Chapter 12 - Participatory processes. The main contents of the chapter consist of the following: The evolution of worker and union participation; the links between teamwork, participation, and work restructuring; the debate surrounding participatory programs
Chapter 12 Participatory Processes McGrawHill/Irwin An Introduction to Collective Bargaining & Industrial Relations, 4e Copyright © 2008 The McGrawHill Companies, Inc. All rights reserved 1 3 The Evolution of Worker and Union Participation 12 3 • Early efforts to create mechanisms for worker involvement included “Quality of Working Life” (QWL) programs QWL is oriented toward improving organizational performance and the working life of the employees • The QWL programs operate at the lowest level of industrial relations activity, on the shop floor through the involvement of groups of workers 1 4 12 4 Early QWL Limited Success • Efforts to create interest in QWL expanded in the early 1970s QWL sought to address a perception that modern factories alienated workers by providing few avenues for employee input QWL sought to reduce worker alienation known as the “blue collar blues” Early efforts had opposition from labor and management • Neither labor nor management saw the need for change • Both labor and management felt that QWL questioned the basic assumptions of the collective bargaining process, and feared for their roles • Few line managers or executives saw the bottomline relevance of QWL – but QWL was “reborn” in the 1980s as economic pressures intensified 1 5 12 5 Quality Circles • In a typical Quality Circle (QC) program, workers in one area of a plant meet for one or two hours per week with their supervisor Quality Circles allow workers and management to identify improvements in production and service delivery Many companies initially reported large payoffs from QC activities, with scrap rates dropping and cost savings through new processes • The Limited Gains from Quality Circles QC gains dissipated over time Workers became frustrated when their suggestions were ignored Workers ran out of suggestions or found them to be in violation of work rules 1 6 The Broadening of QC and QWL Programs 12 6 • The most successful QC and QWL programs involved broadening work rules, bargaining issues, and production methods Without the broadening of work rules, QWL programs were not able to address performance and employment security • The Expansion of QWL at Xerox Xerox and their union committed to expand problemsolving Study teams of workers and management suggested changes in work organization that required contractual changes, and thus integrated QWL into the collective bargaining process Unions agreed to subcontracting and management accepted a no layoff provision Xerox won the Baldrige award for organizational excellence, and the participatory activities received much of the credit • Strategic participation included top executive access by unions 1 7 12 7 The Limits of Participation • Events at Xerox at the start of the twentyfirst century also illustrate the limits of the participatory process The process cannot override fundamental changes in market conditions or declines in core business caused by strategic mistakes By 2000, Xerox lost market share, failed in elements of restructuring, and was charged with accounting irregularities Employment in Rochester, NY, has been reduced by 50% While the extent of the participation has diminished, efforts to work together have continued 1 8 12 8 New Channels of Communication • The expansion of the participation processes is often associated with new communications between management and labor Often led to expanded communication between union officers and highermanagement • Work Organization Restructuring Links to QWL Work reorganization became a central part of many participation processes due to pressures for flexibility More easily done in new plants or those that are completely retrofitted 1 9 12 9 The Links between Teamwork, Participation, and Work Restructuring • Teamwork systems require a fundamental reorganization of the workplace They replace multiple and narrow job classifications with jobs that are broader in scope Workers make discretionary judgments and an investment in training Some involve “payforknowledge” plans 1 10 New Roles for Supervisors • Traditional supervisors are sometimes replaced with team leaders Many team leaders are members of the bargaining unit rather than firstline management In some cases, such as the Saturn Corporation, union and nonunion team leaders are paired as partners who share responsibility for managing the teams • The Expansion of Teams Some plants have an “administrative” team which includes the plant manager and union chairman A key to such a team’s success is union participation in initial design of changes 12 10 1 14 New Union Rules 12 14 • Joint steering committees can help with oversight of the participatory process Former union officers can make good facilitators • They tend to be respected by the work force and adept at compromise The result is the creation of a complex set of committees and new jobs that coordinate participation and collective bargaining In many settings, union officers now spend as much of their time on joint activities as they do traditional arm’slength activities 1 15 The Expansion of Joint Activities 12 15 • Other joint activities tend to evolve from the participatory process They include employee assistance programs, such as alcohol and drug abuse counseling, health and safety committees, absentee programs, training and education, and community service programs Union officers spend more time in such roles This trend has led to changes in job titles of workers and more facilitation In service industries, such as hotels or hospitals where multi employer bargaining structures exist, joint efforts often cut across employers 1 16 Worker and Union Participation in Strategic Decisions 12 16 Some worker involvement comes from the formal participatory process • In other cases from an informal basis An example of this evolutionary expansion occurred in some auto plants • Workers and union representatives now sit on planning committees that operate at the plant level • They assist in developing new practices to avoid outsourcing and win new business 1 17 The Effects of Downsizing and Outsourcing Pressures: Heightened Concern for Employment Security 12 17 Downsizing and threats of outsourcing in the 1990s led many unions to increase their involvement in business issues Unions bargained for employment security clauses that included participation as well as concessions The process