(Employee Relations)

Unit - 1:
Essentials of Employee Relations
& Reward System

PARUL INSTITUTE OF BUSINESS

ADMINISTRATION
IMBA SEM-4
Employee Relations
Meaning:
• Employee relations (or employment relations) refers to the
efforts of an organization to develop and maintain its
relationships with employees – both on a collective and individual
level. The focus of employee relations includes concerns such as:
 Working conditions
 Compensation and benefits
 Workplace/employee safety
 Incentives, rewards, and recognition
 Work-life balance
 Conflict resolution

• Maintaining positive employee relations can improve overall

individual and organizational engagement and performance
while creating a healthier, more enjoyable day-to-day work
Employee Relations
• Employee relations (ER) is the management of the relationship
between employers and employees. It focuses on both individual
and collective relationships in the workplace with an increasing
emphasis on the connection between managers and their team
members.
• Employee relations involves:
 Governing the employee-employer relationship to form mutual respect, trust,
and appreciation.
 Building a strong company culture and healthy work environment.
 Advocating for employees, supporting them, and addressing their concerns and
conflicts.
• In other words, employee relations cover the contractual, practical, as
well as physical, and emotional dimensions of the employee-employer
relationship. It’s a crucial factor when it comes to overall organizational
performance because good employee relations management translates
into increased employee well-being and productivity.
Employee Relations
• A company’s HR department is typically responsible for managing
employee relations, but they may also have a dedicated employee
relations manager (or team) that focuses specifically on those tasks and
issues.
• Those in charge of employee relations are often responsible for:

 Liaising between employees and managers, leaders, or supervisors

 Creating or advising on workplace policies around employee issues and needs
 Helping to create the company’s employee handbook.
 Preventing and resolving issues between employees and management
 Improving and maintaining positive working conditions (pay, benefits, work-life
balance, etc.)
 Managing employee files
 Assisting in the recruiting, hiring, and employee exiting processes.
 Sharing company news, announcements, or policy updates
Importance of Employee
Relations
• Improve employee engagement, which plays a vital role in the
development of an organization.
• Improve work-life balance, which reduces employee exhaustion
and stress.
• Enhance workplace culture, which makes the organization a
happy place to work.
• Reduce workplace conflicts, which fosters cooperation and
harmony among employees.
• Increase motivation and loyalty, which boosts employee
performance and retention.
• A strong employee relations team or strategy helps employees feel
valued, and keeps them engaged. As a result, they’ll be more likely
to stay with the company.
Examples of Employee
Relations
Making sure new team
members add to the
company culture
Onboarding support for the
fresh recruits

Providing ongoing support

for employees

Analysing Performance

Dealing with employee

misconduct

Resolving ongoing conflicts

Exploring new ways to

further improve employee
well-being

Extra-curricular initiatives

Office health and safety

procedures
Crucial Traits of ER Managers
Emotional
Leadership
Intelligence
Good
Social
Communication
Responsibility
Skills
The ability to An innovative
identify problems mindset
A strategic
Resilience
mindset
Employee Relations Practice

Invest in Let your Have a Open and Promote

your employe well- Honest inclusivit
people es know defined Commu- y
beyond that you company nication
the trust culture
recruitm them
ent
phase
Common Employee Relations
Issues
This is a big employee relations issue. Beyond stifling
Disengaged their personal growth, disengaged employees can become toxic.
employees Their actions could affect the productivity and morale of others
If
andemployees
also harmfeel likemental
their they've put in the work to deserve a higher
health.
salary or promotion, they may find it disheartening when others
Little achieve this.
Limited opportunities for upward mobility can also cause jealousy
Opportunity for and resentment, while also providing little incentive for employees
upward mobility to go above and beyond.
Not everything will be rosy all the time. Personalities may clash,
Conflict team members might not see eye-to-eye, and tempers could
Management flare. It's important that all disagreements are settled fast and
professionally.
According to HR Acuity, 58% of HR representatives think that
Not having having access to better data would help them serve their
access to better employees better. Not having the tools to improve your offerings
information can hold you back and cause a leakage in talent.
Employee Relations Management
Strategy
Conclusion
Employee relations can make or break the workplace climate – and your
organizational performance. The best practices we shared in this article can
be a big help in building a strong ER in your organization for long-term
success.

The first step toward an effective employee relations strategy is

actively encouraging transparent communication and trust within your
organization.

Employee relations can make or break the workplace climate and your
organizational performance.

It is paramount to provide value to others in this field, knowing team

members’ biggest struggles and how to tackle them.

