Managerial Prerogative of the Manager "Pros" and "Cons"

Topics: Economics

There are still ongoing arguments on whether managerial prerogative should be practise by manager without any external interference from states, trade unions and employees. Human Resource Management (HRM), described by Boselie (2009) is using the human resources through high performance work practises which increase an organisation’s competitive advantage (p. 93). Boselie’s reference to high performance work practices indicated strong highly control through managerial prerogative.

This paper stressed the importance of interventions from trade unions and state tribunals as supported by Nissan (as cited in Godfrey, Dale, Marchington & Wilkinson, 1997, p.

3) that the consequences of allowing managerial prerogative on issues such as recruiting, selecting, training and development reduced teamwork commitment, loyalty to organisation, skilled employees The unitary theory (HRM) enforce managerial prerogative, one source of authority where decision makings should be done by management solely which employees have to obey the decisions management made.

Trade union’s intervention (Bray & Warring, 2006, p. 46) is considered as the inhibitor force due to the effect of collective bargaining on an organisation.

On the contrary, Oakland (as cited in Godfrey, Dale, Marchington & Wilkinson, 1997, p. 559) argued controlling others is not an effective approach. Pluralistic approach pointed out the need for interventions as conflicts are inevitable. There are always issues to be address and solve. This is where trade union’s step in when managerial control undermines employee rights.

Trade union negotiates with management regarding the concerns voiced by employees. At times which management tend to neglect as they emphasised on efficiency and standardisation as well as profitability.

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There are several examples incorporated to illustrate the downside of practising the HRM approach. First off is Australia. The Howard Government “Workplace Relations Act 1996” has replaced Keating (Australian Labour Party) Government awards with enterprise agreements. The enterprise agreements encouraged individual bargaining contract agreements whereby increasing managerial prerogative.

Bray & Warring (2006) argued the righteousness of the individual contracts because different employees will then have different pay systems in regards to overtime or weekends or public holiday’s rates (p. 55). The question is whether employees have a choice to accept or reject the offer? Management has made unilaterally decision making when making that offer to employees. In result, teamwork is damaged consequentially of individual pay system Collective bargaining was reduced during that era. Beaumont & Harris (1996, p. 392) agreed that HRM removes collective bargaining.

Collective bargaining (Gardner & Palmer, 1997) is the mutual agreement after trade union and management discussed and negotiated after issues such as remuneration and workplace environment. Barneveld and Nassir (2003, p. 29) pointed out that the individual contracts reduced labour costs as the centralised awards system were ignored. The inequality pay system caused an employee to have lower wage reduced more as compared to fellow colleagues with position and skills. A trade union as described by Perline and Poynter (1988, p. 28) is the solace to fight this inequality as the power of collectivism made their voices stronger in attempting to solve their issues. Therefore, bargaining experiences as Walton and McKersie (as cited in Beaumont & Harris, 1996, p. 400) emphasised should be share for the benefits of employees. The shared bargaining experiences are the key towards creating effective teamwork beneficial for problem solving of all parties involved. Understandably, the current economic environment, all organisations have to manage effectively and efficiently at the same time using low cost inputs.

In order to do this, an organisation has the choice to either hire skilled labour or machineries. Using hire skilled labours for example, in order to attract these people to work in that organisation, a manager (Tsui & Wu, 2005) offers lucrative pay to attract the individuals to come and work with the selected organisation (p. 119). When these happen, manager will do further cost cutting through redundancies or wage cuts to accommodate the new recruitments. This short term requirements, Mabey (as cited in Baker, 1999, p. 54) do not strategically fit to HRM’s objective as the approach that oversees long term benefits.

The key to attract and retain candidates are to avoid arbitrary treatment by management. The pluralistic approach helps employees to fight this arbitrary treatment. Rhetorically, if training is carried out, on the long term run, current employees will be more multi-skilled. Therefore, the redundancies and wage cuts can be avoided. Organisation does not need to increase labour wages as Goux & Maurin (as cited in Grip & Sieben, 1997) discovered that training has no real effect on workers’ wages (p. 2). A worker’s wage does not oversee any increment from the training when firm’s paid for it.

Either the firm delivered on the job training or off the job training. In addition, the skills of the workers are not rewarded according to their relevance for the productivity of the firm. A worker’s computer skill may be advantageous towards firm’s productivity but nonetheless, a worker’s wage would not be given extra incentive just because he/she possess this particular skill. In other words, the unitarist approach in the organisation increased workers workloads. The downside of adopting this approach is that performance in workplace drop expressing weak psychologically commitment to the organisation.

Secondly, loyalty to organisation is now replaced with a contract like economic exchange. In the end, management lose high performance and committed employees. In terms of health and safety issue, what happens when an employee refuse to work in hazardous work environment in fear of his/her personal safety? McDonald as all know is the biggest fast food employer with high labour turnover. Significantly, they are also overtly anti-union. There was a case where two youngsters, Tessa Lowinger and Jennifer Wiebe were exasperated with the unsafe working environment.

Their repetitive consulting management on these problems fell on deaf ears. They joined a union because they believed on collectivism power is stronger compared to their individual consultation to management. However, when they were discovered joining a union, their wage was deduce to 25 cents an hour. HRM enforcement subjectively allows McDonald to ignore in ensuring employees safety and punished these two teenagers for joining a union and speaking up for better working environment (Featherstone, 2008, p. 4 – 5).

The other disadvantage of HRM in terms of unfair dismissal can be shown through the case of Drapp and Nickens, former employees of McDonald (Featherstone, 2008, p. 5) who were dismissed because they organised strike. Ronnnmar (2006, p. 61) argued it is the breach of duty of obedience that allowed management to dismiss them based on “the employer’s right to direct and allocate work. ” Yet, management was the one who failed to regulate the content of the obligation of work. Regulating the contract for management was proven to be difficult and economically inefficient to properly define the contract.

Plus, it’s an “employer’s right to direct and allocate work and right of transfer”, disregarding employees sayings (Malmberg as cited in Ronnnmar, 2006, p. 64). Another party that intervene when dispute between management and trade union cannot be solve, by which both parties bring forth their case to state tribunals. It plays the regulatory tool (Peetz, 2005, p. 90) as it introduced legislation that all industries have to follow; keeping managerial prerogative under control. Gardner & Palmers (1997) described the process of intervention where the first step is to coerce the defendant and plaintiff to try to come to terms into agreement.

If failure to come to terms, arbitrator will make decision to settle the dispute. The decision of arbitrator will usually pass lawful code where it is mutually accepted by both parties (p. 189). Managerial prerogative can be exercise if there are cooperative communication between trade unions and management. Sirota et al. (as cited in Karnes, p. 196) corresponded “there is a strong positive relationship between employee morale and business success, as gauged by productivity, quality, sales, long-term stock market performance and many measures.

Trust is the key to good employer – employee relationship (Tsui & Wu, 2005; Hills, Madigan & Scott as cited in Beaumont & Harris, 1996). A business success is build up by the members (employees) in the organisation! Even machines require human labour to be operative. Another issue caused by managerial prerogative are inefficiency and decentralise decision making in an organisation (Kleiner and Bouillon, as cited in Schwoerer, May & Rosen, 1995, p. 535).

Nissan plant in Sunderland (Garrahan & Stewart as cited in Graham, Dale, Marchington & Wilkinson, 1997, p. 5) was supposedly practised empowerment yet employees pace were controlled by increas6ed workload with only short breaks to meet productivity targets. Productivity targets were met as management achieved cost effectiveness. Is this acceptable for employees where they were mislead on the truth? Implementing HRM is beneficial in the long run but only with employer and employees involvement in structuring those organisation’s plans/objectives.

However, HRM requires a necessity of intervention from external parties to keep the managerial prerogative’s power exercise in an objective manner. Employees are motivated and be more innovative when they felt that manager or the organisation treat them decently and with respect. It is a matter of providing common framework, strategies that accommodate the knowledge of industrial relations and human resource management. To conclude this essay, it is simply a matter of trying to find the balance that satisfies all parties.

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Managerial Prerogative of the Manager "Pros" and "Cons". (2019, Dec 07). Retrieved from

Managerial Prerogative of the Manager "Pros" and "Cons"
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