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EMPLOYEE RELATIONS AND IT’S IMPACT ON EMPLOYEE PERFORMANCE:A

CASE STUDY

Research · May 2015

DOI: 10.13140/RG.2.1.3942.5446

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EMPLOYEE RELATIONS AND IT’S IMPACT ON
EMPLOYEE PERFORMANCE:A CASE STUDY

A.H.Sequeira

Apoorva Dhriti

ABSTRACT

Employees are among an organization's most important resources and coined as most
valuable assets. It involves maintaining a work environment that satisfies the needs of
individual employees and management. Improving employee morale, building company
culture, conveying expectations. An effective employee relation involves creating and
cultivating a motivated and productive workforce.
This study emphasizes on understanding employee relations practices, its underlying factors,
issues and its impact on employee performance in Kavya Systems, Bangalore.
A descriptive approach is adopted for this research in the beginning to describe the existing
employee relations practices at Kavya Systems while at the later stage of study Causal
approach was applied in order to link the employee relation factors to performance of
employees. The study includes questionnaire based survey design to find out employee
relations practices, its underlying factors, issues and its impact on employee performance in
Kavya Systems, Bangalore. The ground aspect of this study is to analyses the effect of
Employee Relations on the performance of an employee. Primary data collection was
conducted by undertaking convenient sampling which may have affected the accuracy of
results. Relationship between employee relations factors and employee performance were
found by statistical testing of formulated hypothesis. In the research conducted it was
identified that employee relations practices followed in the organization had a direct impact
on the performance of employees in the organization. Employees with higher level of
satisfaction with the existing organization practices where more productive and resistive
towards changing the current organization. The study also revealed that improving the
employee relations practices an organization can improve the performance of employees and
thereby the overall productivity of the organization.

Page | 1
Introduction

Employees are among an organization's most important resources and coined as most
valuable assets. The nature and amount of work performed by them have a direct impact on
the productivity of an organization. So maintaining healthy employee relations in an
organization is a pre-requisite for any organization in order to achieve growth and success.
According to CIPD (Chartered Institute of Personnel & Development) Employee relations is
a broad term that incorporates many issues from collective bargaining, negotiations,
employment legislation to more recent considerations such as work-life balance, equal
opportunities and managing diversity. It comprises of the practices or initiatives for ensuring
that Employees are happy and are productive. Employee Relations offers assistance in a
variety of ways including employee recognition, policy development and interpretation, and
all types of problem solving and dispute resolution. It involves handling the pay–work
bargain, dealing with employment practices, terms and conditions of employment, issues
arising from employment, providing employees with a voice and communicating with
employees. Employee relations is concerned with maintaining employee-employer relation,
which contributes to satisfactory productivity, increase in employee morale and motivation
Once there was a time when "Employee Relations" meant labor relations that fragmented into
Negotiate. Orchestrate. Dictate. HR professionals helped negotiate collective bargaining
agreements. The provisions of the contract defined the relationship between management,
unions, and workers.
Today, Employee Relations is a much broader concept. It involves maintaining a work
environment that satisfies the needs of individual employees and management. Improving
employee morale, building company culture, conveying expectations. An effective employee
relation involves creating and cultivating a motivated and productive workforce. It’s
necessary to keep the dynamics of employer-employee relationship in mind. It covers all the
relations between employers and employees in industry. Employee relations also includes
giving scope for employee participation in management decisions, communications, policies
for improving cooperation and control of grievances and minimization of conflicts.

People are generally motivated from within, but HR and organization focus should be on
what they can do to help foster the type of environment where employees thrive to give their
best performance. Motivated employees have higher level of work engagement, reduced
turnover and better performance as compared to disengaged employees. Since the
organization success is directly linked with the performance of its employees the companies
maintaining strong employee relations initiatives will benefit because their workforce is
highly motivated to put their best efforts. Hence managing these relationships becomes
important for business success, as strong and healthy relationships can lead to greater
employee happiness and even increased productivity.