has led to extensive cooperation, including avoidance of representation elections 1 18 The Sources of Failure 12 18 • Joint processes seldom last forever Many fail in the early stages because leaders are unable to make the organizational and role adjustments needed to integrate joint efforts in union/management relationships Recognition that participatory process are vulnerable to business decisions traditionally under the control of top management is why some labor leaders pressed for a voice in strategic decision making 1 19 12 19 Worker and Union Voice in 21st Century Corporations • The U.S. experienced a crisis of corporate confidence in the early twentyfirst century The scandals arose from accounting and executive compensation issues in companies such as Enron, Tyco, Polaroid, and Adelphia Communications These scandals raised questions about the role of employees and union representatives in corporate governance Given the growing importance of knowledge and skills as a source of competitive advantage to corporations, this issue will be important in future debates over the roles of employees 1 20 12 The Debate Surrounding Participatory 20 Programs • Critics argue that participatory programs do not lead to meaningful worker involvement They claim that the team systems are used to put peer pressure on workers and remove the independent voice of the union They call such programs a “halfway house” to nonunion operations Proponents argue it’s a better way to reach their membership’s goals 1 21 Assessing the Effects of Participatory Processes 12 21 Management seems convinced that participatory processes and work reforms can improve productivity and quality A number of unionists are coming to a similar judgment Research shows that narrowly defined QC and QWL programs have only a small positive effect on product quality and negligible effects on productivity Auto plants with the highest productivity and quality are not the most technologically advanced, but those that integrate human resource strategy with production processes The best performing plants link “humanware” and “hardware” through participation 1 22 12 Union Representation on a Company’s 22 Board of Directors Formal representation on the board of directors is another way unions have achieved involvement in strategic decisions Started with the addition of a UAW representative on Chrysler’s board as part of the federal loan guarantees in 1980 Not all are success stories, as with Rath Packing and Eastern Airlines Evidence suggests that board membership alone does not lead to substantial payoff for workers 1 23 Employee Ownership 12 23 A more radical form or participation is employee ownership In some cases, employee buyouts occurred in the face of impending plant shutdowns Some unions have promoted employee ownership as a way to improve job security The employee buyout of United Airlines is the most noteworthy example In 1994, United became the largest employeeowned company in the U.S. It is not clear that the employee ownership had a positive effect on morale or corporate performance at United 1 24 The Views of Labor Toward Employee Ownership Unions have been traditionally unenthusiastic Union leaders may fear that ownership will lead to a lack of need for a union However, studies show this may not be the case While new forums arise in ESOPs, members still prefer traditional bargaining for wage and benefit negotiations Unions fear that economic pressures will bring wage and benefit cuts to save jobs Unions are also concerned about the effects of such wage cuts on other unionized firms in the industry 12 24 1 25 12 25 The Impact of Worker Ownership on Economic Performance • Evidence suggest that performance improves in employee owned firms when workers have broader decisionmaking opportunities ESOPs may work best in small, stable firms, where skilled workers can improve productivity and economic performance through motivation and group performance Critics say ESOPs put worker pensions at risk without any real increase in decisionmaking 1 26 Participation through Industrywide LaborManagement Committees 12 26 • In some competitive industries with numerous employers and a single union or small number of unions, industrywide labormanagement committees historically were used to discuss problems of mutual interest outside the collective bargaining process • Those committees represented early efforts by unions to participate in broad strategic issues outside of formal collective bargaining 1 27 The Textile Industry Case 12 27 The Amalgamated Clothing and Textile Workers Union (ACTWU now part of UNITE) became involved at the early stage in research and development to mechanize production to help stem the flow of imported goods In contrast to other unions, the ACTWU became deeply involved before management’s strategic decision to implement the technology Later, the union agreed to an experimental program that allowed some importation of goods in exchange for a commitment to reinvest in U.S. facilities Joint committees can be useful in creating links between participation and the formal bargaining process 1 28 Summary 12 28 Experience suggest that new participatory processes cannot operate in isolation from collective bargaining Reforms work best when they are associated with changes across all three levels of industrial relations activity The ultimate success of reforms depends upon the ability to reinforce and sustain high levels of trust To achieve tangible benefits, participatory programs have often been accompanied by contract changes Shop floor participation has been spurred by strategic participation This helps convince workers that enhanced job security will follow strategic participation Union critics fear that they will be coopted by management in the participatory process and their independence will be compromised Participation has rarely expanded without a crisis setting ... Without the broadening of work rules, QWL programs were not able to address performance and employment security • The Expansion of QWL at Xerox Xerox and their union committed to expand problemsolving Study teams of workers and management suggested changes in ... design of changes 12 10 1 11 12 Managing the Overlap between Participation, Work 11 Restructuring, and Collective Bargaining • As participatory processes expand, unions face a challenge to manage and coordinate the overlap... Assessing the Effects of Participatory Processes 12 21 Management seems convinced that participatory processes and work reforms can improve productivity and quality A number of unionists are coming to a similar judgment