Employee-employer relationship and its impact on an organization

Analysis of the concept of the employment relationship. Discusses the importance of employee-employer relationship and how it impacts work output in an organization. Definition of the main advantages of having a good employee-employer relationship.

Рубрика Менеджмент и трудовые отношения
Вид статья
Язык английский
Дата добавления 13.04.2018
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Kazan Federal University

Institute of Economics, Finance and Management

Employee-employer relationship and its impact on an organization

Asante Vera Doeyo 2nd year Masters Student in General and Strategic Management




This article discusses the importance of employee-employer relationship and how it impacts work output in an organization. Also, it emphasizes on understanding employee relations practices, its underlying factors, issues and its impact on employee performance in an organization. The author offers a brief discussion on the impacts of having a good employee-employer relationship as well as the consequences of having a bad employee-employer relationship. According to the author, employers must pay attention to the relationship between them and their employees and also manage this relationship properly. In this article, the author describes the advantages of having a good employee-employer relationship and its impact on the organization.

Keywords: Employee, employer, relationship, employee-employer relationship, and organization


Every organization involves two main categories of a group, the employee and the employer. The employee is the one who has agreed to work for the employer on stated terms. Thus the employer is the one who owns/runs the organization and requires the service of the employee to achieve its goals. According to leadership consultant Stephen A. Miles, it's useful to look at the employer-employee relationship as a series of promises. For instance, employers promise money and job support, while an employee promises to perform her job to the best of her ability. In any organization, the service of both groups is needed for it to survive. In this light, there is the need for both groups to have a good working relationship for the enterprise to thrive. [1, 157-169].

When an employer hires a new employee, he/she is not just adding a new member of the workforce on board but he is also starting a new relationship. Much has changed in the employee-employer relationship over the last fifty years especially over the last two decades. Today employee-employer relationship is a much broad concept. One way of understanding this is by having a look at and by contrasting employment contracts of the 19th century and that of this century. Changes in business strategies and also the impacts of globalization have played a key role in how employees relate to employers and vice versa. People are ordinarily motivated from within, therefore the employer via the human resources should focus on what they can do to help encourage the type of environment where employees thrive to give their best performance. The type of management style practiced by the employer also has an effect on the employee-employer relationship because the management styles influence the level of connection between employees and employers in an organization. Employee relations is characterized by both conflict and cooperation, M. Marchington and A. Wilkinson (2008) described the management of employee relations as being key to the success or failure of an organization and it is seen as central to Human resource management.[2,15]

1. Employee-employer relationship

According to the International Labor Organization, The employment relationship is the legal link between employers and employees. It exists when a person performs work or services under certain conditions in return for remuneration [3, 1]. This can be seen as the connection between the employee and employer in the working environment.

Also, the Chartered Institute of Personnel & Development (CIPD), states that Employee relations' has replaced the term `industrial relations' which referred to collective relationships between employers and their workforce. Today's interpretation of employee relations is much wider and refers to the individual as well as collective workplace relationships. It reflects the increasing individualization of the employment relationship following the rise of individual workplace rights and the decline in the trade union reach and influence.

Furthermore, Employee relationship (ER) is a kind of special interpersonal relationships, which is a concept put forward by the western scholars in the 20th century in order to replace industrial relation, it refers to the relationship of right and obligation, management and obeying caused by the interests between enterprise and the staff, which is also shown as the total of cooperating, conflict, strength and power relations, and is influenced by economic, technology, policy, legal system and social culture background in certain society. Employee relationship puts emphasis on the internal relationship regarding the staff as the subject and starting point, which is produced on the basis of work contract [4, 25]. Employee relationship pays attention to the relation and exchange on the individual level, including the relationships between the organization and the staff, staff and staff, it is the intention of this concept to pay attention to harmony and cooperation. [5, 189-197]

Based on some definitions by different authors, Employee relationship can be described as the connection between employers and employees whether strong or weak, positive or negative and this relationship only takes place as a result of being employed in an organization. employment work organization

The following are three interesting issues with regard to employment:

1. What ethical rules should support the employment relationship?

2. What employment-related policies and practices lead to optimal results for employees?

3. Which employment-related policies and practices lead to optimal results for employers?

Employee-Employer relationship encompasses several issues such as collective bargaining, effective communication, mutual respect, motivation, gratitude, training, negotiations, employment legislation, work-life balance, equal opportunities as well as managing diversity. It seeks to ensure that both the employee and the employer are happy with a productive work life.