Page | 2
Research Objectives
1. To understand the importance of employee relations.
2. Study the factors related to employee relations.
3. Analyze the impact of employee relations on employee performance.

Research Questions:
1. What are the factors affecting employee relations?

2. What is the impact of employee relations on employee performance?

Investigative Questions:
1. Does the organization provide ample resources for job execution?

2. Is organization work related information dissemination effective?

3. Does organization encourages employee motivation through work recognition?

4. How is the working environment of the organization?

5. What all initiatives have been taken to motivate employees and look after their
satisfaction?

Hypotheses

Hypothesis statements based on assumptions include:

H01 (null hypothesis) - Working efficiency of employees is not dependent on the

resources provided by the company to employees. 

H11 (alternate hypothesis) - Working efficiency of employees is dependent on
resources provided by the company to employees

Page | 3
Literature Review

The literature review is a critical review of the existing research which relates to this project.
Below are some of the important researches done in the same area as this.

Gennard J and Judge G define employee relations as Employee relations is a study of the
rules, regulations and agreements by which employees are managed both as individuals and
as a collective group, the priority given to the individual as opposed to the collective
relationship varying from company to company depending upon the values of management.
As such it is concerned with how to gain people’s commitment to the achievement of an
organisation’s business goals and objectives in a number of different situations.

Schein (1988) is largely responsible for this notion of a psychological contract and his
suggestion was that between employer and employee there exists an implicit contractual
relationship which is derived from a series of assumptions on the part of employer and
employee about the nature of their relationship. These assumptions may not be legally
enforceable but they constitute a set of reciprocal arrangements and form the basis for a series
of expectations that may have a considerable degree of moral force.

The main assumptions are that:

 Employees will be treated fairly and honestly.
 The relationship will be characterised by a concern for equity and justice and this will
require the communication of sufficient information about changes and developments.
 Employees’ input will be recognised and valued by the employer.

Cully (1998) addressed this issue as part of an attempt to ascertain the extent to which
employees in the UK were satisfied with their job/work. They compiled a measure of job
satisfaction which took into account employees’ satisfaction with four different components
of their overall reward package incorporating both intrinsic and extrinsic factors. The intrinsic
factors can be seen to reflect components of the psychological contract above and consist of:

 Influence (the level of autonomy and control) over the job;

 A sense of achievement derived from meeting the challenge presented by work; and
Page | 4
 Respect from managers in terms of recognition for a job well done.
The fourth component of the measure was pay. The conclusions of the researchers were that,
overall, a majority of employees were satisfied however:
 Employees tended to be least satisfied with pay;
 Managers tended to be more satisfied than other occupational groups;
 Older workers tended to be more satisfied than younger workers; and
 Part-time workers were more satisfied than full-time workers.
Summary of Literature review

Author, Year Important findings

Gennard J and Judge G (2002) It is management that determines the priority

given to the individual relationship

Schein (1988) There exists an implicit contractual

relationship between the employee and the
employer which is derived from a series of
assumptions on the part of employer and
employee about the nature of their
relationship.

Cully (1998) Work satisfaction depends on sense of

achievement, respect from managers in terms
of recognition for a job well done.

Etzioni(1975) Identified three different sources and forms

of power that could be utilised by employers
and three different forms of involvement.
The sources and forms of power were named
coercive, remunerative and normative, and
the forms of involvement were named
alienative, calculative and moral.

Gazioglu, Saziye (2013) Job satisfaction in relation to managerial

attitudes towards employees

King, Price& Dainty (2004) An organizations strengths and weakness

relies on the way they manage and undertake
employee relations within their businesses.