Good employee relations are about more than organizing events and quirky
office designs. Career growth opportunities, the right tools for learning,
and reminding everyone that they are essential to the company are all
equally important.
Role of Reward
Management
Role of Reward Management in
maintaining Employee Relations
• Reward Management is
concerned with the formulation
and implementation of
strategies and policies that aim
to reward people fairly,
equitably, and consistently by
their value to the organization.
• Compensation and Reward
System plays a vital role in a
business organization.
• Reward is an incentive plan to
reinforce the desirable
behavior of workers or
employers in return for their
service to the organization.
• Management of reward is
primarily concerned with the
management of expectations.
Aim of Reward
Management
Reward the
right
things to
Reward Motivate
convey the
employees employees
Reward right
according and obtain
employees message Develop a
to what the their
for the about what performanc
organizatio commitme
value they is e culture.
n values nt and
create. important
and wants engageme
in terms of
to pay for. nt.
behaviors
and
outcomes.
Purpose of Reward System
• Some of the organizational aims • Organizations make provision of rewards for
are motivation, development several reasons. The main purpose of giving
of high performance, and rewards is to enhance recruitment and
rewarding the right behavior. retention of employees, arouse interest and
enthusiasm among them, stimulate their
mindsets towards the achievement of
• The main purpose of the reward personal and professional goals, and lead to
system is to augment job improvements in productivity and
performance, retain valuable profitability.
employees, and lead to the overall
development of the organization. • Positive rewards include incentives,
The reward system puts together the bonuses, power, autonomy, promotional
real self-interests with the opportunities, paid leaves, paid vacations,
and so forth.
organization’s objectives and gives • Whereas, negative rewards are referred
three kinds of management control to as punishments. These include no
benefits, informational, motivational, increase in salaries, no promotional
and personnel-related. The rewards opportunities, no type of guidance and
need to catch the attention of the direction obtained from superiors, and so
employees. forth.
Characteristics
Fundamentally
about people

Stakeholder
oriented
• Strategic or vertical
Integration
• HRM or horizontal
Integrated integration
• Reward or internal
integration

Strategic

Evidence based
 Approach to Achieving
Reward Aims
Reward Philosophy Strategic Alignment
Distributive Justice Contextual and
Procedural justice cultural fit
Fairness Performance and
Reward
Equity
Segmentation
Consistency
Transparency
Approach to achieving Reward Aims

1. Reward philosophy:
• Consistent with the values of the organization and help to
enact them.
• Reward people differentially according to their
contribution.
• It must be strategic and address longer-term issues.
• Total Rewards approach.
Approach to achieving Reward Aims

2. Distributive Justice:
• It refers to how rewards are provided to people.
• Distribution of awards following the value of employee’s
contribution.

3. Procedural Justice:
• It refers to how managerial decisions are made and
reward policies are put into practice.
Approach to achieving Reward Aims

4. Fairness:
• Felt to be fair

5. Equity:
• Equal pay for work of equal value

6. Consistency:
• Decisions on pay should not vary arbitrarily
Approach to achieving Reward Aims

7. Transparency:
• The reward system should be transparent

8. Strategic Alignment:
• Support the achievement of business goals

9. Contextual and cultural fit:

• Should be taken by the organization’s context and
culture and should not be universally applicable
Approach to achieving Reward Aims

10. Performance and Reward:

• Contribute to the achievement of a high-performance
culture.

11. Segmentation:
• Different segments of the workforce will be motivated by
different segments of awards.
Factors influencing the
achievement of the aims

Contextual
Factors

Internal External
Context Context
Internal Context
The
organization’
s culture

Political
and The
social organization’s
climate business or
sector

Work
Business
environme
Strategy
nt

People
External Context
Globalizatio
n

Rates of pay
The trade in the
unions market-
place

Societal The
factors economy
 Fundamental
concepts
1. The resource-based view
• The role of Reward management is to contribute to
the acquisition and retention of an organization’s
rare, hard-to-imitate, and hard-to-substitute human
resources.

2. Human Capital Management

• An integrated effort to manage and develop human
capabilities to achieve significantly higher levels of
performance and attain “Human Capital Advantage”.
3. Human Process Advantage
• Establishment of difficult-to-imitate, highly evolved
processes within the firm.
• “Differentiate from rather than imitate the best
practices of another firm.”

4. Motivation theory
• It deals with how financial and non-financial rewards
affect the motivation to work and levels of performance.
• Extrinsic motivation- Things are done to or for
people to motivate them.
• Intrinsic motivation- Work itself.
Four main categories of
Motivation Theory
Instrumentality Theory
If we do one thing it will lead to another.
People will be motivated to work if rewards and penalties
are tied directly to their performance.

Content (Need) Theory

Guides what needs (Achievement, Recognition,
Responsibility, Autonomy, Opportunity to develop, and use
skills, etc.) should be satisfied by a reward system if
motivation is to occur.
Process Theory: Cognitive Evaluation
• Psychological processes or forces
that affect motivation.
Theory:
• Argues that placing a strong
 Expectancy theory: Motivation is emphasis on monetary
high when people know what they have rewards decreases people’s
to do to get a reward.
interest in the work itself.
 Goal Theory: Motivation and
performance are higher when
individuals are set specific goals.
 Equity Theory: People will be better
motivated if they are treated equitably.
– Distributive Equity: Fairness with
which people feel they are rewarded
for their contribution and in
comparison with others.
– Procedural equity: Perception
employees have about the fairness
with which company procedures are
being operated.