This report will discuss the effectiveness of the trade union and management partnership in the UK. For this, there will be discussion on the TUC principles for the partnership and the benefits and disadvantages of the trade union and management partnership. How the partnership between trade union and management helps in employee flexibility, quality and productivity.
The background of the partnership between trade union and the management in the UK is as follows. In May 1999, the trade Union Congress of the UK arranged the major conference for the promotion of the partnership agreement between trade union and management. This agreement stressed on the shared responsibility that is based on the employment security and flexibility in working that lead to the modernization of the industrial relationships. However, few people think that this agreement exacerbate and reflect the weakness of the trade union. In May1997, the election of the labor government, much has been made on the idea of the partnership that brings a new third way to the industrial relationship that represent a modern alternative to the traditional bargaining and unilateral managerialism of nineteen’s. In 1997, the publication of the statement of the TUC ‘partnership for progress’ and the government working document ‘competitiveness through partnership with people’ help in setting the tone. After this,the concept has been promoted by the Institute of Personnel and Development and the institute of the involvement and Participation Association. In the TUC sponsored conference in May 1999, the concept was endorsed by the Prime minister, Secretary of the trade and industry and Confederation of British Industry Director General. For the implementation of this new partnership between trade union and management and to know the effectiveness of this concept the UK government had done the analysis of this agreement on the enterprise level. However, there is no universal definition for the partnership agreement.
UK case examples
The most of the partnership agreement has the central purpose of the improvement in the performance of the business. The partnership agreement between Cooperative Bank and Banking Insurance and the Finance Union reveals that this partnership agreement is intended for the growth of the business in the viable and sustainable environment.
United Distillers stated that the partnership agreement is the agreement that drives the company towards the world class manufacturing with a step change. In the formal partnership, the trade union affix to their commitment to pursue their objective and act jointly with the management for a given change. In the partnership, the union are recognized and considered as the partner of the agreement. A Scottish power agreement is designated as the central partnership council, an effective way for the management representative and the representative of the trade union to deliver the joint commitment that works for the growth and future success of the business within the partnership agreement.
London and Manchester and Manufacturing science, finance have agreed for the involvement of the union in all plans and initiative of the company at an earlier time.
A Partnership agreement between the Blue Circle Cement and its four unions claims that it greatly enhanced the role of the trade union by focusing on the national bargaining on the long term strategic issues and enlargement of the scope of the joint consultation.
The Tesco Supermarket Groups provided in every store the forum for the staff leading to the trade union based regional and group meetings. Generally the companies having the partnership agreement with the trade union have stress on the importance that they have the involvement of the trade union and encouraged the employees to join the trade union.
TUC principles of the partnership
A report published on 4 January 2002 on the partnership work state that in an organization where the employers and employees work together in the partnership, the productivity and profitability of the organization. The report reveals the unique approach of the unions and the TUC Partnership institute to the success of the companies. The report also reveals that how this partnership supports in the security of the jobs and makes them more fulfilling. The reports also evaluate that 46 companies are now using this partnership agreement to promote the involvement of the trade union in the strategic decisions and have the effective relationship between the managers, supervisors and the union representatives.
There are six key principles of the TUC that make the partnership agreement meaningful.
There should be a joint commitment for the growth and success of the organization
The trade union and the management should recognize their legitimate interests and resolve difference in the environment of the trust.
A joint commitment to the security of the employee’s job should be there.
Both focus on the quality of the working life.
There should be transparency and the sharing of the information between trade union and management.
There should be mutual gains for the employers and the trade union that leads to the improved performance, terms and condition and the involvement of the employee.
Partnership work summary
The workplace that works on the partnership agreement have the one third more likely to the financial performance that is much better than the average and a quarter more likely labor productivity that is much more better than the average.
The Partnership agreement between employees, their unions and employer turns to lower labor turnover and lesser absenteeism and also the higher profits and sales.
A study based upon the international call center, the interviews with the managers and staffs revealed that the partnership agreement has the beneficial impact on the job control, design, training and the career development.
Key characteristics of the partnership
The author defined the partnership as the trade union movement having the clear opportunity for increased influence in the social and economic level. The Partnership agreement between trade union and the management is important for the both. Both the participants are engaged in this partnership because of many reasons. The rationale of this partnership is that the industrial relationship goes from zero to positive one and the partnership also brings shift from harder HRM practices to softer one. Partnership generally occurs due to take over or the merger. Trade union helps the management during the change management in the organization. Consistent and the strategic partnership draw the attention for the trade union. Partnership agreement is the agreement in which the employers and the trade union work together for the common objectives such as competitiveness and fairness. This partnership is based upon the common interests of the management and the trade union such as re-skilling, training and participation so that the workplace relation becomes co-operative, mutual gains and trust. The concept of the partnership agreement becomes very famous in the recent years. It is the better way to attain the goals and for the change in the outlook of the organization for the same. It supports in attaining the mutual gains and trust. In the recent time the partnership becomes the integral part of the policy of the government and helps in the modernization of the employer and trade union relationship and it is important for the renewal and revitalization of the trade union. Partnership is an agreement in which the rights and the responsibilities of the employers and the trade union are mentioned. Because of this partnership agreement the employers cannot make the strategic Changes without the discussion with the trade union. In the last, the role of the employees in the decision making process should be clear and how the profit will be shared between them should be clear. The partnership agreement provides the new way for the employee-management relationship. This is the relationship in which risks, gains and losses are well managed and understand by the employee relationship.
