employee relations, employee relations 101

Employee Relations 101

Employee relations (the relationship between employers and employees) can make or break a workplace.

Employee relations has to do with the contractual agreement between employer and employee, but it touches upon the emotional relationship between the parties as well.

The term is also used to refer to employee conduct in the workplace.

Gartner defines the employee relations as a department within HR that deals with workplace policies about employee conduct, the investigation of improper conduct, and handling grievances and resolving disputes between employers and employees or between employees.

Why is employee relations important?

Employee relations is key to organizational performance. Good employee relations means happy and engaged employees, which boosts productivity and the bottom line.

Examples of employee relations issues

Workplace conflict: There are many reasons for workplace conflict, and with the insistence on workplace diversity, it is getting worse. It is inevitable when people with different backgrounds, perspectives, and work ethics have to work together. If conflict is allowed to run its course and is not resolved by HR, low morale is the result.

Workplace bullying: Conflict can escalate and be expressed as bullying. It can be the result of poor communication, careless hiring, and managerial mismanagement. Apart from work disruptions and decreased productivity, bullying leads to emotional stress, absenteeism, and resignations.

Workplace safety: Tensions arise in the workplace when accidents happen or employees are made to feel guilty when they need to take medical leave due to ill health. The employer may be held responsible for the injuries, medical leave, and incur expenses. The resulting loss of productivity can be significant for the organization. Promoting workplace safety should be a high priority for employers.

Hourly wage disputes: Wage disputes are only too common and lead to poor workplace relations. For instance, disputes can happen when employers expect employees to work around the clock without overtime pay, employees don’t get enough time to take a break, employees earn less than the state minimum wage, employees are dishonest about the hours they worked, or employees work unapproved overtime hours.

Annual leave: Annual leave is a common issue that causes disputes in the workplace. Annual leave is sacred to employees and when it is in dispute, conflict is inevitable. Mismanaged annual leave can dramatically affect employee relations and company operations. The first step to negotiating this issue successfully, is formulating a formal leave policy that is explained to all employees.

Pay raise requests: Pay raise disputes are common and tricky to negotiate. When managers ignore pay raise requests, or continually deny such requests, employees become disgruntled and turnover rates increase. Formally written pay raise policies communicated throughout the organizations may be helpful.

Benefits of good employee relations

  1. Improved employee loyalty and retention

Even good employees quit their jobs. Research shows that more than 57% of unhappy employees leave their jobs because of poor relations with their boss. This may be the person in charge of the department, the person in charge of a project, or the actual owner of the business.

When employees feel a deep connection to the company, it is unlikely that they will leave.

  1. Improved employee engagement

Poor employee relations often leads to a lack of employee engagement. One of the reasons given by employees is poor employer communication, with 65% of US employees indicating that their job satisfaction is impacted by employer communications.

Better workplace communication and frequent appreciation of top performers leads to improved employee engagement. An engaged workforce is more productive and committed to the success of the projects they work on. Engaged employees are motivated to do their best to help the company succeed.

  1. Decreased workplace conflicts

Unresolved and ongoing workplace conflict can severely damage an organization and even sink it. Workplace conflict as a result of differences between employers and employees, or between employees can lead to poor workplace relations.

When workplace relations are good, there is less chance for conflict. Clear communication, fairness, clear expectations, empathy, and ethical behavior on the part of the employer enhance good relationships, which minimizes the risk of workplace conflict.

  1. Improved trust

Exceptional employee relations sow the seed of trust in the workplace. Trust is built by clear and regular communication and fair treatment of employees. When managers are alert and sensitive to the feelings of their employees and treat them with empathy, a foundation of trust is established. When both parties trust each other, the whole organization benefits through productivity and employee retention.

  1. Improved workplace culture

Workplace culture can be described as the character and personality of an organization, that which makes it unique. Good employee relations lead to positive workplace culture, which spreads like wildfire across the ether. Everybody wants to work for a company with a great culture. Good work relations, and, in turn, a great company culture, impacts happiness and satisfaction in the workplace, which attracts talent.

  1. Improved work-life balance

The current work culture demands a hectic work schedule that doesn’t allow employees (and employers) enough time off to rejuvenate. Too often, employees become demotivated and end up experiencing burnout. If employee relations in the company are poor, employees may hesitate to speak up.

When employee relations are good, employees have the confidence to speak up and management can take action before the problem escalates.

  1. Improved public image

Good employee relations help companies maintain a positive public image, which leads to improved consumer confidence and sales.

One outcome of good employee relations is when employees recommend their workplace to job seekers. The reasons employees give for recommending their company are all employer actions that boost employee relations: being recognized, rewarded, and promoted by management.

