Assesement of Employee Relation Final Thesis

ASSESSMENT
MENT OF EMPLOYEE RELATION

A CASE STUDY OF ARBAMINCH
ARBAMINCH FARM AND GINNERY AMIBARA
AGRICU
AGRICULTURAL DEVELOPMENTPLC.
MBA THESIS
BY
SEWUNET AMARE
ADVISOR - GEMECHU NEMERA (PhD)

ADVISOR:
OCTOBER2017
ARBA MINCH
MINCH, ETHIOPIA
ASSESSMENT OF EMPLOYEE RELATION
A CASE STUDY OF ARBA MINCH FARM AND GINNERY AMIBARA
BY
SEWUNET AMARE
A THESIS SUBMITTED TO THE DEPARTMENT OF MANAGEMENET, COLLEGE

OF BUSINESS AND ECONOMICS,SCHOOL OF GRADUATE STUDIES,ARBA MINCH
UNIVERSITYIN PARTIAL FULFILLMENT OF THEREQUIREMENTS FOR
THEDEGREE OFMASTER OF BUSINESS ADMINISTRATION
ADVISOR: - GEMECHU NEMERA (PhD)
OCTOBER 2017
ARBAMINCH
Declaration
I, the undersigned, declare that this studyis my original work and has not been presented for a
degree in any other university, and that all the sources of material used for the study have been
dully acknowledged.
Declared by;
Name ________________________
Signature ______________________
Date __________________________
ADVISORS APPROVAL SHEET

A CASE STUDY OF ARBAMINCH FARM AND GINNERY AMIBARA
ARBA MINCH UNIVERSITY SCHOOL OF GRADUATE STUDIES
DEPARTMENT OF MANAGEMENT
BY
SEWUNET AMARE
APPROVED BY ADVISOR
DATE SIGNATURE
GEMECHU NEMERA (PhD) -------------------------- -----------------------------
Research advisor
ABIYU JIRU (MBA) --------------------------- ------------------------------
Co-advisor
APPROVAL SHEET

A CASE STUDY OF ARBAMINCH FARM AND GINNERY AMIBARA
ARBA MINCH UNIVERSITY SCHOOL OF GRADUATE STUDIES DEPARTMENT OF

MANAGEMENT
BY
SEWUNET AMARE
APPROVED BY DATE SIGNATURE
EXAMINER ---------------------------- --------------------------------
EXAMINER ------------------------------- ----------------------------------
EXAMINER ------------------------------- ----------------------------------

Acknowledgement
The completion of this study would have not been realized without the help of others and I wouldlike
to take this opportunity to thank everyone who helped me with this project work. First, I would like
to express my thanks and appreciation to my Advisor Dr.Gemechu Nemera, who has been
supporting and guiding me with my research work, from the beginning to the end.
I would like also to thank my wife AddisalemWondimu for her encouragement and support to
carry out the whole study of this program including this research work.
Finally and most importantly, I would like to acknowledge all the participants of this study who
gave their time and provided their valuable information. Moreover, my heartfelt thanks goes
down to everyone that has contributed to this thesis and to my education in general directly or
indirectly.
THANK YOU ALL
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Table of Contents page
Acknowledgement ........................................................................................................................... i
Table of Contents .............................................................................................................................ii
List of Tables ...................................................................................................................................v
List of Figures .................................................................................................................................vi
Abbreviations ................................................................................................................................. vii
Abstract ......................................................................................................................................... viii
CHAPTER ONE .................................................................................................................. 1
1. INTRODUCTION ................................................................................................................. 1
1.1. Background of the study .................................................................................................. 1
1.2. Background of the organization ....................................................................................... 3
1.3. Statement of the Problem ................................................................................................. 4
1.4. Research Questions .......................................................................................................... 5
1.5. Research Objectives ......................................................................................................... 6
1.5.1. General Objective: .................................................................................................... 6
1.5.2. Specific Objectives: .................................................................................................. 6
1.6. Significance of the Study ................................................................................................. 7
1.7. Scope and Limitations of the Study ................................................................................. 7
1.7.1. Scope of the study ..................................................................................................... 7
1.7.2. Limitations of the Study............................................................................................ 7
1.8. Organization of the study ................................................................................................. 8
CHAPTER TWO ................................................................................................................. 9
LITERATURE REVIEW .................................................................................................... 9
2.1. Employment ..................................................................................................................... 9
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2.2. Employee Relations.......................................................................................................... 9
2.3. Employee Relations Issues ............................................................................................. 10
2.3.1. Work place practices ............................................................................................... 11
2.3.2. Safety and health ..................................................................................................... 11
2.3.3. Healthy employee relation issue ............................................................................. 12
2.3.4. Training ................................................................................................................... 12
2.3.5. Performance management ...................................................................................... 13
2.3.6. Living Wage............................................................................................................ 14
2.3.7. Grievance procedures and internal dispute resolution ............................................ 14
2.3.8. Employee Engagement and Commitment .............................................................. 15
2.3.8.1. Engagement ............................................................................................................ 15
2.3.8.2. Commitment ........................................................................................................... 16
2.3.9. Trust and engagement ............................................................................................. 17
2.4. Tripartite Cooperation .................................................................................................... 18
2.5. Legal framework for employment in Ethiopia ............................................................... 18
2.5.1. Bargaining ............................................................................................................... 19
2.5.1.1. Legal framework of employee relation in Ethiopia ............................................ 19
2.5.2.2. Collective bargaining and agreements in the Ethiopia ........................................ 20
CHAPTER THREE ........................................................................................................... 21
RESEARCH METHODLOGY .......................................................................................... 21
3.1. Research Design ............................................................................................................. 21
3.2. Sample of the Study ....................................................................................................... 21
3.2.1. Sampling design .................................................................................................... 21
3.2.1.1. Population size .................................................................................................... 21
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3.2.1.2. Sample size.......................................................................................................... 21
3.3. Data Collection ............................................................................................................... 22
3.3.1. Primary Sources ...................................................................................................... 22
3.3.2. Secondary Sources .................................................................................................. 22
3.4. Instrument....................................................................................................................... 23
3.4.1. Design of the Instruments ....................................................................................... 23
3.5. Reliability Analysis…………………………………………………………………….…23
3.6. Methods of Data Analysis .............................................................................................. 24
CHAPTER FOUR .............................................................................................................. 25
DATA PRESENTATION, ANALYSIS AND INTERPRETATION .................................. 25
4.1. General Characteristics of the Respondents ................................................................... 25

4.2. Employee Relation Practice ........................................................................................... 27
4.3. Tripartite relations .......................................................................................................... 32
4.4. Labor Union ................................................................................................................... 35
CHAPTER FIVE ............................................................................................................... 41
SUMMARY, CONCLUSION AND RECOMMENDATIONS ........................................... 41
5.1. Summary ............................................................................................................................ 41

5.2. Conclusions ........................................................................................................................ 44
5.3. Recommendation ............................................................................................................... 45
5.4. Direction for future research…………………………………….…………………………………45
REFERENCES .................................................................................................................. 46
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List of Tables pages
Table 3.1.Sampel size determination…………………………………………………...................... 24

Table 3.1.Relyability analysis………………………….……………………………..…….............. 23
Table 4.1 general characteristics of sampled respondents……………………………………...…. 28
Table 4.2.1 respondent response concerning, the existence and awareness of
Policy and procedures…………………………………………………………………... 30
Table 4.2.2 respondents understanding of frequency major employee
Relation issues that case conflict……………………………………………………… 32
Table 4.2.3 respondents rank of employee relation issues that cause grievance and
Complaints basedon their severity level…………………………………….……………33
Table 4.2.4 rating of sampled respondents on issues related to conflict resolution practic……..….. 34
Table 4.2.5 response of respondent on the extent of effectiveness of employee relation practice…. 35
Table 4.3.1 response of sampled respondents on the contribution of the tripartite agreement…..… 36
Table 4.3.2 sampled respondent’s response on rating bad effect of the tripartite agreement………. 37
Table 4.4.1 sampled respondents rating factors that influence to be member of labor union……... 39
Table 4.4.2 of sampled respondents rating factors not to be member of trade union……………… 40
Table 4.4.3responses of sampled respondents on the existence of healthy employee relation… 41
Table 4.4.4 responses of sampled respondents on the existence of bad employee relation……..... 43
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List of Figures pages
Graph 4.2.1 respondent’s awareness of policy and procedure based on experience ……….…….. 31
Pie chart 4.2.1 the existence of employee relation issues which are case of
Conflict in AFGAAD……………………………………………………………. 31
Pie chart 4.3.1 the existence of tripartite relation to solve disputes………………………………. 35
Pie chart 4.4.1 Response of sampled respondents on the existence of labor union……………….. 38
Pie chart 4.4.2 State of membership of sampled respondents to labor union………………………. 38
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Abbreviations/Acronomyies
 HR – Human Resource
 HRM- Human Resource Management
 AFGAAD-Arbaminch Farm and Ginnery AmibaraAgricultural Development
 PPESA-Public Enterprises Supervising Agency
 SPSS – Statistical Package for Social Sciences
 ILO- International Labor Organization
 CIPD-Chartered Institute of Personnel and Development
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Abstract
Employees are among an organization's most important resources and coined as most valuable
assets. An effective employee relation involves creating and cultivating a motivated and
productive workforce and also it involves maintaining a work environment that satisfies the
needs of individual employees and management. This research work is designed to assess
employee relation of Arbaminch Farm and Ginnery Amibara Agricultural
Development.PLCAFGAAD.Ninety-two employees and management members are selected using
non probability sampling method. The objective of the study is to assess the employee relation in
the organization. To gather information for the study questionnaires with close and open ended
are used. Accordingly, 92 questionnaires were distributed to both the management
andemployees and interview was conduct with top five management members (section heads and
unit farm heads) and labor union representatives (Labor union head and other executive
committee members).On the basis of the data obtained from the respondents, the study found that
there is high level of employee turnover grievance logged and less productivity because of lack
of motivation, inefficient communication, poor working condition, and lack ofemployee
participation,the organizations employee relation polices and procedure and the organization
hasplace importance to employee relation issues like health and safety, learning &development,
fair and just treatment and financial benefits are found to be very important for employees. In
light of the findings, the followingrecommendations were forwarded. AFGAAD need to create
awareness regarding tripartite relationship so as to minimize employees’ suspicion and
ambiguity regarding tripartite. And to make use of its positive contribution for enhancing
employee relation practices; Theorganization need to enhance key employees relationissues
related to health and safety, financial benefit, trust and confidence, learning and
development;AFGAAD should improve the working conditionsto create a good conducive
environment for employees, motivate employees , Improve communication within the
organization and involving employees in decision making so as to improve relationship with
employees to improve Organization productivity.Implement strategies for effectively putting in
topractice those employee relation issue which causes conflict and also for enhancing issue
which strength the employee relation practice and lead the organization to better future.
Key words: -employee relation, tripartite cooperation, conflict resolution, safety and health,
collective bargaining.
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CHAPTER ONE
1. INTRODUCTION
1.1.Background of the study
Employees are the focal point in the success of every organization. If the employees work
together and share a good relationship with employers they can achieve their tasks much faster.
Harmonies employee relationship is important and valuable to the organizational success and
achieving competitive advantage. It is necessary to have a strong relationship between
employees and employers that leads to productivity, motivation, and better performance.
Employee relationship refers to the relationship between employees and management as a
framework of organizational justice consisting of organizational culture and management style as
well as rules and procedural sequence for grievances and conflict management indeed, the
objective of employee relationship is to achieve harmonious employee relations and minimize
conflict practices in employment Torrington and Hall (1998).
According to Edward (2010), employee relations involve the body of work concerned with
maintaining employer employeerelation that contributes to satisfaction productivity, motivation,
and morale. Essentially, an employee relation is concerned with preventing and resolving
problems involving individuals who arise out of work situations. Management shall provided
information to employees to create better understanding of management's goals and policies to
enhance harmonious employee relation. Feedback is a means to healthy employee’s relation in
correcting poor performance, and to address personal issues that affect them in the workplace.
According to Fairris (1997), employee relations are related to the three solutions to labor
problems: personnel/human resource management; trade unionism and collective bargaining and
government legislation. Labor-management relations aim to protect the interests of labor and
management. It targets the highest level of mutual understanding among all party which takes
part in the organization process. It seeks to prevent conflict and works for harmonious relations,
a key factor in the productivity of the staff and to the organization progress. Among worker-
management relations' objectives are: increased productivity; enhanced worker efficiency; the
establishment and promotion of work place democracy; the elimination or reduction of the
number of strikes or lockouts via the provision of reasonable wages, enhanced living and
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working conditions and certain benefits; the improved economic conditions of workers in the
existing state of industrial managements and political government.
According to Armstrong (2010), employee relations are concerned with generally managing the
employment relationship and developing a positive psychological contract. In particular they
deal with terms and conditions of employment, issues arising from employment, providing
employees with a voice and communicating with employees.
James (2002) stated that organization effectiveness is based upon effective employee relations,
and these are based upon trust. Trust could be built only based on relationship at a time. But this
kind of partnership can multiply more rapidly if an organization behaves in accordance with
certain shared values, focusing on honesty, respect, empowerment, collaboration, transparent
behavior, and open communication. Accordingly, relationship continuum exists, a series of
stages in the evolution of how employee and management choose to relate to one another. The
relationship continuum, as a model, is both descriptive and prescriptive. It is descriptive in that it
identifies the status of the labor-management relationship by showing at which stage the
relationship currently stands. It indicates whether it is effective and based upon the positive
values we have described, or whether it is characterized by resentment.
According to National Employment Policy and Strategy of Ethiopia (2009) in Ethiopia, there is a
high employee turnover, due to very low job satisfaction which is caused byan employee relation
problems and unconducive organizational climate, AFGAAD is one of the organization in which
high employees turnover is observed from year to year and repeatedly grievance lodged by
employees dueto employee relation problems and unattractive organizational climate. When
employees with their skills and knowledge leave the organization, it reduces the quality of the
service of the organization, hamper moral of the remaining employees, force the organization to
huge amount of financial lose, costing the organization in terms of productivity, money, time and
even increase work load to the remaining workers.
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1.2. Background of the organization
Arbaminch Farm and Ginnery Amibara Agricultural Development plc. AFGAAD is located in
Southern Ethiopia at a distance of 505 km away from Addis Ababa. The farm was initially
established by a foreign company in 1960, with a total area of 892 hectares. It was run by few
share holders till the time of the socialist regime (North Omo Agricultural Development
Enterprises 1998).
In 1993 the farm was re-organized as public enterprises by council of ministers regulation
No.133/1993 and has become  North Omo Agricultural Development Enterprise which was
established with the mandate of administering three state farms (Arbaminch farm and Ginnery,
Abaya and Sile farms). The supervising of the enterprises was designated by the government in
accordance with proclamation No.312/2004 and has become  privatization and public
enterprises supervising agency (AmibaraAgricultural Development PLC 2012).
In 2008 the Privatization and Public Enterprises Supervising Agency (PPESA) separate all
NorthOmo Agricultural Development Enterprise state farms and announcing forprivatization,
AmibaraAgricultural Development plc has leased Arbaminch Farm and Ginnery by lease
contract with annual lease fee of 1,300,000 (One million three hundred thousand birr) from
PPESA, then it has become Arbaminch Farm and Ginnery AmibaraAgricultural Development
plc. AFGAAD(AmibaraAgricultural Development PLC 2012).
North Omo Agricultural Development Enterprises organizational structure was organized to

