Friday, April 22, 2016

Everything you need to know about the employment relationship in one tweet

At the end of March, #ModernCollectiveNouns was a trending hashtag on Twitter. Here are some examples I saw:

A clutch of car mechanics.
A fraud of bankers.
A Kardashian of crap.
An avalanche of skiers.

My (ultra-academic) contribution to this was the following:

A market of economists. A unity of HR people. A plurality of industrial relationists. An alienation of Marxists.











My tweet probably didn't make much sense to most people, but students and other scholars should recognize this as capturing what I assert are the four key frames of references (or ideologies) on the employment relationship. I repeatedly return to these four frames of reference in my teaching and writing because they provide essential insights by revealing the roots of different views on labor unions, HR practices, and the like.

The first model of the employment relationship is derived from mainstream (neoclassical) economic thought and rests on a view of rational agents pursuing their individual self-interest in economic markets (because of the importance of self-interest, I label this the “egoist” model). Labor is viewed as a commodity, and only differs from other commodities in its tendency to avoid exerting full work effort (“shirking”). As labor markets are generally seen as perfectly competitive, they are embraced as the primary driver of the employment relationship. Under these assumptions, the egoist employment relationship is characterized by employees and organizations engaging in voluntary, mutually-beneficial economic transactions to buy and sell units of labor based on what the labor market will allow (and therefore outcomes are seen as fair), and abuses are prevented by labor market competition. HR practices largely implement what the market dictates, and unions interfere with the ideal operation of competitive markets.

In contrast, the unitarist model of the employment relationship views employees as psychological rather than economic actors. This model is most closely associated with scholarship in industrial/organizational psychology, organizational behavior, and human resource management such that the egoist model’s material economic interests are de-emphasized in favor of psychological interests such as satisfaction and esteem. Moreover, economic markets are seen as imperfectly competitive so profit-maximizing employers can choose their strategies for pursuing their organizational goals. And in the unitarist employment relationship, the optimal organizational strategies are those that align the interests of organizations and employees because a key assumption is that organizations and employees share a unity of all of their interests; thus, the label “unitarist” employment relationship. For example, jobs that are designed to be fulfilling will be rewarding to the employees, and the private or public sector organization will also benefit because these employees will be productive. High-road or high-commitment human resource management strategies are therefore key, unions are seen as unnecessary and as adding unproductive conflict.

An alternative perspective, the pluralist model, rejects the egoist model’s view of labor as a commodity traded in perfectly-competitive markets; rather, employees are viewed as human beings entitled to key standards and rights consistent with human dignity and citizenship. The pluralist model also rejects the unitarist view of largely shared organization-employee interests; rather, organizations and employees are seen as having a mixture of common and conflicting interests. That is, the pluralist employment relationship rests on a belief of a plurality of legitimate but sometimes-conflicting interests in the employment relationship. The classic example of conflicting interests is higher wages versus higher profits. These assumptions mean that institutional interventions are needed to better balance the bargaining power inequalities generated by imperfect labor markets, and to protect workers when organizations prioritize their own interests. Hence the important of industrial relations institutions such as labor unions and labor legislation to supplement high-road HR strategies.

The fourth and final alternative model of the employment relationship reflects radical, heterodox, and feminist scholarship in sociology, economics, and industrial relations is therefore labeled the critical employment relationship. Like the unitarist and pluralist models, this model sees labor as more than a commodity and also sees labor markets as imperfectly competitive. But where the critical perspective differs is in its emphasis on sharp conflicts of interests and unequal power dynamics between competing groups. Marxist and related perspectives focus on unequal power relations between workers and organizations, feminist perspectives focus on unequal power relations between men and women, and critical race perspectives focus on segregation and control along racial lines. In all of these critical perspectives, the employment relationship is seen as one piece of a larger socio-politico-economic system throughout which elites are able to perpetuate or reproduce their dominance, albeit with some accommodation of the interests of the weaker party in order to foster compliance and consent.

Returning to the #ModernCollectiveNouns hashtag, a friend of mine responded with "a propaganda of HR managers." Provocative! But for those who understand the competing frames of reference, this reflects an important critique from a pluralist or critical frame.

OK, maybe this isn't all that you need to know about the employment relationship, but it's an essential foundation. And maybe my #ModernCollectiveNouns tweet will help you remember this foundation.

If you want to see more applications of this framework, take a look at some of my earlier blog postings, such as:
Or for a more academic treatment, see my book chapter titled "The Employment Relationship" with Devasheesh Bhave from the Sage Handbook of Human Resource Management

184 comments:

  1. Thank you for the post and sharing the chapter. Very helpful.

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  2. Very Very Informative and Interesting, covering all the aspects of the relevant subjects which may be used any time by the aspiring candidates.

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  3. Provides great insight

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  4. What a great way to interpret the different dimensions of employment relationships, from the perceived employer / organizations unification to the Marxist, feminist and socio-politico-economic view. Very interesting and eye opening.

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  5. The four ideologies are explained in a very engaging and realistic way. One argument builds on the previous one quite fittingly.

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  6. Quite some deep explanations into employment relationship perspectives. You made it very easy to understand. The write up states out each point clearly. Thank you for this educational piece.

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  7. This comment has been removed by a blog administrator.

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  8. Thanks Professor for helping understand the different school of thoughts in the employment relationship.

    Regina Ujomu

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  9. You make so many great points here that I read your article a couple of times. Your views are in accordance with my own for the most part. This is great content for your readers.

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  10. I read the article twice, I really enjoyed it. Your statement of "Marxist and related perspectives focus on unequal power relations between workers and organizations, feminist perspectives focus on unequal power relations between men and women, and critical race perspectives focus on segregation and control along racial lines." Strong and moving words.

