EMPLOYEE RELATIONSHIP AND ITS EFFECT ON ORGANIZATIONAL PERFORMANCE

Abstract

This study was on Employee Relationship and Its Effect on Organizational Performance. Three objectives were raised which included; To identify various employee relations practices, and its effect on the productivity of an organization, to identify the challenges faced by employees at work places and to identify ways of enhancing healthy relationship between employees and employers in an organization. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from South Akim Rural Bank at the New Juaben Municipal Assembly in the Eastern Region of Ghana. Hypothesis was tested using Chi-Square statistical tool (SPSS).

Chapter one

Introduction

1.1Background of the study

Maintaining healthy employee relations in an organization is a pre-requisite for organizational success. Strong employee relations are required for high productivity and human satisfaction. Employee relations generally deal with avoiding and resolving issues concerning individuals which might arise out of or influence the work scenario. Strong employee relation depends upon healthy and safe work environment, cent percent involvement and commitment of all employees, incentives for employee motivation, and effective communication system in the organization. Healthy employee relations lead to more efficient, motivated and productive employees which further lead to increase in production level. Over 40 percent of the companies listed in the top 100 of Fortune magazine’s “America’s Best Companies to Work For” also appear on the Fortune 500. While it is possible that employees enjoy working at these organizations because they are successful, the Watson Wyatt Worldwide Human Capital Index study suggests that effective human resources practices lead to positive financial outcomes more often than positive financial outcomes lead to good practices.

1.1 BACKGROUND OF THE STUDY AND ORGANIZATIONAL PROFILE

Employee relations had its roots in the industrial revolution which created the modern employment relationship by spawning free labour markets and large-scale industrial organizations with thousands of wage workers. As society wrestled with these massive economic and social changes, labour problems arose. Low wages, long working hours, monotonous and dangerous work, and abusive supervisory practices led to high employee turnover, violent strikes, and the threat of social instability. Intellectually, industrial relations was formed at the end of the 19th century as a middle ground between classical economics and Marxism, with Sidney Webb and Beatrice Webb’s Industrial Democracy being the key intellectual work. Industrial relations thus rejected the classical econ. Institutionally, employee relation was founded by John R. Commons when he created the first academic industrial relations program at the University of Wisconsin in 1920. Early financial support for the field came from John D. Rockefeller, Jr. who supported progressive labour-management relations in the aftermath of the bloody strike at a Rockefeller-owned coal mine in Colorado. In Britain, another progressive industrialist, Montague Burton, endowed chairs in industrial relations at Leeds, Cardiff and Cambridge in 1930, and the discipline was formalized in the 1950s with the formation of the Oxford School by Allan Flanders and Hugh Clegg. Industrial relations were formed with a strong problem-solving orientation that rejected both the classical economists’ laissez faire solutions to labour problems and the Marxist solution of class revolution. It is this approach that underlies the New Deal legislation in the United States, such as the National Labour Relations Act and the Fair Labour Standards Act.

1.1.2 PROFILE OF THE ORGANIZATION

For the purpose of this study, the South Akim Rural Bank has been selected as a case study to illustrate the effects of employee relations on the productivity of a firm. South Akim Rural Bank has its Head Office situated on the main Suhum – Koforidua road opposite the post office, Nankese. The South Akim Rural Bank Limited was commissioned and started banking business in 1984 at Nankese in the Suhum/Kraboa/Coaltar District.

The bank is still rated first in the Eastern Region in terms of deposits and among the first ten rural and community banks in the country as a whole in terms of deposits and assets.

1.2 STATEMENT OF THE PROBLEM

In recent times, while most workers are on job, they do not produce more simply because of the un-healthy relationship they have with their fellow colleagues and employers. A recent study conducted by Blyton (2008) revealed that employees do not put up their best performances at workplaces when they are un-happy with management, government, or even their fellow colleagues. Bad employee-employer relationship results in strike actions and lockouts. All these actions taken by employees to display their grievances only do the organization harm than good as productivity will be reduced drastically.

By many accounts, employee relations today are in crisis. In academia, its traditional positions are threatened on one side by the dominance of mainstream economics and organizational behaviour, and on the other by postmodernism. In policy-making circles, the industrial relations emphasis on institutional intervention is trumped by a neo-liberal emphasis on the laissez faire promotion of free markets.

1.3 RESEARCH OBJECTIVES

The objectives for this study are:

1. To identify various employee relations practices, and its effect on the productivity of an organization.
2. To identify the challenges faced by employees at work places.
3. To identify ways of enhancing healthy relationship between employees and employers in an organization.

1.4 RESEARCH HYPOTHESES

The study formulated the following research hypotheses

H0: there are no various employee relations practices, and its effect on the productivity of an organization

H1: there are various employee relations practices, and its effect on the productivity of an organization

H0: there are no challenges faced by employees at work places

H2: there are challenges faced by employees at work places

1.5 SIGNIFICANCE OF THE STUDY

This study seeks to bring out the various employee relations practices which South Akim Rural Bank has undertaken to increase its productivity and contribute its quota in the economic development of the communities which it operates, and the country at large. This study will therefore help enlighten management of various organizations of the various effects of relationship practices between employers and employees in an organization. The study will also bring out specifically, the employee relations practices which the bank has been able to make available to its employees. It also seeks to bring out the level of encouragement and motivation the bank has given to its employees to work effectively, among others. The importance of this study is therefore to highlight the various employee relations practices and how it affects the productivity of an organization. This study will go a long way to illustrate how organizations should treat employees’ in-order to increase productivity.

1.6 SCOPE OF THE STUDY

The scope of the research will be limited to South Akim Rural Bank at the New Juaben Municipal Assembly in the Eastern Region of Ghana. The research will rely on the bank for vital information as well as information from secondary source. The research will take duration of four months to complete.

1.7 LIMITATION OF THE STUDY

The researcher encountered a limitation in regards to availability of information. Thus due to the institutions working ethics, the researcher could not get access to vital information since it was treated as confidential and the targeted respondent’s number was not attained since some employees were on leave. Inadequate funds and availability of time also became a limitation.

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