administer three farms with a head quarter at Arbaminch and liaison office in Addis. The two
Abaya and Sile state farms were leased out to other domestic investors, it was not practical to
maintain the previous organizational structure to run only Arbaminch Farm and Ginnery.
Because of this AmibaraAgricultural Development.PLC restructured the organizational structure
in 2009 and it has been administering the farm up to now with successful achievement in
production and profit (AmibaraAgricultural Development PLC 2012).
Currently the organization is striving to maximize its productivity, profitability and increase the
satisfaction of its customers through increasing yield of banana, maize and cotton, use of all
cultivable land, expansion of different vegetables and banana cultivation, improving the banana
3
production and packaging technologyand supplied lint cotton to domestic textile factories
(Amibara Agricultural Development PLC 2015).
The realization of banana cultivation and different vegetables expansion, the banana export
market availability, lint cotton demand in the market and the increment of crops yield and
productivity motivated, engaged and committed staffs at all levels in the organization hierarchy
through implementing harmonious employee relations based on trust and confidence. Having
good employee relations is crucial to every company, as when employees and managers share a
positive relationship, employee engagement, productivity, motivation and morale are high,
moreover it enable cooperative and flexible bargaining ,smooth communication between
employees and management, between superiors and subordinates, between labor union and
management, and among workers. Happy employees work harder, produce better work, and
ultimately keep the customer happy and the business thriving (AmibaraAgricultural
Development PLC 2015).
1.3. Statement of the Problem
According to Bibhuti (2010) andOverall et al,(2010) the success of any organization depends to a
great extent on the relationship between the employees and employer. Some of the issues of
relation are disagreement & conflict between employer and employees, dispute over working
hours and wage, lack of adequate safety in the work place, dispute on annual leave, dispute on
attendance, training and education opportunity, the work environment, grievances, hours of
work, production targets, involvement, fair and just treatment.
When there is good employee relation practices it create trust and confidence and this in-turn
pave the way to cooperative and flexible bargaining ,smooth communication ,realisticwork
arrangement. Harmonious employee relations contribute to employee engagement
andcommitment which is sign of productivity and motivation. Trust has a central role in
developingeffective communication and openness in the relationship between employees and
management, between superiors and subordinates, between trade union and management, and
amongcoworkers in the workplace (Morley, Webb and Stephenson, 1988).
Essentially employee relations are concerned with preventing and resolving problems
involvingIndividuals which arise out of or affect work situations. The absence of good employee
relationbetween employee and employer will result in dissatisfaction that expressed in grievance,
4
change in behavior, absenteeism, slow performance, loss of commitment, high turnover Morley,
Webb and Stephenson, (1988).
Arbaminch Farm and Ginnery Amibara Agricultural Development Plc usesdifferentbenefit

packages for its employee to maximize the organizational profit and to growth the organizational
productivity and has good working relation with labor union. Though, thesefactors expected to
contribute highly for having effective and harmonies employee relation. However thepreliminary
investigation done through interview, grievance and disciplinary records indicates there are
employee relation problems in the organization and also employees cannot participate in decision
making. The outcomes of these critical problems are basically expressed by dissatisfaction and
turnover, some higher position and middle level management positions are either occupied by
practitioner or remain open until qualified professionals are obtained. In 2014 year alone from
165 permanent employees 26 qualified/experienced employees from different positions left the
organization, furthermore 20 disciplinary measures were taken on employees and 28 grievance
lodged by employees,(AFGAAD Annual report,2014, AFGAAD survey report 2016).
Therefore, the purpose of this study is to assess the employee relations at Arbaminch Farm and
Ginnery Amibara Agricultural Development.plc (AFGAAD) and pinpoint the relation aspects
orissues those adversely affect productivities, motivations, trust, and engagement, Commitment
and smooth employer and employee relation. This study enable AFGAAD to identify the root
cause of the problems that manifest in terms dissatisfaction, high turnover, grievance logged and
less productivity.
1.4. Research Questions
This research intends to address the following questions:
1. What is the nature and the level of employees’ relation practices in relation to issues such
as guidance, involvement/participation, encouragement, effective communication and
support provided by their manager/supervisor?
2. What is the contribution of the tripartite agreement towards improving employee
relation?
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3. What are the perceptions of the employee and/or management regarding harmonious
employee relations practice in the organization which constitutes trust, confidence, good
communication and realistic working agreements?
4. How are conflicts resolved in AFGAAD on the understanding of productivity and
cooperative bargaining assumptions?
5. What challenges and opportunities do employees and/or management have in the
organization to achieve harmonious employee relations?
1.5. Research Objectives

