 Welcome to the second clip that belongs to the sixth chapter, which is about the power of workers. And in this clip, I will talk about critical perspectives on employee voice. And I will also dive into the associated literature on industrial relations. As you may remember, the critical perspective views the power relationship between employers and employees as problematic. By definition, the employer is the more powerful relationship and employees have all kinds of risks if they speak up and voice their concerns, for example, about their employment conditions. So this is the starting point of the critical perspective, a problematic power relationship between employers and employees. After this clip, you will understand three different perspectives on this critical perspective. So first, I will dive into what is actually meant by the critical perspective, what are its origins. I will go into the concept of the conflict paradigm. Then I will show two applications of this conflict paradigm, first in labor process theory and second in industrial relations theory. And of course, I will show you some practical relevance for policymaking as well as human resource management. Remember that we started off that employees voicing their concerns is actually the preferred reaction. Preferred reaction because if employees speak up about what concerns them in the employment relationship, they will feel better, so it's good for their well-being. But there's also benefits for the organization because it gives the organization the opportunity to act upon concerns of employees. The vehicle for voicing concerns is dialogue. A dialogue can resolve dissatisfaction and reduce exit behavior of employees, which in the end is undesired behavior both for employers and for employees. However, there's a risk for employees to speak up because in the power relationship, employers may perceive employees who speak up as disloyal and disloyal employees are a concern and you rather get rid of people who are complaining. So out of fear for losing their jobs, employees may stay silent. However, silence we know has negative effects. It affects the performance and the well-being of employees. So here today, we will zoom into the critical perspective starting from this unequal power balance. So what are still opportunities or channels for employees to speak up and voice their concerns in a safe way? So it's that employees benefit from it as well. So what's the origin of critical theories? And you can maybe already draw from the picture and from the words there that the godfather of critical theories Karl Marx. In his book on dust capital in the early 20th century, he described a situation where the gap between those who own the production means and those who add value by working for these facilities was actually becoming larger and larger. And more and more people would end up in poverty and fewer and fewer people would own all the means and become very, very rich. And he saw this as a source for conflict. I'll explicate in a little bit more detail on the next slide and then explain how this relates to modern perspectives on human research management and industrial relations. So what's the conflict theory in a nutshell? Like I said, there's a small class in society called by Marx as the bourgeois who controls all the production means. And there's a large group of people in society called the proletariat who provide labor and who add value to the products. So a product by itself doesn't do anything, it can't act, you need labor to add value to products and to increase the value of this product. So raw products are worth a little bit, but if you transform them by manual labor or by any type of labor into something that has more market value, then there's a lot of added value from the raw product to what is in the market. However, those who add value to those products by offering their labor, they only get a small reward for the value added. A lot of the value added is going into the pockets of the capitalists, of the bourgeois. They are largely rewarded through all these sales and profits. So there is a problem when this added value that goes back to workers is really, really small, because in the end you will have a poor working class who looks up to the bourgeois who has all the means and leaves a lot of people with have nothing. According to Karl Marx, the consequence is that this proletariat, people don't have anything, will be very dissatisfied and eventually they will revolt against the owning class. So you're probably familiar with this line of thoughts. You're also familiar with how it affected in, for example, the Soviet Union. There's a lot of criticism, but this rationale that there is an unequal... There's groups of society who have more, who have more power, who have more means, and groups of society that are less powerful and also have less resources. This is the essence of conflict theory that informs also the thinking about human resource management. So conflict theory has become a common and dominant paradigm in sociology. It builds on Marx's thinking about this unequal division of benefits across society. And according to the conflict paradigm, any social system, so also a country society, is not defined by consensus, so people don't agree about this division of resources, but by conflict. So there is social inequality. There are social groups, some have power and some have not. Some can change their situation and others cannot. So this is common thinking in sociology. We also see that this conflict theory paradigm has been applied to employment relations because there are two social groups, there are employers and employees, and it's visible there is different power in employers and in employees. I'm going to talk a