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.