2. Impacts of employee- employer relationship on an organization

Several issues persist when it comes to the employee-employer relationship. In many working environments, the relationship between the employer and the employee has been formal, strict and closed. Most employers are noted to be unfriendly and formal when it comes to dealing with their employees. They do not open up and relate informally with their employees. They mostly see employees as the working class and some even act as if they own them. Some employers believe that when they are free or open to employees, they might not earn the respect they deserve and their decision would not be taken seriously by employees. Others also believe that they own the organization and could do what they want irrespective of any legitimate concern by employees [6, 91-92].

In the other way, some employees also think that they are the movers and makers of the organization without which the organization would not survive and as such tend to exhibit some negative traits in the enterprise which directly or indirectly affect it. Some based on their expertise and skills tends to be domineering, disrespectful and difficult. Others also have long held negative stereotypes about employers and tend to distance themselves from them [7, 313-322].

3. Advantages of having a good employee- employer relationship

Despite the foregoing issues between the employer and employee, some employees and employers do have very good working relationships in some organizations and this has yielded some dividend to such organizations.

"A Good Relationship is necessary for the smooth running of any business. The term `Industrial Relations' means the relationship between employers and employees, A good communication between an employer and its employees is imperative for building a positive workplace culture. In order to improve the work performance, an employee must receive feedback, both positive and critical. Gratitude and Appreciation are very important. The discipline that benefits the company and the employees, Employers will treat their employees with respect and vice versa if they all want to succeed and achieve goals. Spending a time with the employees, listening to employees is important. The negative effects of employer-employee relation, an employer who fails to understand issues concerning his employees might not achieve long-term success in his enterprise"[8, 108].

In the context of the employee-employer relationship, it should be noted that the existence of a good working relationship between an employee and employer is indispensable for a successful enterprise. Though differences may exist between the employee and the employer, they have to acknowledge the fact that they are both working towards the same goal of making the organization successful. For the attainment of the set goals, there should be a strong synergy between the two that is, the employer and employee [9, 24].

A strong and positive employee-employer relationship makes the working environment pleasant and increases employee motivation and morale. Organizations that take the employee-employer relationship seriously have experienced an increase in productivity and ultimately profit for the enterprise.

When employers exhibit positive attitudes towards employees, it makes them loyal workforce and facilitates employee retention. The ripple effects are a reduction in the cost of recruitment, hiring and training. By doing this, employee turnover which negatively impacts on organizations are reduced and very skilled and trained employees remain in the organization [10, 2157-2163].

Further, a positive employer-employee relationship makes working environment-friendly and efficient which reduce the extent of workplace conflict. It makes employees free to discuss their problems and grievances in a more friendly and constructive way with their employers which makes settlement easier. Encouraging the expression of employees' opinion, it imparts a sense of belongingness between employees and also, strengthens the employee-employer relationship. Employee involvement is a form of employer-employee relations that allows more involvement of the employee in organizational decisions; this is when employees can influence decisions that are normally put aside for management [2, 18]. If this is encouraged, employees feel they are assets to the organization when their voices and opinions are heard, taken into consideration and implemented.

One major issue of employee-employer relationship is effective communication. Effective communication has been noted as an important tool in every organization. Both the employee and employer should be transparent to each other. Most especially the employer should make its door open to employees. The employer should be able to give his/her employees the assurance that their doors are open to concerns and are ready to listen and offer assistance accordingly. Ensuring and maintaining an open channel of communication make the employer aware of some of the problems within the organization which facilitate a quick decision [11, 45].

Another important issue in the employee-employer relationship is the issue of equality. In most organizations, equality has become short lived. Most employees are being discriminated by employers based on origin, family ties, personal relationship, and gender to mention but few. The existence of such inequities is an affront to employee dignity which reduces their morale and impact on the productivity in organizations. Thus it results in apathy among employees and makes them lose interest in what they are doing. Most employers show favoritism at all levels such as promotion, motivation, awarding, granting of leave, etcetera. On the other hand, where employers embrace equality and treat every employee fairly and equal, there is a sense of belongingness among employees and they are more likely to work harder to improve productivity.

