THE EFFECT OF EMPLOYEE RELATIONS ON ORGANIZATIONAL PERFORMANCE

THE EFFECT OF EMPLOYEE RELATIONS ON ORGANIZATIONAL PERFORMANCE  

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

An organization is a structural component that is made up of sub-component such as man, materials and money which work interrelated and interdependently in the achievement of organizational objective. All these sub-component must work together before an organization can increase or improve in its performance. But among them, man which is the employer and the employee must exist in a cordial relationship between themselves and with the organization so as to enable them actualized the objective of the organization, manage the materials and money and also have a satisfactory working environment. Again, the employees in the organizations are the vital elements an organization should always strive hard to satisfy because without the employees, the organization would find it difficult to survive. In that case, the employer in an organization must have a good employee relation which will help the employees feel relaxed and satisfied in their workplace. 

However, in context to the prevalent discussion, employee relation is seen as the fairness, trust, and the harmonious relationship that exist among the employers and their employees within organization which has a positive effect on organizational performance (Bingham, 2016). It is also seen in simple terms as the relationship that exists between the employer and the employee. According to Muhammed, Sohail, &Riaz (2013) in their research “impact of employee relation on employee performance in hospitality industry of Pakistan” view employee relation as a set of organizational functions and practices that deals with issues related to people as staffing, compensation and benefit, performance management, organizational development, health and safety, communication and administration. These means that people separated as staff should have connections or relationships among each other which will enable them work together as a team in getting a setting work done. Nevertheless, employees who have worked so hard need to be compensated and grant benefit that will make them satisfied in their workplace. In order to determine the workplace satisfaction of employees, certain variables such as health, safety, employees’ canteen, compensation, benefit, communication and many other variables need to be considered so that the organization can improve in its performance.

Therefore, an organization can only improve in its performance when the employees that work in that organization have developed a sense of belonging, and go extra mile to help the organization prosper. It is against this boundary that this study seems to investigate the effect of employee relations on organizational performance using Michelle Pharmaceutical Company as a case study.

1.2 Statement of the Problem

In recent time, some organizations have been decreasing in its performance due to inadequate management abilities of employee relations by the human resource department which is in charge of the employee’s welfare within the organization. Organizations can only improve in its performance if only a proper employee relation is adopted and maintained. However, relatively little has been written about the everyday management strategies involved in management of the contemporary relationship. Over the years the Chartered Institute of personnel and Development has undertaken a series of interviews with human resource professionals that were designed to establish what significance the term employee relation has for them and their organization.

Nevertheless, the vital determinants of work place performance are employee relationship which has been given little, if any priority. The aspect of employee- employee relations and how it relates to performance has not been given the attention it deserves by management. This is based on the fact that employees in every organization should be regarded as the most valuable assets in that organization. Hence their workplace environment impacts a lot on whether the organization achieves its goals. 

1.3 Objectives of the Study

The objectives which this study seems to achieve are as follows:

1. To find out the extent employee relations is practice in this organization.

2. To determine the components of employee relations the organization gives attention.

3. To examine the extent employee relations strategies could be used to improve performance. 

1.4 Research Question

In the context of this study, the research asks the following questions:

1. What is the extent of these organizational practices of employee relations?

2. What are the components of employee relations in this organization?

3. How can employee relations strategies improve organizational performance?

1.5 Research Hypotheses

The hypotheses will be testing the significant of the research question base on the following:

H1 Organizational practices of employee relation have a positive effect on organizational performance.

H0 Organizational practices of employee relation have no positive effect on organizational performance.

H1  Employee relations hassome component that significantly affects organizational performance.

H0 Employee relations hasno component that significantly affects organizational performance.

H1 Employee relation strategies has a positive effect on organizational performance.

H0 Employee relation strategies hasno positive effect on organizational performance.

1.6 Significance of the Study

To the organization, it will help identify means of having better employee relations. It offers some useful information about employee relation that can be used for further scientific research. 

To the researcher, it can contribute to build up researcher’s knowledge and understanding on the aspect of employee relation by providing awareness to the examined organizations about employee relation and how it affects organizational performance. 

To the reader, it will widen his/her knowledge on how employee relation should practice in organization.

