The Three Major Dimensions Of Bargening In The Employee Relationship

1231 words - 5 pages

In the theory and practice of industrial relations it is pertinent to note that it arises from employment relations. Hence it highlights the dual nature of industrial relations and the constant actions by the two sides attempt to control power in the relationship. Therefore, what is central to industrial relations is the employment relationship between an employer and employee as it gives raise to the bargaining agenda in the pursuit of power. As a result of common practice of bargaining in the employment relationship some three major dimensions can be identified. These are: economic, legal and social; this paper will thus seek to show how the three interact and posit that the economic dimension is most crucial in industrial relations.
Economic dimension
Employment relationships at its basic level revolves around economics, this is highlighted by the neoclassical economics which provides a theoretical approach on how employment relations take a form of economic transactions the world over. This is because individual laborers and firms are keen on maximizing utility and profits respectively from scarce resources based on market determined prices which are beyond their control. For example the employees are often seeking work using their individual skills at a price offered by the firms. After which, they can enjoy utility of that wage through consumption; whereas, the capitalists or firms seek to maximize their profits by producing goods and services from the employees which is covered by wages. In this arena of globalization, the case of competition is prevalent in the market environment and therefore firms seek to maximize outputs at a lower wage rate leading to pressure on the employment relationship (Dibben & Williams, 2012).This illustration therefore justifies the notion that the economic dimension is most important in employee relations.
There are two economic dimensions: these are on a broader level dealing with the economic structure of society and the labour market dimension. The understanding of these perspectives is important in learning its importance to industrial relations. As per economic structure of the society, there is a tendency towards a capitalist mode of production as the firms pursue profits at all costs and at times leads to infringement of the rights of the employees. The global phenomena on employment practice; cost cutting is a good example to illustrate this point. As a result of globalization many firms in the developed world are fond of cutting down on production costs by outsourcing non-core services to emerging economies like India where they access cheap labour. This has an indirect relation to employee relations as it leads to job cuts in the parent country and loss of income to spend.
Still on the economic structure of the society the salient feature of power is demonstrated by the employer as it used to be in the feudal systems. In the present economic society the employer or firms wield immense...

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