Page | 5
Blyton & Turnbull (2008) Conducted a study that revealed: employees
do not put up their best performance at work
if the employee-employer relations are
estranged

Gospel & Palmer (1993) Regarding to employee relations they stated :

Conflict and cooperation coexists in
organization

Variables Identified

Table – Independent and dependent variables

Independent Variable Dependent Variable

Employee-employer relation Employee Performance

Organization Success
Strong employee relations

Work environment Conflict and co-operation

Research Methodology
Research Approach
Descriptive & Causal approach
Researchers used descriptive approach for their research as the objective of the research is
known to them. The major emphasis is on describing what has happened i.e. ―the post-facto‖
analysis. The main objective of the research is to find the impact of employee relations on
performance of employees. At later stage to study the underlying factors of employee
relation and its effect on employee performance causal approach was applied.

Data collection method

The primary data were collected in three ways:

A survey questionnaire (Paper-pencil-questionnaire), and face- to- face interview (semi-
structured interview wherever possible) was organised to gather required information on the

Page | 6
impact of employee relations on performance of employees in Kavya Systems, Bangalore.
Secondary data were an important part in this study, especially in the literature review. Two
main sources for the secondary data collection included:
 Different websites containing journals, research papers & general information on
Employee Relations.
 Through the literature research, some useful journal papers and PDF files have been
found online.

The aim of the survey method was to understand the existing employee relation practices and
impact of the same on employee performance in Kavya Systems. The survey was made up of
questionnaires and interviews. Two types of survey were considered in this study:
1. Semi-structured interviews wherever possible and a Paper-pencil-questionnaire was
not possible.
2. Paper-pencil survey questionnaire.

Sampling Design
―Sample is the segment of the population selected for investigation. The selection of the units
to which the data relate is an important phase in the collection of data‖ (Bryman, 2004). It is
difficult to do a direct observation and survey every individual in the company. Instead, a
sample population was used to make inferences about the impact of employee relations on
employee performance. The following methods were employed in this study.
 Non-probability Convenience sampling with randomly selected samples.

 th 
The actual responses were collected from 25 March – 1st Apr 2015.

In convenience sampling, the selection of samples from the population is based on easy
availability and accessibility.

 Population: Researcher took present employees of Kavya System.

 Sample Frame: Employees of Kavya System were the selected as sample frame by
research team.
 Scale Used: For this study researcher has used nominal as well as ordinal scale. And
researchers set up some questionnaire with Likert scale. Most of the questions were
close ended questions.

 Sample size:

After concerned calculation, research team had arrived at a sample size of

Population (N) = 1470, Confidence Interval (e) = 6.5%

Page | 7
Sample proportion (p) = 0.5, q (1-p) = 0.5, Confidence Level = 95%
Z-Score (Z) = 1.96
Sample Size = 215

Research Tools
Questionnaire Design
There are about 14 questions in the questionnaire for employees. Researchers tried to keep
the questionnaire as short as possible to get more reliable responses asking all the details they
needed. The first two questions were demographic questions. All the questions were closed
questions as they are more specific than open ones, and could detect differences among
respondents more accurately.

DATA ANALYSIS & INTERPRETATION

Analysis was done with the help of Pivot table and then generating useful graphs in Microsoft
excel. In the charts below:-

 F- stands for female employees response

 M- stands for male employees response
 2-stands for strongly disagree response
 3-stands for disagree response
 4-stands for agree response
 5-stands for strongly agree response

Employee Age Employee Age

25 25
21 21
20 18 20 18

15 15
11 Co… 11 Count
10 10

5 5
0 0
0 0
20-25 25-30 30-35 35-40 20-25 25-30 30-35 35-40

Page | 8
 Kavya System provides ample resources : 61% employees agreed that the company
provided the necessary materials and equipment needed to do the job efficiently. The
percentage was lower who didn’t agreed on the same matter i.e. 9%

strongly
0% 20% 40% 60% 80% disagree
strongly agree

strongly disagree 9% disagree

strongly agree 11%
agree
disagree 19%
agree 61%

Source: Survey Data

Fig. Providing ample resources

Able to complete work in time: Among the employees higher number of female employees (44)
disagreed in completing work in time whereas higher number of male employees (40) agreed that
they were able to complete the work in time.

