful leadership tool. The regression analysis in Table 3 was used to establish the level of relationship between managing employee relations and its effect on organizational success. Traditionally, in regression analysis, there is an important measure, R2, which measures the goodness-of-fit of the regression model. By this, it calculates the percentage of variation in the dependent variable accounted for by the independent variable(s). The possible values of R2 range from 0 to 1.00. The closer R2 is to 1, the greater the percentage of the explained variation. A high value of R2, of about .80 or more, would indicate that the independent variable is a good predictor of values of the dependent variable of interest. A low value of about .25 or less would indicate a poor predictor, and a value between .25 and .80 would indicate a moderate predictor. Therefore, in this original study the R2 value of 0.82 showed a strong positive relationship between the variables of interest. The adjusted R2 value of 0.76 showed that the goodness-of-fit test of the model of the study, is also superlative. The Durbin-Waston value of 2.3 lies within the range between 1.5 and 2.5 and this statistically means that there is no autocorrelation among the independent variables of interest. In the circumstance therefore, Ho: was rejected and Hi: accepted to assert that there is strong positive relationship between managing employee relations and organizational success. This is the objective of the study. This result supports the finding of Rahman and Taniya (2017) (that employee relationship management is critical to organizational success.
4.2. Scope for Further Study
Further study should examine the relationship between organizational commitment and employee performance. This is important as a measure to enhance employee satisfaction and organizational sustainability.
4.3. Recommendations
Managing employee relations is critical to motivate employees toward better performance and organizational success. Factors such as recognition, counselling, mentoring among others help in boosting the morale of employees and organizational citizenship behaviour required for organizational success. The exploratory research design was used for the study and the result showed strong positive association between managing employee relations and organizational success, which is frequently measured by performance and profitability. This is the objective of the study.
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