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EMPLOYEE RELATIONS AND IT'S EFFECTS ON EMPLOYEE PRODUCTIVITY

ABSTRACT

One of the most pressing issues facing most organizations today is the need to raise employee productivity. There is a widespread belief that productivity improvements can only be achieved through a fundamental reform in the area of employee relations. Changes are thought to be necessary both in the organization and structure of work and in the way in which employees are trained, remunerated and motivated. Moreover, it is argued that these changes cannot be separated from the need to overhaul our system of interest representation and dispute resolution. The activities of trade unions and the operations of arbitration tribunals are often viewed as impediments to management efforts to lift the competitive performance of their organizations. The purpose of this study is to evaluate these arguments, identify ways employee relations affect productivity, and how to improve productivity in organizations. South Akim Rural Bank was used as a case study for this research, as various employees and management of the bank were used as respondents for the study. Responses gotten from the employees and employers were analyzed to bring out findings as well as recommendations for this study. With regards to the research methodology of this study, the casual research design was chosen as the most appropriate research design for the study. Data was gathered form both primary and secondary sources of information. Responses from questionnaires and interviews with management of the bank formed the basis for the primary data, while books, articles and journals on employee relations acted as the secondary data. Findings from this study revealed that employee relations practices affect productivity through employee morale, quality and quantity of output/product. Other findings include various challenges that employees face at workplace and various ways to enhance healthy relationship between employees and their employers in an organization. The most valuable recommendation given is to treat employees with great care.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Maintaining healthy employee relations in an organization is a pre-requisite for organizational success. Strong employee relations are required for high productivity and human satisfaction. Employee relations generally deal with avoiding and resolving issues concerning individuals which might arise out of or influence the work scenario. Strong employee relation depends upon healthy and safe work environment, cent percent involvement and commitment of all employees, incentives for employee motivation, and effective communication system in the organization. Healthy employee relations lead to more efficient, motivated and productive employees which further lead to increase in production level. Over 40 percent of the companies listed in the top 100 of Fortune magazine’s “America’s Best Companies to Work For” also appear on the Fortune 500. While it is possible that employees enjoy working at these organizations because they are successful, the Watson Wyatt WorldwideHuman Capital Index study suggests that effective human resources practices lead to positive financial outcomes more often than positive financial outcomes lead to good practices.

Employee relations had its roots in the industrial revolution which created the modern employment relationship by spawning free labour markets and large-scale industrial organizations with thousands of wage workers. As society wrestled with these massive economic and social changes, labour problems arose. Low wages, long working hours, monotonous and dangerous work, and abusive supervisory practices led to high employee turnover, violent strikes, and the threat of social instability. Intellectually, industrial relations was formed at the end of the 19th century as a middle ground between classical economics and Marxism, with Sidney Webb and Beatrice Webb’s Industrial Democracy being the key intellectual work. Industrial relations thus rejected the classical econ. Institutionally, employee relation was founded by John R. Commons when he created the first academic industrial relations program at the University of Wisconsin in 1920. Early financial support for the field came from John D. Rockefeller, Jr. who supported progressive labour-management relations in the aftermath of the bloody strike at a Rockefeller-owned coal mine in Colorado. In Britain, another progressive industrialist, Montague Burton, endowed chairs in industrial relations at Leeds, Cardiff and Cambridge in 1930, and the discipline was formalized in the 1950s with the formation of the Oxford School by Allan Flanders and Hugh Clegg. Industrial relations were formed with a strong problem-solving orientation that rejected both the classical economists’ laissez faire solutions to labour problems and the Marxist solution of class revolution. It is this approach that underlies the New Deal legislation in the United States, such as the National Labour Relations Act and the Fair Labour Standards Act.

1.1.2 PROFILE OF THE ORGANIZATION

 For the purpose of this study, the South Akim Rural Bank has been selected as a case study to illustrate the effects of employee relations on the productivity of a firm. South Akim Rural Bank has its Head Office situated on the main Suhum – Koforidua road opposite the post office, Nankese. The South Akim Rural Bank Limited was commissioned and started banking business in 1984 at Nankese in the Suhum/Kraboa/Coaltar District.

 The bank is still rated first in the Eastern Region in terms of deposits and among the first ten rural and community banks in the country as a whole in terms of deposits and assets.

1.2 STATEMENT OF THE PROBLEM

 In recent times, while most workers are on job, they do not produce more simply because of the un-healthy relationship they have with their fellow colleagues and employers. A recent study conducted by Blyton (2008) revealed that employees do not put up their best performances at workplaces when they are un-happy with management, government, or even their fellow colleagues. Bad employee-employer relationship results in strike actions and lockouts. All these actions taken by employees to display their grievances only do the organization harm than good as productivity will be reduced drastically.

 By many accounts, employee relations today are in crisis. In academia, its traditional positions are threatened on one side by the dominance of mainstream economics and organizational behaviour, and on the other by postmodernism. In policy-making circles, the industrial relations emphasis on institutional intervention is trumped by a neo-liberal emphasis on the laissez faire promotion of free markets.

1.3 RESEARCH OBJECTIVES

 The objectives for this study are:

To identify various employee relations practices, and its effect on the productivity of an organization.

To identify the challenges faced by employees at work places.

To identify ways of enhancing healthy relationship between employees and employers in an organization.

1.4 RESEARCH QUESTIONS

 The following questions were used to achieve the above objectives:

What are the various employee relations practices in your organization, and how do they affect productivity?

What challenges do you face in your organization?

In what ways can healthy relationship be enhanced between employees and employers in an organization?

1.5. RESEARCH HYPOTHESIS

H0: employee relations does not influence employee productivity

H0: employee relations influences employee productivity

1.6 SIGNIFICANCE OF THE STUDY

 This study seeks to bring out the various employee relations practices which South Akim Rural Bank has undertaken to increase its productivity and contribute its quota in the economic development of the communities which it operates, and the country at large. This study will therefore help enlighten management of various organizations of the various effects of relationship practices between employers and employees in an organization. The study will also bring out specifically, the employee relations practices which the bank has been able to make available to its employees. It also seeks to bring out the level of encouragement and motivation the bank has given to its employees to work effectively, among others. The importance of this study is therefore to highlight the various employee relations practices and how it affects the productivity of an organization. This study will go a long way to illustrate how organizations should treat employees’ in-order to increase productivity.

1.7 SCOPE OF THE STUDY

 The scope of the research will be limited to South Akim Rural Bank at the New Juaben Municipal Assembly in the Eastern Region of Ghana. The research will rely on the bank for vital information as well as information from secondary source. The research will take duration of four months to complete.

1.8  LIMITATION OF THE STUDY

 The researcher encountered a limitation in regards to availability of information. Thus due to the institutions working ethics, the researcher could not get access to vital information since it was treated as confidential  and the targeted respondent’s number was not attained since some employees were on leave. Inadequate funds and availability of time also became a limitation.

1.9 CHAPTER SCHEME

 The project will be organized around following chapters;

 Chapter one gives an introduction to the research work. It gives the basic information about the company and the research being undertaken. This chapter therefore consists of the background of the study and organizational profile, statement of the problem, objectives, research questions, significance of the study, scope of the study, and limitations encountered by the researcher.

 Chapter Twoconsists of the literature review and the theoretical framework

 Chapter three gives details of the research methodology. The research methodology represents the various ways and methods which the researcher used in order to gain his information.

 Chapter Fourgives the analysis and interpretation of the information gathered by the researcher.

 Chapter five gives the findings and conclusion of the researcher. Here, conclusions will be drawn based on the findings and their implications will also be given.

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