CHAPTER 14
Collective Bargaining and Labor Relations
Chapter Summary
This chapter provides an overview of private-sector labor-management relations in the United States, with brief attention to public-sector differences and international labor relations. After a model of labor-management relations and a context for current relationships are provided, various aspects of the process of collective bargaining are described. Cooperative forms of labor-management relations are then presented. Finally, an explanation is given for how changes in competitive challenges are influencing labor-management interactions.
Learning Objectives
After studying this chapter, the student should be able to:
1. Describe what is meant by collective bargaining and labor relations.
2. Identify the labor relations goals of management, labor unions, and society.
3. Explain the legal environment’s impact on labor relations.
4. Describe the major labor-management interactions: organizing, contract negotiations, and contract administration.
5. Describe the new, less adversarial approaches to labor-management relations.
6. Explain how changes in competitive challenges (e.g., product-market competition and globalization) are influencing labor-management interactions.
7. Explain how labor relations in the public sector differ from labor
relations in the private sector.
Extended Chapter Outline
Note: Key terms appear in boldface and are listed in the “Chapter Vocabulary” section.
The Term Paper on Labor Relations
1. Define the term “collective bargaining” and list and describe four issues that are mandatory components of a collective bargaining agreement. Collective bargaining can be defined as the process of involving representatives from both employers and employees to come to terms and conditions of employment that both parties agree. These agreements are written into legally binding contacts good for ...
Opening Vignette: Labor Relations and the Bottom Line
The main issue in the 54-day strike by the United Auto Workers (UAW) at two General Motors parts plants was job security and whether GM would invest in plants in the United States or continue its effort to cut U.S. employment and shift production overseas to reduce labor costs. The strike postponed all of GM’s plant operations, which caused annual earnings and market share. GM plans to spin off a new unit, which would eliminate 200,000 of UAW workers from the payroll. Ford is thinking about doing the same thing but has postponed the move because of UAW opposition.
I. Introduction—Labor-management relations are complex, and many are in transition as competitive challenges force a realignment of management and worker interests. The need for many U.S. companies to become smaller and more efficient translates into actions (job loss) that are at cross-purposes with the interests of union members.
II. The Labor Relations Framework (text Figure 14.1 and TM 14.1)
A. John Dunlop suggested a labor relations systems that consists of four elements:
1. An environmental context (technology, market forces, etc.).
2. Participants: employees and their unions, management, and the government.
3. A web of rules (rules of the game) that describe the process by
which labor and management interact.
4. Ideology (acceptance of the system and participants).
B. Katz and Kochan have presented a model that focuses on the decision-making process and outcomes.
1. At the strategic level, management makes basic choices such as whether to work with its union or develop nonunion operations.
2. These labor and management choices made at the strategic level affect interaction at the second level, the functional level, where contract negotiations occur.
3. These strategic decisions also affect the workplace level, the arena in which the contract is administered.
III. Goals and Strategies
A. Society—Labor unions’ major benefit to society throughout history has been the balancing of power and the institutionalization of industrial conflict in the least costly way. The National Labor Relations Act (NLRA, 1935) sought to provide a legal framework conducive to collective bargaining.
The Research paper on MANAGEMENT EMPLOYEE RELATIONS
... 2003. ‘Human Resource Management Practices and industrial Relations in Australia’; Industrial Relations Journal. (46): 1-21. ... the companies do that, most unions caution their members against signing them. They ... an archetypal characteristic of representing high level of employee engagement and a ... importance is effective management. Conversely, Australia is a highly competitive labor market and ...
B. Management must decide whether to encourage or discourage the unionization of its employees. Based upon issues of wage cost, flexibility, and labor stability, as well as ideology, management must decide. If management has a union, it has the option of supporting a decertification vote, an election in which employees have a chance to vote out the union.
C. Labor unions seek to give workers formal representation in setting the terms and conditions of employment. (See text Table 14.1 for categories of provisions in collective bargaining agreements).
IV. Union Structure, Administration, and Membership
A. National and international unions are composed of multiple local unions, and most are affiliated with the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) (see Table 14.2 in the text for a list).
