What is employee relations?

Employee relations is a term that describes the interactions, communications, and relationships that businesses cultivate with their employees.

A business is only as effective as its employees. Happy, loyal, engaged employees are significantly more productive and more accurate in their work than disengaged ones. But perhaps even more than that, employees who feel satisfied and supported in their positions are much more likely to pass those positive feelings to customers and clients. Simply put, a positive employee experience leads to incremental returns for the organization.

Unfortunately, in many organizations, happy employees are the exception rather than the rule. Often, this disengagement stems from poor internal relationships. And in an era where more and more disenfranchised workers are choosing to pursue other options rather than stick it out, organizations around the world are scrambling to better understand how to improve employee relationships.

Employee relations (ER) describes an organization’s efforts to create and maintain a positive relationship with their employees. The intended result? A happier work environment and a more engaged workforce—one that will remain loyal and committed even through the most difficult times.

Graphic outlining what employee relations is.

Improved employee relations are often supported by employee relationship management. Employee relationship management describes the tools, strategies, and initiatives designed to manage employee interactions and achieve company objectives. In many cases, the term ‘employee relationship management’ is used synonymously with ‘employee relations.’

At its heart, ER is about treating employees respectfully and building positive interactions within the company. To achieve this, organizations that commit to improving employee relations first need to recognize and adhere to five key principles. These principles are:

Honesty/reliability

Employees devote their time, effort, and energy towards helping their companies achieve their goals. If they can’t trust management to make that sacrifice worthwhile, then they’ll likely move on as soon as a different opportunity presents itself. Companies need to focus on being honest with their employees. This includes keeping promises, as well as dealing fairly with every hire.

Transparency/communication

Communication and transparency are vital to any relationship, and employee relations is no exception. Transparency helps the workforce better understand their roles and responsibilities, and how they contribute to the big picture. Keeping communications lines open and available also demonstrates to employees that their opinions matter and that they have reliable people to turn to when problems, concerns, or anxieties arise.

Feedback/gratitude

Communication is a door that should swing both ways. By providing direct, honest feedback, employers demonstrate their commitment to helping their staff become the best versions of themselves. Likewise, demonstrating gratitude for a job well done—or even just adhering to the social niceties of saying ‘please’ and ‘thank you’— helps reinforce the employees' perceived value of their own contribution.

Investment

Perhaps the most effective way to show employees that they matter is to invest in their success. This should include growth and learning opportunities within the company, but should also go beyond those investments designed specifically to further business interests. Allow employees to pursue non-company projects, and create benefits to help them grow personally, as well as professionally.

Impartiality

Managers and other leaders within the company are people, and will naturally connect better with some employees than with others. However, when it comes to creating an inclusive workplace, these leaders must not allow their personal feelings to influence whom they present opportunities to. Favoritism has no place in positive employee relations; everyone in the company should feel as though their voice is heard and their contribution is appreciated.

Although the C-suite and other decision-makers may be the most prominent faces of the organization, it’s the day-to-day employees that are responsible for helping the company achieve its objectives. When that foundational workforce is disengaged, then the entire business suffers.

Humans are not machines; they don’t exist only to perform specific functions, and they generally aren’t capable of jumping directly to full productivity at a moment’s notice. Employees need to be engaged to perform their best work, and they need to know that their contribution matters and is appreciated.

On the other hand, those businesses that make employee relationship management a priority place the happiness and success of their workforce as a central focus. This not only allows for a happier and more engaged workforce, but also brings many tangible business benefits.

Correctly implemented, employee relationship management brings clear advantages. These may include the following:

Improved growth

A major indicator of business success is growth. As an organization generates enough profit and establishes its place within the market, it begins to seek additional opportunities for creating revenue. By improving ER, companies empower their workforce to accomplish more and to get more out of existing resources. Increased productivity and efficiency, backed by the best efforts of engaged employees, create the perfect environments for organizations to grow.

Increased revenue

A satisfied workforce that feels as though their contribution matters and is appreciated, and that knows that their company is invested in their success, will naturally be more productive. At the same time, employees that are treated well are much more likely to pass those good feelings onto customers and clients. A happy, healthy work environment creates a happy, satisfied customer base, leading to increased returns overall.

Reduced workplace conflicts

Whenever two or more people are brought together to collaborate on a project, conflict becomes a possibility. Unfortunately, workplace conflict can slow productivity down to a crawl, and in extreme cases may even lead to absenteeism, project failure, terminations, and even lawsuits. Companies that foster positive relationships within the organization see fewer conflicts. And when disagreements do arise, employees trust management enough to be willing to work with team and department leaders to find a solution that can benefit everyone.

Enhanced loyalty

There are few things as valuable to a company as the right talent. But with the ever-increasing demand for dedicated, capable employees, businesses are having to do more to retain their people. Employee relations help ensure that the work environment is a positive one and that valuable talent doesn’t have to search elsewhere for recognition, support, or competitive benefits. Even when competitors may be offering higher salaries, employees that are happy with their current organization are less likely to leave.

For businesses of all sizes, across all industries, engaged employees are a resource worth investing in. But while an increased focus on ER can go a long way towards securing valuable talent throughout a workforce, modern organizations need the right tools to help boost employee productivity and engagement.

With ServiceNow® HR Service Delivery you can boost productivity and operational efficiency with a unified employee experience platform, empower and support your workforce from anywhere, and deliver connected enterprise-wide employee journeys. As part of HR Case Management, our Employee Relations capabilities create and maintain confidential employee relations cases to record disciplinary issues in the workplace, such as reporting co-worker misconduct. This includes tracking evidence artifacts of cases, viewing case timelines to understand the sequence of events, leveraging a library of reusable templates for employee interviews, and scheduling interviews in Microsoft Outlook directly from ServiceNow®. And with the Anonymous Report Center, it provides a safe space for employees to report concerns.

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