1.5.1. General Objective:
This study has the general objective of assessing Employee Relation of Arbaminch Farm and
Ginnery Amibara Agricultural Development plc.AFGAAD.
1.5.2. Specific Objectives
1. To identify the nature and level of employee relations that have effect on employees
motivation and organizationproductivity.
2. To discover how much the management and employees understand the contribution of
employee relation and what employee expect /perceive it.
3. To assess the factors that can affect the employee relation and of the employee
perception.
4. To identify possible ways of enhancing healthy relationship between employees and
employer that is based on productive negotiating process.
5. To assess the challenges faced and opportunities available /to employees and
Employer at Work places in order to achieve harmonious employee relations and
minimize conflict in employment.
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1.6. Significance of the Study
This project has been identifies associated problems with employee relation that contribute for
high turnover, grievance and disciplinary measure and to lay grounds for the organization to take
corrective action.
It can also help the organization as a resource material to effectively manage the employee
relation in order to improve motivation of employees and their productivity; search appropriate
strategies for enhancing employee relation , focusing on employees’ satisfaction, motivation and
productivity, trust, confidence, communications procedure, good interpersonal relations, realistic
working agreements, effectively use conflict resolution methods, integrative or cooperative
flexibility agreement, tripartite agreement, harmonious employee relations, minimize conflict
and improve healthy relationship or social capital and ultimately committed and engaged skilled
competent work force.
It also helps Arbaminch Farm and Ginnery Amibara Agricultural Development plc. AFGAAD
for preparing strategies for alleviating employee relation issues those adversely affecting smooth
employer and employee relation and future direction of employee and employers relation.
Finally it can also serve as a source document and as a stepping stone for those researchers who
want to make further study on the area afterwards.
1.7. Scope and Limitations of the Study
1.7.1. Scope of the study
Amibara Agricultural Developmental has four farms; namely Arbaminch farm and Ginnery,
Abaya, Woito and Daramallo cotton, vegetables and banana farms in southern Ethiopia, and the
study is only focused onemployees of Arbaminch Farm and Ginnery at Arbaminch.
Further more; it will be good the researcher studies the employee reletion practise and
organaizetional performance, conflict management and other activities of the organization.
However because of some limitations the study was only focused on the employee reletion
aspect of the organization.
1.7.2. Limitations of the Study
The major limitation of the study was the shortage of time, finance and the lack of enough
literature on the issue in Ethiopian context. As a result of this the study forced to depend on
foreign literatures & practices.
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1.8. Organization of the study
This study was organized into five chapters. Chapter one introduced the study by giving the
background information, the research problem, research questions, objectives, and significance
of the study, scope and limitation of the study.Chapter two reviewed the literature of the study
and chapter three discuss about the methodology used in the study. In the fourth chapter the
research analysis i.e. finding, interpretations and discussion was presented, while chapter five
discusses about summary, conclusion and recommendation of the study.
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CHAPTER TWO
LITERATURE REVIEW
2.1. Employment
Edwards, P.T. (2010) argue that there is difference between employment and work. Based on his
argument, employment unlike work, which can be paid or unpaid, performed in a market or
outside one; basically employment calls for an economic exchange between two parties and
situates people within a market. According to the International Labor Organization (ILO), the
employment relationship is usually considered as involving full-time work, under a contract of
employment. The legal structures that are built around the employment relationship focus both
with ensuring labor markets operate smoothly and with the need to protect employees from
unfair practices and in-turn improve productivity. It is believed that, business leaders do not
generally regard staff as ‘commodities’ and often invest considerable effort and resources in
avoiding that impression. There is different perception among workers regarding employee
relationship. Thus, staffs differ widely in their needs and wants from work with some preferring
less involved form of work than might be implied by the term. The governing fact of
employment is the intertwined relationship between worker and employer and the
interdependency among them.
2.2. Employee Relations
According to Ruth Mayhew (2014) good relationships between employer and employee don't
just happen. They are the result of a strategy and activities that employee relations managers
design to improve communication between employees and management. Employee relations
managers create ways to boost employees' attitudes. Best practices incorporate labor and
employment laws, resourcefulness and human resource expertise in developing practices that
improve working relationships.
Torrington and Hall (1998) refers to the relationship between employees and management as a
framework of organizational justice consisting of organizational culture and management style as
well as rules and procedural sequence for grievance and conflict management indeed, the
objective of employee relationship is to achieve harmonious employee relations and minimize
conflict practices in employment
9
Business owners wishing to compete at a world-class level must understand the human side of
their organization and business processes. According to Jansen et al. (2013: 192-216), they must
be social architects who can work across levels and functions of the organization, continuously
improving the business process and fostering an atmosphere favorable for innovation, risk-
taking, self-directed teamwork, commitment, quality and self-improvement. Tosurvive and grow
in the twenty-first century, entrepreneurs must learn and use appropriate human skills to motivate
and inspire all those involved in their business (McDermott and Conway. (2013).
Daft and Marcic (2010) advise business owners to never allow a negative relationship to exist
between themselves and their staff. If this happens, the productivity levels of the organization
decrease. The employees are the ones who have direct contact with the customers and go an
extra mile to be helpful. When they are happy, a good relationship between themselves and the
customer is created and maintained. When they are unhappy these employees often direct their
unhappiness at the customers.
According to (Burns 2012) declared that good employer-employee relations are essential for
different reasons. These reasons might include:
 Employees who are inspired to work produce better and more results.
 The level of competency of the staff increases because of their drive to become better.
 Customer service is improved because employees who have good relations with their
employer are usually viewed as good customer consultants.
2.3. Employee Relations Issues
According to Paul O’Brien (2004) The Benefits of Strong Employment relations-are listed
below;
Productivity
Strong employment relations create a pleasant atmosphere within the work environment; it
increases the employee motivation and can also be increased through improved employee
morale. Companies that have invested into employee relations programs have experienced
increases in the productivity, and therefore the increased productivity leads to increases in profits
for the business.
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Employee loyalty
Creating the productive and pleasant work environment has a drastic effect on an employee’s
loyalty to the business, it encourages a loyal workforce. Having such a workforce improves
employee retention, in doing so the cost of recruitment, hiring and training is cut drastically. For
most businesses the high cost of employee turnover outweighs the cost of the employee relations
program that they have in place. Another benefit is that when the employee turnover is low it
ensures that the employer has a trained and skilled set of employees.
Conflict reduction
When a work environments efficient and friendly the extent of conflict within the workplace is
reduced. Less conflict results in the employees being able to concentrate on the tasks at hand and
they are therefore more productive. All the research and statistics lead to one conclusion, ‘A
happy workforce is a productive workforce’. Creating a sound and efficient work environment
with good management and a strong employer- employee relation can be the vital key to any
businesses success or failure.
2.3.1. Work place practices

According to Government of Canadian report (2012) workplace practices are the proclamation,
Procedures, and rules and practices affecting the way of work gets performed in the organization.
They include recruitment and promotion, discipline and grievance, termination, compensation,
and practices that affect working conditions, such as employee participation
2.3.2. Safety and health
According to Government of Canadian report (2012) companies are realized the contribution of
promoting the highest degree of physical, mental and social well-being of their employees and
the protection from risks to health caused by working conditions for harmonious employer
employee relation. Major workplace health issues include stress, smoking, the inability to
balance time to work and family, and lack of involvement in workplace schedules and
environments.
Health and safety concerns of employees can rise over hazardous equipment, processes and
substances employed by the company. Employees involvements are paramount important for
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minimizing hazardous condition and promoting positive health and safety culture, this in turn can
help company to attract and retain employees, it also reduce the health care costs associated with
disability, medicine and absenteeism, and improve morale. Company Success is dependent on
management commitment, employee engagement, adequate resources and a healthy workplace
policy that sets the tone and direction.
2.3.3. Healthy employee relation issue
Employee relations involve all aspects of an employee's relationship with an employer. Human
resources personnel, managers and supervisors maintain this relationship by implementing
employee policies that establish rules regarding performance, conduct, conflict of interest and
discipline. Managing employee relations issues help employer’s correct inappropriate behavior,
as well as promote a structured and productive workplace.
According to Government of Canadian report (2012) company that capable to timely address
employee relation issue at satisfactory level will enable to motivate its employees. Employers of
Motivated employees could outperform their competitors in customer satisfaction, revenue
growth and overall profitability. Properly addressing employee relations issues mean many
benefits to business. They include:
 Increased employee satisfaction, resulting in lower turnover, improved ability to cope with
change, increased productivity, significant savings and knowledge retention
 Better name recognition, improved reputation and larger talent pool, resulting in reduced
recruitment costs and more voluntary applications
 Reduced absenteeism, injuries, accidents, disability and compensation costs, healthcare and
life insurance costs, temporary employee training costs, property damage costs, fines and
insurance premiums
 Increased staff skills and competencies.
2.3.4. Training
Training is a systematic process of altering the behavior, knowledge, and or motivation of
employees in a direction to increase organizational goal achievements (Glueck, 1982). This
means for any organization to succeed in achieving the objectives of its training program, the
design and implementation will be planned and systematic, tailored towards enhancing
performance and productivity. Business institution well organized in training and development
program can result in greater employee satisfaction fostering employee loyalty and generating
12
business benefits.
Training could be on the job or off the job or both, the company may or may not paid educational
leave, tuition reimbursement, in case of reimbursement employee may obliged tossing contract
of after training service for some sort of years. There are many ways to deliver training,
including classroom training, e-training via mentoring, coaching, and support for professional.
2.3.5. Performance management
Performance management is a systematic process for improving organizational performance by
developing the performance of individuals and teams. It is a means of getting better results by
understanding and managing performance within an agreed framework of planned goals,
standards and competency requirements. Processes exist for establishing shared understanding
about what is to be achieved, and for managing and developing people in a way that increases the
probability that it will be achieved in the short and longer term. It is owned and driven byline
management Armstrong, (2009).
According to Lockett (1992), performance management aims at developing individuals with the
required commitment and competencies for working towards the shared meaningful objectives
within an organizational framework.
Performance management frameworks are designed with the objective of improving both
individual and organizational performance by identifying performance requirements, providing
regular feedback and assisting the employees in their career development.
Performance management aims at building a high performance culture for both the individuals
and the teams so that they jointly take the responsibility of improving the business processes on a
continuous basis and at the same time raise the competence bar by upgrading their own skills
within a leadership framework. Its focus is on enabling goal clarity for making people do the
right things in the right time. It may be said that the main objective of a performance
management system is to achieve the capacity of the employees to the full potential in favor of
both the employee and the organization, by defining the expectations in terms of roles,
responsibilities and accountabilities, required competencies and the expected
behaviors.According to Lockett (1992), the main goal of performance management is to ensure
that the organization as a system and its subsystems work together in an integrated fashion for
accomplishing optimum results or outcomes.
13
The major objectives of performance management are discussed below:
 To enable the employees towards achievement of superior standards of work performance.

 To help the employees in identifying the knowledge and skills required for performing the
job efficiently as this would drive their focus towards performing the right task in the right
way.
 Boosting the performance of the employees by encouraging employee empowerment,
motivation and implementation of an effective reward mechanism.
 Promoting a two-way system of communication between the supervisors and the employees
for clarifying expectations about the roles and accountabilities, communicating the functional
and organizational goals, providing a regular and a transparent feedback for improving
employee performance and continuous coaching.
 Identifying the barriers to effective performance and resolving those barriers through
constant monitoring, coaching and development interventions.
 Creating a basis for several administrative decisions strategic planning, succession planning,
promotions and performance based payment.
 Promoting personal growth and advancement in the career of the employees by helping them
in acquiring the desired knowledge and skills.
2.3.6. Living Wage
According to (Anker 2011) a living wage is: The remuneration received for a standard workweek
by a worker in a particular place sufficient to afford a decent standard of living for the worker
and her or his family. Elements of a decent standard of living include food, water, housing,
education, health care, transport, clothing, and other essential needs including provision for
unexpected events.
2.3.7. Grievance procedures and internal dispute resolution

According to Bishop (1995, 21-26), an internal dispute resolution procedure is superior to
litigation for the following reasons:
 An internal dispute resolution procedure can resolve the dispute relatively quickly. The
employer can usually provide many non-Compensatory benefits for the employee at
relatively low or even no, cost. Some of the most valuable potential benefits are emotional or
14
‘intangible’ benefits relating to self-esteem and employee morale which can usually be dealt
with in nonmonetary ways.
 An internal dispute resolution procedure can reduce the monetary costs of the dispute by
reducing the time, effort, and money that must be expended by the parties in a protracted
legal proceeding.
 The parties avoid the adverse publicity of a lawsuit and deal with the dispute in complete
privacy.
 The employer can deal with the employee in a way that is fair and seen to be fair, thereby
conveying a progressive image.
 The employer is able to identify management practices which may be improved to avoid
similar problems in the future.
2.3.8. Employee Engagement and Commitment
2.3.8.1.Engagement
A highly engaged workforce shows the high level of engagement in their work and is always
keen to take up new challenges in order to bring a positive change or establish a highly
conducive work environment. Various studies have shown that higher level of employee
engagement is directly linked to high satisfaction among them, productivity and profitability of
organization and satisfied and loyal customers.
According to ManagementStudyGuide.com educational portal (2008) the characteristics of an

engaged workforce that play an essential role in the success of any organization.
Mutual Trust: Trust is the base of any organization. Letting people do their work without telling
them how to perform it is one of the best ways to engage staff. Employees welcome each other’s
opinions and find out a wide variety of ways to accomplish a particular task. A highly engaged
workforce doesn’t need directions at each step. They can perform their jobs with mutual help and
trust.
Job and Career Satisfaction: Job satisfaction is one of the main characteristics of an engaged
workforce. The individual who is satisfied with their career and the way their career graph
15
israising prefers to stick to the organization for a very long period of time. Switching the
organizations frequently is not a characteristic of satisfied employee.
Credible Leadership: As mentioned earlier, an engaged workforce doesn’t need directions for
performing a specific job from time to time. Employees know how to do it in the best possible
manner. They not only exhibit credible leadership qualities in routine tasks but also come up
with innovative ways to deal with crisis or emergencies.
Focused and Keen to Take up Challenges: An engaged workforce is entirely focused and
knows what to do and when. They are always keen to take up new challenges in order to solve
the existing problems in the organization as well as acquire new skills. Not only this, they are
always keen to learn new things and widening their horizon.
Better Performance: Employee engagement is directly related to better performance. Employee

