CHAPTER 2

Review of
Literature
Submitted in partial
fulfillment of Project work
for the Degree of Bachelor
of Business Administration
Submitted By
Ajay.T.R
S6 BBA

Submitted To
Sindhu Manoj Madam
BBA Department

K.M.M. College of Arts and Science

,Thrikkakara

Purpose of the Review

Interpersonal relationships at the work place are getting more diverse day by
day. The accelerated growth of diversity in the workforce over the past 20
years have developed new ways in managing employee relations, making it
one of the major challenges faced by the managers. To meet this challenge,
there is a need for the managers to improve their skills such as active listening,
adaptability and decision-making. These core skills can assist supervisors and
managers in tackling difficulties that may arise within their workforce.

One of the basic skills for a manager to practice and understand is

Interpersonal Communications or Enhanced Interpersonal Relationship, as it
is the foundation for all actions in a workplace and it provides him an
opportunity to build relationships with the overall workgroup without
alienating anyone in the work environment. Working with diverse groups of
people requires a tremendous amount of interaction. If these interactions are
positive, they can help in creating the right workplace climate, attitudes,
beliefs and behaviors. In addition, as interactions occur daily, it is important
for managers to have the respect of their employees. If this respect is absent,
the supervisor or manager will have a hard time getting things accomplished.
Good Interpersonal communication provides an employee with opportunities
to develop and extend his personal sphere of Interpersonal relations in his
work environment. This encourages professional satisfaction and the ability to
influence, negotiate and leverage valuable information as a method to enhance
ideas.
Managers who undertake responsibilities for a good interpersonal relationship
in their organization would normally pose with many critical questions to
themselves. Some of these might include the strategies, its impacts & various
issues arising while implementing the strategies etc. It is these questions and
their subsequent answers that improves the organizational effectiveness

through proactive solution. All these points are in favour of nurturing a good
interpersonal relationship and makes it an important field of study.

A Brief History
In the early 70s the relationship between employers and employees in work
place was more of a collective relationship which involves collective
bargaining where representatives of both employer and employees meet to
negotiate on matters relating to pay, terms of employment and working
conditions, representatives of employees are known as trade union(Henderson
2008). Organisations were encouraged to recognise and work with trade
unions so as to improve the employment rights of workers through collective
bargaining(Marchington and Wilkinson 2005).
However, in the early 1990s, countries like UK where trade unionism were
highly recognised witnessed a significant decline in trade unionism, employee
relations changed from the traditional collective method of bargain to a more
individualized method as a result of increase in sophisticated HRM style
initiative in communication, participation and recognition(Henderson 2008)
(Edwards 2003) described the relationship between employer and employee
as a system where both parties have common and divergent interest, this is
a situation where employer and employee communicate their requirement and
views to one another in terms of agreement on work related issues.

Definitions
Organizing Relationships: Traditional and Emerging Perspectives on
Workplace Relationships
-

Patricia M.
Sias

Patricia M. Sias is a Professor of Communication in the Edward R. Murrow

College of Communication at Washington State University. Her research

centers on workplace relationships. She has published articles in and served on

the editorial boards of a variety of academic journal including Communication
Monographs, Human Communication Research, Management Communication
Quarterly, Western Journal of Communication, Communication Quarterly and
Journal of Applied Communication Research. She served as Secretary and
Chairperson of the Organizational Communication Division of the National
Communication Association. She has won numerous awards for her research
including the W. Charles Redding Outstanding Dissertation in Organizational
Communication Award from the International Communication Association,
several Top Paper awards from the National Communication Association, and
the Distinguished Faculty Achievement Award from the Washington State
University College of Liberal Arts.
Janie Hardin Fritz, Duquesne University has quoted the following about
Patricias work.
"Organizing Relationships makes a contribution to the discipline in its
treatment of this area from multiple perspectives, in its deliberate
engagement/suggestions of future research directions, and its functional
purpose of bringing together extant research on this important topic in a
coherent and organized way. It adds cumulatively to our knowledge of
organizational communication and relationships, it fits within the horizon of
the established parameters of our field while opening new areas for
engagement, and, moreover, it is a very interesting read. It will, no doubt,
become a touchstone for the field of organizational communication."
Communication Miracles at Work: Effective Tools and Tips for
Getting the Most from Your Work Relationships
-

Matthew
Gilbert.

Matthew Gilbert teaches communication skills that can help anyone improve
relationships with coworkers, managers, and clients. Readers learn to
communicate well, break bad communication habits, and communicate

effectively to achieve workplace harmony. Topics include the influence of

corporate culture on employees ability to get along with each other, the role
of stress in ineffective communication, gender issues, and communication
skills for navigating a variety of real-world situations. Offering practical
advice that can be applied to any job, this book demonstrates that improving
communication is the key to having better day to day experiences at work.
Lauren Szokoly have quoted the following words about Gilberts work.
I found this book to be quite interesting. Gilbert describes the various
communication problems that occur not only with a coworker or boss but as
well as with coworkers of the opposite sex and with customers.
Miscommunication can also be caused by a long term problem that has not
been resolved among two coworkers; employees who feel that they are
superior to other employees and managers who speak down to their
employees. All of Gilbert's examples made me realize that even though I have
never encountered such communication problems with coworkers, but also to
keep my eyes open about future miscommunications which may occur
sometime throughout my working experience.

