Human Resource Management: Gaining a Competitive Advantage Chapter 14 Collective Bargaining and Labor Relations McGraw-Hill/Irwin Copyright © 2010 by the McGraw-Hill Companies, Inc All rights reserved Learning Objectives Describe collective bargaining and labor relations Identify labor relations, goals of management, labor unions and society Explain legal environment's impact on labor relations Describe major labor-management interactions: organizing, contract negotiations and contract administration Describe new, less adversarial approaches to labormanagement relations Explain how changes in competitive challenges are influencing labor-management interactions Explain how labor relations in the public and private sectors differ 14-2 Labor Relations Framework Elements of John Dunlop’s Labor Relations System 14-3 Labor Relations Framework Competitive Challenges - Legal - Stakeholder Needs - High-performance Work Systems Goals Employees & Unions - Management - Society Union Structure & Administration Union Membership &Relative Bargaining Power Union&Management Interactions - Organizing - Negotiating - Administering Goal Attainment - Employees& Unions - Management - Society 14-4 Goals&Strategies Society Labor unions' major benefit to society has been balancing power and institutionalization of industrial conflict in the least costly way National Labor Relations Act (NLRA, 1935) provides a legal framework conducive to collective bargaining Management decides to encourage or discourage unionization Labor Unions seek to give workers through collective action formal and independent voice in setting employment terms and conditions 14-5 Union Structure, Administration & Membership National and International Unions Craft unions Industrial unions Local Unions Responsible for contract negotiations and day-today contract administration, including grievance procedure AFL-CIO Not a union but rather an association that advances its shared interest of its member unions at the national level 14-6 Union Security Check off Provision Right-toWork Laws Closed Shop Maintenance of Membership Union Shop Agency Shop 14-7 Reasons for Decline in U.S Union Membership 14-8 Legal Framework Wagner Act of 1935 (NLRA) enshrined collective bargaining as the preferred mechanism for settling labor-management disputes Section of the NLRA: employees have 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." 14-9 Unfair Labor Practices (ULPs) NLRA prohibits certain activities by both employers and labor unions Employers cannot: interfere with, restrain, or coerce employees in exercising their Section rights dominate or interfere with a union discriminate against an individual for exercising his or her right to join or assist a union discriminate against employees for providing testimony relevant to enforcement of the NLRA refuse to bargain collectively with a certified union 14-10 Organizing Campaigns NLRB may set aside election results if the employer created an atmosphere of confusion or fear of reprisals Associate union membership- union receives dues in exchange for services but does not provide representation in collective bargaining Corporate campaigns bring public, financial or political pressure on employers during the organizing and negotiating process 14-15 Union and Management Interactions: Negotiation Process Distributive Bargaining - Win/Lose Intraorganizational Bargaining -Conflicting Objectives -Different Factions Integrative Bargaining - Win/Win Attitudinal Structuring - Relationship&Trust 14-16 Preparing Managers for Negotiations Steps: Establish interdepartmental contract objectives Review old contract Prepare and analyze data Anticipate union demands Establish costs of various contract provisions Make preparations for a strike Determine strategy and logistics 14-17 Negotiation Stages and Tactics 14-18 Negotiation Stages and Tactics Early stages may include many individuals, as union proposals are presented Middle stages, each side makes decisions regarding priorities, theirs and the other parties' Final stage, momentum may build toward settlement or pressure may build as impasse becomes more apparent May involve interaction with negotiators or facilitators 14-19 Management’s Willingness to Take a Strike 14-20 Management’s Willingness to Take a Strike Factors If Management Is Able To Take a Strike: Product Demand Product Perishability Technology Availability of Replacement Workers Multiple Production Sites and Staggered Contracts Integrated Facilities Lack of Substitutes for Product 14-21 Alternatives to Strikes Mediation - Has no formal authority to force a solution; acts as a facilitator for parties Fact finder - Investigates and reports on reasons for dispute and both sides' positions Arbitration -process through which a neutral party makes a final and binding decision 14-22 Grievance Procedure Negotiation process occurs every three years Negotiation and administration processes are linked Effectiveness of grievance procedures may be judged on three criteria: How well are day-to-day problems resolved? How well does the process adjust to changing circumstances? In multi-unit contracts, how well does the process handle local contract issues? Duty of Fair Representation 14-23 Grievance Procedure Arbitration is a final and binding step Criteria arbitrators used to reach decisions include: Did the employee know the rule and the consequences of violating it? Was the rule applied in a consistent and predictable way? Were the facts collected in a fair and systematic way? Did the employee have the right to question the facts and present a defense? Does the employee have the right of appeal? Is there progressive discipline? Are there mitigating circumstances? 