Understanding the Basic Concepts of Employment
Employment is created when two parties agree to work with each other. But instead of partnership, one of the parties would be the employer and the other would be the employee. An employer is basically someone who controls the business and usually manages the employee especially in a small business setting. An employee on the other hand, is someone who works on specific tasks as directed by the manager or the business owner (employer). The employee is usually compensated for their tasks depending on the agreement between parties before work commences. The relationship between an employee and employer is called employment.
Basic Settings of Employment
- Business Setting – this is the most popular form of employment. In this setting the owner or a company hires individuals to do various tasks for financial gain. The employees are paid according their agreement.
- Government Setting – this is almost the same as business setting except that the government becomes the employer. The employees are also rewarded for doing the tasks they were assigned to do depending on agreement.
- Non-profit – in this setting, the employers are non-profit organization and the employees are the volunteers working on specific tasks. The employees and employers do not receive any financial remuneration for their efforts.
- Household – this type of employment is not for business purposes but on servicing households. The employer’s object for employment is for housekeeping.
Becoming an Employer
One of the biggest mistakes of small businesses is the concept that they can just hire anyone in becoming an employer. This is, of course, possible but there are a lot of financial and managerial repercussions an employer should consider. Without thinking of any of these, a new business employer could lose their business.
An employer should consider not just the basic wages an employee would require. In most settings, a small business owner would arrange for an hourly salary. But this is not the only compensation a business should offer. There’s always the possibility of overtime pay, medical benefits and other types of insurance related to business. Some employees would also ask for child-care if they have a small kid left at home.
Employers should also consider their managerial skills. More often than not, small business owners know what to do on their enterprise but they have to make sure that they convey that knowledge to their employees. They have to carefully select their employee to ensure that their business would grow.
Working as an Employee
The burden of working in an employment setting is not only for employers. Employees should also do their part to ensure that the business or their task would be a success.
But first and foremost, one has to be employed first before becoming an employee. To become an employee, one has to match their skills to the existing demand for various industries. After going through basic screening processes, a potential employee agrees to remuneration before employment starts. Aside from work, an employee should also know their rights related to their status. Many organize labor unions used to collectively bargain or represent the employees.
Types of Relationship for Employee and Employers
Because of the evolving business processes, different types of relationship between employees and employers are created. Identifying the types of relationship is very important since this can dictate how they business owners and managers can quell disputes or conflicts.
- Small business relationship – often referred to as the “mainstream” relationship, this setting refers to business owners trying to gain financial rewards based on the products and services they offer through the employees. The employees simply do their task and are rewarded financially.
- HRM or Human resource management – this relationship is based on the fact that the most important resource for the business is the employees. This is often observed on service-oriented businesses wherein an employer hires someone who could do a specific service for the business clients.
- Pluralist industrial relations – the business is controlled by stakeholders so employees are not only working for one owner but with various stakeholders who has their personal interests and goals with the business.
- Critical industrial relations – a precarious relationship related to the pluralist view but differs in the receiving end. Instead of employees, groups are involved.
Labor Disputes
Labor disputes often arise when employees are not contending with the compensation they receive. Some could dispute their current salary as this could have been a breach of the agreement. Others would simply complain about their current working conditions. Labor disputes could also deal with dismissal or employee termination.
Labor dispute is often addressed to the government arm in charge in working with laborers. The government representative would then get in touch with the manager or the owner regarding the dispute. The process usually differs per country on how to settle a labor dispute but this often requires a 3rd party which could be a government or a labor arbiter.
Impact of Employment to National Economy
Employment is one of the most important indicators for the national economy. When the employment rate is up, then there is a big chance that the economic situation of a country is stable. The reason is that every employee is earning and the money they earn is spent on basic services and other products which also fuel other industries. When employment is high, government support is also strong because people would also contribute through taxes not only from their salary but also on other financial transactions. Along with various businesses, the government collects taxes which could be used to support the basic services of the community.