Chapter 2 THE STUDY OF EMPLOYMENT RELATIONS: ANALYTICAL TOOLS Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-1 Learning objectives 1. Define theory and discuss its value to students of employment relations 2. Understand the distinction between description and explanation in social science analysis 3. Provide examples of taxonomies in the study of employment relations 4. Distinguish between commonsense description and theoretically informed description Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-2 Learning objectives 5. Understand the necessity of both agency and context in the explanation of employment relations 6. Provide examples of agency and context in employment relations explanations Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-3 Chapter overview 1. What is theory? 2. Describing patterns of employment relations 3. Explaining patterns of employment relations Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-4 Introduction • Employment relations is highly practical—it examines issues and events central to everyday lives of everyone who works • Study of employment relations requires systematic theoretical concepts • Students need to: – explore the analytical tools that characterise employment relations – understand ideas and concepts in employment relations Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-5 What is theory? ‘an attempt to account for a given phenomenon, that is, to show what, how and/or why it is.’ (Lewins 1992, p. 104) • It helps understand the world of employment relations • Aims to explain all situations, not just some • There are different types of theory and explanation (e.g. Lewins’ five levels of explanation) Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-6 Lewins’ five levels of explanation 1. Description—An account of an event or phenomenon from a particular standpoint, whether it is adopted consciously or unconsciously 2. Taxonomy—A classification scheme designed for a particular purpose that groups together events or phenomena on the basis of similar characteristics 3. Model—A simplification or representation of relationships between events or phenomena that is designed to provide a clearer picture of the world Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-7 Lewins’ five levels of explanation 4. Law—A statement of a relationship between two or more variables that inevitably produces the same outcome, in terms of events or phenomena 5. Causal theory—A complete answer to the ‘why’ question, which not only identifies the inevitable relationships between variables but also provides an account of the process by which one determines the other (Lewins 1992, pp.19–27) Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-8 What is description? • ‘To describe’ is to ‘give an account of’ or ‘state the characteristics of’ a specific event or instance—but we are all different • It is all about what facts we accept, and therefore interpret • Description can be very subjective Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-9 What is description? • Theoretically informed description begins the task of explanation • It narrows the facts that are considered relevant • It provides the observer with guidelines about how to select some ‘facts’ as important, while discarding others • This advances understanding of the situation • Description reveals the standpoint from which the event is observed Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-10 What is taxonomy? • Taxonomies are classification systems designed to identify similar properties or characteristics in diverse events, situations or objects, e.g. – clothes: ‘whites’ and ‘colours’ – rules: ‘formal’ and ‘informal’, ‘substantive’ and ‘procedural’ • Taxonomies attempt to move analysis from the specific to the general • They also attempt to identify commonalities Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-11 What is taxonomy? • While taxonomies help bring order from chaos, they are still largely descriptive—they do not explain much about why events or situations occur Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-12 What is causal explanation? • Explanation is to ‘make clear the cause or reason of’ an event or phenomenon (Dictionary.com, 2017a) • Lewins’ three ‘higher levels’ of explanations (models, laws and causal explanation) progressively move closer to complete causal explanation • Complete causal explanation is rarely reached Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-13 Why is causal explanation rare? • According to Abercombie, Hill and Turner (2006, p. 47): – Most social phenomena are complex and devising procedures to clearly identify which elements are causally important is difficult – One cannot generally set up an experimental procedure with proper control groups – Such explanations assume human beings are like natural objects Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-14 Descriptive analysis • While description can be regarded as the first step towards explanation, it must be accompanied by theory • Description does not lead to explanation • Theory means set of assumptions that can be tested • Describing patterns of employment relations leads to an ability to generalise—to understand other events Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-15 Describing patterns of employment relations • Employment relations can be defined as the ‘formal rules and informal rules which regulate the employment relationship’ • This definition provides a consistent ‘language’ for reporting observations • It also assists in ‘selecting’ relevant ‘facts’ to be reported • In this way descriptive analysis is informed by theory even if it does not allow us to explain why things occur Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-16 Rules and the employment relationship • The rules that regulate the employment relationship are a central tenet of our approach to employment relations • A rule is ‘a principle or condition governing conduct, action’ • By studying rules we can understand the behaviour of individuals, groups and societies Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-17 Rules and the employment relationship • ‘Every industrial relations system creates a complex of rules to govern the workplace and work community.’ • ‘Rules define the status of the actors and to govern the conduct of the actors at the workplace and work community.’ (Dunlop 1958, p. vii) Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-18 Formal rules • Official, consciously determined and enforced through deliberate social processes • Usually written down – E.g. collective agreements approved under the Fair Work Act 2009 • Written individual employment contracts Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-19 Informal rules • Frequently more unofficial, sometimes consciously negotiated but often accepted unconsciously • Less recognisable and enforceable because they are not written down – e.g. unwritten agreements between union job delegates and supervisors • Shared understandings between employees and managers over appropriate behaviours or ‘custom and practice’ Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-20 Substantive and procedural rules • Emphasises the content of the rules • Substantive rules govern the essential or material terms under which employees sell (e.g. wage rates) • Procedural rules govern the processes or actions to be taken in response to different circumstances at work (e.g. grievance procedures) Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-21 Parties to the employment relationship • The social actors who create and enforce the rules that regulate the employment relationship – Employees often do not participate directly in the rule-making process, but engage a range of other agents to act on their behalf, to represent their interests – The way that employers are represented and thereby contribute to the making of the rules of the employment relationship varies Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-22 ‘Parties’ to the employment relationship – Beyond employees and employers, state agencies are major parties – Many other social agents sometimes become involved in making and enforcing rules that regulate the employment relationship • We usually refer to employers, employees and the state as the main parties to the employment relationship Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-23 Who makes the rules? 1. Unilateral rule-making – Creation and enforcement of rules by one single party (e.g. managerial prerogative) 2. Bilateral rule-making – Joint creation and enforcement of rules by two parties (e.g. collective bargaining) 3. Multilateral rule-making – When three or more parties jointly make and enforce rules (e.g. the FWC with employers and unions) Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-24 Who makes the rules? • Authorship of rule-making is vital – Indicates where power lies in the employment relationship (e.g. high employer power = low employee power) – Can have important consequences for the effectiveness of rules in influencing the behaviour of the parties to the employment relationship (e.g. more input = greater chance of acceptance) Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-25 Explaining patterns of employment relations • Why do patterns of employment relations vary in different empirical situations? – E.g. across countries, industries, enterprises • Why do they change over time? Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-26 Beyond description: explanatory factors and models • Description leads to taxonomies • Taxonomies, in turn, lead to the development of: – models – laws – causal explanations Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-27 Development of explanatory models • Identify the reasons why events occur or the factors that are thought to explain particular empirical situations • This produces a long list of potential factors • Link potential factors to form a model [Models are] representations of something that exists in the world. They do not exist by themselves but, by their simplified nature, provide a clear picture of the world. (Lewins 1992) Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-28 Models and taxonomies • Models go beyond taxonomies because they attempt to link social phenomena together, thereby indicating relationships and potential lines of causality • Models attempt to show, at a highly simplified level, how various factors affect each other Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-29 Models in employment relations Dunlop’s model (1958): • All industrial relations systems comprise three main ‘actors’, who interact with each other and produce rules to regulate behaviour: – The state – Employees – Employers • The model suggests that industrial relations systems operate within a larger ‘environment’ or context, which influences the rule-making behaviour of the actors within the system Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-30 Context • Context is external to, or beyond the control of, individuals and organisations, but influences behaviour of those individuals and organisations • The nature and dynamics of product markets help explain prevailing patterns of employment relations • According to Dunlop, one aspect of product markets is the nature of competition. Competition affects the types of employment relations rules and their content Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-31 Context • The nature of technology, and the production process more generally, impacts on employment relations • The impact of the locus and distribution of power in wider society mostly relates to the role of the state, as channelled through a country’s political system Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-32 Context • Dunlop’s model promotes contextual factors as key explanations for employment relations • It locates employment relations within the broader environment • Look to environmental factors when trying to understand why parties behave in particular ways or why different types of rules are produced in different situations and at different times Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-33 Agency • Agency is the capacity of social actors (individuals and organisations) to take action as a result of the choices they make • Humans are conscious beings and do not react automatically to stimuli—we exercise choice • Different individuals/organisations perceive external factors differently and respond differently • Effective causal explanation can only come about through a combination of context and agency Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-34 Agency • We must pay attention to the parties in rulemaking in employment relations – People All have different values, motives and past experiences Because they are all different, would probably make different choices in the same situation – Organisations Are also all different from each other Different purpose, history, governance, goals All these factors impact on what response to a given situation will be chosen Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-35 Agency • To explain patterns of employment relations, we must therefore understand people and their organisations Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-36 Summary • This chapter is all about theory – Theory is about explanation: ‘an attempt to account for a given phenomenon—to show what, how and/or why it is’ – Many types of theory and levels of explanation • Description is the first step towards explanation • Description uses taxonomies that help to understand the parties to the employment relationship, the rules they make and enforce, and the processes by which those rules are made and enforced Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-37 Summary • Explanation in employment relations mostly comes in the form of ‘models’ • Explanations of employment relations must combine ‘context’ and ‘agency’ – Contexts are the ‘external’ circumstances in which the parties find themselves—largely beyond their control – Agency emphasises the choices that the parties make on the basis of their ambitions, values, perceptions of the situation they are in, the options they have available to them and the course of action that is most likely to achieve their goals Copyright © 2017 McGraw-Hill Education (Australia) Pty Ltd Bray, Waring, Cooper, Macneil, Employment Relations 4e 2-38