Google is one company that has often been promoted by employees for the great company culture that has been created there. Google has a good public image as a desired workplace as a result.

Employee relations best practices

Companies have at their disposal a number of strategies they can follow to improve employee relations. Let’s take a look at some of them.

  1. Open and honest communication 

Employee relations best practices involve strengthening communication with employees so they have the confidence to share their opinions, suggestions, and concerns with their employer. Open and clear communication is critical for building good relationships. Employees need complete and unambiguous assignments and constructive feedback.

Employees respond positively when they believe the organization’s communications are fair and truthful. Frequent, honest communication builds trust between employers and employees, which is the cornerstone of good employee relations.

  1. Trust your employees

Employees that don’t feel trusted by management don’t work to their full potential. A lack of trust in employees affects employee morale, which in turn lowers productivity. Employees who are not trusted to do their work well, forever feel like children and end up lacking the confidence to take initiative.

Besides, micromanagement is counterproductive. Managers who monitor teams closely soon experience burnout because they are under pressure to get their own work done as well.

When employees don’t feel trusted their morale and performance suffer. People who are trusted to get a job done, tend to take responsibility and ownership of the task, which leads to job satisfaction.

  1. Show employees recognition and appreciation 

It is not that people need a shout-out every time they complete a task successfully. However, it’s demoralizing if you have been slaving away at a project, overcoming setbacks in the process, and nobody breathes a word about it afterward.

The reality is that not feeling appreciated at work is one of the main reasons for employees quitting their jobs.

Showing appreciation and recognizing achievements are key to building strong employee relations. There are many ways to do this, including regular cross-organizational meetings, private talks with employees, or monthly public celebrations.

  1. Invest in your people

Company investment in employees is crucial to creating an engaged workforce and improving employee relations. Many people feel disconnected and disengaged at work, and it’s partly due to limited opportunities for growth.

Companies can support their employees to grow personally and professionally through an Individual Development Plan (IDP), Learning and Development (L&D), or a mentoring program. There are more options depending on the type of organization and the industry. Peer coaching is also a great option that many employees enjoy.

  1. Prioritize work/life balance

When employees work such long hours that it impedes their private life, it results in discontent, mental health issues, and physical consequences like hypertension, heart problems, digestive issues, and chronic aches and pains.

You will never get the best out of your employees if you expect them to live their lives at the office.

Long working hours lead to stress, which is the underlying cause of 25% of deaths. Add to this the fact that a quarter of Americans say that work is their main source of stress. Conclusion: Companies and their work culture cause 25% of deaths in America!

Avoid long working hours and be flexible on requests for time off. Respect the fact that employees have a life outside of their working hours.

  1. Offer perks and benefits that matter

The best perks that work for employee relations improvement are ones that are tailored to the needs and desires of employees and that will differ from company to company. Here are a few examples:

  • Consider offering on-site medical care. Employees who work full-time have to leave for doctors’ appointments. For common ailments, they could consult your on-site registered nurse. 
  • Offer free meals – it’s always a welcome perk.
  • Offer healthy meal prep ingredients in the cafeteria so employees can buy all the ingredients they need instead of having to shop after work.
  • For younger employees, consider paying for childcare or having childcare facilities on-premise.
  • Provide help paying off a student loan.
  • Make contributions to employee volunteer efforts. This is a perk really appreciated by people who follow a cause.
  • Pet lovers appreciate pet-related perks, such as discounts on pet food, pet merchandise, grooming, and training classes. 

Companies that excel at employee relations


Google is famous for its employee perks. From a funky work environment, sleep pods where workers can take a nap, topnotch cafeterias, onsite gyms, swimming pools, dry cleaning services, haircut services, car washes, and more.

And the best of all: time to work on their own project. This last employee perk has led to valuable outcomes for Google, giving birth to AdSense, Gmail, and Google Maps.

This incredible company culture has led to one of the most successful companies in the world.

Virgin Group

The Virgin Group is one of the most successful business empires in the world. Most of the Virgin Group success can directly be credited to the personal belief system of the founder and CEO of Virgin, Richard Branson.

Sir Richard Branson has always made it clear that employees are the company’s biggest asset and, as such, should be respected. The Virgin Group company culture can be described as a people-first culture.

The company creates a free and relaxed work environment and subsidizes employees who want to continue their education.

Because of this people-centered culture, the company has flourished and grown to a conglomerate of more than 400 businesses. Not surprisingly, LinkedIn voted Virgin as the seventh-best company to work for in 2017.

Final thoughts.

Good employee relations is crucial to the success of a company. It is the foundation of a winning company culture that is based on fairness, trust, and mutual respect. Good employee relations enhances engagement, motivation, loyalty, and performance among employees, leading to successful giants like Google and the Virgin Group.