In 1995, three major unions, the UAW, the United Steelworkers, and the International Association of Machinists, announced plans to merge by the year 2000.
| | |A related reading from Dushkin’s | |Annual Editions: Human Resources 99/00: | |(“HR Comes of Age” by Michael Losey |
1. Craft unions are those that organize members of a particular skill or trade, such as electricians or plumbers. Craft unions are likely to be responsible for training programs called apprenticeships.
2. Industrial unions are made up of members who work in any number of positions in a given industry, such as the auto or steel industry. Whereas craft unions may wish to control the number of members, industrial unions wish to maximize the number of members.
B. Local unions are frequently responsible for the negotiations of a contract as well as the day-to-day administration of the contract, including the grievance procedure. Typically, an industrial local corresponds to a single manufacturing facility.
C. The AFL-CIO is a federation of national unions. It represents labor’s interests in the political process and provides numerous services to its members, in terms of research and education (text Figure 14.2).
| | |A related reading from Dushkin’s | |Annual Editions: Human Resources 99/00:
| |(“Labor Deals a New Hand” by Marc Cooper |
D. Union security depends upon its ability to ensure a stability of members and dues. Unions typically negotiate a contract clause that defines the relationship it has to employees and that provides for an uninterrupted flow of dues.
The Term Paper on Union Unions That Represent Employees
Collective Bargaining: a process in which representatives of Labor & Mgmt negotiate the terms & conditions of employment. Structure: Single Employer Bargaining: a single employer involved w/ a single union (can also bargain w/ more than 1 unit). Boutique is a specialized Taylor agreement b / w employer & unit (usually seen in oligopolistic type market) Pattern Bargaining: Pick a target ...
1. A checkoff provision is an automatic deduction of union dues from an employee’s paycheck.
2. A closed shop is a union security provision under which a person must be a union member.
3. A union shop requires a person to join the union within a certain length of time after beginning employment.
4. An agency shop is similar to a union shop, but does not require union membership, only that an agency fee be paid.
5. Maintenance of membership requires only that those who join the union remain members through the life of the current contract.
6. Right-to-work laws—As a function of the Taft-Hartley amendment to the NLRA, states may decide to make mandatory union membership (or even dues paying) illegal.
E. Union Membership and Bargaining Power—Employers are increasingly resisting unionization. Unions are making new attempts to organize new memberships and to provide new services. Union membership has consistently declined since 1950 and now stands at roughly 10 percent of private-sector employment (text Figure 14.3 and TM 14.2).
Reasons for this decline are noted below:
1. Structural Changes in the Economy—These changes include decline in
core manufacturing and increase in the service sector. But these changes, according to studies, only account for 25 percent of the overall union membership decline.
2. Increased Employer Resistance—Almost 50 percent of large employers in a survey reported that their most important labor goal was to remain union free. Unions’ ability to organize whole industries has declined, and therefore wages are rarely taken out of competition. Additionally, studies have shown that if a union wins an election, it is frequently the case that managers lose their jobs (see Figure 14.4 for the increase in unfair labor practices filed).
| | |Competing by Meeting Stakeholders’ Needs: | |Is Strong Labor Relations Good for Business? | | | |Milwaukee-based Johnson Controls is not looking to cultivate a unionized work force. That is why it endures strikes at its seat| |making factories by UAW workers who were trying to negotiate their first collective bargaining contract with the company. Ford | |has taken a different view because it has begun a strong commitment with the UAW to be a competitive advantage. Ford realizes | |that it is not in the best interests of its employees to accept seats by replacement workers because their relationship with the| |union and respect for the team are too important to them. Finally, Johnson Controls agreed on a contract with the UAW at its | |two plants with help from Ford. |
The Essay on This Paper Talks About How The Employer employee Relationship Has Evolved
This paper talks about how the employer-employee relationship has evolved over a period of time and how it is changing in the days of recession. This relationship is mostly governed by the decisions an organization takes about its employees and how the leader of the organization win the trust of their people in the bad times. Gone are the days when a person would join an organization and continue ...
