The number of employees covered by collective agreements fell from nearly three quarters in the mid-1970s to under half by 1994. This is evidence that Britain has definitely decreased the amount of collective forms of industrial action. Even where collective bargaining still exists four out of every five employees are covered by single employer agreements, as opposed to collective agreements, which undermines the collective agreements further. (Metcalf, 1994) Sisson provides factual evidence of this change towards collectivism from individualism. “Nearly half (45%) of all establishments had some form of individual pay in 1990”.
Also “34% [of all establishments] had some form of merit pay, i. e. pay that is dependent on the subjective judgment of a supervisor or manager rather than on a relatively objective measure of output. ” (Sisson, 1993) Employees seem to want opportunity to influence, negotiate their own terms and conditions of employment. In conclusion, “There is new recognition of the role and importance of the individual employee. Traditional patterns of industrial relations, based on collective bargaining and collective agreements, seem increasingly inappropriate and are in decline” (1992 White Paper, People, Jobs and Opportunities)
Product market competition and higher unemployment peaks are among the ways that the industrial relations environment has become harsher. Legislation has promoted individual responsibility, voice, exit from collective agreements and loyalty to the company, resulting in an undermining of collectivism. (Metcalf, 1994) These harsher conditions make it more necessary for managers to reap the advantages of good employment relations. As a result of these changes, by the 1980s the rise of individualism and the rule of the market was evident.
The transformation is not perfect, because the action of government resulted in high unemployment (more than 3 million people became unemployed when the government policy was implemented). To what extent have these changes been simultaneous with a move towards Human Resource Management (HRM)? Is this HRM superior to collective forms of industrial action in relation to tolerance, rationality and being well-informed? HRM in a broad sense is seen as incorporating all the activities of management in respect of managing employees.
(Dyer, 1985) It is the use of Human Resources to create competitive advantage. It involves managing culture, integrating action on selection, communication, training, reward and development of employees and also restructuring and job redesign to allow devolved responsibility and empowerment. (Storey, 2001) “Few would quarrel with the view that HRM has been the industrial relations issue of the 1980s and early 1990s” (Sisson, 1993) There is no consensus to the definition of HRM, however Sisson identifies three comment elements that have appeared in discussions about HRM.
These are a) the balance between ‘individualism’ and ‘collectivism’ in management’s approach, b) the attention paid to participation and involvement and c) management’s organisation. Sisson’s evidence is based on WIRS3 (The 3rd Workplace Industrial Relations Survey, 1990) data. All three elements were evident in the above analysis of the change in industrial relations. Does this mean that industrial relations has moved towards a more enlightened form of Human Resource Management?
To be enlightened, HRM needs to be well-informed, tolerant and guided by rational thought. To be more enlightened than the collective forms of industrial relations, HRM needs to be superior to industrial relations in these aspects. Sisson, 1993 indicates that logically people expect, ceteris paribus, union-free workplaces are more likely to show evidence of HRM than union workplaces. However the WIRS3 shockingly showed the opposite result. Non-union workplaces dealt with grievances, safety issues, employment security, and communication with employees badly.
There has been a decline in the number of Union workplaces and an increase in the number of non-union workplaces, which does not favour the argument of a move towards HRM. An explanation of this is supplied by Sisson, 1993, “Freed from the pressure of unions, managements in the small and medium-sized workplaces especially are more likely to follow the ‘traditional’ approach of a Grunwick than the HRM of an IBM or Marks & Spencer – a view which seems to be confirmed by the recent Citizens’ Advice Bureau (1993) report on an increase in unfair dismissals.
This suggests that HRM is not an enlightenment of collective bargaining. The British Environment hinders the implementation of HRM. There is no legal regulation to ensure that managements adopt basic standards of employment relationships. In other EU countries Labour Codes exist to serve this purpose. Also the UK has an increasingly decentralised structure of collective bargaining.
A third reason is that British managers have incentives to act towards short-termism – due to strategies that put emphasis on ‘numbers-driven’ rather than ‘issue-driven’ planning, lack of managerial education and the domination of the finance function. (Sisson, 1993) There is evidence to suggest that rather than a move from collectivism to individualism, there is a ‘dualism’ where collective bargaining and HRM-type practices run simultaneously. (Storey, 1992) “There may even be the hope that trade unions will ‘wither on the vine’ if they continue to emphasise ‘individualism’ at the expense of ‘collectivism’. (Sisson, 1993).