HRM gaining a competitive advantage noe ch014

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