44
45 40
40
33
35
30 27 2

25 3
20 4
14
15 11 5
9
10 6
5
0
F M

Source: Survey Data

Fig: Able to complete work in time

Received necessary information and communication needed to do the job:

Page | 9
Among the employees number of well informed employees was much higher (96) than the
employees who were not well informed about job and their responsibilities.

44
45 40
40
33
35
30 27 2

25 3
20 4
14
15 11 5
9
10 6
5
0
F M

Source: Survey Data

Fig: Necessary information and communication

Satisfied with current salary

More number of employees was satisfied by their salary (96) however there was marginal difference
when compared to unsatisfied employees i.e.10

100
14
90 9
80
33 5
70
40 4
60
50 3
40 2
44
30 27
20
10 6 11
0
F M

Source: Survey Data

Fig: Satisfied with current salary

Regularly receive recognition/praise for good work

Company exhibited work recognition and praising more number of employees for their good work
and majority of employees felt their work recognized by the company and agreed to the matter
Page | 10
 45
40
40 38

35
29
30
25 2
25
3
20
4
15 13
11 5
9
10
6
5

0
F M

Source: Survey Data

Fig: Recognition/praise for good work

Regular hike in salary

The hike in salary of male employees was more frequent and regular as compared to salary
hike for female employees. Overall more employees agreed that they were given salary hike
on regular basis.

9
40
M 27
11 5
4
3
14
33 2
F 44
6

0 10 20 30 40 50

Source: Survey Data

Fig: Regular hike in salary

Benefits offered here are fair

More number of employees agreed to fair practices and benefits given by the company to its
employees which show fewer discrepancies in offering to employee’s benefits in Kavya
Systems.
Page | 11
 45
40
40 38

35
29
30
25 2
25
3
20
4
15 13
11 5
9
10
6
5

0
F M

Source: Survey Data

Fig: Fair Benefits

Opportunities to express opinion

Kavya systems encouraged employee participation in decision making and were open to
employee’s opinion. As a result of survey data we came across the same conclusion as higher
number of employees agreed of opportunities being given to express their opinions.

44
45 40
40
33
35
30 27 2

25 3
20 4
14
15 11 5
9
10 6
5
0
F M

Source: Survey Data

Fig: Express opinion
Colleagues are pleasant and co-operative
Regarding work ambience created by peers and colleagues, more number of employees of
Page | 12
Kavya System felt that their co-workers are pleasant and co-operative and provided healthy
work environment.

45
40
40 38

35
29
30
25 2
25
3
20
4
15 13
11 5
9
10
6
5

0
F M

Source: Survey Data

Fig: Colleagues are pleasant and co-operative
Management encourages and helps in career development
Though more number of employees agreed that the company’s management encouraged and
helped its employees in career development but there was marginal difference in employee’s
views who disagreed to the case i.e.10.

9
38
M
25
13
5
4
11
3
29
F 2
40
6

0 10 20 30 40 50

Source: Survey Data

Fig: Management encourages and helps in career development

Feedback and guidance by superiors

Kavya Systems management approach encouraged giving feedback and guidance to the
employees by their superiors. In the data survey number of employees agreed that they were

Page | 13
given feedback and guidance by their superiors.

40
38
40

35
29
30 25
2
25
3
20
4
13
15 11
9 5
10 6
5

0
F M

Source: Survey Data

Fig: Feedback and guidance by superiors

Communicating work expectations

The employees of Kavya Systems where well informed by their superiors about the amount
of work expected from them. Higher number of employees agreed that work expectations
were effectively communicated to employees.

40
38
40

35
29
30 25
2
25
3
20
4
13
15 11
9 5
10 6
5

0
F M

Source: Survey Data

Fig: Communicating work expectations
Adequate training and direction received
Kavya Systems provided adequate training opportunities to its workforce to meet their job
expectations. Higher number of employees agreed to adequate work related training and
direction given by the company.

