Compare and Contrast Employment Relation System in Britain and America
The history of employment relations is dominated by the changing relationships between workers, trade unions, employers and the state. The concept which started from the rights for sufficient payment and good working conditions now has evolved in much broader areas.
Coming from mid 19th century to this date, employment relation has evolved a lot as a concept and practice. Employment relation in Britain and USA has some similarity in its fundamental areas of pay and working conditions; however, there are some differences like in industrial relation, unionism, collective bargaining as well as other HR practices.
What are Employment Relation and Industrial Relation?
Employment relation is the broader term of industrial relation. The term "industrial relations" has developed both a broad and a narrow meaning. When defining broadly, industrial relations, relationships and interactions between employers and employees.
From this perspective, industrial relations cover all aspects of the employment relationship, including human resource (or personnel) management, employee relations, and union-management (or labour) relations.
However, the term ‘industrial relation’ was narrowed in 1950s and 60s to avoid the confusion from word industrial, now , more restricted interpretation that largely links it with unionized employment relationships. In this view, industrial relations relate to the study and practice of collective bargaining, trade unionism, and labour-management relations, while human resource management is a separate, largely distinct field that deals with non-union employment relationships and the personnel practices and policies of employers. Thus, employment relations can be said to encapsulate both HRM and industrial relations.
UK history
Employment relation, as we now know, essentially grew from the trade union with the need to improve pay and working conditions, in particular around issues of health and safety and quality of life for the workers. To understand the issues today it is important to remember the past and the origins of the Trade Union movement and, in particular the role that women played in that process.
Trade unions in the industrialization in the 18th century existed as artisans' guilds; but trade unions did not formally (or legally) come into existence in Britain until the Industrial Revolution in the 19th century. Employers used to determine the wages of an individual worker. Trade unions were not legal, also legislation prevents their existence.
Workers were able to form friendly societies and trade clubs, but were hindered by the legislation. The Six Acts of 1819 extend the magistrates' powers and restrict meetings and the distribution of leaflets. Trade Unions Act of 1825, allowed trade unions to exist, but not to strike, picket, or intimidate the workers who did not go on strike.
The legislation 1824–25 enabled organizations of workers to engage in collective bargaining. In 1851 the Amalgamated Society of Engineers (ASE) was formed. It was followed by unions in a number of crafts, such as carpentry, bricklaying, and boiler making These ‘New Model unions’ offered schemes against sickness, unemployment, and old age, and did not wish to change the nature of society. They did not support strikes, and tried instead to negotiate with employers. They were well organized and, since they recruited from skilled workers, well financed.
In 1868 thirty‐four delegates representing 118,000 trade unionists met at a ‘congress’ in Manchester; the Trades Union Congress (TUC) gradually became accepted as the central organization for trade unions. Under the Trade Union Act of 1871 unions were fully legalized and union funds were protected from dishonest officials. The Criminal Law Amendment Act (1871) allowed peaceful picketing during strikes.
19th century saw the growth of ‘new unionism’– unions for unskilled workers. The new unions concentrated on fighting for better wages and against unemployment. Strike action undertaken by unskilled workers' unions was more successful, such as the London Match Girls' Strike, led by Annie Besant in 1888; the Glassworkers' Strike, led by Will Thorne in 1889; and the Dockers' Strike, led by Ben Tillett in 1889.
After the 1890s the organization of unskilled labour spread rapidly. The trade union movement was involved in the formation, in 1900, of the Labour Representation Committee, a predecessor of the Labour Party. Successive acts of Parliament enabled the unions to broaden their field of action; for example, the Trade Disputes Act of 1906 protected the unions against claims for damages by their employers, and in 1908 the miners secured an eight‐hour day for their members, after industrial action.
By 1918 unions were stronger than ever before with a membership of 8 million. In 1919 miners, railway workers, and transport workers formed the ‘Triple Alliance’, agreeing to take joint action if any one union was threatened... Under the Trade Disputes and Trade Union Act of 1927 general strikes or strikes called in sympathy with other workers were made illegal, and union membership slumped. During the depression of the early 1930s, the unions were weak, since employers could call upon a vast pool of unemployed people who were happy to work under any conditions.
Because of coalition government of union leaders, trade unions raised to 8 million by 1944. The restrictive 1927 Act was repealed under the Labour government in 1946 resulting increase in unionism among white‐collar workers.
From the 1960s onwards there were confrontations between the government and the trade unions. In 1965 the Labour government set up a royal commission to examine the role of trade unions. The succeeding Conservative government's Industrial Relations Act (1971) included registration of trade unions, legal enforcement of collective agreements, compulsory cooling‐off periods, and strike ballots. The Employment Protection Act (1975) and the Trade Union Act (1976) increased the involvement of the government in industrial relations.
At this time, UK trade union membership had reached a peak of 13.5 million, representing 54% of the workforce. However, the 1980s saw a sharp setback in union fortunes, caused by severe economic repression, a shift in the economy towards the poorly‐unionized service industry, small firms, part‐time and self‐employed sectors, and a hostile Conservative government Prime Minister Margaret Thatcher made the reduction of union power a key priority. Consequently, by 1989 union membership had fallen to 9.7 million, or 40% of the workforce, while working days lost to industrial action were around 3 million per annum. By 1996 union membership had fallen further, to a level of 7.9 million, of whom four‐fifths were affiliated to the TUC.
The Labour government which came to power in 1997 ,announced, in 1998, that an employer would be required to recognize a union if a minimum of 40% of the total workforce vote in favour of union representation.
It also introduced a statutory minimum wage, which unions representing low‐paid workers had campaigned for.
However, although still an important paymaster of the Labour Party, trade unions' influence over the party's policy and decision‐making was far less than during the 1970s. There still existed, in 1999, around 230 trade unions. Now, the trend has been towards union merger to create a small number of ‘super unions’.