3. Substitution with HRM—In large nonunion companies, HRM policies and practices may encourage positive employee relations, and therefore union representation is not desired by employees.
| | |Competing through Globalization: | |UAW Concedes Defeat at Transplants—for Now | | | |UAW is diverting its attention from the Japanese-owned assembly plants to the German-owned plants because the Japanese are | |turning their backs on the UAW. Transplant operations are tough to implement, but they are continuing to grow in this country | |and employment continues to shrink. Also, the UAW membership is beginning to shrink because it depends on the auto industry for| |its existence. Transplant operations usually offer pay and benefits and the social and political environments don’t support | |unions. BMW and Mercedes-Benz are willing to work with the U.S. auto union because it is easier to organize during economic | |times and they may be able to influence affairs with Germany. BMW pays workers hourly with bonuses as well as using a | |self-directed work team concept. These pay and benefits are attractive to the workers at this company. The union must also | |contend with plant expansions because employees find themselves considering job promotion or at least a move to a more appealing| |work slot. BMW and Mercedes-Benz are expanding both their factories and their payrolls. |
4. Substitution by Government Regulation—Employment laws have been passed that reduce the areas in which unions can make a contribution.
5. Worker Views—The lack of a U.S. history of feudalism and class distinctions has limited the class-consciousness needed to support a strong union movement.
The Essay on Collective Bargaining Union Labor Contract
... in the contract. Union Security Labor organization usually seeks to protect by insisting on a security clause. Management and labor can negotiate a contract that when ... agreement. The employees are represented in bargaining by a union or other labor organizations. Does the employer have to Bargain with the Union Collective bargaining can ...
6. Union Actions—Corruption, resistance to obvious economic change, and openness to women and minorities have all hurt the perception of union.
V. Legal Framework—Legislation and court decisions that provide the
structure within which unions must operate have had an effect upon membership, bargaining power, and the degree to which unions and managements are successful in achieving their goals. The 1935 NLRA enshrined collective bargaining as the preferred mechanism for settling labor-management disputes. Section 7 of the act sets out the rights of employees, including the “right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining.”
A. Unfair Labor Practices (ULPs)—Employers: The National Labor Relations Act (1935) prohibits certain activities by both employers and labor unions. Section 8(a) of the NLRA contains ULPs by employers.
1. Employers cannot interfere with, restrain, or coerce employees in exercising their Section 7 rights.
2. Employers cannot dominate or interfere with a union.
3. Employers may not discriminate against an individual for exercising his or her right to join or assist a union.
4. Employers cannot refuse to bargain collectively with a certified union (other examples are given in text Table 14.3).
B. Unfair Labor Practices—Labor Unions: These were added by the 1947 Taft-Hartley Act.
1. These ULPs parallel those listed previously. For example, unions may not restrain or coerce employees in the exercise of their Section 7 rights (see Table 14.4 in the text for additional examples).
C. Enforcement—The National Labor Relations Board (NLRB) has the primary responsibility for enforcing the NLRA.
1. The NLRB is a five-member board appointed by the president. Additionally, there are 33 regional offices.
2. Only businesses involved in interstate commerce are covered by the NLRA and therefore subject to the NLRB.
3. The NLRB has two major functions:
a. To conduct and certify representation elections.
b. To prevent ULPs and to adjudicate them.
4. ULP charges are filed at and investigated by the regional offices.
5. The NLRB may defer to the parties’ grievance process instead of holding a hearing.
The Term Paper on Employer-Employee Relations
The employer employee relationship is one of the most common relationships in the legal system. The employer employee relationship includes several important parts which includes how the relationship begins, laws protecting employees and employers, discrimination, and how a relationship can be terminated. Many different factors that play a role in the way employees and employers work together with ...
6. The NLRB can issue a cease-and-desist order to halt a ULP. It may order reinstatement and back pay. The court of appeals can choose to enforce the NLRB’s orders.
VI. Union and Management Interactions: Organizing
A. Why Do Employees Join Unions?—Is it for wages and benefits? Do unions help increase wages and benefits?
B. The Process and Legal Framework of Organizing—An election may be held if at least 30 percent of the employees in the bargaining unit sign authorization cards. A secret ballot election will be held. The union is certified by the NLRB if a simple majority of employees vote for it.
1. A decertification election may be held if no other election has been held within the year or if no contract is in force.