performance is the only way to measure the engagement, involvement and dedication of
employees towards their jobs. If all these factors cannot be interlinked, there is no meaning of
anything. It can be said that the workforce is not engaged or actively disengaged.
Problem Solving Attitude: Engaged workforce not only delivers its job responsibilities but also
keeps a problem solving attitude always. A highly engaged employee displays a sense of
belongingness towards the organization and makes every effort to solve the problems that pose a
hindrance in the organization’s way of success.
2.3.8.2.Commitment
R. J. Vance (2006) examined that commitment in the context of employee relation is both
willingness to stay in the current company and reluctance to search other job outside the current
employer, rather a sense of obligation to stay the company. People usually experience and
express positive feelings toward an entity or individual to whom they have made a commitment.
They thoughtfully plan and carry out the actions required to fulfill them.
According to Konovsky and Cropanzano (1991) and Meyer and other (1998) have uncovered a
positive relationship between commitment and job performance. Employees who are committed
to their respective organization are more likely not only to remain with the organization but are
also likely to exert more efforts on behalf of the organization and work towards its success and
16
therefore are also likely to exhibit better performance that the uncommitted employees.
Employee commitment can benefit organization in a number of ways such as it can improve
performance; reduced absenteeism, and turnover thereby resulting in sustained productivity.
2.3.9. Trust and engagement
According to CIPD report (2011) stated that “lack of trust on both sides was the second biggest
obstacle to effective partnership working between managers and union representatives.” In high
trust relationships, union representatives are involved in the early stages of decision making.
Both parties see an opportunity to solve a problem rather than blame the other for the problem or
seek to push the problem through a formal and often expanded structure or policy. Sharing
information and engaging in open and honest dialogue are the types of behaviors that can lead to
a culture of mutual trust in union and management relationships.
Trust and engagement are created when:
 Employees informed of strategic business decisions, share business information regularly and
who honestly say when times are tough.
 Employers enable employees to contribute to organizational strategy and influence decisions
before they are made.
 Managers develop a supportive work climate, admit mistakes and show how they will be
doing things differently in future.
 Supervisor trust their teams to develop and implement solutions such as how they manage
their time at work and how products or services can be improved.
 Management developed skills so that key behaviors which build trust are reinforced and
embedded throughout the organization.
 Using a variety of methods that is direct and indirect for capturing employee voice and then
listening and acting upon the ideas of employees.
 Line manager will be the heart of this approach.
 Employees will be trusted to contribute ideas, be innovative and to solve problems.
 Managers listen to representatives’ views and explain their decisions.
 Practicing joint problem solving among groups of union representatives and managers to
resolve ongoing or pressing issues which will increase cooperation and trust.
 Reviewing employee forums regularly to ensure they are achieving their objectives, address
the right issues and that they are a trusted mechanism for employee voice.
17
Employee participation
This involves employees participating in decision making .Processes of an organization. The
employee participates in an organization through consultations, collective bargaining to workers.
Employee participation refers to the practice in which employees take part in management
decision and it is based on the assumption of community of interest between employer and
employee in furthering the long-term prospects of the enterprise and those working in it. The
British institute of management (1977).
2.4. Tripartite Cooperation
Marsden & David (2012) asserted that tripartite cooperation plays an important role in promoting
harmonious labor relations. The involving parties in tripartite cooperation are representatives of
employers, employees and the government, they have to work in collaboration and through
consultation and discussion; resolve employment-related issues of common concern. Through
tripartite cooperation it is possible detect potential labor relations problems at an early stage and
through the concerted efforts of employers, employees and the government, resolve such
problems at early stage; can facilitate mutual understanding of employers and employees on
issues of common concern and reaching consensus through tripartite efforts; can set commonly
accepted standards on employment related issues to accommodate the specific needs of
individual industries; can forge partnership between employers and employees toward workplace
Cooperation; and can foster long-term development of the industry which in the end will benefit
both the enterprises and the employees.
2.5. Legal framework for employment in Ethiopia
In Ethiopia the guiding legal framework of employment relationship for commercial entities is
Labor Proclamation No. 377/2003. Article No. 4 of this proclamation explain about employment
relation. According to the article, employee relation is established between the agreement of
employee and employer where by the employee agree to perform work for employer for definite
or indefinite period or piece work in return for wages. The proclamation cautions that a contract
of employment shall not be concluded for the program of unlawful or immoral activities.
Furthermore, Article No. 23 of this proclamation state that a contract of employment shall only
be terminated upon initiation by the employer or worker and in accordance with the provisions of
the law or a collective agreement or by the agreement of the two parties. The amalgamation or
18
division or transfer of ownership of an undertaking shall not have the effect of terminating a
contract of employment.
2.5.1. Bargaining
Amy DelPo and Lisa Guerin (2007) examined that all workers have certain rights and often
through unions negotiate additional rights. Collective bargaining agreements are detailed
contracts between the union and the company, internal grievance procedures are one part of the
collective bargaining agreement. The bargaining may typically include about pay, performance,
discipline, and other personnel matters. If the workplace already has collective agreement, the
union may adopt as an effort to replace this by new agreement that provide better right
foremployees. Severance pay or other benefits to fired workers are part of the barging agreement.
In collective bargaining an impasse occurs when the parties are not able to move further toward
settlement. An impasse usually occurs because one party is demanding more than the other will
offer. Sometimes an impasse can be resolved through a third party –a disinterested person such
as a mediator or arbitrator. If the impasse is not resolved in this way, the union may call a work
stoppage, or strike, to put pressure on management (Dessler, 2008).
2.5.1.1.Legal framework of employee relation in Ethiopia
According to Labor Proclamation No. 377/2003 Article No. 141 when a dispute rise concerning
matters of
 Wage and other benefit.
 Establishments of new condition of work.
 The conclusion, amendment, duration and invalidation of collective agreement.
 The interpretation and provision of this proclamation, collective agreement or work rule.
 Procedure of employment and promotion of worker.
 Mater affecting the worker in general and the existence of undertaking
 Claim related to the reduction of worker are important matters that required interference of
the government to resolve the dispute.
Accordingly, Ministry of Labor and Social Affairs is responsible for the assignment of
conciliator who works to bring settlement of the case. In respect of matters specified under
Article 142 is reported to the Ministry of Labor and Social Affairs either on the disputing parties,
it shall assign a conciliator to bring about a settlement of the case. The Ministry may assign
19
conciliators at the national & when necessary at the district level (Ethiopian Labor Proclamation
No. 377/2003).
2.5.2.2.Collective bargaining and agreements in the Ethiopia
Collective bargaining can be important in balancing (unequal) employment relations between
employers and workers, allowing workers’ voices to be heard and improving working conditions.
In many countries, it plays a key role in regulating full-time, regular or ‘standard’ employment
relationships. While these standard employment relationships remain the dominant form of
employment, at least in industrialized countries, non-standard forms of employment are on the
rise in many countriesXhafa ,(2015).
The Ethiopian Labor Proclamation states that one of its central objectives is to promote
collective bargaining as a means of maintaining industrial peace and of working in the spirit of
harmony and cooperation towards the all-round development of the country.
According to Labor Proclamation No. 377/2003 Article No. 124, 128 & 129 collective
agreements mean an agreement concluded in writing between one or more representative of
labor union and one or more employers, agent or representatives of employer or organization.
Collective bargaining also mean a negotiation made between employers and workers or
organization or their representative concerning condition of work or collective agreement the
renewal and modification of the collective agreement. Matters concerning employment
relationand condition of work as well as relation of employers and there with
workersorganization maybe determined by collective agreement. Matters inter alia, be
determined by collective agreement are:
 Matters left by the provisions of this proclamation or other laws to be regulated by
collective agreement,
 The conditions for protection of occupational safety and health and the manner of improving
social services,
 Workers participation, particularly, in mattes regarding promotion, wage, transfer, reduction
and discipline,
 Condition of work, the procedure for making work rules and grievance procedures,
 Arrangement of working hours and interval break times,
 Parties covered by the collective agreement and its duration.
20
CHAPTER THREE
RESEARCH METHODLOGY
3.1. Research Design
The descriptive research method was used in this study. Cross-sectional design is used and non
probability sampling was used in selecting respondents from the sample frame. The researcher
used this technique to ensure that each members of the target population has an equal and
independent chance of being included in the sample of this study by non probability sampling
methods. Ninety two employee and management members are selected using non probablity
sampling methods. To gather information for the study questionnaires with close and open ended are
used. Accordingly, out of a total 92 questionnaires 23 were distributed to the management and the
remaining 69 were distributed for employees and interview was conducted with five top
management members (Department managers and service heads) and four labor union
representatives (Labor union head and other executive committee members) the data collected were
analyzed using SPSS software Version 20. The descriptive research methodwas used in this study.
3.2. Sample of the Study
The population of interest is all 120 permanent employees of Arbaminch Farm and Ginnery
Amibara Agricultural Development plc. AFGAAD
3.2.1. Sampling design
3.2.1.1.Population size
The total number of the population was 120 permanent employees.
3.2.1.2.Sample size
The desired sample size is 92, which is calculated by sampling determination method developed
by Krejcie and Morgan, 1970
• s = X 2NP2(1− P) ÷ d 2 (N −1) + X 2P (1− P).
• s = required sample size.
• X2 = the table value of chi-square for 1 degree of freedom at thedesired confidence level
(3.841).
• N = the population size.
• P = the population proportion (assumed to be .50 since this would Provide the maximum
21
sample size).
• d = the degree of accuracy expressed as a proportion (.05)
Table 3.1. Sample size determination.
S .N Section No. of Percentage Sample Sample size

