| The aim of this paper is to discuss potential modes of restructuring the employment relationship in the European Union countries. In the current global economy, intensified market competition forced firms to adjust to the new economic environment introducing new technologies and reorganizing production. Intensifying market differentiation has been closely related to profound changes in the organization of production. Growing need for flexibility and differentiation in global markets seriously undermined institutions of centralized collective bargaining as a central characteristic of post-war industrial relations arrangements in most European Union countries. Labor flexibility for the enterprise is at the heart of post-Fordism. It is up to individual firms to improve internal flexibility by means of staff versatility and flexible working time. To this aim corporations have to promote internal at the expense of external labor market institutions, a trend that encourages the decentralization of industrial relations. Indeed, in the last decade, there has been a remarkable devolution of European labor relations decision-making from the national and industry level to company and even to workplace one.
Provided the emphasis on enterprise level labor-management relations, recent literature has drawn particular attention to two competing models: the Human Resource Management (HRM) approach and that of the "participatory company". Parallel to the distinctive tendency to decentralize collective activities towards the company level in most industrialized countries deregulationist argument is built around the HRM model as an alternative paradigm to the post-war "European social model" of employee relations. The emphasis shifts from "collectivism" to "individualism", undermining the post-war “European social model” of employee relations. There is a marked decline in trade unions presence. Union derecognition is getting momentum and management's antipathy towards collective activity, is pronounced.. Merit pay systems have largely been introduced, and communication and employee participation schemes have been implementing at an increasing pace. Attempts of power devolution towards line managers and a noticeable disengagement of companies from employers’ associations have been revealing elements of individual firm inclination to internalize labor relations within corporate structures. Basic elements of the employment relationship such as compensation and working time arrangements are regarded as the prerogative of management. Human resource practices are elevated to new levels of importance constituting a source of competitive advantage for a company. The vision is of a systematic utilization of employee participation schemes to enhance workplace innovation and efficiency. This approach seems to have found fertile soil in US and UK firms.
Nevertheless, prominent HRM scholars acknowledge that eventhough UK organizations have begun to implement an array of HRM practices, they have not rigorously pursued a HRM coherent model. As far as the diffusion of HRM practices in the US firms is concerned, they point out that rhetoric outstrips the reality and the difficulties mainly lie on the failure of management, union leaders and national policymakers to truly understand the strategic significance of human resource policies for corporate competitiveness. The HRM proponents, regarding the prospects of the “empowerment organisation” in the European union, admit their scepticism. Impediments to non-union HRM practices have been contributed both to organised labour and management sides. Unions in many European countries tend to perceive these practices as delegitimizing process of collective representation. Senior management, on the other side, is sceptic due to high commitments to labor. Scepticism seems to dominate middle-managers’ attitudes too, since they tend to perceive the empowerment of their subordinates as a threat to their future employment status.
Studies on continental Europe point out that companies in Europe are highly reluctant in adopting non-union HRM practices. There is a diversity of adjustments of European industrial relations systems to the challenge of bargaining decentralization. The documented diversity is attributed to the combined effects of workers' relative shop-floor power and the European governments varying stance towards national bodies of industrial relations concertation. In the European Union the management strategy at corporate level is conditioned by labor market institutions. The proponents of the “participatory company” argue that the intensification of international competition, with regard not only prices but also product quality, has implied for many European firms a search for some co-operation by their workforce. Hence, the reshaping of industrial relations has been mostly carried out, so far, not by attacking unions, but by securing their support. This signals the new role for European unions in allowing them a degree of centralized control over the process of decentralization. Joint re-regulation marked in many companies seems to be built on mutual understanding and a minimum level of trust between the social patterns. Government role is pivotal in flourishing the participatory firm. In contrast to HRM approach, the proponents of this approach stress that a conciliatory strategy of unions accepting flexibility in company employment arrangements must be encouraged and supported by a government-led institutionalization of unions expressing voice. Which approach is going to prevail in the European union labor markets remains to be seen. However, it must be noticed that the prospects of the “participatory company” approach are supported actively by the European Commission. Over the last decade, Commission has constantly promoted the dialogue between social partners, has institutionalized European Works Councils, and encouraged company flexibility and mutual trust through its White and Green papers. |
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