Pros and cons of the trade union and management partnership
Advantages of the partnership between the union and management
Employee satisfaction: this partnership agreement between the trade union and management increase the satisfaction of the employee towards the management. When the employee speaks to the trade union then they have satisfaction that through union they are able to speak to the employers.
Fewer turnovers: the other advantage of this partnership is that there are fewer turnovers of the jobs in the organization. As the employees have satisfaction with their jobs, so there are fewer turnovers in the companies.
Easier change making: business should have to regularly change their strategies as they want to survive in the competitive world. If the company has the partnership agreement with the trade union then both the employers and the union work together for a given change and make it easy to implement.
Job security: this partnership agreement displays the sense of the job security as the employees think that they are more involved in the strategic decisions of the company.
Through this partnership agreement the Trade union can increase the wages and the benefits of its members through negotiation
Trade union represents the workers in front of the employers and the society.
The trade union can reduce the exploitation of the workers
Trade union helps to uptake the health of the employee and legalization.
Trade union helps the employees to fight against the legal action of the company
Disadvantages of the partnership
The main disadvantage of the partnership is that it is very difficult to hire a new staff when there is partnership between union and employers. It is very bad thing when a full take over on the company is effective and the new management wants to change the staff.
The second disadvantage is that the trade union is the main competitor of the HR department. If a company has multiple trade unions and all of these negotiate with the HR department then it becomes very difficult to satisfy all of them.
Limitation of the partnership
The main limitation of the partnership is that the building and maintenance cost of the partnership is highly endeavor. However cost and time required for the management of the partnership is not exactly demonstrated but there impacts are not as such potential as compared to their maintenance cost and time.
The second limitation is that the leaders of the union have less vision towards the ideas and views of the employees.
Singapore case study
In Singapore electronic and electrical sector are highly affected by the crisis. There were 26,000 peoples affected and 4300 workers were retrenched. Some of the workers have to go first because of the non-renewal of the contracts. When due to the financial crisis, the orders were cut down, then the United Workers of the electronic and Electrical Industries worked with the companies to minimize the job losses in the companies. Murata electronics Singapore Ltd. works in the close relationship with the union to take the advantage of the SPUR. Both the participants come together to discuss the representatives of the workers and the managers concerns to deal with the crisis.
United Workers of the Electronic and Electrical Industries
It is the largest union in the Singapore having 120 branches and 52,873 workers. 60% of the workers are not organized in this sector. The proportions of the Singaporeans are 45% and non-Singaporeans are the 46% and the proportion of the female members are 55% and the male workers are the 45%. The key initiatives of the union are
To organize more of the employees, to reach out to the non-ionized companies
Enhancement in the employability of the working through improving their skills by training given by the NTUC e2i and also through the use of the SPUR
Engagement in the industrial relationship that includes the negotiating wages and the working condition
Expansion in the outreach for the contract workers that work on the huge terms and condition in comparison to the permanent workers
Promotion of the re-employment of the older peoples or the workers
In spite of these initiatives that are undertaken in cooperation with the NTUC, Bipartism supports as the instrument for the implementation of the policies and strategies that are based on the consultation between the social partners that is known as the tripartite consultation.
Murata Electronics Singapore Ltd.
It is the company that is situated in Japan and established by the Murata manufacturing Company Ltd in 1944. It is one of the largest chip monolithic ceramic capacitor industry in the world. In the end of December 2009, it had the 1,282 employees. From this workforce about two-third are the 20-39 years old. The half of the employee of the company works for the one to five years followed that 17.4% for six to ten years, 10.1% for eleven to fifteen years, 10.4% for sixteen to twenty years and 11.2% for more than twenty years. The high proportions of the workers that work less than five years are the workers that were on short duration contract basis. From the total of the workforce 54.2% are the local workers and 45.8% are the workers that work on the work permit. On the basis of the nationality, the Singaporean workers are 28.6%, Malaysian 34.9%, Indian 8.3%, Chinese 22.3%, and others 5.9%. In September 2008, the global financial crisis seriously affected the production sale of the Murata and also the sale percentage of the company dropped very sharply, the operational capacity of the company is reduced to the lower level that is equivalent to the 15%. The priorities of the Murata are to secure jobs and improvement in employee’s morale. Thus, the Murata Company becomes the first unionized company that stood first to protect its employees with the SPUR program. Murata works in co-operation with the UWEEI and e2i to ensure that the workforce gain the new skills and repositioning in the company. So, to protect and secure the jobs, Murata approach is to temporary shutdown with the consideration in the production only on the one location. The company transverse the way of calculating the over-time from monthly to a three month basis for the labor that works in shift of the 12 hours in association with MOM and workers agreement. They also innovated the new ways that reduce the wastage. During the critical period, Murata works on the 12 hours shift basis, so the company had to declare more off days during this time. This approach lowers down the salaries of the employees. Senior management of the company started the cut down of the salary so that the losses will be divided equally.