2. The NLRB must define the appropriate bargaining unit. The
criterion they use is “mutuality of interest” of employees.
3. Certain categories of employees cannot be included.
C. Organizing Campaigns: Management and Union Strategies and Tactics (see text Tables 14.5 and 14.6 for common campaign issues).
1. Table 14.7 in the text and TM 14.3 list employer strategies, legal and illegal, that are used during organizing campaigns. Additionally, note the significant increase in employer ULPs since the late 1960s.
2. The consequence of breaking the law in this situation is minimal, and discrimination against employees active in union organizing decreases organizing success.
3. The NLRB may set aside the results of an election if the employer has created “an atmosphere of confusion or fear of reprisals.”
4. Associate union membership provides a person who is not part of a bargaining unit with some of the services a full union member receives (access to insurance, credit cards, etc.).
This is a strategy unions are trying in order to increase support.
5. Corporate campaigns seek to bring public, financial, or political pressure on employers during the organizing and negotiating process.
Example: William Patterson, corporate affairs director of the Teamsters union, attended the 1996 Time Warner Inc.’s annual meeting, where he unsuccessfully pushed a Teamsters proposal to split the chairman and CEO position into two separate positions. The Teamsters pension funds have assets of $48 billion and actively pursue strategies as stockholders to support their positions.
VII. Union and Management Interaction: Contract Negotiation—Bargaining structures, the range of employees and employers that are covered under a
given contract, differ, as shown in text Table 14.8.
A. The Negotiation Process—Walton and McKersie suggested that negotiations could be broken into four subprocesses:
1. Distributive bargaining occurs when the parties are attempting to divide a fixed economic pie into two parts. What one party gains, the other loses.
2. Integrative bargaining has a win-win focus; it seeks solutions beneficial to both sides.
3. Attitudinal structuring refers to behaviors that modify the relationships between the parties, for example, offering to share information or a meal.
4. Intraorganizational bargaining is the consensus-building and negotiations that go on between members of the same party.
B. Management’s preparation for negotiations is critical to labor costs and productivity issues. The following steps are suggested:
1. Establish interdepartmental contract objectives among industrial relations and finance, production, and so on.
2. Review the old contract to focus on provisions needing change.
3. Prepare and analyze data on labor costs, your own and competitors’. Data on grievances, compensation, and benefits must be examined as well.
4. Anticipate union demands by maintaining an awareness of the union perspective.
5. Establish the potential costs of various possible contract
provisions.
6. Make preparations for a strike, including possible replacements, security, and supplier and customer.
7. Determine the strategy and logistics for the negotiators.
C. Negotiation Stages and Tactics
1. The early stages may include many individuals, as union proposals are presented.
2. During the middle stages, each side makes decisions regarding priorities, theirs and the other parties’.
3. In the final stage, momentum may build toward settlement or pressure may build as an impasse becomes more apparent. More small groups are used to address specific issues.
4. Getting to Yes by Fisher and Ury presents four principles of negotiations:
a. Separate the people from the problem.
b. Focus on interests, not positions.
c. Generate a variety of possibilities before deciding what to do.
d. Insist that the results be based on some objective standard.
D. Bargaining Power, Impasses, and Impasse Resolution—An important determinant of the outcomes of negotiations is the relative bargaining power of each party. Strikes impose various economic costs on both sides and therefore, in part, determine the power.
E. Management’s Willingness to Take a Strike—Willingness is determined by the answers to two questions.
1. Can the company remain profitable over the long run if it agrees to the union’s demands?
2. Can the company continue to operate in the short run despite a strike.
3. The following factors help determine whether management is able to take a strike:
a. Product Demand—If it’s strong, there is greater potential loss for management.
b. Product Perishability—A strike timed with perishability of a crop results in permanent revenue loss.
c. Technology—A capital-intensive firm is less dependent on labor for continued operation.
d. Availability of Replacement Workers—(Note that the Clinton Administration issued an executive order that at the time of publication was under an injunctive order. This executive order prohibits federal contractors from permanently replacing striking workers).
e. Multiple Production Sites and Staggered Contracts—These permit the shifting of work from a struck site.
f. Integrated Facilities—If parts are not available from a struck plant, other facilities may be shut down.
g. Lack of Substitutes for the Product—A strike is less costly if customers cannot purchase substitute goods.
