All You Need to Know about Employee Relations

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All You Need to Know about Employee Relations

Employee relations can make or break the workplace climate. In this article, we’ll take a look at the key pillars of employee relationship management, examples of employee relations gone wrong, and we’ll share some best practices.

What is employee relations? A definition
Employee relations examples
Employee relationship management – Key principles 
Employee relations best practices 
Employee relations policy example 

What is ’employee relations’? A definition 

Put simply, ’employee relations’ (ER) is the term that defines the relationship between employers and employees. ER focuses both on individual and collective relationships in the workplace with an increasing emphasis on the relationship between managers and their team members. 

‘Employee relations’ covers the contractual, practical, as well as the physical and emotional dimensions of the employee-employer relationship.

The term employee relations is also used to highlight the efforts a company – or the HR department – makes to manage that relationship. These efforts are usually formalized in an employee relations policy or program.

ER is a crucial factor when it comes to overall organizational performance. Why? Because good employee relationship management translates into increased employee wellbeing (and performance). And, since employees are the engine of any organization, you want to make sure that both employer-employee and cross-employee relations are well-maintained.

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Employee relations examples 

Since we just mentioned that maintaining healthy employee relations is central to organizational performance, it is therefore equally important to be aware of what ’employee relations management gone wrong’ looks like. Here are 14 examples of the different issues that may arise, and which should be tackled accordingly. Employees, for instance:

  • Have excessive unplanned absences from work 
  • Watch sexually explicit material via the company internet 
  • Show little to no respect when speaking to their supervisor
  • Get into disputes with  co-workers 
  • Are (always late) for meetings
  • Gossip all the time 
  • Have personal hygiene problems that become an issue
  • Violate  safety rules
  • Don’t communicate to management what they are doing
  • Have insufficient problem-solving skills 
  • Work from home but don’t seem to be reachable 
  • Seem to have a substance abuse problem 
  • Keep their office space or desk a mess 
  • Call the women in the office things like ‘sweetie’ and ‘darling’

Of course, these examples don’t even begin to cover the wide variety of ER issues companies have to handle. What they do illustrate, however, is that each issue concerns either the contractual, emotional, physical or practical aspects of the employee-employer relationship – or several of these dimensions at the same time.  

Employee relationship management – Key principles

At the foundation of the employee – organization relationship lies a social and psychological contract. This contract consists of beliefs about reciprocal obligations between the two parties (Rousseau, 1989, Schein,1965). Perhaps unsurprisingly, employees often perceive that their organization has failed to adequately fulfill that contract.

These perceptions, whether or not accurate, have been found to reduce employees’:

  • trust
  • job satisfaction
  • intentions to remain with the organization
  • sense of obligation
  • in-role and extra-role performance

In other words: these perceptions can potentially be catastrophic for your employee relations. This is why it’s important to understand when perceptions of psychological contract breach arise.

According to a study by Morrison and Robinson, there are two root causes of perceived psychological contract breach: reneging and incongruence. Reneging is when an agent of the organization recognizes that an obligation exists but knowingly fails to meet that obligation. An example would be when a recruiter made an explicit promise to a new hire that he or she would be promoted within three years and then fails to uphold that promise.

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Incongruence, on the other hand, is when the employee and organizational agent(s) have different understandings about whether a given obligation exists or about the nature of a given obligation. An example would be when a recruiter vaguely said that people tend to get promoted quickly, often within three years and that the new hire (mis)interpreted this as a promise.

Now, what lessons can we deduct from the above when it comes to employee relationship management?

There are two key principles here for organizations: 1) keep your promises and 2) be both clear and honest in your communication. As tempting as it may be, don’t oversell the opportunities your company has to offer to candidates or employees because this will lead to disappointment and all of the other negative effects we mentioned earlier. And if for some reason you realize that you won’t be able to fulfill a certain obligation, be honest about it and inform people sooner rather than later.

Check out this Learning Bite to learn all about employee relations!

Employee relations best practices

Let’s take a look at some of the employee relations efforts HR departments make to manage the employee-employer relationship. Here are 6 employee relations best practices.

1. Honest communication 

No surprises here. As we pointed out earlier, it’s crucial to communicate openly with your employees since good and honest communication is the foundation of your relationship with them. Share organizational updates with your team, inform them as soon as possible about people leaving, and build a relationship in which no one is afraid to speak up or ask questions. Part of this communication should be about sharing the company’s vision.