Permanent from the total size Percentage (%)
Employees population (%)
1 Administration and 50 41.7 38 41.3
Human Resource
2 Ginning factory 9 7.5 7 7.7
3 Finance 7 5.8 5 5.4
4 Unit farms 26 21.7 20 21.7
5 Technical 22 18.3 17 18.5
6 Property Administration 6 5 5 5.4
Total 120 100.0 92 100.0
Source: survey 2016
3.3. Data Collection
The data for this research has been obtained from primary and secondary sources.
3.3.1. Primary Sources
In order to realize the target, the study used questionnaire and interview. Copies of the
questionnaires were distributed to collect necessary information from respondents. The
questionnaire has fivemain sections, the first part comprising 6 questions dealing with
respondents’ profile of biographicaland organizational variables, the second part comprising ten
questions dealing with employee relation practice, and the third part of the questionnaire also
comprise 8 measuring questions with dealing tripartite relationship and labor membership, the
fourth and the fifth parts of the questionnaire required written responses from respondents to
explain their observation and additional idea on the management development. This was
completed by employees and managers related to employee relation and subjected to analysis.
3.3.2. Secondary Sources
The secondary data was collected from strategic plan of the organization, previous research,
employee relation, publication, magazines and reports.grievance records and documents.
22
3.4. Instrument
A structured interview and questionnaire was used to gather data for analysis. The questionnaire
has been pilot tested on selected individual. Employee relation practitioner was consulted to
review the questionnaires. Accordingly the questionnaires were adjusted and adapted. Interviews
were made mainly with management and Labor union officials to obtain data that could not be
obtained through the questionnaires.
3.4.1. Design of the Instruments
Basically, the instruments were developed based on the objectives of the study and research
questions. The principles of questionnaires such as, use simple and clear languages, statements
should not be too long and use of appropriate punctuations is also considered when developing
theinstrument. The instruments were designed in such ways that can strength the viability of the
study.
3.5. Reliability Analysis
For this study Cronbach’s alpha was used to assess the internal consistency of variables in the
research instrument (questionnaire). Cronbach’s alpha is a coefficient of reliability used to
measure the internal consistency of the scale; it is represented as a number between 0 and 1.
According to Zikmund et al (2010) scales with coefficient alpha between 0.6 and 0.7 indicate fair
reliability. Thus, for this study, a Cronbach’s alpha score of .70 or higher is considered adequate
to determine reliability. The result of the Cronbach’s alpha for this study’s instrument was found
to be in the acceptance range, i.e. > 0.7 and one of them labor union question result is 0.633
which is fair reliability, thus showing as indication of acceptability of the scale for further
analysis. The Cronbach’s alpha coefficient of the research instrument is shown in table 3.5
below.
Table 3.5 Reliability Analysis
Cronbach's Alpha Number of Items
.987 9 Tripartite agreement
.633 6 Labor union
.892 14 Existence of healthy employee relation
.986 6 Conflict resolution
.977 7 Factors for bad employee relation
Source: survey result, 2016
23
3.6. Methods of Data Analysis
Descriptive statistics was used as one method of data analysis and the statistical tool that was
used for analysis was SPSS (Statistical Package for Social Science). The analyzed data were
presented as graph and tables wherever appropriate.
Ethical considerations
The researcher maintained scientific objectivity through out the study, recognizing the
limitations of his competence. Every person involved in the study was entitled to the right of
privacy and dignity of treatment, and no personal harm was caused to subjects in the research.
Informationobtained was held in strict confidentiality by the researcher. All assistance,
collaboration ofothers and sources from which information was drawn is acknowledged. The
following ethical considerations were at the base of this research.
a) Fairness.
b) Openness of intent.
c) Disclosure of methods.
d) Respect or the integrity of the individuals
e) Informed willingness on the part of the subjects to participate voluntarily in the research
24
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION

In order to obtain relevant data for the study, a questionnaire was distributed for AFGAAD’s
employee and management members. Thus, a total of 92 questionnaires were distributed and
82(89%) were properly filled and returned. And the rest 10(11%) questionnaires were not
returned.
Semi structured interviews were also conducted with AFGAAD’s five top management members
(Section Heads and unit farm managers) and four labor union representative.
The data presentation and analysis is primarily based on responses of the employees and
management members obtained through questionnaires and semi-structure interviews.
After the presentation of the general characteristics of the respondents, the study deals with
presentation, analysis and interpretation of data collected from the questionnaire and interview.
The responses for the semi-structured interview also analyzed in the relevant topic under each
tables. When it is found appropriate missing values, in which respondents did not provide their
response to the subject, is also presented on the table. Moreover, the valid percentage, the
percentage based on the actual respondents rather than the total sample size, the mean and
standard deviation is used for the analysis.
4.1. General Characteristics of the Respondents
Table 4.1 The general characteristics of the respondents, the general characteristics of
respondents which includes employee working unit, academic qualification, position in the
organization, years of service and age are presented.
25
Table 4.1 general characteristics of sampled respondents.
Description Frequency Percent Valid Cumulative
percent percent
Administration and HR section 35 42.7 42.7 42.7
Ginning Factory section 7 8.5 8.5 51.2
Section Finance section 5 6.1 6.1 57.3
Unit Farm section 15 18.3 18.3 75.6
Technical section 15 18.3 18.3 93.9
Property administration section 5 6.1 6.1 100
Total 82 100.0 100
High school Graduate 42 51.2 51.2 51.2
College/Technical school diploma 15 18.3 18.3 69.5
BA/BSC Degree 10 12.2 12.2 81.7
Academic
Master’s Degree - - - -
Qualification
Other (please specify) 15 18.3 18.3 100.0
Total 82 100.0 100.0
Senior manager 3 3.7 3.0 3.9
Position in the Middle level manager 10 12.2 12.8 16.7
Organization Supervisor 10 12.2 12.8 29.5
General staff /non supervisor 55 67 70.5 100.0
Total 78 95.2 100.0
Missing System 4 4.9
Total 82 100.0
0-5 5 6.1 6.4 6.4
Service in 6-10 10 12.2 12.8 19.2
Enterprise 11-20 17 20.7 21.8 41
20+ 46 56.1 59 100.0
Total 78 95.1 100.0
Missing System 4 4.9
Total 82 100.0
<25 4 4.9 4.9 4.9
25-30 10 12.2 12.2 17.1
Age 31-35 16 19.5 19.5 36.6
36-40 11 13.4 13.4 50
41-45 10 12.2 12.2 62.2
46-50 15 18.3 18.3 80.5
50+ 16 19.5 19.5 100
Total 82 100.0 100.0
Source: survey result, 2016
Table 4.1 shows that among the sample employees, the majority i.e. 42.7 of them of work in
Administration and HR section while 18.3% works in Unit farms and18.3% works in Technical
section and the rest 20.7% works in Ginning factory, Finance and property administration
26
sections. The distribution of the respondents is proportional to number of employee in the
functional sections. As to the educational level, the total figure shows 51.2% and 18.3% of the
respondents are high school graduate and diploma graduate respectively. While 12.2%, have
academic qualification of BA degree. The rest of employees categorized as others have academic
qualification of below grade 12.
Examination of sample employees job positions indicate, the majority of the respondents 70.5%
are general staffs who are not assigned on supervisory positions. Concerning to employees
service, a high proportion of respondents 59% have been working more than 20 years and 21.8%
are working 11-20 years in the organization. Similarly data of the age distribution confirm that a
substantial number of employees found in age groups 25-30 (12.2%), in 41-45(12.2%), in 46-
50(18.3%) and 50+(19.5%).
4.2. Employee Relation Practice
Table 4.2.1 respondent response concerning, the existence and awareness of policy and
procedures.
Description Response Freq Percent Mean Stand dev

To what extent you Very much 20 24.4
areaccustomed to To some extent 36 43.9
employeerelation 2.78 0.94
To lesser extent 14 17.1
polices Not accustomed 12 14.6
andprocedure?
Total 82 100.0
Does the Yes 35 42.7
managementconsider No 47 57.3
employeerelation as
one of thestrategic
concern?
Total 82 100.0
Source: Survey result, 2016
As data on table 4.2.1 shown 57.3% of the respondents confirm that management of the company
considers employee relation as a strategic concern. Similarly 42.7% ofthe respondents confirm
that management of the company does not consider employee relation as a strategic
concern.24.4% respondents are also accustomed to employee relation policy and procedure to
very high extent and 43.9% of the respondents are accustomed to some extent with the mean and
27
standard deviation of 2.78 and 0.94. In addition to this the interview conducted with top
management and labor union gives additional conformance to the existence well developed
policy and procedure regarding employee relation, and the management takes the employee
relation issue as strategic issues.
Figure 4.2.1 respondent’s awareness of policy and procedure based on experience.
60.00%
50.00%
40.00%
30.00% Yes
No
20.00%
10.00%
0.00%
0_5 5_10 11_20 20+

As shown in figure 4.2.1 sampled respondents who have been working 20 and above years in the
company is more accustomed to employee relation policy and procedure than others.
27.2%
yes
No
72.8%
Figure4.2.2 the existence of employee relation issues which are case of conflict in AFGAAD.
28
Figure 4.2.2 reveals that 27.2% of respondents explained that there are employee relation issues
that cause conflict. Whereas the majority of the respondents 72.8% stated that there is no
employee relation issue which causes conflict.
Table 4.2.2 respondents understanding of frequency major employee relation issues that
causeconflict.
S.N Majors employee relation issues Frequency Percent

1 Learning & Development 16 19.5
2 Health and Safety 10 12.2
3 Fair and just treatment 9 11
4 Financial benefits 8 9.8

5 Growth and profitability 7 8.5
6 Career development 4 4.9
7 Hour of work &schedules 5 6.1
8 Effective communication 6 7.3
9 Working environment 5 6.1
10 Dispute & Grievance 4 4.9
11 Profitability and cost reduction 3 3.7
12 Efficiency and effectiveness 2 2.4
13 Production target and productivity 2 2.4
14 Involvement/participation 1 1.2
Total 82 100.00%
Table 4.2.2 reveals that employee relation issues such as: learning & development 19.5%, health
and safety 12.2% fair and just treatment11%, financial benefit 9.8% and growth and profitability
8.5 % were selected by majority of respondents as cause of conflict. On the other hand,
profitability and cost reduction 3.7%, efficiency and effectiveness 2.4%,
involvement/participation 1.2% and production target and productivity 2.4% were selected by
few respondents as cause of conflict.
29
Table 4.2.3 respondents rank of employee relation issues that cause grievance and complaints
based on their severity level.
First Rank Second Rank Third Rank
SN Employee relation issues Freq % Valid Freq % Vali Freq % Valid
% d %
%
1 Financial benefits 20 24.4 25 8.5 8.9 6 4.3 7.7
2 Learning & Development 4 4.9 5 9 11 11.4 9 6.5 11.5
3 Effective communication 3 3.7 3.8 9 11 11.4 4 2.2 3.8
4 Working environment 3 3.7 2.5 5 6.1 6.3 10 8.7 15.4
5 Dispute & Grievance 9 11 11.2 2 2.4 2.5 3 1.1 1.9
6 Health and Safety 16 19.5 20 10 12.2 12.7 10 8.7 15.4
7 Hour of work &schedules 5 6.1 6.2 2 2.4 2.5 6 4.3 1.9
8 Career development 10 12.2 12.5 6 7.3 7.6 5 3.3 15.4
9 Involvement/participation 3 3.7 3.8 5 6.1 6.3 6 4.3 7.7
10 Fair and just treatment 3 3.7 2.5 10 12.2 12.7 5 3.3 5.8
11 Profitability and cost 4 4.9 5 9 11 11.4 8 6.5 11.5
Reduction
12 Production target and 2 2.4 2.5 5 6.1 6.3 5 3.3 5.8
Productivity
Total 82 97.6 100.0 79 96.3 100 77 56.5 100
System - - 3 3.7 5 43.5
Total 82 100 82 100 82 100
As stated on the above table respondent’s ranked financial benefit as first by 19.6% & health and
safety as second by 17.4%. The secondary data from exit interview also confirms that health &
safety as well as financial benefit as the driving force for employee turnover. Production target
and Productivity is ranked last by 2.4%.
30
Table 4.2.4 rating of sampled respondents on issues related to conflict resolution practice.
Description Strongly Agree Indifferent Disagree Strongly Total Mea Std.