Page | 14
 5
30
M 23
10 5
4
3
8
27 2
F 42
8

0 10 20 30 40 50

Source: Survey Data

Fig: Adequate training and direction received

Changing company
Less number of employees agreed to switch company if they were given similar job
opportunity whereas more number of employees agreed they would choose to stay rather than
switch company in this case.

44
45 40
40
33
35
27 2
30
25 3
20 4
14
15 11 5
9
10 6
5
0
F M

Source: Survey Data

Fig: Switching company

Hypothesis testing

H01 (null hypothesis)- Working efficiency of employees is not dependent on the

resources provided by the company to employees. 
H11 (alternate hypothesis)- Working efficiency of employees is dependent on the
resources provided by the company to employees.
Page | 15
 
Degree of freedom for (2x2 ) table = (2-1)x(2-1) = 1 degree of freedom.

Contingency table for hypothesis

Observed (O) Expected ( E) (O - E) (O-E)2 (O - E)2/E

98 97.10 0.9 0.81 0.008

45 45.89 -0.89 0.7921 0.0017

48 48.89 -0.89 0.7921 0.0016

24 23.10 0.9 0.81 0.035

2 2
The critical value of  = 3.841 at α = 0.05 and d.f = 1. Since calculated value of 
= 0.046 is less than its critical value, the null hypothesis is accepted.
Hence, we conclude that Working efficiency of employees is dependent on the
resources provided by the company to employees.
Conclusion
The study revealed that majority employees of Kavya Systems have agreed that resources
were provided by the company and has direct impact on their work efficiency. Availability of
ample resources to employees leads to completion of work in time. It enhanced their
performance.In addition , it was also found that performance of employees was related to
other factors apart from resources provided such as:

 Effective communication of work related information – makes employee aware of the

work related responsibilities and expectations.

 Motivation by work recognition – employee is encouraged to perform consistently and

put their best effort in work.

 Fair policies and practices exhibited by the management of organisation- creates

equal opportunities and provide equal treatment to employees without any bias which
promotes positive attitude towards organisation and work among employees.

 Job satisfaction in terms of salary, growth opportunities and work environment

provided by the company – satisfied workers are happy workers and are more
productive than other workers who lack job satisfaction.Work environment not only
involves the ambience created by organisation but also co-workers.Kavya Systems
employees described their co-workers as pleasant and co-operative.

 Feedback and guidance from superiors – keeps employees on track regarding job
targets they have achieved, whether they have achieved in time or not, what the
organisation expects from them and how they can attain mutual benefits.

 Encouraging expression of employee opinion – imparts a sense of belongingness

among employees and strengthens the employee-employer relationship. Employees feel
they are an asset to the organisation, their voice and opinions are heard and implemented.
Page | 16
 From the study we may conclude that the employees with higher level of job satisfaction which
includes salary, work environment and growth opportunities were more productive at work, were
able to complete their work on time and also were motivated to give opinions for organisation’s
development and improve their own performance . The organisation exhibit to foster healthy
employ relation by giving ample growth opportunities, work related training, regular salary
hike and healthy work environment.

REFRENCES
Brian Wilson, (1988). "Employee Relations — A Future-Oriented, Progressive Approach".
Employee Relations, Vol. 10 Iss: 4, pp.27 – 29

Blyton P and Turnbull P (1994) The Dynamics of Employee Relations. Basingstoke: Macmillan.

Blyton P and Turnbull P (2004) The Dynamics of Employee Relations. (3rd edn). Basingstoke:
Macmillan

G, Nicholls P and Tailby S (eds), Employee Relations. London: FT/Pitman, 11–54.

Roethlisberger FJ and Dickson WJ (1939) Management and the Worker. Cambridge, MA:
Harvard

Gospel. H. & Palmer, G. (1992), British Industrial Relations, (second edition), Routledge, Lond

King, Price& Dainty.(2004).-Strategic approaches to managing human relations within

construction smes

Nicholls P (1999) Context and theory in employee relations. In: Hollinshead

Page | 17

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