2. Get your team behind the vision

Which brings us to our next employee relations best practice. This one consists of two parts. The first part is about making sure you frequently share – and communicate, there it is again – the mission and vision of the company. 

At AIHR, one way we do this is by randomly asking people questions like ‘What’s our company mission?’ or ‘What’s our goal for 2025?’ during our weekly stand-up meeting. Rather than having a manager repeat the company vision over and over, this quiz-like method gets everyone involved.

Sharing the vision and making sure everyone in your team knows the organization’s vision is the first step in getting them behind it. It makes people feel like they’re part of something bigger and that they do in fact play an active role in achieving this common goal.   

3. Trust your people

In other words: don’t micro-manage. Once you’ve made sure that people know what they need to do, what’s expected of them, and that you’re there if they need you, let them be. Trust them. 

One of my former managers was great at this. He and I used to have a weekly sit-down during which we’d discuss everything I had going on and then that was it. 

He didn’t mind if I worked from home (or from an Airbnb abroad), and never did I receive a message that left me feeling like he was trying to check what I was doing. If, on the other hand, I had a question or needed more information I knew I could always reach out to him and I’d usually get an answer almost immediately. 

Granted, this level of trusting your people is probably exceptional and won’t work for everyone. Just keep in mind that there is a fine line between offering guidance and feedback

4. Recognition & appreciation 

No less than 76% of employees who don’t feel valued at work are looking for opportunities elsewhere. Showing your employees you care and giving them recognition is key in building strong employee relations. One way to do this is by incorporating public praise into your workplace:

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  • Encourage team-wide meetings across the organization on a regular basis. This is a great, informal moment to share appreciation for work well done and to recognize goals reached. It’s also a great chance to ensure team members how valued they are. 
  • Encourage regular, company-wide ‘all hands’ meetings. During these meetings, achievements can be recognized and celebrated across departments. All hands events also leave everyone with the knowledge that their contributions are part of a bigger picture, working towards a common goal. 
  • Celebrate your coworkers. Have a small, end of the week celebration of the little things that impacted people’s weeks. This can be as simple as sending out an email reminding people to put forward their weekly ‘cheers for peers’ which are then read or shared in front of the whole company at the end of the day, getting the pre-weekend praise flowing.   

5. Invest in your people

Showing people you care and building strong employee relations also means investing in them. For example with learning and development (L&D), a peer mentoring program, or an employee wellness program. The options here are endless and will depend on the type of organization, industry, and available budget. 

A powerful – and usually budget-friendly – form of L&D is peer coaching. Having and being a peer coach gives people a 360-degree view of their performance and enables them to obtain new knowledge and (leadership) skills. 

As an added bonus, peer coaching boosts a feeling of camaraderie among employees and has a positive effect on their engagement.       

When it comes to learning and development, two more things are worth noting. The first one is feedback. It’s hard to talk about people’s development without mentioning feedback since it’s thanks to constructive feedback that we are able to improve ourselves. 

The second one is flexibility. If you want your people to develop themselves you should give them the time to do so. Giving them a certain flexibility to manage their own days and workload allows them to schedule moments for their learning too.  

6. No favorites

Put simply, if you want your employee relations to be good with everyone then don’t play favorites. Create a work environment that truly enables all employees to participate and thrive and in which everybody knows that they are heard. This has everything to do with being an inclusive workplace, something we’ve written about before.      

Employee relations policy example

There are probably as many employee relations policy examples as there are companies. However, they all have a few things in common (non exhaustive list): 

  • An introduction about the company and why it needs an employee relations policy
  • The company’s Guiding Principles in creating its employee relations 
  • A section on Compliance
  • A section on Collective Negotiations/Industrial Relations
  • A section on Disciplinary Action 

Here’s an employee relations policy from Brown University, Deutsche Telekom, and (an old one from) Nestlé.  


Employee relations can make or break the workplace climate – and your organizational performance. The best practices we shared in this article can be a big help in building strong ER in your organization. If you feel we missed one, share it with us in the comments below.


What is employee relations?

Put simply, employee relations’ (ER) is the term that defines the relationship between employers and employees. ER focuses both on individual and collective relationships in the workplace with an increasing emphasis on the relationship between managers and their team members. 

How to manage employee relations?

There are two key principles for organizations when it comes to employee relationship management: 1) keep your promises and 2) be both clear and honest in your communication.

What are employee relations best practices?

Best practices include: open communication, get your team behind your vision, invest in your people, give recognition and appreciation and don’t play favorites.

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