Employee Relations

Work dominates the lives of most men and woman. Aside from the domestic and voluntary spheres, the vast majority of those who work are employees rather than employers. The terms and conditions under which they undertake that work are of central importance to them. These terms and conditions include both the “market exchange” that they enter into with the employer and the “managerial relations” to which they are subjected. The former evokes notions of fairness and equity in the exertion of effort and the remuneration of labour. According to an old proverb, “in all labour there is profit”, but how much profit should the employer derive from the employees labour? The latter, managerial relations is equally important because “there can be no employment relationship without power to command and a duty to obey”.

Australia’s workplace relations laws

As set out in the Fair Work Act 2009 and other workplace legislation, the key elements of our workplace relations framework are:

  • A safety net of minimum terms and conditions of employment.
  • A system of enterprise-level collective bargaining underpinned by bargaining obligations and rules governing industrial action.
  • Provision for individual flexibility arrangements as a way to allow an individual worker and an employer to make flexible work arrangements that meet their genuine needs, provided that the employee is better off overall.
  • Protections against unfair or unlawful termination of employment.
  • Protection of the freedom of both employers and employees to choose whether or not to be represented by a third party in workplace matters and the provision of rules governing the rights and responsibilities of employer and employee representatives.

What is employee relations?

Employee relations, known historically as industrial relations, is concerned with the contractual, emotional, physical and practical relationship between employer and employee. The term employee relations is increasingly used due to the recognition of the fact that much of the relationship is non-industrial. Some authors cite employee relations as dealing only with non-unionised employees and labour or industrial relations with unionised employees. Others suggest that industrial relations and employee relations are dead fields, replaced by the more all-encompassing human resource management.

The origins of industrial relations emerged from the industrial revolution and the creation of free markets and large, unified movements of workers. The resulting tensions escalated and created an urgent need for forces that could regulate the relationship. Intellectually, the first piece of literature that seriously addressed the relationship between employer and employee was Sidney Webb and Beatrice Webb’s Industrial Democracy (1897).

In the past employee relations, under the industrial relations umbrella, was concerned with conflict management and managing the vastly different agendas of employer and employee. Nowadays the term is used more collaboratively and looks at ways both employer and employee can benefit from new schemes and initiatives. Increasingly there is the belief that the needs of both employer and employee entwine, although some scholars and businesses find it difficult to reconcile the needs of businesses operating in a competitive, free market with those of employees.

Happy employees are productive employees. Successful businesses know how to manage relationships to build lasting employee satisfaction

The 5 R’s For Building Lifelong Relationships with Employees

Responsibility – Show your employees you trust them by giving them responsibilities that truly empower them and that allow them to grow and feel like an important part of the company. Encourage them to gain new skills, competencies and capacities by recruiting from within wherever possible and by giving promotions at appropriate times.

Respect – Employees want to know they are respected as people and that their contributions are appreciated. If you treat their work lightly or fail to acknowledge them because you’re too busy or distracted with your concerns, they’ll likely start to feel dissatisfied and will start to look elsewhere for the respect they’re hoping to find. Every single employee should be treated with respect. This doesn’t mean that their behaviour or output is always respected‚ Æbut the respect you hold for that individual and their unique talents should always be clear.

For example, one regional CEO made a practice of berating his employees in front of clients without warning in an attempt to impress clients with his disdain for the slightest slip in performance. In conversations with other executives, he regularly referred to his employees as the worker bees.‚ π Not surprisingly, turnover became rampant for his company, and many have fled.

In contrast, another CEO, while walking past an elevator with his board of directors, noticed an employee in the elevator who had come to work, but was clearly feeling bereaved about a family concern. He stopped the conversation, left his directors, and took the employee’s hand in both of his while he expressed his sincere compassion for the individual, and then made sure the employee was fully taken care of before moving on. That company, not coincidentally, has an extremely low turnover and is one of the top revenue-producing firms in our state.

Revenue-sharing – Tie a part of your employees’ wages to the company’s performance. Offer a base pay and then add a part of the company’s revenue and profit on top as a performance bonus. This will not only motivate the employees to work hard but will align their interests with the company’s revenue and profit goals and will serve as an incentive to stay with the company as it grows. The employees feel much more engaged and part of the company in this model, which is not far behind ownership of the company itself.

For small businesses with high growth potential, this is an effective way to attract top talent without breaking the bank. It’s also a good way to weather financial storms and to reward employees generously when times are good. By making the fixed cost of payroll inherently more variable under differing business conditions, you can make your company more resilient and agile while also treating your employees exceptionally well.

Reward – Reward is similar to Respect and Revenue-sharing, but it goes beyond monetary rewards. Those elements are important as ways to show gratitude for employees’ hard work. However, other kinds of rewards, such as recognition in front of the company, company parties, department parties, family events, employee of the month awards, free lunches with the boss, gift cards, company logo clothing, thank you cards, flowers and support as employees have babies, adopt children, or do something good in the community, etc., help to contribute to the positive culture of the company and can be good morale builders, as well.

Relaxation Time – Be generous with time off. Don’t go overboard, but make sure your employees have sufficient time for sick days, family holidays, new babies, etc. Remember that it’s their jobs that enable the company to grow, but also remember to allow your employees to enjoy their lives during the time they’re outside office walls. There are much more important roles for your employees than their work-related positions, and they need to know that you honour and value those priorities as well.


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