Theoretical Background
(Newell and Scarbrough 2002) posed different dimension on how
organizations handle issues of employee relation and on this basis four
management style have been suggested:

Sophisticated human relations: employees are viewed as the

most valuable resource of the organisation, emphasis
employees' appraisal and extensive method of communication

aimed at enhancing employee loyalty and commitment. Trade

unionism is discouraged. Many US companies adopt this style.

Consultative approach: this is similar to the first approach only
those trade unions are recognised. This style is mostly found in

the European countries such as Germany

Traditional style: employees are seen as a mere factor of
production, it represents the Taylors management approach.

Unions are opposed.

Constitutional style: this is similar to the traditional style only
that unions are recognised and accepted.

It limitation above theory is that different management styles can be used in

the same organisation for example the sophisticated human relations style can
be used when managing managers while the traditional style when managing
other employee(Newell and Scarbrough 2002).
Considering theories that relate to performance and reward management,
motivation theories like the Maslow's hierarchy of need, his theory identifies
five levels of needs. Level 1- physiological needs like food, water and
comfort. The organisation provides financial reward. Level 2-safety needs: the
organisation provides this by benefits. Level 3- social needs: the organisation
satisfies employee's social need through social gathering. Level 4-esteem
needs: the organisation helps to satisfy employee esteem needs by showing
employees appreciation of work done. Level 5:self-actualisation needs: deal
with self needs, discovering individual's full potential(Beardwell and Claydon
2007). Researchers have often criticised this theory following the proportion
that there is no clear relationship between needs and behaviour. Alternatively
Alderfer's ERG theory suggested that needs could be classified into three
instead of Maslow's five; these types of needs are existence, relatedness and
growth. Herzberg identified two factors based on his research namely
motivators and hygiene factor(Beardwell and Claydon 2007).

Besides motivation, modern theory in employee participation known as

employee engagement was defined by CIPD 2007 as ''the combination of
commitment to the organisation and its values that goes beyond job
satisfaction and motivation''. This can be linked to psychological contract
which will be later discussed extensively, but this has to do with a stronger
emotional attachment between employer and employee that helps in attracting
and retaining employees(Henderson 2008)
The concept of 'soft' model HRM throws light to the positive attitude created
from the use of appropriate HRM practices together with communication,
motivation and leadership enhances commitment to the organisation and
improved performance (Guest 2002). while the 'Hard' HRM model emphasizes
on the effective utilization of employees, ensuring that HRM strategy are
driven by overall corporate strategy(Keenan 2005).

Empirical Literature
In a research carried out by (Edgar and Alan 2005)" they stated that effective
HRM policies and practices should be measured by their perceived quality, not
simply by the number of practices introduced."
Another important issue raised by (Mac Mahon 1996) is that, even in small
firms where the need for improved productivity is very important, reward
systems was rarely tied to productivity and performance, and also conflict
between employer and employee tend to be rare rather conflict was apparent
on a personal level.
(Savolainen 2000)also linked employer-employee relations with the aspect of
leadership and suggested three development strategies: 1)Trust building or
participative

strategy,

2)The

entrepreneurial

cooperative

strategy,

3)Negotiative strategy. Findings also revealed how organisation change or

move towards a new workplace and the role of line managers.

Another research suggest that the effective communication of information and

ideas to employees should be developed through practice and commitment,
findings also revealed that organisation should assess current culture to desired
objectives and as a result new attitude often needs to be acquired by both
employer and employees(Owusu 1999). In the work of (Dawson 1995)
evidence suggest that human resource strategy has shifted focus of job design
to career development, skill development which enhanced employee
involvement.
From my findings I have discovered that most research on areas of
interpersonal relations between employees and employers have focused more
on the impact of HRM practices on employee performance, however few
researchers have worked on employee relations and how it affects
organisational commitment and performance, the justification for this research
is to shed more light on the impact of this relationship and how it can be
improved to enhance organisational performance.

Benefits

The mutual relationship between both parties increases

motivation which in turn leads to increase productivity and
profit maximization.

Estenson (1999) describes employer-employee relations as a

key

ingredient

in

the

implementation

of

quality

improvement(Savolainen 2000).

Furthermore, (Sadri and Lees 2001)said a positive relationship

between both parties could lead to a competitive advantage

over other firms in the industry and also provide enormous

benefits to the organisation.

Valued work relationships can influence organizational

outcomes by increasing institutional participation, establishing
supportive and innovative climates, increasing organizational
productivity and indirectly reducing the intent to turnover
(Berman, West, Richter, & Maurice, 2002; Crabtree, 2004;
Ellingwood, 2004; Riordan & Griffeth, 1995; Song & Olshfski,
2008).

Advantages
Most of the previous research works contributed its major share of advantages
on the modern interpersonal relations experienced by the employees and
employers in the workplace of recent times. Some of them are as follows;

It helps to maintain healthy relationships and harmony at the

workplace
Reduces absenteeism, attrition rates and cost on training due to

low attrition rate

Improves the morale level of employees and makes them more

responsible
It encourages more creativity, new innovative techniques and

ideas from employees.

Provides better time management and its utilization.
Reduces unnecessary cost of hiring employees from outside as
it can get good talent from within the organization

It makes employees stress free, enthusiastic, more focused

towards the work and managements expectations

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