impact of neoliberalism on employee relation

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Running Head: NEOLIBERALISM: IMPACT OF EMPLOYEE RELATION 0 Employee Relations Impact Of Neoliberalism On Australian employee relations Student Name

NEOLIBERALISM: IMPACT ON EMPLOYEE RELATION 1 In order to make certain that the organizations are successful, it becomes crucial to focus on the concept of employee relations. Employee relation, in layman’s terms, refers to the relationship between the employee and employer. Organizations must focus on employee retention rather than employee recruitment because recruiting an employee is a cost for the company. Organizations must make the plans and policies considering the basic issues of employees i.e. pay and other benefits, safe working environment and must maintain the balance in the work life. The theoretical aspect of neoliberalism majorly focuses on improving the living standards of the economy as a whole, by facilitating the entrepreneurial freedoms and skills and providing those with free markets and trade. It wishes to strengthen and enlarge the market by increasing in number, expanding the size of operations and reinforcement of transactions. This discussion focuses on highlighting the amalgamation of this aforementioned concept of neoliberalism and employee relation, with a particular focus on Australian context. Before going into the detailed analysis on the stated topics, it becomes important to attain clarity on what exactly employee relation and neoliberalism stand for. Employee relation refers to managing of relationship between the employee and employer and it ensures a positive working environment and emphasize that the working conditions are safe for employees. A good employee relation will help the organization in achieving success and maintaining its competitive edge over the others. Hence, the loyal and committed employees will work towards the common goal. Organization can have more of satisfied employees if there is proper communication between employee and their employer and by considering the employees as their stakeholders. Coming to the second topic of this discussion, it denotes Neoliberalism aims at reducing the government intervention to achieve higher profits. It promotes privatisation to attain more

NEOLIBERALISM: IMPACT ON EMPLOYEE RELATION 2 efficiency in operations and thus generating increase in maximising wealth. Its focus is to deregulate the regulation of government and increase the movement of goods internationally so that growth rate of the organizations improves. It also eliminates the concept of public good rather focuses on giving individual responsibility to the poor people to improve their lifestyle , health by themselves and will be individually responsible for their failure . Neoliberalism fosters maximisation of transactions and thus focusing on increasing economic growth and expanding employment opportunities, which improves the standard of living. John Howard introduced the concept of neoliberalism, in the year 1960. He directed the greatest substantial transformation of the employment relationship in Australia. This government promoted an active form of neoliberalism, driven and maintained by other arms of government with the main aim of attacking collective bargaining. The main aim of this theory was to lessen the union power and initiative the individualization of the employment relationship. Deviations in the aspects of labour market offers more holistic view of the relationship between employer -employee and provides benefit to all the workers it has created a positive impact on the development of employee relationship. Changes in labour market has generated rise in the service-oriented positions. Employers focus on part time jobs to satisfy the needs of market and employees are also interested in such jobs to improve the standard of living. After emergence of neoliberalism participation of women employees has increased as the laws of equal employment is encouraged. It focuses on providing more employment opportunities to promote individual contracts and attack collective bargaining. Increase in participation rate had developed positive impact on employee relation. Emergence of neoliberalism has increased the size of existing market as well as focuses on developing new market. The adaption of neoliberalism has increased market growth by

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NEOLIBERALISM: IMPACT ON EMPLOYEE RELATION 3 facilitating free trade practices and optimising economic performance in a strongly aggressive environment. Neoliberalism at work place helps the organization in recruiting and shoots the employees as required and the incentives are provided to the workers on the individual basis rather than collective basis. This helped the organization in improving their employee relation as the employees have the personal desire to achieve incentives and considering the organization goals as collective goal. It helps the organization in maximising the profits and increasing the productivity and growth of the organization. Nationally the concept of neoliberals has focused to attract the multinational corporations and adopt the policies inclined towards removing market interference and growing transfers and thus contributing in the direction of the development of a global labour market in which labour force competes with one another. This provides the opportunity to the employees to explore globally and thus attain the maximum benefit. Prior to neoliberalism, the workers were provided benefits based on superiority privileges and negotiating but the organizations that adopts neoliberalism provide wages on the basis of determination of market. They aim to signify a critical interruption with the great negotiation in labour relations and attaining labour collaboration and peace through the approval of bargained rights for employees. By relating neoliberalism employees are focusing on increasing the shareholders profit and varying the methods of production to eradicate waste and consuming the resources effectively. The concept of neoliberalism has helped the employers in hiring the employees that are most productive for the company and thus eliminating the one who are less productive for the organization. The employees are heartened to perceive themselves as businesspersons and thus providing them with the opportunity to upgrade their skills.

