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Every organization aims to hire best human resource with the objective to increase its resourcefulness for attainment of its organizational objectives. Recruitment of best resources is not enough. The organization also has to ensure that these resources are motivated and trained to the highest degree. The connection of the employee with the management and ownership of the organization is highly important. Employee Relations, therefore, assumes key importance in forming resourcefulness of the organization, as well as, the ability to use these human resources in the best possible manner.

Traditionally, line managers were considered to be the only contact point of the employee with the organization.  Line managers used to perform administrative functions of employee management like handling employee benefits, determining career path and training needs, etc. With the passage of time, top management of organizations began to lay down policies and procedures to serve as guidelines for line managers. Organizations have sought to reduce turnover of skilled resources and to increase satisfaction of employees with their job by introducing reward structure, bonuses and other perks. Shortly, organizations began to realize that dealing with people is one of the most important aspects of organization; hence, a separate Human Resources function began to take shape within prevailing organizational structures.

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Human Resource Management, subsequently, became a separate department within organizations and Employee Relations became an integral component of the function. Several organizations even have in place specialist Employee Relations specialists, while others use human resource generalists to handle all aspects of human resources.

Relations of organization with its employees is dependent on a wide range of factors. The primary determinant of employee-organization relationship is the degree of trust in the relationship (Cardy and Miller, 2007). If employees have a high level of trust on their employer that commitments will be fulfilled, and their efforts will be rightly rewarded, then they are likely to expend greater efforts in their jobs. Employee Relations involve work concerned with maintaining cordial employee-employer relationships. A healthy relationship leads to satisfactory productivity, motivation and morale among employees (Mudor and Phadett, 2011).  Fundamentally, Employee Relations is related with averting problems from arising between employees and organizations. In case, an avoidable problem has occurred, Employee Relations creates solutions to individual solutions to create win-win outcomes.
Employee Relations in human resource management also advices line managers on dealing with problems with subordinates. If poor performances are exhibited by an employee, then Employee Relations attempts to find possible solutions to the problem. Maintenance of progressive discipline requires regulatory measures to create disciplinary actions in resolving employee grievances (Mudor and Phadett, 2011). Employee misconduct is also addressed in accordance with the guidelines outlined by Employee Relations. The key is to treat employees as partners in mutual relationship and foster a situation in which both stakeholders are able to understand each other’s point of view (Mudor and Phadett, 2011). The paper establishes the link between HRM, Employee Relations and organizational performance. The role of Employee Relations in the theory and practice of Human Resource management is discussed, following which corporate sustainability is dealt with in the paper.


Human Resource of an organization is a determinant of organizational performance. Employee Relations is among the key component of HRM practices of an organization. There is a dichotomy between interests of the employees and interest of the organization. HR professionals give preference to ownership’s interest over employee interest. This gap between employee and employer’s interest can be overcome by investing in human intellectual development. Another factor which creates conflict of interest between the employer and the employee is a negative correlation between workload and family relationships. These challenged to Human Resource Management and Employee Relations can be overcome by considering human resource as a competitive advantage of the organization. It is in the interest of the company to invest in human resources to improve its competitive positioning in global terms. By engaging employees in decision making and a certain level of autonomy, the employees of the organization can be motivated and engaged with organizational goals.


The objective of human resource management is to make employees a part of strategic design of organization. Employees are a key resource for an organization which means that the quality of the operations of the organization is an outcome of the efficiency with which employees are managed and relations with employees are maintained. Buren and Greenwood (2011) emphasise the need to shift from employee focus to strategy focus. It is widely known that there is a conflict of interest between an employee’s objectives and objectives of organization’s ownership. The task of HRM is to bridge the gap between these two interests to bring them in-line with each other. The findings of a survey revealed that HR professionals frequently give preference to ownership’s interest over employee interest (Buren and Greenwood, 2011). HR professional defends this approach by stating that the key reason for the change is adoption of a strategic mindset.
However, several organizations have successfully discovered the ways to bridge the gap between employee, and employer’s dichotomy in interest by investing in human intellectual development (Cardy and Miller, 2007). The advantage of this approach is that employees get the feeling that their employer is genuinely contributing to their wellbeing by spending money on their skill development. This approach towards Employee Relations is termed as input orientation (Cardy and Miller, 2007). It is a fundamental law of business and any organizational process that the quality of output is directly dependent on the quality of input. The approach of providing training to employees and investing in their skill enhancement has been validated by several management theorists (Cardy and Miller, 2007). Employee relations are greatly benefited through this approach by creating a win-win situation.  Kasser (2006) speaks about creation of another conflict between work and family. The study explored the relationship between the amount of time spent at work and interference with family values. Work overload is found to have a a deteriorating impact on family relationship of employees (Kasser, 2006). Deleterious impact of work on family life is a major problem for managers because assigning more responsibilities on an employee is likely to create a disturbance at his/her home. This is yet another challenge for the discipline of Employee Relations.
Kramar, Bartram and De Cieri (2011) use the example of selected Australian companies to depict best practices in Employee Relations and Human Resource Management. Contemporary organizations in Australia have devices useful mechanisms to bring employee interests closer to the interests of the organization. These companies have made special emphasis on creating a work/family balance, employee learning and creation of cross-functional teams (Kramar, Bartram and De Cieri, 2011). The approach used by these Australisn organizations is to consider human resources and culture of organization as a competitive advantage. Once, human resources are considered as a competitive advantage of the organization then it is in the interest of the company to invest in human resources to improve its competitive positioning in global terms. While organizations in other parts of the world invest in technology, infrastructure and marketing; Australian businesses tend to invest in strengthening their HR systems through Employee Relations (Kramar, Bartram and De Cieri, 2011). While other competitive advantages can be duplicated, a dedicated team of employees cannot be duplicated by competitors. Positive relations with employees are, therefore, are a key advantage of a firm and assists the organization towards reaching its goals.
Mudor and Phadett (2011) have proposed that a harmonious resolution can be achieved between job satisfaction, low turnover and management practices. The fundamental idea is that happy employees are productive employees. Employee Relations is dependent on three major variables. These variables are supervision of employees, training imparted to employees and job satisfaction. Supervision of employees was termed by traditional management theorists as positively correlated with performance. However, increased supervision is detrimental to organization-employee trust because it depicts that the organization does not trust its staff. Mudor and Phadett (2011) suggests providing broad goals to employees and entrusting them with the responsibility to attain the goals through their own creativity and initiative. Employees who are managed with this approach are found to be much more intellectually engaged rather than being physically present only. Motivation level of such employees is also found to be significantly high. Organizational goals are attained while maintaining positive Employee Relations through these HRM practices. Turnover levels of engaged and motivated employees is far lesser than employees which are grossly supervised. Mudor and Phadett (2011), therefore, suggest a delegation where employees at operational levels are also entrusted to make certain decisions.


There are key Human Resource Management practices which can improve the employer-employee relationship and at the same time contribute toward benefits for the organization. By involving employees into the decision making process and giving them autonomy in fulfilling their job roles, the employees of the organization can be groomed as a key resource of the organization. Investment in skill development of human resource can bridge the gap between employer and employee conflict of interest. Also, considerations should be given by HR professionals in creating a work-life balance for the staff.
The inherent nature of employee and employer relationship contains a conflict of interest. Employer’s perspective is to get maximum amount of work done by the staff, while employees tend to discharge their duties in minimum amount of time. Human Resource function is also more inclined towards benefit of organization’s ownership and management, instead of employees. Such behavior intensifies the conflict of interest. If employees are given good compensation, then the output produced by them will also be of superior quality. It is now known that satisfied employees are much more productive than unsatisfied employees. The conflict of interest can be reduced through a number of approaches which link compensation of employees with the objectives of the organization. For instance, stock options and rewards on achieving key performance indicator link the benefit of organization with the benefits of employees. The quality of output is directly dependent on the quality of input.


Employee Relations can be greatly improved through adoption of appropriate HRM practices. Employee Relations is among the key component of HRM practices of an organization.  Employee and employer’s conflict of interest can be overcome by investing in human intellectual development. Human resource of an organization can be developed as a competitive advantage of the organization. Rather than treating employees as mere tools for achieving organizational goal, the emerging theme for Human Resource Management is to strenghten employer-employer relationship.  


  1. Employees should be involved in decision making and provided certain level of autonomy to foster favorable Employee Relations
  2. Organizations should invest in human resource development to create a win-win relationship with its staff
  3. HRM practices should be driven by the objective of creating work-life balance for employees rather than focusing on its own benefits only
  4. Human Resource should be developed as a competitive advantage by the organization to gain a favorable position in contemporary global economy


Buren, H. and Greenwood, M. (2011) 'Strategic human resource management and the decline of employeenext term focus', Human Resource Management Review, vol. 21, no. 3, pp. 209-219.
Cardy, R. and Miller, J. (2007) 'Employee next term equity: Toward a person-based approach to previous term HRM next term', Human Resource Management Review, vol. 17, no. 2, pp. 140-151.
Kasser, T. (2006) The Ethical Problems of a Materialistic Value Orientation for Businesses, Greenwich: Information Age Publishing.
Kramar, R., Bartram, T. and De Cieri, H. (2011) Human Resource Management in Australia- Strategy, People, Performance (4th ed.), Sydney: McGraw-Hill.
Mudor, H. and Phadett, T. (2011) 'Conceptual framework on the relationship between human resource management practices, job satisfaction, and turnover', Journal of Economics and Behavioral Studies, vol. 2, no. 2, pp. 41-49.

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