In every organization, employers have the capacity and ability to help employees reach their full potentials which should be part of the employee-employer relationship. On this note, it is important that employers do so to help their employees by assisting them to acquire further training and education to boost their knowledge and skills to the benefit of the organization. This leads to employees having job satisfaction. While the employer does this, it is important for the employee to be honest, faithful, and loyal to the employer in this regard. Job satisfaction is defined as the positive feelings and attitudes employees hold about their jobs [12,77]. Job satisfaction is also a correct indicator of good relationships between the employer and the employees. This is because a satisfied worker usually has good relationships with the employer [13, 440-468]. Employees should be willing to show more support for the organization's welfare and progress by also making sacrifices to that would help in the achievement of the organization's missions and vision. There should be mutual respect among both in working towards the common goal of the organization.

One aspect of the employee-employer relationship is mutual dependence. There should be a balanced amount of dependence on both the employer and employee. The employer relies on the employee to do his or her job well for the benefit of the business, the employee and the other hand also relies on the employer to treat him/her fairly and pay equitably [14, 2]. When this mutual dependence becomes imbalanced or one-way, problems will inevitably occur. The employer may start to feel that the employee's efforts are no longer contributory in the company and view them as jettisoning, while the employee may no longer value his/her job and start to become less engaging. When either of these things happens, it's time for the employer to reevaluate the employee's role at the company - whether a new agreement can be reached, or whether it's time to part ways.

Finally, there should be appreciation from both sides in the relationship but more of the responsibility should be on the employer to recognize and appreciate the efforts of well deserving employees.


Employee-employer relationships are expected to involve some interdependent contractual obligations binding both parties. As the saying goes, `a happy workforce is an efficient workforce', it is important that an engaging atmosphere exists between the employee and the employer as it is a key to a successful organization. No organization can survive without giving importance to its employees.

Employees are more productive at work, able to complete their work on time and are also motivated to give opinions for organization's development and improve their own performance once there is a good relationship with their employers. This is an indication that they have a higher level of job satisfaction which includes salary, work environment and growth opportunities and the employee-employer relationship in the organization is commendable and worthy to be emulated by other organizations.


1. Abadi, F. E., Jalilvand, M. R., Sharif, M., Salimi, G. A., & Khanzadeh, S. A. (2011). A Study of Influential Factors on Employees? Motivation for Participating in the In-Service Training Courses Based on Modified Expectancy Theory. International Business and Management, 2 (1), pp. 157-169.

2. M. Marchington. A. Wilkinson, Human Resource Management at Work: People Management and Development, CIPD Publishing, 2008 pp. 15, 18

3. http://ilo.org/ifpdial/areas-of-work/labour-law/WCMS_CON_TXT_IFPDIAL_EMPREL_EN/lang--en/index.htm pp.1, extracted on 30/12/2017

4. https://www.cipd.co.uk/knowledge/fundamentals/relations/employees/factsheet, [accessed Jan 07 2018] pp. 25

5. Karnes, R. (2009). A Change in Business Ethics: The Impact on Employer-Employee Relations. Journal of Business Ethics, 87(2), pp. 189-197. Retrieved from http://www.jstor.org/stable/40294915

6. Yongcai, Y. (2010). Employee Relationship Management of Small and Medium-sized Enterprises. International Conference on E-Business and E-Government (IEEE), pp.91-92

7. Chiang, C.F., & Jang, S.C. (2008). An expectancy theory model for hotel employee motivation. International Journal of Hospitality Management, 27:pp. 313-322.

8. B. Devamaindhan, "EMPLOYER-EMPLOYEE RELATIONSHIP" Assistant Professor, Department of Management Studies (IDE), University of Madras, Chennai 2014 pp. 108

9. Paul O'Brien (2014): Why Strong Employee/Employer Relationship is Important and How to Achieve This? pp. 2

10. Hunjra, AI, Chani, MI, Aslam, S, Azam, M & Rehman, KU (2010), 'Factors effecting job satisfaction of employees in Pakistani banking sector', African Journal of Business Management, vol 4, no. 10, pp. 2157-2163.

11. Hellriegel D, Jackson SE, Slocum J, Staude G, Amos T, Klopper HB, Louw L, Oosthuizen T (2008). Management. 3rd South African Edition. Cape Town: Oxford University Press Southern Africa (Pty) Ltd.

12. Schults D, Schults S. (2002). Psychology Work Today. 8th Edition. New Jersey: Pearson Education Ltd.

13. Daft RL, Lane G.P. (2010). Management. 9th Edition. 2010, 2008 South-Western, Cengage Learning pp. 440-468


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