To the employees, it will help them to know how there can be able to relate with one another within the organization which will help them in making their work less stressful and it will also help them to know the better ways to get their work done more effectively and efficiently.

1.7 Scope of the Study

The study was done mainly in Thinkers’ Corner where the researcher was able to get all the relevant individuals. 

1.8 Limitation of the Study

In the process of carrying out the study, the researcher encounter the following difficulties:

Collection of Population Sample: The researcher found it difficult to collect the population sample from the proposed company due to some privacy. It was after some series of verification through a letter submitted to the company by the researcher which serve as a means of evidence showing that the population were meant for academic purpose only.

Administration of Questionnaire: The researcher also at first meet for the distribution of the research questionnaire through the help of the proposed Company’s Administrative manager was turned down. It was when the researcher have to go back there with the Head of Department that the questionnaire was administered and was collected after 1 week and 5 days. 

1.9 Definition of Terms

1.8.1 Employee: These are the people spending their time, energy working within an organization in exchange for money. It is a person who is hired to provide services to a company on a regular basis in exchange for compensation and who does not provide these services as part of an independent business. It is also anIndividual who works part time or full time under a contract of employment, whether oral or written, express or implied, and has recognized rights and duties.

1.8.2 Employee Relation: It is a tripartite (it involve the employer, employee and the government) relationship that exists within an organization. It can also be seen as a relationship between the employers and the employees which makes the employee to feel comfortable in the workplace.

1.8.3 Organizational Performance: In the '50s organizational performance was defined as the extent to which organizations, viewed as a social system fulfilled their objectives. It can also be seen as the ability of an organization to exploit its environment for accessing and using the limited resources. 

1.8.4 Job Satisfaction: It is referred to job satisfaction as the positive feelings and attitudes employees hold about their jobs.

1.8.5 Performance Management: Performance management is a systematic process for improving organizational performance by developing the performance of individuals and teams. It is a means of getting better results by understanding and managing performance within an agreed framework of planned goals, standards and competency requirements. Performance management is defined as a strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them by developing the capabilities of teams and individual contributors. 

CHAPTER TWO

REVIEW OF RELATED LITERATURE 

2.1 Introduction

In this chapter, the study will emphasize on employee relation starting with the conceptual framework which contains the explanation of employee relation, employee relation management as a tool for improving organizational performance, the objective of employee relations, strategies of improving employee relation, employee relationship management practices, goals of employee relationship management practice, importance and functions of employee relationship management. The study will also emphasize on the theoretical framework which contain some of the theories relating to employee relations and the. Furthermore, it states the empirical review of the related study and finally has a brief summary of the review of related literature.

2.2 Conceptual Framework

Employee relationship (ER) is a kind of special interpersonal relationships, which was put forward by the western scholars in the 20th century in order to replace industrial relation. It refers to the relationship of rights and obligations of management and the interests between enterprise and the staff, which is also shown as the total of cooperating, conflict management, strength and power relations, and is influenced by economic, technology, policy, legal system and social culture background in certain society. Employee-employer and or employee-organization relationships are part of a business’s internal relationship management. Much research regarding this internal relationship management has focused on organizational behavior/theory and human resource management. Thus, employee relations can be considered to be a study of the relationship between employers or the representative managers and employees aimed at resolving conflicts and to help in improving productivity of the organization by increasing motivation and morale of the workers (Nikoloski, Dimitrova, Koleva&Kacarski, 2014).

Since the employees are the pillars for the companies building of relationship with the customers, a deliberate and well-thought-out initiative is required by the companies to build foundation for a strong relationship of employees with the organization (Rai, 2013).

Sinha & Bajaj (2013) states that employers should take care of the needs of the employees and this can be understood by human resource management practices like training, job satisfaction, job rotation, participative management, performance appraisal and career planning for their employees. Satisfied employees can contribute more towards employee relations and hence employee relation management status can be understood by equating employee relation management to satisfaction of employees so as to where satisfaction is taken as proxy variable.

However, employee relations are the ways in which the company is interacting with the employees to deliver important information and to give information about company policies and works to create a more productive work place. By not creating good policies for the employees it will affect the growth of company and affect the company success.