Agree Disagree n dev
Fre % Fre % Fre % Fre % Fre % Fre %
q q q q q q
AFGAAD have 22 26.8 34 41.5 12 14.6 8 9.8 6 7.3 82 100 3.70 1.18
good conflict
Resolution practice.
There are proper 20 24.4 32 39 24 29.3 6 73 0 0 82 100 3.80 0.89
guideline and
procedure to
solveconflict
resolution.
Problem resolved 30 36.6 28 34.2 10 12.2 7 8.5 7 8.5 82 100 3.69 1.18
in house: With
direct cooperation
between employee
andemployer.
Problem resolved 26 31.7 24 29.3 14 17.1 10 12.2 8 12.2 82 100 3.85 1.03
in house with the
help advocates or
union
representative.
Resolution by 24 29.3 26 31.7 16 19.5 9 11 7 8.5 82 100 3.62 1.25
Negotiation with
out mediation and
other problem
solving methods
are properly
practiced in the
organization.
Involvements of 10 12.2 15 18.3 26 31.7 17 20.7 14 17.1 82 100 3.48 1.22
third parties are
common.
According to the data on table 4.2.4, 68.3% of respondents agreed on the existence of good
conflict resolution practices with the mean and standard deviation of 3.70 and
1.17.Similarly70.8% of the respondents agreed that there is direct cooperation between employee
and employer on conflict resolution practices with the mean and standard deviation of 3.69 and
1.18. 46.3% of respondent also assure that existence of in house problem solving mechanism
with the help of advocates orunion representative with the mean and standard deviation of 3.85
31
and 1.03. On top of this, 30.5% of the respondents disagree on the existence of the involvement
of third parties in conflict resolution practices with the mean and standard deviation of 2.87 and
1.25.
Table 4.2.5 response of respondent on the extent of effectiveness of employee relation practice.
Description Response Freq Percentage Mean Stand.

dev.
How do you evaluate the extent Excellent 35 42.7

of effectiveness of Very good 21 25.6
the employee relation Good 14 17.1 3.78 1.18
Practice in AFGAAD? poor 12 14.6
Total 82 100.0
As show in the above Table 4.2.5 68.3 % of the respondents respond that there is Excellent and
Very good employee relation practice. Only 14.6% of the respondent responds the existence of
poor employee relation with the mean and standard deviation of 3.78and 1.18.
4.3. Tripartite relations
21.7%
yes
No
78.3%
Figure 4.3.1 the existence of tripartite relation to solve disputes.

32
The data from the above pie chart shows that about 78.3% of the respondents have knowledge
about the existence of the tripartite relation to solve disputes in AFGAAD.
Table 4.3.1 response of sampled respondents on the contribution of the tripartite agreement.
Strongly Agree Indifferent Disagree Total
Agree Mean Stan
Fre % Fre % Fre % Fre % Fre % dev
q q q q q
22 26.8 36 44 16 19.5 8 97 82 100 2.88 0.92

There is adequate
tripartite agreement in
AFGAAD
The tripartite agreement in 20 24.4 30 36.6 21 25.6 11 13.4 82 100 2.72 0.98
AFGAAD are frequently
used to resolve conflict
The Tripartite agreement 16 19.5 29 35.4 28 34.2 9 11 82 100 2.51 0.93
helps to reduce conflict in
the Organization.
The Tripartite agreement 22 26.8 22 26.8 31 37.8 8 8.6 82 100 2.72 0.96
helps the organization to
be productive and
profitable through saving
time and money of both
parties.
Table 4.3.1 depicted that about 70.8% of the respondent agreed on the adequacy tripartite
agreement in the company with the mean and standard deviation of 2.88 and 0.92. Similarly the
respondent agreed on the contribution of the tripartite agreement in reducing conflict in the
enterprise and its applicability frequently to resolve conflictby rating 54.9% and 61%
respectively with the mean and standard deviation of 2.51 and 0.93. On the other hand ranging
from 19.5% - 37.8 % of the respondents are indifferent on the application of the tripartite
agreement in to bring harmonious relation.
33
Table 4.3.2 sampled respondent’s response on rating bad effect of the tripartite agreement.
Strongly Strongly
Agree Agree Indifferent Disagree Disagree Total Mea St.d
Fre % Fre % Fre % Fre % Fre % Fre % n
q q q q q q
The tripartite 10 12.2 15 18.3 24 29.2 18 22 15 18.3 82 100 2.84 1.27
agreement will
restrict employees
seeking justices
The tripartite 11 13.4 13 15.9 23 28 18 22 17 20.7 82 100 2.79 1.31
agreement will
restrict employer
pursuing
righteousness.
There are no 5 6.1 21 25.6 22 26.8 18 27 16 19.5 82 100 2.76 1.21
Neutral third
parties.
It impedes 9 11 13 15.9 17 20.7 9 26.8 21 25.6 82 100 2.60 1.32
employee and
employer not to
Appeal to the court
on time.
The tripartite 5 6.1 9 11 19 23.2 21 25.6 28 34.1 82 100 2.29 1.22
agreement supers
employees’ right.
As depicted table 4.3.2, the respondents disagree on the bad outcome of the tripartite agreement
by evaluating the factors that contributed bad outcome relatively less point; the highest point
rank is 31.7% for no neutral third parties with the mean and standard deviationof 2.76 and 1.21.
Tripartite agreement will restrict employer pursuing righteousness are rated by respondents
29.3% with the mean and standard deviation of 2.79and 1.31. Tripartite agreement will restrict
employees seeking justices are rated by respondents 30.5% with the mean and standard deviation
of 2.84 and 1.21. On the other hand 41.5%, 52.4% and 42.7% of respondents’ agreement on the
existence of neutral third parties, on the in existence of obstacles to appeal to the court on time
and inability to restrict employer pursuing righteousness respectively.
34
4.4. Labor Union
Figure 4.4.2 State of membership of sampled respondents to labor union.
28%
yes
No
72%

As shown on the above pie char the respondent’s confirmed that 72% of them are a member of
the labor union.
Table 4.4.1 sampled respondents rating factors that influence to be member of labor union.
Strongly Agree Indifferen Disagree Stro/ Total
Agree t Disagre Mea Std.
e n dev
Fre % Fre % Fr % Fr % Fr % Fre %
q q eq eq eq q
I become a member of 31 53.4 18 31 5 8.6 4 7 - - 58 100 4.31 0.90
labor union because the
labor union will enhance
my financial benefit
through negotiating with
the employ
The labor union will 28 48.3 23 39.6 4 79 - - 3 5.1 58 100 4.26 0.98
protect me from abuse and
will also ensure myjob
security
It keeps me from stressful 21 36.2 26 44.0 5 8.6 6 10.3 - - 58 100 4.07 0.93
and time consuming
tedious situation
I can also get some 24 41.4 21 36.2 8 13.8 5 8.6 - - 58 100 4.10 0.95
financial benefit from the
labor union investment
35
As depicted on table 4.4.1, the majority of the respondent agreed on the stated reasons for their
membership to trade union by mentioning that the labor union will protect them from abuse and
will also ensure their job security (87.9%) with the mean and standard deviation of 4.26 and
0.98, the union will enhance their financial benefit through negotiating with the employer
(84.4%) with the mean and standard deviation of 4.31 and 0.90, to earn some financial benefit
from the labor union investment (77.6%) with the mean and standard deviation of 4.10 and 0.95,
& to be safe from stressful and time consuming tedious situation (81.1%) with the mean and
standard deviation of 4.07 and 0.93.
Table 4.4.2 of sampled respondents rating factors not to be member of trade union.
Strongly Agree Indiffere Disagree Strongly Total

Std.
Agree nt Disagree
Mean dev
Fre % Fre % Fre % Fr % Fr % Fre %
q q q eq eq q
The employer will
ensure my benefit 5 21.7 7 30.5 3 13 4 17.4 4 17.4 23 100 3.21 1.44
and jobsecurity for
the sake ofbeing
competitive and
Productive
The employer has
clearly policy and 3 12.5 9 37.5 2 8.3 3 12.5 7 29.2 24 100 2.92 1.50
procedure regarding
our employment
relationship thus
the labor union will
not add any Value
Table 4.4.2 revealed that 52.2% of the respondents agreed that the main reason for them not tobe
a member of the labor union is due to their believe that the employer will ensure their benefit and
36
job security for the sake of being competitive and productive with the mean and standard
deviation of 3.21 and 1.44. While 34.8% of the respondents expressed their disagreement to this
reasons for their membership status. Similarly 50% of the respondent said that due to the factor
that the employer has clear policy and procedure regarding their employment relationship the
labor union will not add any value with the mean and standard deviation of 2.92 and 1.50. Onthe
other hand 41.7% of the respondents expressed their disagreement on the dependability of the
employer for their right.
Table 4.4.3 responses of sampled respondents on the existence of healthy employee relation in
AFGAAD
Strongly Agree Indifferent Disagree Strongly Total
Agree Disagree Mea St.d
n
Fre % Fr % Fr % Fre % freq % fre %
q eq eq q q
There are high trust & 14 17.1 38 46.3 13 15.8 13 15.8 4 5 82 100 3.56 1.08
Confidence
There is 20 24.4 50 61 8 9.7 4 4.9 0 0 82 100 4.04 0.73
cooperativeness
There is smooth 22 26.8 42 57.3 6 7.3 3 3.6 4 5 82 100 3.98 0.96
Communication
There is employee 26 31.7 40 48.8 14 17.1 1 1.2 1 1.2 82 100 4.08 0.76
Engagement and
commitment
There is productivity 44 53.7 33 40.2 3 3.6 2 2.5 0 0 82 100 4.45 0.68
and Motivation
There is good 26 31.7 42 51.2 8 9.7 4 5 2 2.4 82 100 4.05 0.91
interpersonal
relationship between:
Employees and fellow
Colleagues.
There is good 24 29.3 39 47.6 11 13.4 5 6.1 3 3.6 82 100 3.93 0.95
interpersonal
relationship between
Employees and
supervisors/
managers
Table 4.4.3 show 63.4% of the respondents are agreed on the existence of high trust and
confidence which has contributes for healthy employee relation in AFGAAD. On the other hand,
20.8% of the respondents believed on the contrary, the remaining are indifferent with the mean
37
and standard deviation of 3.56 and 1.08. Similarly, 85.4% of the respondents agreed that the
existence of cooperativeness contributes to healthy employee relation in AFGAAD. On the other
hand 4.49% of the respondents disagree on the existence cooperativeness in the work place, the
remaining are indifferen twith the mean and standard deviation of 4.05 and 0.91.
On the same way, 84.1% of the respondents stated their agreement on the existence of smooth
communication which has contributes for health employee relation in AFGAAD. On the other
hand 8.6% of the respondents believed on the contrary, the remaining are indifferent with the
mean and standard deviation of 3.98 and 0.96. Concerning commitment and engagement, 80.5%
of the respondents agreed on its existence contribute to healthy employee relation in AFGAAD.
On the other hand 2.4% of the respondents state no commitment and engagement in the work
place with the mean and standard deviation of 4.08 and 0.80.
38
Table 4.4.4 responses of sampled respondents on the existence of bad employee relation in
AFGAAAD
Strongly Agree Indifferent Disagree Strongly Total Mean Std.d
Description Agree Disagree ev
Fre % Fre % Fre % Fre % Fre % Fre %

q q q q q q
There is dissatisfaction 18 22 22 26.8 10 12.2 20 24.4 12 14.6 82 100 3.66 1.34
in employee relation
and Performance
issues.
There are frequent 4 4.9 15 18.3 20 24.4 33 40.2 10 12.2 82 100 2.91 1.02
conflict
There is frequent 3.7 15 18.3 22 26.8 30 36.6 12 14.6 82 100 2.60 1.08
Absenteeism among 3
employee
There is low 16 19.5 2 2.4 20 24.4 26 31.7 18 22 82 100 2.66 1.31
commitment
There is high turnover 17 20.7 22 26.8 20 24.4 10 12.2 13 15.0 82 100 3.24 1.16
There are many 2 2.4 4 4.9 38 46.4 26 31.7 12 14.6 82 100 2.48 0.86
disciplinary measures
taken uponemployee
In-house conflict 2 2.4 5 6.1 22 26.8 30 36.6 23 25 82 100 2.18 0.95
(personalityand
relationship issues)
There are systematic 4.9 5 6.1 21 25.0 27 32.9 25 30.5 82 100 2.17 1.05
biases. 4
Unfair treatment 10 12.2 6 7.3 24 29.3 27 32.9 15 18.3 82 100 2.62 1.32
(including allegations
of harassment or
discrimination)
Discrimination , 13 15.9 - - 25 30.5 25 30.5 19 23.1 82 100 2.54 1.25
partiality and
purposely suppressing
the employee
Alleged unjustified 2.4 3 3.7 28 34.2 33 40.2 16 19.5 82 100 2.29 0.87
Dismissal/redundancy. 2
Misconduct 2 2.4 4 4.9 30 36.6 33 40.2 13 15.0 82 100 2.37 0.70
problem resolution
system favoring: 3 3.7 5 6.1 33 40.2 25 30.5 16 19.5 82 100 2.43 0.95
Employees
Problem resolution 5 6.1 18 21.9 21 25.7 20 24.4 18 21.9 82 100 2.65 1.19
system Favoring:
Employers
39
As shown on table 4.4.4 most of the respondents agreed on the existence of factors contributing
to bad employee relationship in relation to performance issues by 48.8% with the mean and
standard deviation of 3.66 and 1.34. The second moststated agreement on the existence of top
factors which contributes for the existence of bad employee relations is high turnover by 47.5%
with the mean and standard deviation of3.24 and 1.16, problem resolution system favoring
employers by 28% put on the third rank with the mean and standard deviation of 2.65 and 1.19,
low commitment put on the fourth rank as source of dissatisfaction and ultimately cause bad
employee relation by 21.9% with the mean and standard deviation of 2.66 and 1.31. However, on
all factors which has contribution for bad employee relation issues, majority of the respondents
either disagreed or indifferent.
40
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS

1.1. Summary
The major purpose of this study was to assess employee relation of Arbaminch Farm and
Ginnery Amibara Agricultural Development plc. For the relevant data gathering a total of 92
questionnaires were distributed and 82(89%) were properly filled and returned. Semi structured
interviews were conducted with AFGAAD’s five top management members (unit farm managers
and section Heads) and with four labor union representative (Labor union Head and other
executive committee members). Moreover, documents relevant to the topic were reviewed. The
data obtained were analyzed using descriptive statistics, the following major findings were found
in the study.
1. Findings on the existence of employee policy and procedure
 The existence of employee relation polices and procedure is confirmed by the majority
of respondents.
 57.3%of respondents asserted that AFGAAD management does not consider employee
relation as a strategic concern. Similarly 42.7% of respondents asserted that AFGAAD
management consider employee relation as a strategic concern.
 Most of the respondents are familiar with AFGAAD employee relation policies and
procedures.
 Respondents with long service year and higher educational qualification know more
about AFGAAD’s employee relation practice and procedure.
2. Findings on theemployee relation issues which are causes of conflict
 The majority 72.8% of the respondents acknowledge that, there are no employee
relation issues which are causes of conflict. But it doesn’t justify the fact that there are
no employee relation issues in AFGAAD rather the employee relation issues didn’t
cause conflict.
 While 27.2% of the respondents asserted that there are employee relation issues which
are causes of conflict.
41
 The majority of respondents who served more 20+ years have confirmed that there are
employee relation issues.
 Among the employee relation issues learning & development, fair and just treatment
and financial benefit are the most sever issue that result in conflict. While employee
relation issues related to production target and productivity and
Involvement/participation and efficiency and effectiveness are rated as lowest in
severity.
 Employee relation issues related to financial benefits and health and safety were ranked
as first by the majority of the respondents while involvement/participation and
profitability and cost reduction was ranked as first by fewer respondents.
3. Findings on theConflict resolution practice and good faith in AFGAAD

 More than 60% of the respondents hinted that AFGAAD have good conflict resolution
practice with proper guideline and procedure.
 The majority of the respondents (60%) experienced that AFGAAD has the practice of
resolving conflict in house with direct cooperation between employee and
management as well as with the help union representative.
 The majorities of the respondents agree that AFGAAD’s employee relation give all
parties the opportunity to be heard including commenting on any proposal that might
be detrimental to their interests and also maintains appropriate confidentiality and
privacy. Furthermore, managements are open and honest about all dealings.
4. Findings on thetripartite relationship and labor membership

 Majority of the respondents only agree with the idea that there is adequate tripartite
agreement in AFGAAD, the tripartite agreement in AFGAAD are frequently used to
resolve conflict and the agreement also reduce conflict in the organization.
 The majorities of the respondent are indifferent or disagree with the claim that
agreement will restrict both employee and employee to seeking justice and purse their
right.
42
 The majority of the respondents are a member of labor union and more than 80% of
them become a member of the union on the belief to enhance their financial benefit
through negotiating with the employer, to have protection from abuse and to ensure
job security.
 Almost half of respondents are indifferent or disagree with the claim that employer
will ensure their benefit and job security for the sake of being competitive and
productive and the labor union will not add value to their employment relation with
the enterprise.
5. The effectiveness of employee relation in AFGAAD

 The majority of the respondents evaluate the extent of effectiveness of the
employeerelation as excellent and very good.
6. Factors expressing employee relations

 Among the factor expressing good employee relation the majority of the
respondents agree that there is productivity and motivation, smooth communication,
employee engagement and commitment, cooperativeness and good interpersonal
relationship smooth communication in AFGAAD respectively.
 Despite of other factors that express good employee relation are rated high by
majority of the respondents, only 61.7% of the respondents expressed the existence
of high trust and confidence.
 Thought the majority of the respondents are indifferent or disagree with existence
of factory causing bad employee relation , some respondents point out that there are
to lower extent discrimination, partiality and purposely suppressing by employee;
unfair treatment (including allegations of harassment ) in employee relation
andPerformance issues.
43
5.2. Conclusions
1. Understating employee relation issue that might cause conflict play pivotal role in
developing workable employee relation practice. Employee relation issues like
health and safety, learning & development, fair and just treatment and financial
benefit are considered very important for employees.
2. Employees place less importance to employee relation issue such as production
target &productivity and involvement/participation that have great contribution for
the success ofthe enterprise. Employee relation is the outcome of contract of
employment and it has twoparts; the rights and obligations of both parties. Placing
less importance to either of themcould be potential cases of conflict.
3. When employees are satisfied with employee relation practices it creates trust and
confidence.This in-turn paves the way to cooperative & flexible bargaining, smooth
communication andrealistic work arrangement. Trust has a central role in
developing effective communicationand openness in the relationship between
employees and management. However, the levelof trust among employee and
management & employee in AFGAAD was not satisfactory.
4. Though most of employees understand the existence of tripartite relationship, they
didn’t fully grasp its essence and are reluctant to articulate their concern on the
relationship. Through tripartite cooperation, representatives of the enterprise,
employees and thegovernment can work in collaboration and through consultation
to resolve employmentrelatedissues of common concern. It helps to detect and solve
potential labor relation problems at an early stage. The data explicitly showed that
AFGAAD is at the proper way of handling grievance.
5. Most of the employees in AFGGAD are pro labor union and to some extent they
lack trust on the enterprise regarding their financial benefit as well as job security. It
is obvious that employee become more dependent on the labor union when they
lack trust on thecompany. From the response of the respondents it was understood
that the level of employee confidence on the organization was at the growing stage.
44
5.3. Recommendation
On the basis of the findings obtained and the conclusion drawn, the following recommendations
were suggested.
1. The organization management should improve the working condition to create a good
conducive environment for employeesand give different types of training to shape the
attitude of employee to accept and practice employee relation issue such as production target
and productivity, involvement/participation, efficiency and effectiveness, which will enhance
healthy employee relation practice and lead the enterprise to better future.
2. AFGAAD need to understand the extent and effect of existing employee relation issues such
as health and safety, financial benefit, trust and confidence, learning and development and
the likes which adversely affect the harmonious employee relation and need to take sound
measure to improve the prevailing situation.
3. The organization should improve communication within the organization therefore
employees should interchange ideas, feelings and opinions with management, andthe
involvement of employees in decision making and consultation should be improve trust
between them.
4. AFGAAD must be understating and comprehend employee relation issue that might cause
conflict and appropriate action need to be taken in advance to nurture the exiting practice and
to enhance it, so as to reduce employee grievance and to enhance employee motivation and
productivity.
5. AFGAAD need to create awareness regarding tripartite relationship so as to minimize
employees’ suspicion and ambiguity regarding tripartite. And to make use of its positive
contribution for enhancing employee relation practices.
5.4. Direction for future research
When conducting this thesis I came across topics that were related to my subject matter but did
not fit into this study. I consider those topics as important aspects when studying employee
relation and therefore further studies will be required.
The followings are suggested related topics for future studies:
 The effect of employee relationship Management on employees’ motivation.
 Assessment of employee relation practice and organizational performance.
It is also suggested a larger samples should be used, utilizing a number of institutions, across a
range of organizations in Ethiopia
45
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48
Appendix
Arbaminch University
College of Business and Economics
Department of Management
MBA program
Interview prepared for management members and labor union leaders

Dear respondents, the information you provide is valuable for the study. Please be confident thatthe
information you provide here is used only for academic purpose and will strictly be kept
confidential
1. Is there any effective Employee Relation policy in AFGAAD? If so what objectives do it
serves as stated in the policy manual.
2. How do you see the contribution of Employee Relation practice of the organization in
advancement of productivity and effectiveness?
3. What are the major problems that you particularly and the Enterprise as whole facing with
respect to Employee Relation practice?
4. How was the currently active collective agreement barging process? Was it time taking or
short? Was it smooth or full of challenge? Were their issues submitted to the competent
labor dispute settlement tribunal?
5. What are the current & future challenges that AFGAAD might face with respect to
employee relation?
6. Do you think that the tripartite relation contributed for improving employee relation?
7. Do you believe that the collective agreement application is fair and trust worthy?
8. Finally is there anything that you want to comment the employee relation practice of the
organization?
Thank for your cooperation and time.
1
Arbaminch University
College of Business and Economics
Department of Management
MBA program
Questionnaire for Management members and Employees.

My name is SewunetAmare. I am Master of Business Administration (MBA) degree student at
Arbaminch University.
This questionnaire is prepared to Management members and Employees of Arbaminch Farm and
Ginnery Amibara Agricultural Development (AFGAAD). The purpose of this questionnaire is to
collect information that helps to assess the effectiveness of Employee Relation in AFGAAD for the
partial fulfillment of Masters of Business Administration (MBA) degree.
The information you provide will be valuable for the successful completion of the study and hence I
sincerely request you to provide me reliable and honest information to the best of your knowledge
so that the findings from the study would meet the intended purpose.
I certainly assure you of that the response you provide is strictly confidential and used only for
academic purpose/ I would like to extend my heartfelt thanks in advance for being a volunteer to
dedicate your valuable time and effort in filling this questionnaire.
General Instructions:
1. No need of writing your name.
2. For the question that requires selection or ranking please tick ( ) at your pertinent answer
inside the square.
3. In parts where written responses are required, please provide your written response briefly in
the blank space provided
4. Please give more attention and return the completed as fast as possible.
5. AFGAAD stands for Arbaminch Farm and Ginnery Amibara Agricultural Development.
6. If you need further explanation, you can contact me on through the address sown below.
SewunetAmare
Mobile: +251913724664
E-mail: sewunetamare@yahoo.com
Thank you in advance, for your cooperation.
2
SECTION 1: Biographical Information
1. In what department you are working:
1.1 Administration and Human Resource section.
1.2 Ginning Factory section.
1.3 Unit Farm section.
1.4 Technical section.
1.5 Finance section.
1.6 Property administration section.
Other (please specify)
2. what is your academic qualification:

2.1 High school Graduate
2.2 College/Technical school diploma
2.3 BA/BSC Degree
2.4 Master’s Degree and above
2.5 Other (please specify)
3. What is your position in the Organization?

3.1 Senior manager.
3.2 Middle level manager.
3.3 Supervisor.
3.4 General staff /non supervisor.
4. How long have you been employed at AFGAAD?

4.1. 0 to 5 years. 
4.2. 6 to 10 years. 
4.3. 11to 20 years 
4 .4. More than 20 years 
5. Sex: Male  Female 
6. Age: Below 25  25-30  31-35  36-40  41-45  46-50  Above 50 
3
Part II Employee Relation Practices
1. Is your answer to question no. 1 is “yes” do the management consider employee relation as one
of the strategic concern?
a. Yes  b. No 
2. If your answer to question no 1 is “yes” to what extent you are accustomed to employee relation
polices and procedure.
a) Very much  b) To some extent  c) To lesser extent  d) Not accustomed

3. Are there employee relation issues which are cause of conflict in AFGAAD?
a. Yes  b. No 
4. Among the major employee relation issues stated below which of them create employee
grievance and complaints?
a) Financial benefits 
b) Learning & Development 
c) Effective communication 
d) Working environment 
e) Dispute & Grievance 
f) Health and Safety 
g) Hour of work &schedules 
h) Efficiency and effectiveness 
i) Growth and profitability
j) Career development 
k) Involvement/participation
l) Fair and just treatment 
m) Profitability and cost reduction 
n) Production target and productivity 
o) Others (please specify___________________
5. Would you rank employee relation issues stated in question No.5 that causes grievance and
complaints based on their severity level?
1st. ________________________________ 5th. ____________________________
2nd. ________________________________ 6th. ____________________________
4
3rd. ________________________________ 7th. ____________________________
4th. ________________________________ 8th. ____________________________
7. Would you please rate the issue related to conflict resolution practice in the organization?
Items Strongly Agree Indifferent Disagree Strongly

Agree Disagree
AFGAAD do have good conflict
resolution practice
There are proper guideline and
procedure to solve conflict resolution
Problem resolved in house:
With direct cooperation between
employee and employer.
with the help advocates or union
representative
Resolution by Negotiation without
mediation and other problem solving
methods are properly practiced in the
enterprise
Involvements of third parties are
Common.
Other reasons(please state here)
8. How do you evaluate the extent of effectiveness of the employee relation practice in
AFGAAD?
a) Excellent  b) Very good  c) Good  d) poor
5
9. Would you rate the extent of factors expressing bad employee relationship?
Strongly Agree Indifferent Disagree Strongly
Items Agree Disagree
There are high trust &confidence

There is cooperativeness
There is smoothcommunication
There is employee Engagement and
commitment
There is productivity andmotivation
There is good interpersonal
relationship between:
Employees and fellowColleagues.
There is good interpersonal
relationship betweenEmployees and
supervisors/managers
6
10. Table 4.4.4 responses of sampled respondents on the existence of healthy employee relation in
AFGAAAD
Strongly Agree Indifferent Disagree Strongly
Items Agree Disagree
There is dissatisfaction in
employee relation and
Performance issues.
There are frequent conflict
There is frequent
Absenteeismamong employee
There is low commitment
There is high turnover
There are many
disciplinarymeasures taken
uponemployee
In-house conflict (personalityand
relationship issues)
There are systematic biases.
Unfair treatment
(includingallegations of harassment
ordiscrimination)
Discrimination , partiality
andpurposely suppressing
theemployee
Alleged unjustified
Dismissal/redundancy.
Misconduct
problem resolution system
favoring: Employees
problem resolution system
favoring: Employers
7
Part III. Tripartite relationship and labor membership
1. Is there tripartite agreement (an agreement signed between employer, employee and government
to solve dispute with negotiation rather than going to third party) in AFGAAD?
a. Yes  b.) No 
2. How do you rate the tripartite agreement in AFGAAD?
Factors Strongly Agree Indifferent Disagree Strongly

Agree Disagree
There is adequate tripartite agreement
in AFGAAD
The tripartite agreement in AFGAAD
are frequently used to resolve conflict
The Tripartite agreement helps to
reduce conflict in the Organization.
The Tripartite agreement helps the
organization to be productive and
profitable through saving time and
money of both parties.
3. How do you rate the following issue related to the tripartite agreement in AFGAAD.

Agree Disagree
The tripartite agreement will restrict
Employees seeking justices.
The tripartite agreement will restrict
Employer pursuing righteousness.
There are no Neutral third parties.
It impedes employee and employer
not to Appeal to the court on time.
8
4. Do you have adequate information about the existence of labor union in the Organization?
a) Yes, I have  b) No, I haven’t 
5. Are you a member of labor union?
a) Yes  b) No
6. If your answer to question No.5 is “Yes” to what extent do the following reasons affect you
decision for becoming member:

Agree Disagree
I become a member of labor union
because the labor union will enhance
my financial benefit through
negotiating with the employer
The labor union will protect me from
abuse and will also ensure my job
security
It keeps me from stressful and time
Consuming tedious situation.
I can also get some financial benefit
from the labor union investment
9
7. If your answer to question No.5 is “No” to what extent do the following reasons affect you
decision for becoming member

Agree Disagree
The employer will ensure my benefit
and job security for the sake of being
competitive and productive
The employer has clearly policy and
procedure regarding our employment
relationship thus the labor union will
not add any value.
8. Do you satisfied with the process and outcomes of the most recent employment relationship
problem do you had and resolved in your Enterprise?
a) Yes I satisfied  b) No I am not satisfied  c) neutral 
d) I am very much dissatisfied 
10
Part IV. Explain your observation
1. What do you think is the major employee relations challenge in AFGAAD?
______________________________________________________________________________
______________________________________________________________________________
2. What practical solutions have been devised for tackling the challenges encountered in Employee
Relation?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
3. What ideas do you suggest to enhance healthy relationship in Arbaminch Farm and Ginnery
Amibara Agricultural Development Plc regarding to Employee Relation?
______________________________________________________________________________
______________________________________________________________________________
Part V. Additional Idea on the management development
1. Do you have any additional information other than the above mentioned please specify on the
topic?
______________________________________________________________________________
__________________________________________________________________________
2. Do you have any suggestion for improving the current Employee Relation practice in
AFGAAD? (You can use separate sheet for the answer if you need)
______________________________________________________________________________
__________________________________________________________________________
______________________________________________________________________________
__________________________________________________________________________
Thank you very much for your co-operation and time!
11
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Assesement of Employee Relation Final Thesis

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ASSESSMENT

MENT OF EMPLOYEE RELATION

ADVISOR - GEMECHU NEMERA (PhD)

A THESIS SUBMITTED TO THE DEPARTMENT OF MANAGEMENET, COLLEGE

ADVISOR: - GEMECHU NEMERA (PhD)

ASSESSMENT OF EMPLOYEE RELATION

ARBA MINCH UNIVERSITY SCHOOL OF GRADUATE STUDIES

GEMECHU NEMERA (PhD) -------------------------- -----------------------------

ABIYU JIRU (MBA) --------------------------- ------------------------------

ASSESSMENT OF EMPLOYEE RELATION

ARBA MINCH UNIVERSITY SCHOOL OF GRADUATE STUDIES DEPARTMENT OF

APPROVED BY DATE SIGNATURE

EXAMINER ---------------------------- --------------------------------

EXAMINER ------------------------------- ----------------------------------

EXAMINER ------------------------------- ----------------------------------

THANK YOU ALL

Table of Contents .............................................................................................................................ii

List of Tables ...................................................................................................................................v

List of Figures .................................................................................................................................vi

Abbreviations ................................................................................................................................. vii

Abstract ......................................................................................................................................... viii

CHAPTER ONE .................................................................................................................. 1

1.1. Background of the study .................................................................................................. 1

1.2. Background of the organization ....................................................................................... 3

1.3. Statement of the Problem ................................................................................................. 4

1.4. Research Questions .......................................................................................................... 5

1.5. Research Objectives ......................................................................................................... 6

1.5.1. General Objective: .................................................................................................... 6

1.5.2. Specific Objectives: .................................................................................................. 6

1.6. Significance of the Study ................................................................................................. 7

1.7. Scope and Limitations of the Study ................................................................................. 7

1.7.1. Scope of the study ..................................................................................................... 7

1.7.2. Limitations of the Study............................................................................................ 7

1.8. Organization of the study ................................................................................................. 8

CHAPTER TWO ................................................................................................................. 9

LITERATURE REVIEW .................................................................................................... 9

2.1. Employment ..................................................................................................................... 9

2.3. Employee Relations Issues ............................................................................................. 10

2.3.1. Work place practices ............................................................................................... 11

2.3.2. Safety and health ..................................................................................................... 11

2.3.3. Healthy employee relation issue ............................................................................. 12

2.3.4. Training ................................................................................................................... 12

2.3.5. Performance management ...................................................................................... 13

2.3.6. Living Wage............................................................................................................ 14

2.3.7. Grievance procedures and internal dispute resolution ............................................ 14

2.3.8. Employee Engagement and Commitment .............................................................. 15

2.3.8.1. Engagement ............................................................................................................ 15

2.3.8.2. Commitment ........................................................................................................... 16

2.3.9. Trust and engagement ............................................................................................. 17

2.4. Tripartite Cooperation .................................................................................................... 18

2.5. Legal framework for employment in Ethiopia ............................................................... 18

2.5.1. Bargaining ............................................................................................................... 19

2.5.1.1. Legal framework of employee relation in Ethiopia ............................................ 19

2.5.2.2. Collective bargaining and agreements in the Ethiopia ........................................ 20

CHAPTER THREE ........................................................................................................... 21

RESEARCH METHODLOGY .......................................................................................... 21

3.1. Research Design ............................................................................................................. 21

3.2. Sample of the Study ....................................................................................................... 21

3.2.1. Sampling design .................................................................................................... 21

3.2.1.1. Population size .................................................................................................... 21

3.3. Data Collection ............................................................................................................... 22

3.3.1. Primary Sources ...................................................................................................... 22

3.3.2. Secondary Sources .................................................................................................. 22