little bit about the two key theories in this area, so labour process theory and industrial relations. The focus of both theories is... They try to understand the rules that management uses to manage employees and to what extent it is an expression of exploitation. So remember the thinking of Karl Marx. So in the powerful groups, they are striving to keep the costs of production as low as possible, so a small amount of returns that are coming in through added value go back to the ones that actually created the added value, so employees. The concern of all the critical theories in human research management is the fairness for employees. So to what extent is the reward that is there for employees in a fair balance with what employees have added to the organisation? So let's have a look at labour process theory. This is almost very much concentrated on this power question. And also how human research management is not so much a vehicle to make employees happy, but a vehicle to exploit workers, to make them work as hard as possible for as little as rewards possible. So labour process theory often times uses qualitative research methods, so they go to an organisation and they try to understand, by watching the language that is used by management, if there is actually a fair exchange of rewards to workers or if there is some hidden agenda behind what they are saying. As an example, let's turn to the title of chapter two, which is called investing in people. But it sounds really nice investing in people, doesn't it? However, what do organisations actually want when they invest in people? So what's behind this nice idea that investing in people is a good thing? Well, actually what they intend to say, but not with so many words, is if they invest in people, we expect that employees will do more and that they work harder and that they have a larger contribution to the returns eventually, to the added value of a product. And we're not going to pay so much for them because they have all these nice trainings, why should we pay more? So investing in people according to a labour process theory analysis would be something that is a disguised way of labour exploitation. Karen Lek has phrased this as a wolf in sheep's clothes. Human resource management acts nice, but in the end, it's a management vehicle that is just there to make employees work harder. Interesting perspective. Okay, so to wrap up, labour process theory is a theory that uses Marxist conflict theory to understand what human resource management is actually doing to workers. So is it there to restore the balance and make sure that employees have a fair reward or is it actually a vehicle used by management to make employees work harder? Another perspective that uses the conflict theory paradigm is industrial relations, and I'll turn to that in the next slide. Industrial relations, that's the entire set of stakeholders that have a say in the rewards that employees receive for the efforts that they do in our organisations. Again here, the starting point is employee voice. It's a preferred reaction for employees. So if employees are in the opportunity to say what they would like, what their expectations about salaries and benefits are, then they can start a dialogue with the employer and they can come to terms of agreement that are beneficial for everybody. So employees willing to work longer and employers to have the employees that they need for the work. So because employers and employees have different interests, employers having an interest in productivity, employees having an interest in fairness, and employers being the powerful relationship, the fairness of employees is at risk. So there is always a risk of exploitation when it comes to employment relations. Industrial relations comes in when workers use their power collectively. So one employee complaining may be a risky business for this person. However, if all of the employees of an organisation decide that they disagree with what the employer is offering, then all of a sudden they can exert quite a lot of power. So for example, by organising a strike, if nobody goes to work during a strike, then the organisation can never reach its goals. So united workers can exert quite a lot of power. A vehicle to unite and to exert power is to organise in employee unions or trade unions. These are official institutions where employees are a member of and who on behalf of employees negotiate with organisations. So what unions offer to the potential exploitative nature of the employment relationship is that they communicate on behalf of employees. So a single employee is not vulnerable anymore because they are represented by a trade union who negotiates on their behalf with the employer to secure that they have good benefits. This dynamics, so employees teaming up together in unions, the reactions of employers and also the role of the state, the regulations in there, we know this as the domain of industrial relations. So industrial relations is the literature describing the power and influence of labour unions and organised labour representations to promote the fairness of employment relations. Industrial relations theory reasons that this is a good thing. Employees teaming up, organising in trade unions, in labour unions, are a benefit to organisations, to employees, but also to society at large. Let's have a look at what Schumpeter says and how he disagrees with Marx about how conflict actually helps societies ahead. So Schumpeter starts with a shared point with Karl Marx. He states that if we leave the labour relations, the employment relations to the free market, it will do no good. It doesn't apply to labour markets because there are frictions and there is this power relationship. So in the end it's