The second challenge of the Murata is how to overcome the negative impact to increase the morale of the employees. For this cause, the Murata change its top up culture to a culture that respects the thinking, ambition and independency of the employees.
Flexible and competitive wage system
Impact of globalization, volatile business environment and increased competition supports the flexible and performance based wage system.
For the wage restructuring the Tripartite taskforce was formed in 2003 for addressing the concerns of the Singapore wage competitiveness. For the wage restructuring task five groups were set. A wage model working group, sectorial working groups for the hotels, electronics, Land transports and chemicals and the recommendation is released in 2004. Key recommendations are
1. Salaries to reflect their values of job
Companies should change their seniority based wage system and should narrow their maximum minimum ratio to average 1.5 or less.
The maximum minimum ratio should be decided at the company by taking consideration of the nature of the job, responsibility level, learning curve, experience importance.
2. Bonus linkage to KPI
Companies should prepare the list of annual variable components and connect these components to the KPI.
The companies should try to motivate and engage the employees for achieving the targets of the companies.
KPI can be at departmental level, individual level and organization wide level.
3. For timely wage adjustments MVC
Companies should construct monthly variable components from the basic wages and from the future wage increase.
The MVC helps the companies to timely adjustment of the wages in contract to the change business environment.
Companies should sort out the clear guidelines for how to cut out or restore the monthly variable components in consultation with employees or trade union.
Supporting practices and system
A flexible and performance based wage system is effective if it is supported by the following facts.
Regular sharing of information between employees and union on business performance and perspectives
A transparent and effective appraisal system of the company
Management taking the initiative to set aside the larger proportion of their compensation as the variable components
Tripartite guidelines for managing the excessive manpower
Instead of recruiting a huge amount of manpower, the companies should consider the following alternatives
Use of Job credit scheme for reducing the wage cost
Use of the SPUR to send the workers for the training
Flexible work schedules, flexible work arrangement, temporary layoff and shorter work week
Flexible wage system is used for the management of the wage cost
Skill redevelopment program
STEP- skill training for excellence performance was constructed by the Singapore workforce development agency and the Ministry of the manpower. STEP is launched to support the professionals, executives and managers to update their skills, expertise and knowledge to sustain the competitive world. For this SPUR program is very beneficial.
SPUR is the 650 million dollars two year program that helps the company and the employee to manage the economic downturn and investment in the skills for the recovery. SPUR provides huge by the subsidy of the 90% of the fees amount and for the employees 90% of the payroll. More than the 800 of the SPUR courses at the more than 100 provider center and the 42 CET center. Managers, executives, professionals and technicians are also entitled to the SPUR programs under the PSP professional skill program. Tripartite partners run the SPUR program. The WDA and MOM provide funding as well as skill development programs. The NTUC pay roll the students of the SPUR program by the Employment and the Employability institute while the SNEF reach to the companies to improve their human resources capabilities. The Community Development services also take part in the SPUR program through the community support and career services.
Implication for management and union
The implication for the management and union are trust, engagement, security and many more. For the management of the trust, the management should motivate the employees to join the trade union. The mutual gains and losses cannot be easily measured and established. The partnership agreement between the trade union and management is non-sincere when the union makes the unrealistic demands regarding the job security and loyalty. The success of the partnership depends upon the more members of the union and when the voice of each employee is considered. With help of the partnership the strategic change which is necessity of the current business becomes an easy task.
In this report, discussion on the partnership agreement between management and union trade has been done. This partnership agreement can helps in the success and growth of the company in many ways if it is implemented in the best way. This partnership enhances the employee’s morale, loyalty and satisfaction towards the job. As the employee is satisfied with his job and has trust on the management and the company, he or she works in more engagement and efficiency in the company. This partnership increase the performance of each employee hence the success of the company and also in case of the threat or crisis the employees and management works together to fight with the problem. In addition to all, the partnership helps the employers to have the work flexibility from their employees. In the last, it was concluded that the partnership agreement between the trade union and management leads the company to the way of growth and success.
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