‘Human Resource’ is a very pivotal term which determines the success or failure of an organization. Human resource primarily focuses upon concepts related to organizational psychology. The term has come into existence from Economics and refers to labour which is one of four most important factors of production; the other three factors being land, capital and entrepreneurship. The prime endeavour of human resource is to minimize the financial risk involved and to maximize the return invested on capital. This paper will examine and analyse the pros and cons of unionization and the impact of the same on productivity in an organization. A comprehensive analysis of all the details pertaining to the same will be analyzed and a conclusion will be drawn in the end.
The British Economy has time and again faced a problem of having to deal with deficiency in the skills of its workforce. It would appear that British workers are far less qualified when compared with the other workers across the globe working in industrialized nations. The Government has been asked many a time to reform training in private as well as the public sector, and it has duly responded by reforming the private sector in order to maximize the return from the labour working for different companies in the UK.
The British Trade Union and its inception
The British Trade Union began a campaign in the late 1980s demanding prioritization of training for the adult workforce so as to ensure that the economy of Britain would grow and the workforce similarly prosper.
“This issue gives the people something to think about, especially those people who firmly believe that the lack of proper training is one of the most decisive factor that has contributed to the unprecedented Britain’s industrial decline. A series of analysis prove that training becomes a failure because of a number of factors.” (Transferable Training and Market Failure, 1993)
Trade Unions that find it difficult to get involved in training often react by demanding that the wages for the labour should be increased and the possibility of conflict becomes highly likely. The ‘collective bargaining’ strategy for the 1990s was all about the perceived need for unions to prioritize training.
The Pros and Cons of Unionization on Productivity
An arguably positive aspect of trade unions is that workers tend to share a good bond, but it does not mean that an organization that does not have trade union does not share the same collectivism. Trade unions have played an integral role in the British political and industrial scene for more than a century. The Labour Party was established by trade unions to fight for equality and justice for workers, most of whom were exploited terribly throughout the 19th century. The trade union members’ role brought them in direct conflict with management who thought that they were a big threat to the presiding hegemony. The British media, then as now, has tended to view the activities of the trade unions as a threat – perhaps unsurprising as most newspapers – and now, TV channels – are owned by extremely rich and powerful who have a vested interest in denying workers enhanced rights which may well reduce profits. This has contributed to many a tense situation in the past, and although recent years, in Britain at least, have been relatively free of strike action and industrial strife (especially since Thatcher’s ‘victory’ over the miners in 1984/85), this is probably more due to anti-union legislation (e.g. a ban on secondary action and flying pickets) and especially to the fact that a much smaller proportion of the workforce is in heavy industry (mining, steel, shipbuilding etc), than to any sudden outbreak of harmony in management/worker relations.
The main aim of forming a trade union is to ensure better terms and conditions of employment for the workforce, but in doing so unions often seemed to forget the interest of the organization whose profits paid their wages, placing their own interests first, often in a very politically-inspired way, and this, as well as the classbound ‘them and us’ nature of management intransigence, facilitated many a tense situation during the 20th century, and directly affected the productivity of the organization – thereby allowing industries in those nations with more harmonious industrial relations, such as Germany, to prosper while Britain’s declined. Trade unions aspire to ensure that the workers are provided with good, safe working conditions, and they also take care of the funeral expenses of poorer workers, so in this regard forming a trade union is very beneficial for the organization as well as for the workers, as arguably a safer, more secure and motivated workforce will increase productivity.
Industrial action refers to strikes, resistance to lockouts etc and this is carried out by the members of a trade union in order to pursue a common goal, which can be anything from higher wages, better conditions, to other demands. Industrial action is necessarily designed to hamper productivity of an organization so that management will agree to these demands, or at least negotiate. Essentially, it is a form of blackmail, although as workers are not paid during strikes, they are making financial sacrifices as part of that – and of course, management also indulges in ‘veiled threats’ (to paraphrase ‘accept these new working practices or you’re fired’). Of course, all industrial action leads to a loss for both the workers as well as for the whole organization; a classic example of this is the 1970s strikes in the UK which lead to a lot of lost days with regard to productivity, thereby harming British industry and created high inflation and an uncompetitive economy (although this was partly due to a transition from an industrial to a service economy, and may well have had many economic roots in the effects of the previous decades and even the War). The following table shows interesting statistics and the clear impact of trade union on productivity.
|Industrial disputes in the UK, 1965-98|
|Year||No. of strikes||Workers involved (000)||Days lost (000)|
(Labour Market Trends 1999)
The above statistics give a good estimate of lost days because of various strikes that have taken place in the UK. Organizations suffer immensely due to the strikes – though arguably the class-bound management structures and hierarchies, and not the unions, are the main and real cause of them, or at least were in the 1970s. Productivity and profits fall, and, in turn, the organization ends up incurring losses which puts the organization itself in serious trouble. Rival companies capitalize this industrial weakness and prosper at the expense of nation’s whose industrial relations are fractured and fraught: this is exactly what happened in the 1970s where Britain’s industry declined, and Germany’s prospered, because despite a strong German trade union presence, relations with management were generally good, and not riddled with the cancer class identities that so sickened the broken body of British industry for so long, and which maybe still does. Hence repeated strikes take an inevitable toll on the overall efficiency of the organization, which may even collapse and need government assistance (e.g. British Leyland in the 1970s), leading to a vicious circle of deterioration of both industry and national economic strength.
It is quite clear that unionization and industrial relations directly affect productivity. The labour force, in order to satisfy its needs, tries to force various organizations to accept their demands, and if an organization declines to do so, the union members may go on a strike and this adversely affects productivity. However, a great many industrial problems could arguably be considered the fault of bad management too: many countries with traditionally strong unions, such as Germany, did not suffer the same industrial strife as Britain in the past and strong management-union relationships have often been cited as a reason for this workplace harmony. It seems a ‘schizophrenic’, class-bound, ‘them and us’ status quo is Britain which has been the real cause of so much industrial strife in the past. Statistics presented in this paper give a good account of the lost days in the UK due to various strikes, and it can be seen how, in general, few days are now lost to strike action – unlike in countries such as France, Italy etc where strikes are an everyday part of life now in their less streamlined and more regulated economies. Hence, on the basis of the statistics presented in this paper it can concluded that Trade Unions in the workplace can have a negative impact on productivity, but may also be beneficial for the welfare of the workforce. Perhaps responsible trade unions working in partnership with responsible management would be the ideal situation in order to avoid any ‘them and us’ situation developing and would be beneficial for everyone. It remains to be seen whether, in these ‘credit crunch’ days of recession and growing unemployment, Britain remains as relatively free of industrial strife as it has been for the last two decades.
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