F. Impasse-Resolution Procedures: Alternatives to Strikes
1. Mediation is provided by the Federal Mediation and Conciliation Service. While a mediator has no formal authority to force a solution, he or she acts as a facilitator for the parties, trying to help find a way to resolve an impasse.
2. A fact finder is most commonly used in the public sector. The fact finder’s job is to investigate and report on the reasons for the dispute and both sides’ positions.
3. Arbitration is a process through which a neutral party makes a final and binding decision. Traditionally, rights arbitration (the interpretation of contract terms) is widely accepted, while interest arbitration (deciding upon the outcome of contract negotiation) is used much less frequently.
VIII. Union and Management Interactions: Contract Administration
A. The grievance procedure is a process developed to resolve labor management disputes over the interpretation and implementation of the contract. This happens on a day-to-day basis.
1. The WWII War Labor Board first institutionalized the use of a third-party neutral, called an arbitrator (now, the final step in the grievance process).
2. The effectiveness of grievance procedures may be judged on three criteria:
a. How well are day-to-day problems resolved?
b. How well does the process adjust to changing circumstances?
c. In multi-unit contracts, how well does the process handle local
contract issues?
3. The duty of fair representation is mandated by the NLRA and requires that all bargaining-unit members, whether union members or not, have equal access to and appropriate representation in the grievance process. An individual union member may sue the union over negligent or discriminatory representation.
4. Most grievance procedures have several steps prior to arbitration, each including representatives from increasingly higher levels of management and the union (Text Table 14.9 and TM 14.4).
5. Arbitration is a final and binding step. The Supreme Court, through three cases known as the Steelworkers’ Trilogy, confirmed the credibility and binding nature of the arbitrator’s decision.
6. Criteria arbitrators use to reach decisions include:
a. Did the employee know the rule and the consequences of violating it?
b. Was the rule applied in a consistent and predictable way?
c. Were the facts collected in a fair and systematic way?
d. Did the employee have the right to question the facts and present a defense?
e. Does the employee have the right of appeal?
f. Is there progressive discipline?
g. Are there mitigating circumstances?
B. New Labor-Management Strategies
1. There are signs of a transformation from an adversarial approach to a less adversarial and more constructive approach to union-management relations.
2. The transformation includes increasing worker involvement and participation and reorganizing work to increase flexibility.
| | |Competing through High-Performance Work Systems: | |Look Who’s Pushing Productivity | | | |Aluminum Co. of America is working to create a high performance work system within its plant by setting up a labor-management | |partnership and spur productivity, protect jobs, and as using unions as consultants. The International Association of | |Machinists is implementing a revolutionary change in the way unions view cooperation with management. The goal is to protect | |workers’ jobs and pay by making their employers more competitive. By developing expertise in new work systems, unions have a | |chance to make themselves valuable to employers battling today’s intense global and domestic competition. Partnerships can also| |dilute the opposition many executives feel toward unions. However, the most willing unions still battle over wages. The IAM | |has opted for a soft-sell approach, marketing itself as a resource for employers. The one payoff is that unions get more jobs | |for its members even if it can’t win election battles against nonunion contractors. |
3. Union leaders have frequently resisted such change, fearing an erosion of their influence.
4. In the Electromation case, the NLRB ruled that setting up worker-management committees was a violation of the NLRA, given certain
circumstances (see Table 14.10 for a description of what makes teams illegal).
5. Polaroid recently dissolved an employee committee when the U.S. Department of Labor claimed it was a violation.
6. In a third case, the NLRB ruled that worker-management safety committees were illegal because they were dominated by management.
7. These new approaches (with the boundaries of legality) to labor relations may add to an organization’s effectiveness. Table 14.11 in the text and TM 14.5 illustrate the patterns of traditional and transformational approaches.
IX. Labor Relations Outcomes
A. Strikes—See Table 14.12 in the text for U.S. strike data. Note that strikes occur very infrequently.
B. Wages and Benefits—In 1997, private-sector unionized workers received, on average, wages that were 28 percent higher than nonunion counterparts.
