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Partnership Under Pressure: How Does it Survive?

Reilly P
Report 383, Institute for Employment Studies, January 2002

a study supported by the IES Research Networks

Partnership is very much in vogue at the moment. It seems to be the only way to conduct employee relations. Yet it is not that common. The TUC reckons that there are only around 60 bona fide partnership arrangements in existence. This is despite the support of the government and the TUC’s own efforts at promoting the idea. This study, funded by the IES Research Club, aimed to look at whether partnership is a difficult concept to sustain, given the pressures of organisational and economic change.

What is partnership?

As with many ideas that become popular, partnership is not very well defined. It is characterised by a number of common features:

• mutuality. This means that both sides recognise that there are areas of commonality, of shared interest.

• plurality. This recognises that there are areas of difference as well as areas of common interest.

• trust and respect in the intentions of the other side and respect for legitimate difference in interests.

• agreement without coercion. There should be the intention to solve problems through consensus, recognising business and employee needs.

• involvement and voice. This means providing opportunities for employees to shape their work environment and have their opinions heard.

• individualistic and collectivist dimensions through direct and indirect (ie representative) forms of employee involvement.

Partnership is a way of working, but it is also a means to deal with practical issues, against the background of a changing business environment. A whole range of topics can be covered, from terms and conditions to resourcing. Many partnership deals have specifically balanced the employees’ need for job security with the management’s aim of maximising flexibility.

Most partnerships have developed as a response to an economic or corporate crisis - hence the need to get better productivity or reduced costs. Some have come from frustration with the ritualism of traditional employee relations. Some organisations have initiated partnership deals in more positive circumstances - the belief that it might bring higher productivity, greater employee engagement and an enhanced employer brand.

Sources of stress

Partnership can come under pressure from a variety of sources:

• changes in corporate ownership and management - from mergers, acquisitions, joint ventures, etc.

• internal restructuring - downsizing, outsourcing, change programmes, etc.

• loss of key personalities, both management and union

• misunderstanding what partnership is all about, disagreements over the rules of the game

• lack of trust, loss of support, increased equivocation over the benefits of partnership

• imbalance in skills or knowledge, making for a one-sided debate between the parties

• rows over normal business (pay and conditions, flexibility, safety, etc.) that are not resolved and infect relationships across the board.

The source of some of these problems is on the management side, eg through making unilateral decisions on key issues without consultation, or senior management doubting the value of partnership. They can come from trade unions - support may exist from full-time officials but not be backed by shop stewards, or vice versa. Employees may reject the partnership notion, seeing their representatives as management ‘poodles’ unable to look after their interests properly.

Impact of partnership problems

If employee relations start to deteriorate, then there are likely to be direct effects on the business:

• productivity rates to fall

• quality standards to drop

• absenteeism to rise

• resignation rates to grow

• employee/management disputes to increase.

These problems may be greater in partnership organisations precisely because of high expectations of quality work relationships. Many difficulties may arise over time, as trust begins to disappear and fear grows over what the future will bring. The whole partnership edifice begins to crumble. The bricks, made up as they are of personal relationships and supported by intangible trust and understanding, begin to fall. Processes are neglected, old style behaviours return. This then leads to a deteriorating employee relations climate, poor organisational health and the practical manifestations of having a disenchanted workforce.

How best to respond?

Institutionalising partnership arrangements seems to be the key method to develop a robust employee relations strategy that will survive the turbulence of organisational life. It is the method by which you can ride out changes to the principal players and preserve your approach through changes of ownership. This can be done by embedding partnership in the culture of the organisation, in its structures, systems and processes. Reinforcing your consultative and communication arrangements is required. This can be supported by training managers and employee representatives so that they understand how partnership should operate. You can encourage appropriate management skills through recruitment and selection for promotion. You should be aiming to develop a management style that seeks employee involvement and finds ways of engaging the workforce. Practical problems that cause irritation between the parties, over reward, resourcing, working conditions and the like, should be tackled to negate these as sources of conflict. Finally, you should monitor your organisational health to give yourself early warning of upcoming difficulties.

Future of partnership

This is a sophisticated form of employee relations. For employees and their representatives, they can be well informed, consulted, and have a voice - but in the end management decides. Difficulties exist on the management side too. Senior management might be committed to partnership, because they like the theory, but their line managers might not be enthusiastic. HR might be keen, but cannot persuade operational managers to change their style. There may be a charismatic flag-bearer of partnership, but partnership is vulnerable if such an individual moves on.

However, what is the alternative? Is it to move to adversarial industrial relations? How realistic is this in the global economy? Or, there could be the return to ‘constructive antagonism,’ where there will be areas of conflict and collaboration. This is the traditional approach to UK labour relations, but how well has it served either management or trade unions?

Prerequisites for success

Using research evidence, what are the necessary conditions that will make employee relations work well using a partnership approach?

• Top-level commitment. If senior management (and the board) does not support partnership, it will not survive the next crisis.

• Risk-taking by both managers and representative groups. Organisations have to trust employee representatives with sensitive information, and representatives recognise that this may constrain their ability to oppose change.

• Acceptance of multi-channel representation. Trade unions may have to accept sitting down with non-union representatives or members of other union groups if they are to have access to business information or the right to be consulted.

• Dealing with recalcitrance among ‘old school’ middle managers and union representatives.

• A move away from confrontation. The aim is for win/win solutions by seeking end results that satisfy both parties, rather than win/lose from an adversarial approach.

• Acceptance of the validity of each other’s goals. Employees have to accept business priorities and pressures. Managers have to accept that staff involvement, participation, motivation and skill development are central to meeting business objectives.

• Marketing the benefits of partnership. Employees may need convincing or reminding of the advantages of their employee relations structures.

• Recording the partnership approach in the way that best suits the organisation. This is either in a written procedural agreement or through a statement of principles. Alternatively, leave it to be a matter of trust between the parties.

• Integrating employee relations with other people practices. Partnership through representational structures ought to be combined with some form of share ownership or profit sharing, direct employee involvement in job design and/or self-managed teamworking, effective communication, and investment in training and development.

• Recognising the individual. Managers and representatives have to understand and respect the differing needs of staff.

• Investment of time and energy. To make partnership work, managers and employee representatives have to recognise that time has to be spent in nurturing the idea.

Partnership Under Pressure: How Does it Survive?, Reilly P. Report 383, Institute for Employment Studies, 2002.
ISBN: 978-1-85184-312-1. PDF Download only: £8.00

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