THE SCOPE OF EMPLOYEE RELATIONS IN HRM

The term ‘employee relations ’ was conceived as a replacement for the term ‘industrial relations’ but it’s precise meaning in today’s workplaces needs clarification. In 2010/11, CIPD undertook research into the changing nature of employee relations work in UK organizations, through interviews with HR and Employee Relations managers to provide a snapshot of current attitudes and practice. ‘Industrial relations ’ is generally understood to refer to the relationship between employers and employees collectively. The term is no longer widely used by employers but summons up a set of employment relationships that no longer widely exist, except in specific sectors and, even there, in modified form. Consistent with the theory that human capital management influences organizational performance and risk, we find that employee relations explain the cross-sectional variation in credit risk. We construct an aggregate measure for the quality of employee relations based on the firm’s engagement in employment practices and policies, and document that firms with stronger employee relations enjoy a statistically and economically lower cost of debt financing, higher credit ratings, and lower firm-specific risk. These findings are robust to the inclusion of a comprehensive set of controls and to alternative explanations. This review highlights some of the more important employee relation aspect