1. The union-nonunion gap is most likely overestimated due in part to the ease of organizing higher skilled (therefore more highly paid) workers. The “union threat” more than likely causes an underestimation of the differences. The net difference is close to 10 percent.
2. Unions influence the way in which pay is given (across-the-board wages on top of occupational wage rates).
Promotions are in large part based on seniority.
| | |A related reading from Dushkin’s | |Annual Editions: Human Resources 99/00:
| |(“Off the Tenure Track” by Barbara McKenna |
C. Productivity
1. Unions are believed to decrease productivity in three ways:
a. The union pay advantage motivates management to use more capital per worker, which is an inefficiency.
b. Union contracts may limit work load, and so on.
c. Strikes and other job actions result in some lost productivity.
2. Unions, alternatively, may increase productivity:
a. Unions provide more efficient communication with management, which may reduce turnover.
b. The use of seniority decreases the competition between workers.
c. The presence of a union may encourage management to tighten up in terms of consistency on work rules, and so on.
3. Overall, studies have concluded that union workers are more productive than nonunion workers although the explanation is not clear.
Example: Between 1978 and 1982, Ford lost 47 percent of sales. Today, Ford uses one-half as many workers to make a car as they did during that period. A major factor in Ford’s increased productivity has been the improvement in their labor-management relationship. Management has made a strong effort to increase employee involvement. The Walton Hills plant outside of Cleveland, Ohio, is given as an example of a change from an adversarial relationship to a more cooperative approach that allowed for a change of work rules which kept the plant open.
D. Profits and Stock Performance—These may suffer under unionization if costs are raised. Recent studies have shown negative effects on profit and shareholder wealth. These research findings describe the average effects of unions. The consequences of more innovative union-management relationships for profits and stock performance are less clear.
X. The International Context—The United States has both the largest number of union members and the lowest unionization rate of any Western European country or Japan (Text Table 14.13).
A number of potential explanations exist.
A. The growing globalization of markets (EC common market, NAFTA, etc.) will continue to put pressure on labor costs and productivity. Unless U.S. unions can increase productivity or organize new production facilities, union membership may continue to decline.
B. The United States differs from Western Europe in the degree of formal worker participation in decision making. Work councils and codetermination are mandated by law in Germany.
XI. The Public Sector—During the 1960s and 1970s, unionization in the public sector increased dramatically. By 1997, 37 percent of government employees were covered by a union contract. Strikes are illegal at the federal level and in many states for government workers.
Chapter Vocabulary
These terms are defined in the “Extended Chapter Outline” section.
Web of Rules
Decertification
Craft Union
Industrial Union
Local Union
AFL-CIO
Checkoff Provision
Closed Shop
Union Shop
Agency Shop
Maintenance of Membership
Right-to-Work Laws
Unfair Labor Practices (ULPs)
National Labor Relations Act, 1935
Taft-Hartley Act, 1947
National Labor Relations Board
Associate Union Membership
Corporate Campaigns
Distributive Bargaining
Integrative Bargaining
Attitudinal Structuring
Intraorganizational Bargaining
Getting to Yes
Mediation
Fact Finder
Grievance Procedure
Arbitration
Duty of Fair Representation
Electromation Case
Discussion Questions
1. Why do employees join unions?
Employees join unions because of dissatisfaction with wages, benefits, working conditions, and supervisory method. Employees believe that collective voice (representation) will increase the likelihood of improvement. Unionization provides a better balance of power between management and employees (as a group).
2. What has been the trend in union membership in the United States, and what are the underlying reasons for the trend?
Since 1950, union membership has consistently declined as a percentage of employment to approximately 16 percent of all employment. Students may suggest a number of reasons for this (as discussed in the text): decline in the manufacturing “core” industries, increase in employer union resistance,
more frequently adopted progressive HRM policies, increase in employment legislation, and a lack of union adaptation.
3. What are the consequences for management and owners of having a union represent employees?
Various consequences may occur depending on the quality of the union-management relationship. Management may find less flexibility, higher wage and benefit costs, higher productivity, and a negative impact on stock price and profitability.
