The paper "Neoliberal Employment Relationship Is Relevant to Understanding Colgate-Palmolive Workplace Change" is an outstanding example of a business case study. Industrial relations refer to a multidisciplinary field that entails the study of all aspects of work and employment relationship (Gall, Wilkinson and Hurd, 2012). Industrial relations have been dominated by pluralism frame of reference. This frame has been challenged by Marxism, feminism and neo-liberalism employment relationship orientations. This essay agrees that neoliberal employment relationship is relevant in the understanding of Colgate-Palmolive (Australian subsidiary) workplace change (Burgess, 2008). The essay begins with an overview of employment relations and is followed by a brief discussion of the dominant frame of reference, pluralism.
The third section provides an overview of the neoliberal frame of reference that is considered to be relevant to the change that took place at Colgate-Palmolive. A relation between neoliberal and contemporary HRM practices is then discussed. The next section briefly describes the change that took place at Colgate-Palmolive. This is followed by a discussion on the relevancy of the neoliberal frame of reference to the change at the firm. A counter-argument on the relevancy of the frame on the change is then discussed.
Finally, the conclusion is then made. The overall performance of a firm can be impacted significantly by employment relations changes and the employment relationship quality. Moreover, the lives and wellbeing of employees are directly affected by terms and conditions of employment (Plehwe, 2007). Consequently, debates on matters of equity and efficiency have dominated boardroom discussions in recent times. These debates have resulted in the emergence of divergence views on an effective way to manage industrial relations (Perkins, Shortland, Perkins, Shortland and Shortland, 2006).
Moreover, divergent views have emerged on how governments ought to devise laws and policies that promote equitable employment relations and efficiency at the firms (Burgess, 2008). Thus, the roles of government policies, the labor unions regulations and the management have formed the basis of industrial relation debate on employer and employee interests. Various explanations for industrial relations exist but the most dominant one is pluralism. Pluralism frame of reference provides a standard way for the evaluation of industrial relation. It is often used for policy development (Barry and Wilkinson, 2011).
This frame of reference is based on the fact that employers’ and employees’ interests are the two guiding principles of industrial relation (Kabasakal, 2006). Pluralism believes that these interests often conflict with each other (Plehwe, 2007). The frame further believes that there exists power imbalance at the workplace where the employer wages more power than the employee. Moreover, the frame argues that workers need to join unions in order to increase their power (Gall, Wilkinson and Hurd, 2012). Finally, the frame believes that unions and regulations serve the interests of the employees and the general public.
Although pluralism has dominated industrial relation it has been challenged by Marxism, feminism and neo-liberalism employment relationship orientations. In recent years, labor policy development in Australia has increasingly been guided by a neoliberal frame of reference. The neoliberal employment relationship is one of the orientations that have challenged the beliefs of pluralism. Countries such as Britain, New Zealand, Australia and the USA have policies, which reflect the beliefs of neoliberal orientation. This frame of reference belief that employees’ interests are legitimate.
The frame further believes that the management hierarchy and competitive markets can bar inefficiencies. The frame further argues that control and competition help to keep producer interests in check (Plehwe, 2007). Moreover, proponents of neoliberal frame of reference are opposed to trade unions’ actions of advocating for an increase in employee wages and opposition to management prerogative (Burgess, 2008). As such, neoliberals argue that labor unions cannot correct employment relationship power imbalance since the ownership of shares, self-employment, second job and ownership of other property makes employees less dependent on one employer (Perkins et al. , 2006).
Moreover, neoliberals argue that regulations aimed at having a minimum wage are unnecessary since most employees hail from households that have multi-income (Gall, Wilkinson and Hurd, 2012). Neoliberals also argue that minimum wage laws are unnecessary since they transfer employment into the non-formal sector. Another argument against minimum wage put forward by neoliberals is that union bargains for wage increase often result in the displacement of employment into the non-union economy. Neoliberals moreover argue that regulations often destroy jobs of those they are intended to protect through unionization or legislation.
The neoliberals argue that jobs of unionized employees can be destroyed through downsizing, lower production and export of production to other states or countries (Burgess, 2008). Neoliberals also point out that regulations destroy national competitiveness through increased cost of education and make it impossible for ill-equipped individuals such as uneducated to compete effectively in such markets (Perkins et al. , 2006). As a consequence, neoliberals advocate for deregulation of industrial relations (Gall, Wilkinson and Hurd, 2012). They argue that there is a need to withdraw or weaken legislation that inhibits managers from responding to market signals or interfere with market forces.
They further advocate for soft laws where deregulation is not possible (Barry and Wilkinson, 2011). Advocates of the neoliberal frame of reference argue that unions’ roles need to be restricted to the provision of information and skills to their members to promote efficiency in labor markets (Plehwe, 2007). Neoliberals advocate for re-alignment of shareholders’ , managers’ and employees’ interests in order to alleviate main workplace problems. Proponents of this frame of reference thus advocate for merit and incentive pay.
They also propose profit sharing and employee share ownership. The neoliberal frame of reference is the underlying factor in contemporary HRM practices.
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