A company needs to transform a few basic inputs into outputs – the final products or services they trade for a profit. These basic inputs may differ slightly for each industry but generally, they are known as the factors of production. These general and most basic factors of production include natural resources, human resources, capital and entrepreneurship. One cannot combine financial and natural resources effectively or efficiently without human resources – employees. Maintaining healthy employee relations is imperative to ensure a happy and satisfied labour force.
What is ‘employee relations’? It is a term given to the relationship employees have with other employees in the organisation. Considering that employees’ coordination and synergy is essential to achieving business objectives of all kinds, having healthy relationships – throughout the organisational hierarchy, is imperative
There are a few basic elements of an organisation that tell its story. The first is the quality of products and services they provide, the second is the symbols of an organisation which they choose to associate with, the third is the values they project through their vision and mission statements, the fourth is their customer service and lastly – the way the employees perceive the organisation.
The last two elements make maintaining healthy employee relations an incredibly important task carried out by the human resources manager. Healthy employee relations need to be formed and maintained because human resources include the mental and physical talents and skills of employees that combine the factors of production – losing a skilled employee to a poor working environment due to unhealthy employee relations is a situation that needs to be avoided at all costs. The increase in demand for knowledge workers multiplies this need, putting healthy employee relations at the forefront of all human resource activities.
Not only are employees essential to combine other factors of production, they are also one (if not the first) contact point for customers and clients. An experience with a single employee of a company can form a long-lasting impression about the company as this single employee serves as a representative of the entire company’s labour force and its corporate culture. Good customer service is all about having positive interactions with customers. This is essential for creating long-term value customers (those that keep returning to purchase goods and services from the company) and to gain loyalty from clients and customers. Customer service is also a key differential for any company – putting them at a competitive advantage or disadvantage. On the other hand, having excellent customer service is a long-term cost-saving strategy as customer acquisition is a far more expensive endeavour than customer retention. How about that? – Happy employees = saving money on marketing budgets.
So, now that we have established that one factor of a sustainable competitive advantage is good customer service and that good customer service depends on healthy employee relations, the question we need to answer is why.
Employees, customers, investors, banks and the community are just some of the stakeholders in any business. The most important stakeholders that you need to keep happy are your employees. Your employees are the organic mouth piece of your organisation and their perception of and attitude towards the company is an incredibly important aspect to manage during reputation formation. If employees are disgruntled, what impression does that give the public of the business practices within the organisation? Is that really a company that people want to interact with when we live in a free market with plenty other options and a democratic society that affords us the right to choose? No. And the first sign of disgruntled and uninterested employees is the level of customer service.
As we mentioned in the definition of employee relations, this could be relationships with anyone in the hierarchy of the organisation – employees and their managers, managers and other managers or just employees. So, with all these different dynamics, how is it possible to form healthy employee relations and maintain healthy employee relations?
Here are a few tips:
- In motivation theory, there is a theory regarding the equal distribution of rewards. This is known as the equity theory. An employee compares their input-output ratio to those they perceive to be equal to them. If an employee feels that one of their ‘equals’ is being rewarded unfairly, they will become unmotivated and there will be tension between these employees. It Is essential for management to understand who employees are comparing themselves with and ensure that there is no misunderstanding in the distribution of rewards.
- Create an environment that fosters healthy employee relations. This sort of environment would be one that employees feel comfortable to solve disputes and form relationships in. Perhaps you have a mediator that employees can deal with directly to solve issues or an anonymous help desk on how to deal with certain issues in the workplace. Having a little cafeteria or coffee shop on your premises where employees can meet and sit together is also a great way to foster relationships. Remember that these sorts of facilities in an organisation shouldn’t be exclusive because all employees want to feel like equals and not below management. If management had their own ‘executive cafeteria’ it wouldn’t create an environment for employees to form healthy relationships with those at higher levels of the organisation.
- Teambuilding! Yes, it is a little bit of a cliché and some employees can’t stand the thought of some teambuilding activities but if you manage to get this right you can create strong relationships between members of an organisation that enable them to work productively together toward achieving organisational goals
- Honesty and trust. When employees trust each other and the intentions of other employees (again, this isn’t only applicable to employees on the same hierarchical levels) then employee relations are strong. There is little hostility in organisations built on honesty and trust because employees never feel there is malicious intent in the actions or criticism of their fellow employees.
- Track employee relations and disputes to identify patterns and put measures in place to prevent future disputes and remove obstacles inhibiting healthy employee relations. Allow employees and managers to log disciplinary and grievance incidents which are work flowed between the relevant parties with suitable software such as SmartHR’s People Administration Module.
As an HR manager, what other ways do you ensure and maintain healthy employee relations within your organisation? If you’re an employee, how would you want employee relations to be handled?