4. What are the general provisions of the National Labor Relations Act, and how does it affect labor-management interactions?
The NLRA provides a detailed list of individuals’ rights regarding organizing a union, bargaining a contract, and involvement (or lack thereof) in job (concerted) actions. These rights are referred to as Section 7 rights. Section 8 lists unfair labor practices for both employers and unions. Students could present and discuss each of these. The NLRB (the primary enforcement agency) was also mandated by the act.
The NLRA encouraged unionization in order to provide employees with a balance of power vis a vis employers. It affects labor relations by providing a structure for negotiations and conflict resolution. Students could be called upon to provide some specific examples.
5. What are the features of traditional and nontraditional labor relations? What are the potential advantages of the “new” nontraditional approaches to labor relations?
Traditional labor relations can be characterized as adversarial in nature. Negotiations are generally win-lose, and grievances tend to be settled at the third and fourth levels of the process. Nontraditional labor relations include an emphasis on problem-solving and win-win negotiations. Grievances may be more frequently settled informally at the first step. Additionally,
employees may be involved in team efforts and participate in decision making.
6. How does the U.S. industrial and labor relations systems compare with systems in other countries such as those in Western Europe?
The U.S. industrial relations system has a very low relative union density rate. The union wage premium is higher in the United States. Western European unions have a much higher level of formal worker participation in decision making.
Web Exercise
Students are asked to visit UAW’s web site to read about and answer questions about their recent mergers.
• www.uaw.com
End-of-Chapter Case
A Floor Under Foreign Factories?
The global economic crisis is turning up the heat on companies that use cheap overseas labor, and as a result many companies are taking action like Nike, Inc. Nike lifted wages for its entry-level factory workers in Indonesia by 22 percent to offset that country’s devalued currency and other companies are finding ways to fix these problems without being undercut by rivals. The American Apparel Manufacturers Association (AAMA) introduced a task force to set guidelines for companies to police their factories and suppliers. In addition, the Council on Economic Priorities launched a program toward labor relations by having companies self-regulate even in the face of negative publicity about sweatshops, which could in turn create a floor of basic working conditions evolving around the globe. The plan is to establish the Fair Labor Association (FLA), a private entity to be controlled 50-50 by corporate and human-rights or labor representatives. The FLA would accredit auditors, such as accounting firms, to certify
companies as complying with the code of conduct, and inspect about a fifth of a company’s factories for certification. This plan however needs to address wages and unionization rights in order to be successful. These two efforts can pose a problem for companies who still want to deal with sweatshops because human-rights groups will continue to expose the companies that use this technique.
Questions
1. From labor’s point of view, what challenges does the “mobility of capital” create of protecting worker’s rights?
From labor’s point of view, the challenges are: decent wage levels, appropriate standard of living, and job security.
2. Should companies be obligated to pay a “living wage” to workers? What would the likely consequences be for workers?
To avoid exploitation by companies, “living wages” certainly makes sense. It also treats employees as assets rather than cheap labor.
3. If international labor standards are to be enforced, what is the best means? Should enforcement take the form of self-regulation by industry groups or should national governments cooperate in enforcing such standards?
If international standards are to be enforced, they should be consistent and similar for the whole international market. This way it will be easier to monitor and control when there are discrepancies or when there is check-ins in the factories. National governments should take a cooperative approach in this arena to make sure things are going as planned and companies are complying with standards.
4. As a consumer, do the conditions under which people work matter to you in choosing a product to buy?
Answers will vary. For the most part, most consumers will not think about where the products came from or where they were made when deciding on whether to purchase a certain product. The people that will take this issue into consideration would probably be the human-rights groups or other informed and concerned consumers; however, many people do not understand or are well informed about such issues.
Additional Activities
Teaching Suggestions
Students are frequently quite interested in how labor relations work. Additionally, they may have fairly strong opinions about unions and their effectiveness. Discussions are therefore quite easy to start and keep going. Below are a number of activities that can be added to the text material. One role play is included that allows students to try out the first step in a grievance procedure. The HBR case on the clerical and technical employees organizing campaigns gives students a good chance to think about how HRM policies and practices truly play a role in employee relations. Two of the “Competing through” boxes have discussion questions listed. Finally, the Saturn end-of-part case is very useful with this chapter, illustrating the benefits of a constructive joint union-management relationship.
