Chapter 12 Understanding Unions and Their Impact on HRM © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved Chapter Outline • 12-1 Gaining Competitive Advantage • 12-2 HRM Issues and Practices • 12-3 The Manager’s Guide © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-1a Opening Case: Gaining Competitive Advantage at the Saturn Corporation • Problem: Regain lost market share in the American Automotive industry • Solution: Establish a cooperative relationship between management and labor • How cooperative relationship enhanced competitive advantage Promotes teamwork and encourages open communication Allows team members to participate in decision making Consensus process for decision-making Improved quality; enhanced interdepartmental coordination Better solutions through a greater flow of ideas © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-1b Linking Unions to Competitive Advantage • Unions: Labor organizations in which employees participate and which exist for the purpose of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work • Employers can contain HR-related costs by maintaining a union-free environment © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-1b Linking Unions to Competitive Advantage (cont.) • Unionized firms are often more productive than similar nonunion companies • When relations are positive between management and the union, unionization is associated with higher firm productivity • When relations are negative, unionization is associated with lower firm productivity • Unionized firms are typically not as profitable as similar nonunion companies © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-2a Unions Today • Local unions Directly represent the interests of its members Members pay dues to the local for the representation it provides Identify and negotiate plant issues and administer collective bargaining agreements or contracts © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-2a Unions Today (cont.) • National unions Represent workers throughout the country in a particular craft or in a specific industry Negotiate major labor contracts with large employers Organize new local unions among unrepresented workers Most local unions are chartered from parent national unions Charters provide locals with professional services offered by the national union; they also constraint the behavior of locals Locals pay dues to the national union for the staff and services it provides © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-2a Unions Today (cont.) • The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) Promotes cooperation among national unions in order to pursue organized labor’s common objectives Has no power to intervene in the internal affairs of unions Represents organized labor in political forums - Provides lobbyists for legislative bodies Supports pro-union candidates for elected public office © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-2a Unions Today (cont.) • Union membership patterns The percentage of employed wage and salary workers represented by unions has reduced from 31.4 percent in 1960 to 13 percent in 2008 Unions continue to represent a large number of workers in the government, manufacturing, and transportation/public utilities industries © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-2a Unions Today (cont.) • Decline in union membership Shift in employment from manufacturing to service occupations Employers generally oppose unions and have always taken an aggressive stance against them Employers find permanent replacements for striking employees © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-2c Becoming Unionized (cont.) • Certification phase NLRB certifies the results Assuming there is no misconduct , a simple majority by either party is required to win the election The employer or the union may file objections to the election within days If the NLRB finds evidence of gross misconduct on the part of the employer during the campaign, it may issue a bargaining order Bargaining order directs an employer to accept collective bargaining with the union even if the employer won the election © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-2d The Collective Bargaining Agreement • Collective bargaining Negotiations between representatives of employers and employees to reach mutual agreement about employment terms This mutual agreement is called a collective bargaining agreement, which covers all members of the bargaining unit, regardless of whether they are members of the union Can take many forms; no one form is considered more effective © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-2d The Collective Bargaining Agreement (cont.) • Negotiating a collective bargaining agreement Preparing for collective bargaining - Information must be gathered about relevant contract settlements Both parties must estimate the costs of their initial offers In the case of ongoing contractual relationships, both parties must examine their experience in attempting to administer the current contract © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-2d The Collective Bargaining Agreement (cont.) Establishing a bargaining agenda: The three categories of bargaining items are: - - Illegal bargaining items: Matters about which bargaining is not permitted by law Mandatory bargaining items: Issues that must be negotiated if either party brings these matters to the table Voluntary or permissive bargaining items: Become part of the negotiations only if both parties agree to discuss them © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-2d The Collective Bargaining Agreement (cont.) Choosing a bargaining strategy - Each party must decide on its priorities among bargaining items Also establish a range of bargaining objectives for each item to be negotiated: • The realistic bargaining objective • The optimistic bargaining objective • The pessimistic bargaining objective © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-2d The Collective Bargaining Agreement (cont.) Engaging in good faith bargaining - - - Obliges both parties to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment The NLRB evaluates the totality of conduct by a party during the negotiations before determining whether it is bargaining in good or bad faith Bad faith bargaining may include such tactics as complicating the scheduling of bargaining sessions or refusing to provide pertinent information In cooperative bargaining, management and the union often work together for everyone’s benefit © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-2d The Collective Bargaining Agreement (cont.) • Administering a collective bargaining agreement Grievance system: Contractual provisions that provide due process for claims of contract violations Grievance, which can be filed by either employees or employers, is an allegation that contract rights have been violated Grievance systems - Provide a forum in which disagreements concerning violations of contract rights can be adjudicated Influence the way workers view organized labor © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved Figure 12-4 Steps in a Grievance System © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-3a Unions and the Manager’s Job • Managing in a union setting Must adhere to the provisions of the collective bargaining agreements Must understand agreement provisions and how the grievance systems work Must try to resolve conflicts before they turn into costly grievances © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-3a Unions and the Manager’s Job (cont.) • Managing in a nonunion setting Must fairly allocate rewards and punishment, and cultivate a climate that stresses open communication These practices can help a firm improve employee morale and productivity and thus enhance competitive advantage © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-3b How the HRM Department Can Help • HRM practices in a union setting Negotiate and consult with union officials about matters such as: - The assignment of workers to jobs A range of compensation issues The administration of the collective bargaining agreement Comply with the labor contract © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-3b How the HRM Department Can Help (cont.) • HRM practices in a nonunion setting Help devise strategies to prevent unionization Utilize equitable HRM practices so that employees not see any need for union representation Utilize labor relations consultants to direct companies’ efforts to prevent unions from gaining bargaining rights and guide efforts to decertify existing unions © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-3c HRM Skill-Building for Managers • Approaches to handling interpersonal conflicts Competition: Manager sees this as a win–lose situation, and the aim is to win Collaboration: Manager attempts to resolve the conflict by searching for a solution that mutually benefits all parties concerned Compromise: Parties search for an alternative to the original decision; no solution is found that completely satisfies all parties; each must give up something Avoidance: Manager is aware of the conflict, but chooses to ignore it Accommodation: Manager simply gives in to the wishes of the employee © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved 12-3c HRM Skill-Building for Managers (cont.) • Steps in responding to an employee grievance Make an appointment to discuss the problem unless the problem is urgent and must be addressed immediately Do not become defensive, even if the complaint has no foundation Give the worker an opportunity to speak without interruption Set ground rules, if necessary Redirect from accusations to specific behaviors Agree with some aspect of the complaint without accepting all of its ramifications Ask for suggestions of acceptable alternatives © 2010 Cengage Learning. Atomic Dog is a trademark used herein under license All rights reserved ... strikes Allowed states to pass legislation outlawing “closed shops,” companies that require union membership as a condition of employment © 2010 Cengage Learning. Atomic Dog is a trademark used... provide locals with professional services offered by the national union; they also constraint the behavior of locals Locals pay dues to the national union for the staff and services it provides © 2010 Cengage... unit consists of those jobs or positions in which two or more employees share common employment interests and working conditions Step 2: Campaigning by both the union and the employer Step 3: