Question

2. Identify three different factors affecting an employer’s labour relations strategy.
3. How are cost leadership and differentiation strategies different for a business?
4. Outline the difference between a union substitution strategy and one other possible employer labour relations approach.
5. Describe the implications of a cost leadership or differentiation strategy for labour relations.
6. Explain the significance of a high-performance work system for labour relations.

Answer 1

Employe's labour relation is also known as industrial relations, encompasses the relationship between employees and employers. Employee relations are influenced by a number of factors, all of which affect the strategic balance between labor and management. It is important to be aware of the key factors influencing employee relations in order to strike a proper balance.

Unions

Unions and union organizing significantly affect employee relations. Once a union is established, employees do not bargain on their own behalf. Instead, union representatives bargain for them. Unions can be a source of employee empowerment, as union employees may feel as though they share a common goal. Additionally, unions provide arbitration of labor disputes and grievance procedures.

Communication

Communication is a key factor influencing employee relations. Employees who feel they can air grievances, and be heard, typically have higher morale. Effective communication in the workplace involves keeping employees informed of performance expectations and keeping them abreast of any changes in company policy or procedure that may affect them. Open communications, such as in monthly meetings or through weekly memos, assist in alerting management to workplace problems before these problems begin to affect morale.

Company Culture

Each company or corporation has its own culture. Company culture encompasses many things, not the least of which is they way managers relate to employees. Company culture often dictates how employees are treated. For instance, a company culture that emphasizes punishment over reward usually creates an environment of fear and low morale. A company culture that embraces employees' unique attributes and emphasizes reward tends to improve relations between management and labor.

Wages

Wages are a significant factor influencing strategic employee relations. When a company provides employees with industry-standard wages -- or wages that are above industry standards -- employee relations typically run more smoothly. Benefits and bonuses also affect employee relations, as they tend to make employees feel valued and appreciated.

Factors Affecting Industrial Relations – 8 Important Factors: Institutional, Economic, Social, Technological, Psychological, Political, Enterprise-Related and Global Factors.

Cost leadership and differentiation strategies different for a business?

1. Cost Leadership

In cost leadership, a firm sets out to become the low cost producer in its industry. The sources of cost advantage are varied and depend on the structure of the industry. They may include the pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. A low cost producer must find and exploit all sources of cost advantage. if a firm can achieve and sustain overall cost leadership, then it will be an above average performer in its industry, provided it can command prices at or near the industry average.

2. Differentiation

In a differentiation strategy a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers. It selects one or more attributes that many buyers in an industry perceive as important, and uniquely positions itself to meet those needs. It is rewarded for its uniqueness with a premium price.

In cost focus a firm seeks a cost advantage in its target segment, while in differentiation focus a firm seeks differentiation in its target segment.

Difference between a union substitution strategy and one other possible employer labour relations approach.

Union substitution is an approach where management seek to substitute the triggers (or conditions) that would prompt workers to seek to join a trade union. When managers become so responsive to employees' needs that there is no incentive to unionize. union substitution is a deliberate attempt to provide alternative forms of voice and agency to address employee grievances and concerns.

Wheras Human relations approach explains the behaviour of individuals and groups at work and helps in modifying or utilizing such behaviour towards the achievement of organisational objectives. If management and labour both understand and apply human relations approach to their mutual relations industrial conflict can be minimised. Human relations approach is inter-disciplinary in nature because knowledge drawn from several disciplines like psychology, sociology, anthropology, economics and political science is used in it.

The implications of a cost leadership or differentiation strategy for labour relations.

Cost leadership is a competency based approach to personnel management that focuses on development of durable, imperfectly, imitable and non tradable people resources. Considering both processes and outcomes together, l russ and Gratton (1994) defined cost leadership as the linkage of HR functions with strategic goals and organizational objectives to improve business performance and cultivate an organizational culture that fosters innovation and flexibility. However, in the absence of a consistent definition scholars broadly agree that the central feature of cost leadership strategy involves designing and implementing a set of intentionally consistent policies and practices to ensure that human capital contributes to achieving business objectives,

implications for industrial relation of differentiation strategy, are hypothesized to place a higher priority on human resource innovation International Journal of Economics, Commerce and Management, United Kingdom Licensed under Creative Common Page 43 than firms pursuing a cost efficiency strategy. Firms listed on the Nairobi Securities Exchange. He established that competitive strategy has a positive and statistically significant influence relationship between employee’s outcomes and performance. Employee’s outcomes such as commitment, competence and empowerment which are as result of HRM practices implementation have a significant effect on firm performance especially when they are aligned with the firms competitive strategy on aspects like cost leadership, differentiation and focus strategy as evidenced by his study.

Significance of a high-performance work system for labour relations.

High-performance work systems  are a group of separate but interconnected human resource (HR) practices – e.g. selection, training, performance appraisal, and compensation – designed to enhance employee effectiveness.

High-performance work systems systems emphasize employee involvement and reflect a commitment to creating an organizational culture based upon commitment rather than control. At the same time, the cultures of high performance organizations emphasize the pursuit of excellence and expect employees to be well-qualified, highly competent, and constantly engaged in improving the organization

The following is a summary of seven human resource practices for producing higher profits through engaging employees as full owners and partners in an organization’s success.

1. Ensuring Employee Security

2. Selective Hiring

3. Decentralized Decision-Making

4. High Results-Based Compensation

5. Training by Commitment

6. Reduced Status Barriers

7. Sharing Key Information