impossible that there is a wage equilibrium and there is a risk that employees are the party that suffers and will be exploited. However, Schumpeter disagrees with Marx about the consequences of this mix in power. Whereas Marx claims that eventually the power less will rise up and overthrow the owning groups in society, Schumpeter states that this will not happen because before we end there, there is a group of people in society who will speak on behalf of the subordinated, of the exploited workers and they will engage in politics. And politics will be the buffer that will... ...against conflict in society. So Schumpeter sees the system of industrial relations, so again, employees teaming up, joining, representation, unions as a political mechanism to balance between the needs of workers and the requirements of organisations. So according to Schumpeter, industrial relations will protect against social unrest. Before it comes to a revolution, there will have been politics and politics will have secured that the terms and conditions of employment for the weakest people in society are not that bad. And because politics are there, there will be quietness and stability in a nation and therefore, with the absence of a big conflict between employers and employees, there will be stability in a nation. Companies can flourish, employees can just do their thing and there will be welfare. So Schumpeter is a little bit more of an optimist, as Marc could conclude. Actually, this industrial relations theory as proposed by Schumpeter is very much reality. So if you look into practice, you'll see that there are a lot of representation units, unions, representation bodies in society that safeguards that the employment relations in organisations eventually are fair. So this is a schematic overview of all the parties involved in establishing the terms and conditions of employment of people in the organisation. So what do you see here in this figure? The triangle represents an organisation and in the organisation you see the arrows going down for management to employees. So this is the managerial prerogative, but they also go up because there are channels in the organisation that facilitate a dialogue with management. So even within organisations there is dialogue and I'll come back to that later. For now, I will zoom in the higher level external to the organisation bodies that have an impact on what happens in organisations. So what you see here, the yellow coloured stakeholders in industrial relations, these are government, these are employers' associations and these are the trade unions. And we know this as the tripartite negotiation. These parties on a high level, on a national level, they negotiate together each country in its own tradition, but in essence they negotiate about what should be the kind of labour laws, what should be the regulations that all companies, all employees, should adhere to. These inform the rules of play within the organisation and these inform the rules of play at the level below. So there where it comes on the negotiations between employers and employee representation about the terms and conditions that are used in an organisation. There are many different flavours here, I will keep it brief. So important is to remember that there are different parties external to the organisation that together shape the field of industrial relations. They determine labour law, but also sectoral agreements, for example, collective agreements. These influence the leeway that management has to exert power over employees. And within organisations you see a replication of this stakeholder dialogue so even also within organisations, sometimes trade unions are active, they can directly negotiate with management or they help employees who are elected in employee representation bodies in the organisation such as the Joint Consultive Committee to negotiate with management. So the picture of industrial relations shows a kind of institutionalised context in which no organisation can decide completely by itself what the terms and conditions of employment are. There is this whole body of stakeholders who watches over what is happening and who takes the interests of both the employers but definitely also the fairness of employees into account because this ensures national societal stability which is an important good for countries. Moving on, what are the benefits for employees and the economy at large if we look at the system of European industrial relations but it is also pretty common in many other countries? So this idea that there are national consultation boards or tripartite councils is pretty common and always the trade unions as well as employers associations as a government have a role in that. So there are country differences in how they communicate and how willing they are to listen to each other but nevertheless this tripartite interaction exists. And these together they make sure that there is a social pact. So there is governance support. For example, if economic adjustment is needed but also to ensure that there is fairness and social cohesion. There are a lot of examples in the literature. A known example is for example in the 1970s when the European countries were suffering from rising Asian countries and there was a need to reduce on wages to make sure that the economic growth could continue and by the support of trade unions an entire country was able to take this economic priority over employee fairness. In contrast there are also great examples for where employees have had a good say in this industrial relations. For example, think about pension systems and also quite recently the wage compensations that were organized during the pandemic. So to conclude, industrial relations are important. They are