US History
Trade unionism in USA was always opposed by employers and government, situation for unions was hostile than in UK, even using police and armed guards to harass pickets and protect strike breakers, which led to series of violence and bitter conflict.
Although the Democrat New Deal administration provided the right of workers to organize freely and bargain collectively, US legislation such as the Taft‐Hartley Act (1947), prohibited the closed shop (an agreement between employer and union that only the union's members could be employed), and the Landrum‐Griffin Act (1959) outlawed picketing of a related firm's premises.
Starting in the early 1960s, the New Deal industrial relations system, with its emphasis on collective bargaining as the major institution for determining wages and labour conditions in the economy, began to erode and be replaced by a new system.
Bad economic conditions from the 1970s onwards, and a shift in the balance of the economy away from manufacturing towards the service industry, where unionization rates were historically low, resulted in a progressive fall in union activity in the USA.
The new system that emerged, and then became consolidated in the 1980s and 1990s, featured a much smaller role for collective bargaining with a much-expanded role for personnel management now called human resource management and direct government regulation of employment conditions.
The new deal system in the US became the bases on which Human Resource management prosper as a separate filed of study and profession and influence of trade union decreases.
Serials of events from 1960s to 1990s lead to the present situation where Human resource management is popular and power of trade union is neutralised. It is not that there was only t entirely negative for unions, however. The most positive development was the spread of collective bargaining to the public sector. After liberalization of state and federal laws in the 1960s and 1970s, union coverage in the public (government) sector greatly expanded, from 11 percent in 1960 to 37 percent in 2000.
However, during 1960s, personnel/human resource management started coming major force in industrial relations, this is due to decline of the unionized sector of the economy, these new ideas and practices in human resource management allowed companies, in turn, to effectively take advantage of this opportunity. Personnel management by this time started to be recognised as tools of motivating people at work, increasing job satisfaction thus increasing the productivity.
These new insights were gradually integrated into personnel management, leading to a shift in both its name to human resource management and its approach to managing employees (from viewing employees as a short-run expense to a long-term asset). As a result, human resource management gradually replaced labour-management relations (increasingly thought of as synonymous with industrial relations) in the eyes of academics and practitioners as the locus of new and exciting workplace developments.
With the practices of human resources, came the new employment practices into selected plants and facilities, culminating in the development of what is often called a "high-performance" work system.
With package of employment practices, self-managed work teams, gain sharing forms of compensation, promises of employment security, formal dispute resolution systems, and a democratic organizational culture. These work systems not only boost productivity and employee job satisfaction, leading to reduced interest in union representation. Companies have also become much more adept at keeping out unions, not only through progressive human resource management methods but also through more aggressive and sophisticated union-avoidance practices.
Besides that, Civil Rights Act of 1964 passed numerous laws relating to other employment areas, such as pension plans, family and medical leave, and the portability of health insurance. It is widely considered that these laws and attendant agencies, courts, and attorneys have to some degree served as a substitute for unions, thus also explaining a portion of the union decline in the late twentieth century.
By 1999 only a seventh of US workers were union members, and in an effort to attract new members, particularly from the service sector, unions have placed increased emphasis on special benefits they can offer members, such as low‐cost credit cards, legal aid, travel discounts, and health‐ and child‐care.
Comparing and Conclusions
Looking at the history of industrial relations of both the countries, it seems that with the industrial revolution came the labour issues regarding pay, working condition and health and safety. Workers’ union, employers, and government were in constant battle, in this process there were lots of reforms in the employment act and collective bargaining in both the countries. However, the differences in these two development was, USA government become more hostile towards unionism where as in UK, with the raise in the power of labour party , Trade union prosper , till the conservative government of Margaret Thatcher reduces the power of trade union by breaking it down.
USA in 1960s and 1970s , had raise on service industry, which brought the new concept of personal management, in addition to this the US’s market driven economy portraits trade unions as a barriers as a result more individualistic employment relation and HR practices start taking place instead of collective unionism. During 1970s and 1980s, this new individual employment deal started comes in practiced. Highly influenced by USA’s market economy, Thatcher’s government paved the road for individualistic rather than collective form of employment relations.
Purcell & Sission (1983) with their theory of management style and employment relation gave 4 different management style Sophisticated Human Relations, Consultative, Traditional and Constitutional, these 4 dimensional of management style is based on degree of Individualism and Collectivism present in management style. Seeing from this model USA seems to have Sophisticated Human Relation having low on collectivism and high individualism, where as UK is moving from Constitutional towards US style of Sophisticated Human Resources.
With the change in time , there has been changes in employment relation and way people are managed, now with globalization and fast communication technology, outsourcing is becoming common, besides that with free movement of labour in EU, employment relation’s definition might be change in near future.. What ever the situation might be it is certain that no one system can last forever, collectivism which was the based of labour movement thought the UK history is now moving to individualism, therefore, as I see , Human resource management might come up as very strong factor for success and failure of the company.
Bibliography
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Derber, Milton. The American Idea of Industrial Democracy, 1865-1965 Champaign: University of Illinois Press, 1970.
Dunlop, John. Industrial Relations Systems New York: Holt, 1958.
Jacoby, Sanford. Employing Bureaucracy: Managers, Unions, and the Transformation of Work in American Industry, New York: Columbia University Press, 1985.
Kaufman B.E. Human Resources and Industrial Relations: Commonalities and Differences."Human Resource Management Review 11, no. 4 (2001)
Kochan, Thomas, Harry Katz, and Robert McKersie the Transformation of American Industrial Relations New York: Basic Books, 1986.
London School of Economics & Political Science, Blackwell Publishing British Journal of Industrial Relations, Volume 45, Number 3, September 2007
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