NEOLIBERALISM: IMPACT ON EMPLOYEE RELATION 4 Neoliberal policy removes or lessens the involvement of government in Australia by introducing certain policies that focuses on maximising the responsibility of individuals of meeting their needs by participation in labour market. The policies of neoliberals help them in having the individual control over the expenditures to the government that they have to pay when the economy is unstable. These employees have gone in support for this neoliberal policy. At the time of emergence of the policy, the disable employees were not in favour of this policy but afterwards they were in favour of this policy as the necessary changes made in context with their income. Adoption of neoliberal policies has provided wider availability of jobs for the disables and thus increases the financial benefits provided to them. The neoliberal policy in Australia mainly moves around the expectation that the Australian people and the Australian government both are responsible towards one another regarding income and employment. This policy in Australia has encouraged the disable employees to participate in the labour market. Foremost impact of changes in two sectors, labour market and national political landscape gives a task for employee relation experts. The deviations have had influenced over the emergence of female workers and evolution of rules and regulations over employ relation legislation which contributes positive outcomes and provided benefits and equal opportunities for all the workers. Moreover these changes have not only providing strong foundation to employer- employee relationship and becoming more united partnerships rather they also have a positive impact on evolution and becoming more universal in supreme lifestyle . The managerial flexibility, reduction in trade union influence, labour market deregulation, were considered as the main trademarks of neoliberalism. Apart from all the positive impact of neoliberalism witnessed in the above paragraphs it was observed that neoliberalism too has its negative impacts. Neoliberalism has caused severe

NEOLIBERALISM: IMPACT ON EMPLOYEE RELATION 5 falloffs in job value and leads to adverse structural results, which includes rise in turnover, redesigning, and restructuring the complex methods to provide training to the employees that hinders the smooth functioning of the organizations. Occurrence of neoliberalism highlights prospective impediment to administrative accomplishment in the end. These comprise obstructive growth of human wealth in the organization and encouraging unusual positions that incentivize eluding struggle and thus building them. It consumes the energy of the workers. As the theory of neoliberals focuses on short term profit maximisation in an aggressive manner leads to wastage of resources and the contribution done by the potential workers. It leads to undercutting of the long term investments and the productivity that will last long which creates instability and reduction in the management commitment of the workforce. Neoliberals have focused on maximising the shareholders’ value but do not focus on productive development. It has created reduction in the job quality and thus focusing on the short term gains. The organizational outcomes are not maximised. Inequality has become a bigger problem when the neoliberalism was introduced. It has been observed that as neoliberalism is increasing inequality is also increasing. In neoliberalism the main focus is on capital accumulation in which earning profit is the highest priority rather than production of commodities. The resultant changes in wage structure has been the main reason of development of inequality among the male workforce and in case of full time female employees changes in wage arrangement and deviations in workforce composition are considered as main reasons for inequality . Australia was trapped in stagnant position due to the wage inequality which highlights the low wage distribution but having significant growth at the top are the two major features of it , the transformation in the wage inequality among male and female workforce and

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NEOLIBERALISM: IMPACT ON EMPLOYEE RELATION 6 alteration in workforce composition have been of crudely equivalent essential. Fisnancialisation is considered as central element of neoliberalism. In Australia deregulation of financial sector has created large flow of capital and this leads to the enormous increase of credit into resource and property sector. Finance and insurance, construction and mining and property and business industries have grown because of such developments and thus leading to more inequalities. The changes in labour markets have caused lower employment rates due to which the perception of the unions has been changed. It is observed that period of low employment rates transfers the balance of power towards employees rather than employers as employers attempt to tool strategies to encourage loyalty and commitment towards the job. It is observed that the long term unemployment and underemployment has resulted to increase in casualization of work. Adoption of neoliberalism has caused debt crises as privatisation is promoted therefore thus leading to increase in debt. Neoliberalism has caused environment degradation as the intensity of competition has increased worldwide which leads to adoption of the practices that are harmful for the environment. It has led to increase in unemployment in the long run as the organization can shoot the employees without much intervention this creates dissatisfaction among the employees . The application of neoliberal policy has led to harsh effects on the poor people and thus do not focuses on contributing towards the health of the public. From the above discussed paragraphs it is concluded that, At the time of emergence of neoliberalism, free market trade policies has increased the productivity and has provided wide opportunities to the organizations to expand their business and thus created a competitive environment to explore their products globally . It has created employment opportunities for the workers and thus helps in improvisation of their personality. The policy of neoliberals has provided equal opportunities to the women by facilitating proper benefits

NEOLIBERALISM: IMPACT ON EMPLOYEE RELATION 7 to them. It has led to expansion of the existing market and development of new market. In neoliberal policy the employees are provided benefit on the individual basis rather than the collective one which creates satisfaction among the employees as the benefits provided to the employees are according to their capability. It has also provided benefits to the disable employees regarding their pay so that the essence of dissatisfaction can be eliminated. But in current scenario in context of neoliberal approaches it concludes that the organization has faced failures in job quality along with the hampering of productivity and growth which highlights the biased focus on short term profits and more involvement in the shareholders’ value. In the light of evidence due to neoliberalism, in last 25 years it was detected that there is an increment in women employment and having a great workplace structure, indeed in recent years the data highlights that there is a fall in total jobs along with progressively decentralising industries. It is also analysed that employees negotiate directly with the employers for their salaries and working condition therefore it was very complicated to judge values for monetary and non- monetary benefits. From the overall discussion it was determined that neoliberalism idea is solely and entirely swallowed up the world by forceful deregulation on economies, inequalities lead to losses of political values and ideas. Neoliberalism on a fast pace get connected to the international trade and investments which generated a negative impact on workers right, they were more towards global economy participation rather than focussing on workers security and their well -being. It was concluded that the policy of neoliberals was beneficial in the short run but it criticized in the long run because the resources are fully exploited which are difficult to measure. According to economy concern middle class employees found it more difficult to accomplish overall benefits whereas poor class fall under poverty line which became hurdle for them to search jobs, as there benefits out of government decreased. Such effects created

NEOLIBERALISM: IMPACT ON EMPLOYEE RELATION 8 bigger gap between rich and poor. It also highlights the financial instability in the economy as deregulation of financial sector has created large flow of capital and this leads to the enormous increase of credit into resource and property sector and thus leading to broader economic shocks. Neoliberalism has its positive impact in the short run focusing on increasing the competition but was not so beneficial in the long run.

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NEOLIBERALISM: IMPACT ON EMPLOYEE RELATION 9 REFRENCES Blanton, B. R., and Peksen, D. (2016) The dark side of economic freedom: Neoliberalism has deleterious effects on labour rights [online] Available from: http://blogs.lse.ac.uk/politicsandpolicy/the-dark-side-of-economic-freedom/ [Accessed 17/10/18] Johanna, B. (2013) Neoliberalism. Contexts , 12(3), pp. 14-15. David, P., and Janis, B. (2011) Neo-liberal evolution and union responses in Australia [online] Available from https://research- repository.griffith.edu.au/bitstream/handle/10072/42399/75405_1.pdf;sequence=1 [Accessed 17/10/18] Metcalf, S. (2017) Neoliberalism: the idea that swallowed the world [online] Available from: https://www.theguardian.com/news/2017/aug/18/neoliberalism-the-idea-that-changed-the- world [Accessed 17/10/18] Monbiot, G. (2016) Neoliberalism- the ideology at the root of all our problems [online] Available from https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology- problem-george-monbiot [Accessed 17/10/18]

NEOLIBERALISM: IMPACT ON EMPLOYEE RELATION 10 Rodrik, D. (2017) The fatal flaw of neoliberalism: it’s bad economics [online] Available from https://www.theguardian.com/news/2017/nov/14/the-fatal-flaw-of-neoliberalism-its-bad- economics [Accessed 17/10/18] Waston, I. (2015) Wage inequality and neoliberalism: the Australian experiences [online] Available from http://ianwatson.com.au/pubs/watson_jir_wage_inequality_18feb2015.pdf [Accessed 17/10/18] Bal, M.P., and Doci, E. (2018) Neoliberal ideology in work and organizational psychology, European journal of work and organizational psychology , 27(5), pp. 536-548. Available from https://www.tandfonline.com/doi/abs/10.1080/1359432X.2018.1449108 [Accessed 15/10/18] Ganti, T. (2014) Neoliberalism. Annual review of Anthropology , 43(1), pp. 89-104. Waston, I. (2015) Wage inequality and neoliberalism: the Australian experiences [online] Available from http://ianwatson.com.au/pubs/watson_jir_wage_inequality_18feb2015.pdf [Assessed 15/10/18] Pec,J. (2010) Constructions of neoliberal reasons. United States: Oxford university press. Ferguson,J. (2010) The uses of neoliberalism. Wiley online library , 41(1), pp.166-184.

NEOLIBERALISM: IMPACT ON EMPLOYEE RELATION 11 Bernal,V., and Grewal,I. (2014) Theorizing NGOs States,Feminisms,and Neoliberalism. United States of America: Duke University press. Thorsen, E.D. (2010) the neoliberal challenge. Contemporary readings in law and social justice , 2(2), pp. 188- 214. McDonough,T., Reich,M., and Kotz,M.D. (2010) Contemporary capitalism and its crises. United States of America: Cambridge university press. Dursun, P., Lindsey,S.B., and RobertG,B. (2017) Neoliberal policies and human trafficking for labour: Free markets, Unfree workers? Political research Quaterly , 70(3), pp. 673-686. Pettinger,T. (2018) Neoliberalism-examples and criticism [online] Available from: https://www.economicshelp.org/blog/20688/concepts/neoliberalism/ [Accessed 17/10/18] Weller,S., and O’neill,P. (2014) An argument with neoliberalism Australia’s place in a global imaginary,4(2),pp.105-130. http://journals.sagepub.com/doi/abs/10.1177/2043820614536334

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impact of neoliberalism on employee relation

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