1. Competing through Quality Discussion Questions:
• Certainly strikes bring about hostile attitudes in many cases. What strategies can management use to defuse these feelings once people are back at work?
• · Given the Electromation case, how careful does management need to be in using teams as a quality improvement technique?
2. Competing through Globalization Discussion Questions:
• What types of strategies should U.S. organizations use when dealing
with labor relations in other countries? What information do they need and with whom should they staff the labor relations positions?
• Will unions ever move to have a multinational structure like many organizations do? Why or why not? You may wish to have students do some library or Internet research on this question.
3. An interesting case from the Harvard Business School is listed below with questions for discussion. This may be assigned to groups as a written case analysis or used in class to discuss and illustrate a number of points regarding why employees join unions and what sort of union organizing techniques are used.
Case 9-490-027: Clerical and Technical Workers Organizing
Campaign at Harvard University (A)
Case 9-490-081: Part (B)
Teaching Note (5-490-083)
Supplement (9-490-081)
This case describes a successful organizing drive among clerical and technical workers at Harvard. The union (HUCTW) relied on unusual strategies: espousing cooperation, avoiding specific demands, emphasizing the need for worker voice, and making use of volunteer organizers.
Discussion Questions
1. Should Harvard oppose unionization?
2. How would a union affect the university’s “business” needs?
3. How effective were Harvard’s campaign tactics?
4. What did you learn about managing human resources from reading and analyzing this case?
5. The Saturn case presents a labor-management relationship (as well as a plant design process) designed from the ground up as a cooperative, joint interaction. After covering this chapter, students should be well prepared to discuss the demands placed upon both the union and management in a situation like Saturn’s. The case provides some focus on the political riskiness of a cooperative relationship for the union-elected officials.
In the Saturn case discussion, it would be useful to note the difference between beginning a new operation in which the union-management relationship is based on “jointness” and trust and the effort needed to change a relationship in which trust has not existed in the past.
6. Assign the following article from The Wall Street Journal (May 24, 1993): “Why Ms. Brickman of Sarah Lawrence Now Rallies Workers” by Kevin Salwen. Note also that as part of the AFL-CIO’s new “union summer program,” more than 1,600 young people, mostly college students, have applied for pro-labor candidates and help organize workers.
Ask the students to discuss this quote: “Every successful social movement in history, including the civil rights movement, was run by young people. If the labor movement is going to succeed and grow again, they need to be a big part of it.”
7. A role play is useful in talking about the grievance procedure. Using the following scenario, assign the roles of union steward, supervisor, employee, and observer to students in groups of four. Give them 20 minutes to try to resolve the issue informally, but if they are unable to, have them “write it up” as a grievance. Those groups that do resolve it may hand in their resolution. Observers should provide feedback to the students in the other roles on interpersonal skills, empathy, listening, idea generation to resolve the issue, and so on.
It is Friday afternoon in the special-order fabrications section of the Caseville plant. As the supervisor Mary Reed is checking work orders, she notes that there is one order that has not been handled, and delivery is due the next week. Clearly, Mary is going to have to find several people to work a second shift on overtime. Under the Caseville-Local 484 contract, overtime must be distributed by seniority. The supervisor quickly pulls her seniority list from the file and, beginning at the top, walks around her area talking to the employees and asking about their interest in overtime immediately after the current shift ends. After talking with five men, Mary has only one who will work. Quitting time is five minutes away, and the whereabouts of Brooke Youngblood is not known (Brooke is next on the list).
In desperation, Stevens asks three employees standing at their benches who are about to leave. Two of these people agree to work (both are junior to Brooke).
That afternoon and evening the order is completed.
Monday morning, upon arrival, Brooke is greeted and asked about his weekend. It turns out that he had taken a trip into the city with his son for a major league baseball game Friday afternoon. The tickets had been purchased a month before, and the special event was a birthday present. In the course of the discussion, Brooke learns about the overtime and realizes he hadn’t been asked about it by his supervisor. He immediately calls his union steward, Carry Stevens. A discussion ensues.
