Essay: Assessment Three
1001EHR Employment Relations
Mangers’ encouragement of employee voice can lift well-being and productivity. Discuss.
Employee voice is about the participation of employees by influencing decision making in the organisation. In the past, union voice has had the leading voice mechanism with supplementing from employers union voice with nominated non-union reps that often is sitting on joint consultative committees (Charlwood, 2006). The classic work of Freeman and Medoff (1984) regarding trade union showed that the definition of voice practices’ effects (Bryson, Charlwood and Forth, 2006) was the significance of the response from management to the voice of the worker (in particularly trade union voice). This essay will analyse the argument, that employee voice and union representation leads to higher well-being but no clear improvement of productivity.
According to Freeman and Medoff (1984) voice is important, because it makes it possible for unions of trade to improve firms’ productivity as they give a voice to the employees. Freeman and Medoff (1985) mentions two effects; Union “monopoly”, where the unions raise employee’s wages which leads to higher labour productivity and “voice” effect, where employees express their voice, which means that there will be fewer conflicts. According to Bryson et al. (2006) the “monopoly face” of unions, where they seek to limit the labour, which is supplied to the firm in quest of benefits and better wages, on the other hand might be estimated to have more harmful consequences. Rationally, forms of non-union voice might bring benefits in terms of productivity.
The voice or response face of the union can neutralize the monopoly face of union with the outcome that the results of unions on productivity are unclear (Freeman and Medoff, 1984). They claim that the voice of the union can be productivity-increasing where the costs of the voice are lower than what it costs to loose a worker that is not satisfied and also where the lowering of quit percentages inspire firms to invest in human capital, which will lead to a much more productive and skilled workforce. The quality of decision-making can be improved by the information that the management gets from the union voice. The transactions cost of for example enforcement and monitoring contracts unions can reduce (Kaufman, 2004)
The productivity-enchasing outcomes of voice or response are not as straightforward and precise as Freeman and Medoff claimed (Kaufman, 2004). If for example employees chose voice over exit, there could end up being more dissatisfied workers. Not being satisfied could lead to bad morale and less effort and then lowering productivity (Bryson et al, 2006). The relationship between productivity and unionism is not predetermined – it has not yet been achievable to separate the voice effects from the monopoly effects. That’s why the focus typically is on the net effects of trade unionism (Bryson et al., 2006). Hancock (2012) found no evidence of productivity growth contributed from enterprise bargaining. The same goes for the Employment Outlook made OECD in 2006, where they analysed others and its own research and found that the protection legislation of employment of overall employment was possibly small, there is very little or none union impact of significance on labour market performance, that centralisation of a high degree in bargaining was connected with lower unemployment and last, that the relationship between employment and wages was vague.
A big part of the empirical evidence doesn’t match with Freeman and Medoff’s predictions about the effects regarding the enhancing of productivity of the unions according to Hirsch (2004). The majority of the empirical studies, as Hirsch mentions have a negative or insignificant connection with unions and productivity. Though these studies have focus on the effects in the United States and their unions, as Bryson, Forth and Kirby (2005)...
References: Bryson, A., Charlwood, A., and Forth J. (2006), ‘Worker voice, managerial response and labour productivity: an empirical investigation’, Industrial Relations Journal, 37, 5, pp. 438-455
Bryson, A., J
Budd, J., Gollan, P. and Wilkinson, A., (2010), ‘New approaches to employee voice and participation in organizations’, Human Relations March 2010 63: 303-310
Fernie, S. and D. Metcalf (1995), ‘Participation, Contingent Pay, Representation and Work- place Performance: Evidence from Great Britain’, British Journal of Industrial Relations, 33, 3, 379–415.
Hancock, K (2012) ‘Enterprise bargaining and productivity.’ Labour & Industry. 22 (3): 289-302
Kaufman, B. (2004), ‘What do Unions do? Insights from Economic Theory’, Journal of Labor Research, 25, 3, 351–382.
Kersley, B., C
Metcalf, D. (2003a), ‘Unions and Productivity, Financial Performance and Investment: International Evidence’, in J. Addison and C. Schnabel (eds), International Handbook of TradeUnions
OECD Employment Outlook (2006), ‘Boosting jobs and income’
Peetz, D (2012) ‘Does industrial relations policy affect productivity?’ Australian Bulletin of Labour
Peetz, D (2006) ‘Hollow shells: the alleged link between individual contracting and productivity growth.’ Journal of Australian Political Economy. 56: 32-55
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