14-24 New Labor Management Strategies 14-25 Labor Relations Outcomes • Strikes- impose significant costs on union members, employers, and society Wages and Benefits In 2008, private-sector unionized workers received 21% higher wages that nonunion counterparts Total compensation was 40 % higher for union-covered employees because of unions’ effect on benefits Productivity effects of unions is debated Union workers are more productive than nonunion workers although the explanation is unclear Profits and Stock Performance- may suffer under unionization if costs are raised 14-26 International Context Except for China, Russia and Ukraine, U.S has more union members than any other country Growing globalization of markets will continue to put pressure on labor costs and productivity U.S differs from W Europe in formal worker participation in decision-making 14-27 Public Sector 2008 some 36.8 % of government employees were union members Strikes are illegal at the federal level and in many states for government workers In 2008, of 15 major work stoppages were in the public sector 14-28 Summary Labor unions seek to represent their members’ interests in the workplace May witness diminished ability to compete effectively in global economy Management in nonunion companies feel compelled to resist unionization Union losses in membership and bargaining power in the private sector Management and unions are seeking new, more effective ways of working together to enhance competitiveness while giving employees a voice in workplace decisions 14-29 [...]... Negotiations 7 Steps: 1 2 3 4 5 6 7 Establish interdepartmental contract objectives Review old contract Prepare and analyze data Anticipate union demands Establish costs of various contract provisions Make preparations for a strike Determine strategy and logistics 14-17 Negotiation Stages and Tactics 14-18 Negotiation Stages and Tactics Early stages may include many individuals, as union proposals are... Corporate campaigns bring public, financial or political pressure on employers during the organizing and negotiating process 14-15 Union and Management Interactions: Negotiation Process Distributive Bargaining - Win/Lose Intraorganizational Bargaining -Conflicting Objectives -Different Factions Integrative Bargaining - Win/Win Attitudinal Structuring - Relationship&Trust 14-16 Preparing Managers for... Middle stages, each side makes decisions regarding priorities, theirs and the other parties' Final stage, momentum may build toward settlement or pressure may build as impasse becomes more apparent May involve interaction with negotiators or facilitators 14-19 Management’s Willingness to Take a Strike 14-20 Management’s Willingness to Take a Strike 7 Factors If Management Is Able To Take a Strike:... 1 Product Demand 2 Product Perishability 3 Technology 4 Availability of Replacement Workers 5 Multiple Production Sites and Staggered Contracts 6 Integrated Facilities 7 Lack of Substitutes for Product 14-21 Alternatives to Strikes Mediation - Has no formal authority to force a solution; acts as a facilitator for parties Fact finder - Investigates and reports on reasons for dispute and both sides'... contracts, how well does the process handle local contract issues? Duty of Fair Representation 14-23 Grievance Procedure Arbitration is a final and binding step Criteria arbitrators used to reach decisions include: 1 Did the employee know the rule and the consequences of violating it? 2 Was the rule applied in a consistent and predictable way? 3 Were the facts collected in a fair and systematic way?... in bargaining units- agricultural laborers, independent contractors, supervisors, and managers The Employee Free Choice Act- pending 14-14 Organizing Campaigns NLRB may set aside election results if the employer created an atmosphere of confusion or fear of reprisals Associate union membership- union receives dues in exchange for services but does not provide representation in collective bargaining... positions Arbitration -process through which a neutral party makes a final and binding decision 14-22 Grievance Procedure Negotiation process occurs every three years Negotiation and administration processes are linked Effectiveness of grievance procedures may be judged on three criteria: 1 How well are day-to-day problems resolved? 2 How well does the process adjust to changing circumstances? 3...Unfair Labor Practices - Unions 14-11 Enforcement National Labor Relations Board (NLRB) enforces NLRA NLRB is a five-member board appointed by the president with 33 regional offices NLRB’s 2 Major Functions: 1 conduct and certify representation elections 2 prevent unfair labor practices ULP charges are filed at and investigated by the regional offices 14-12 Why Do Employees... &Legal Framework of Organizing An election may be held if at least 30%of employees in the bargaining unit sign authorization cards Secret ballot election will be held The union is certified by NLRB if a simple majority of employees vote for it Decertification election may be held if no other election has been held within the year or if no contract is in force Certain categories of employees cannot... for China, Russia and Ukraine, U.S has more union members than any other country Growing globalization of markets will continue to put pressure on labor costs and productivity U.S differs from W Europe in formal worker participation in decision-making 14-27 Public Sector 2008 some 36.8 % of government employees were union members Strikes are illegal at the federal level and in many states for