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  11. Very helpful in gaining knowledge

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  12. Very helpful in gaining knowledge

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  13. Awesome article, very insightful

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  14. it is best that worker and employer are trying to work together and accommodate each other

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  15. This is quite enlightening. Big kudos to Prof

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  16. Clearly explained. Very helpful!

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  17. This piece help to clarify the different view of employer and employee labor relationship. There are many factors and issues to think about and this illustrates the pros and cons of each view. Good reading

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  18. Good consideration and excellent explanation

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  19. Great article. You really took the time to explain the different schools of thought. This is extremely helpful in HR. An good HR manager will understand the important relationship between the organization and the employee and work to keep a very healthy balance so that everyone wins.

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  20. Interesting. Such a great work!

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  21. I read a several times, he greatly convinced me this article

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  22. Very impressed by this article. Great job on writing it.

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  23. very informative and valuable

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  24. Quite educating. As pluralists and unionists sees employees differently.

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  25. Very helpful in gaining knowledge, thanks

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  26. it's good to know this point of view.

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  27. This article helps to clarify some of the distinctions between the various models. Thank you!

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  28. Thank you. Helpful explanations.

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  29. First explanation is depend on next very helpful

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  30. It's really worth good reads.

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  31. Great content. I read it a few times. This will be very helpful to everyone.

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  32. The authors view essentially captures what some Organisations have turned HR into " A Specialisation of HR fraudstars" This is because this rouge organisations monopolise the specialist knowledge of their HR practitioners to implement policies and procedures in the work place to favour their exploitative intents at the detrement of their staff welfare

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    1. Exactly! HR managers are supposed to be the middle men/mediators between employers and employees. Fighting for the interests of both parties. Not trying to favour one party over the order to

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  33. Detailed explanations... Very helpful to understand the models

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  34. very insightful,it give various economic model's on how to deal with employers and employees employment relationship in an organization.

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  35. Very clear and educative. Thank you very much.

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  36. Fundamental but deep and useful.

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  37. This helps an HRM to know more regarding labor relations. The interest of both organizations and employees

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  38. This comment has been removed by a blog administrator.

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  39. good information but too complicated and could have still made simpler with more simple language than a high level language

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  40. Hello, Prof. John, this writeup again is insightful. I can now appreciate the various views of employment relations and of them all, I think I love the pluralist view as I think it has wider application (my opinion though). However, you did not advice on which employment relation is best or should be considered highly used by HRMs. Do we also use our discretion when applying any of these views? Thank you Sir.

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  41. Quite some deep explanations into employment relationship perspectives. You made it very easy to understand. The write up states out each point clearly. Thank you for this educational piece.

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  42. a brief discussion about relationships among commodities .... excellent writing

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  43. Thank you sir in helping us understand the dynamics of labour as commodity better...

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  44. The power should be equal when it comes to worker and employers of when it comes to men & women. The article was very useful as it highlights the different schools thoughts. Thank you professor

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  45. clearly explained great thanks

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  46. Great summary, Very useful indeed.- Thank you!

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  47. very good tweet. informative as well as funds of knowledge. Thank you sir for this...

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  48. Greatly written sir. I really do appreciate the new terming of the rests frames as Egoist. It's truly represents the explanation provided.

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  49. Very good tweet and the information are understandable

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  50. great insight and well explained

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  51. Thanks for sharing this wonderful article its means a lot to us

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  52. This helps me to get more knowledge. Well explained and greatly written thankyou sir.

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  53. Thank you for sharing this article in a perfect way

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  54. Thanks for sharing the article. It's very informative.

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  55. Thank you for sharing, It's really thoughtful.

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  56. Thanks a bunch for sharing this with us... It's really helpful...

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  57. Thanks for simplifying and making a perfect summary

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  58. Simply a great article detailing and explaining each information

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  59. Very Informative and Interesting, covering all the aspects of the relevant subjects which may be used any time by the aspiring candidates.

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  60. I have got to know many new terms and it's very useful.

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  61. Really insights the differences and some of similarities that adding for the good improvements of the institutions.

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  62. Perfect summary also interesting

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  63. very insightful and informative thanks this

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  64. It's very important for both parties (employers and employees) to work together for better productivity and understand each other's goals and intentions

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  65. great article thank you for your knowledge sharing

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  66. This was a nice article thank you for sharing...

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  67. Great! very interesting piece and very useful as of now.

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  68. very informative and interseting

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  69. Nice splitting and systematic scrutiny in every direction, thank you Professor

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  70. This article provides great insight! Interesting read, Professor Budd.

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  71. Thank you sir for highlighting the fundamental four models in such simple and thought provoking way

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  72. Very helpful in gaining Knowledge

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  73. Informative and excellent article

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  74. Very useful written. It's great.

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  75. Clever word usage - #ModernCollectiveNouns very clever!

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  76. Prof. Budd, this a great work.
    Very educative.

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  77. You did justice to these 4 Models Prof. Well done.

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  78. I am still confused about how feminism sociologi has to be related with the relation between employeers and organizations

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    1. Feminist thought helps us think about gender-based inequalities in the employment relationship (and in other aspects of life, too).

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  79. Nice one. thanks for sharing this post.

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  80. Fantastic. Should I say feminism appear here because women are usually much in an organisation or it's included to help understand the point of divergent?
    In any case, you've concisely done justice to the article.

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  81. This is quiet interesting, thanks for this piece of writing.

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  82. Good to learn from the article.

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  83. Very fine article! ... Understanding these frames of reference is essential for gaining insights into labor unions, HR practices, and related topics.

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