a means for employees to voice concerns in a safe way and they are institutionalized. So they also contribute to the social foundation of modern countries. There is also literature claiming that allowing employee voice in organizations through formalized organized work so allowing literally trade union employees in the organization has benefits for organizations as well. This literature is particularly originated in the United States where employees tend to be really really really careful to allowing union activities in their companies. So if you have to contrast Western Europe with the United States and the United States is a founder-believer of the free market economy whereas Europe is more geared towards the Schumpeterian way of doing and keeping everybody on board through the system of industrial relations. So imagine an American organization. Some organizations do allow union activities and others don't. So what Freeman showed in the 1980s is that companies who allow trade union employees in the organization showed better results. Why? Because having a trade union employee in the organization provides a direct channel for employees to voice their concerns. So there is more dialogue. And this dialogue makes sure that there is fair conditions and that employees will generally just feel more motivated. So what as a consequence Freeman could show that the benefits for employers are that there is lower turnover levels, that there are more possibilities to act upon dissatisfaction among employees and also they use the union work as an area to test human resource management policies. Would it be a good idea to implement such and so? Or would it be a good idea or would it be a bad idea? How might employees react? So actually the dialogue, not only afterwards but even before policies are interested, has benefits. So this brings me back to the triangle of the organization. Within organizations, industrial relations happens as well. Trade unions can be active in organizations. And in some organizations it's not even the trade unions but there's really a system where employee voice is organized. For example, in a works council. So all these things, they lead to opportunities for employees to engage in voicing their opinions about the organization, about the policies or basically about anything. A short distinction about single channel and dual channel organization of industrial relations in the workplace, a single channel means that all the communication with employees goes through union representatives. So in case of conflicts, union representatives provide a safe channel for employees to complain to management. Whereas in dual channel, joint consult commission, organizations have a works council and they are an advisory board that exists sometimes with but often times also without union employees. So it's an employee body and they cooperate with management and they act in a more together way, in a uniterious way to make sure that the organization functions well but also that employees benefit. So this is a more harmony model whereas the single channel is more a conflict model. So what's the task of human resource management in the industrial relations? You may wonder where does the HR department step in? What does the HR manager do? Well, the task of human resource management is to reduce exit behavior so to keep as many employees as you need on board and to facilitate employee voice in organizations. So for example, the task of human resource management department could be to develop a grievance procedure where employees have a safe channel where they for example can complain about unwanted behavior by superiors or whatever. So a safe channel to speak up when they feel disadvantaged. Also they can advise about organizational politics or what is important to make sure that employees stay happy and that there is no conflict or revolution happening within the organization. Important to remember is that human resource management actually is a representative of management. So in the power relation with employees, the human resource management department is actually not the front of the employees, it's the front of management. It's in the... And this shows very clearly when it comes to collective bargaining so where trade unions negotiate with employers about the terms and conditions of employment, it's the human resource management representative who represents the employer. HRM does not represent workers. Trade unions represent workers. HRM does not. After the negotiations, it is important that all these agreements are implemented in the organization and that again is a role of the human resource management department. So they have to make sure that the company adheres to labor law and to the collective agreements that might exist for their company. So to conclude, industrial relations provide a safe channel for employees to voice concerns about fair employment conditions. Entire literature is based in conflict theory. And industrial relations are a means to stabilize conflicts between employers and employees in an organization and in society. So now you know, inequalities in power between employer and employees mean conflict. Starting point is conflict theory. This can be in a hidden or disguised way in language which is the central point of labor process theory. Conflict can be managed through industrial relations and that institutionalized employee voice. Schumpeter is a big thinker there. Industrial relations happen on national, industry and organizational level so it definitely is about the context of organizations. And finally, in organizations, union representation is an effective way to protect and promote the voice of individual employees and to reduce exit as Freeman has shown to us. Thank you.