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Mgmt 583. Chapter 11: Contract Negotiations Fall 2008. Four Stages of Collective Bargaining. Preparation Initial Proposals Primary bargaining Eleventh-hour bargaining. Management Preparation. Three objectives of the preparation stage: Determines the bargaining objectives.
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Mgmt 583 Chapter 11: Contract Negotiations Fall 2008
Four Stages of Collective Bargaining • Preparation • Initial Proposals • Primary bargaining • Eleventh-hour bargaining.
Management Preparation • Three objectives of the preparation stage: • Determines the bargaining objectives. • Enables the bargaining team to substantiate and defend its proposals. • Enables the bargaining team to anticipate and war-game the union’s proposals.
Stages in Preparation • Coordination stage • Individuals are assigned to draft proposals for specific parts of the CBA. • Timetables for negotiations are established. • Selecting the Bargaining Team • Chief negotiator • Cost specialist • Secretary-/note taker • Language draftsman • Operations specialist (determines the impact of concessions on production and processes.
Stages in Preparation • Review the previous negotiations • Id personalities • Id union’s critical issues • Id success and failures in last negotiations • Id union success and failures in last negotiations • Id union’s previous tactics • Review current CBA for necessary changes • Id problem provisions. • Look at grievance trends.
Stages in Preparation • Gather company and industry data • Gather economic data relevant to bargaining • Get inputs from supervisors and employees • Formulate proposals, priorities, and bottom-line proposals • Select the bargaining site • Prepare the bargaining book
Union Preparation • Activities at the National • Researches firm’s ability to pay. • Researches locals ability to strike. • Willingness for strike vote. • Nationals financial ability to support a strike. • Consults with representatives from the local. • Locals present concerns and objectives. • Nation conveys “non-concession” objectives.
Union Preparation • Activities at the Local • Negotiation team is elected • Field representative from national explains the negotiation process to members. • Information regarding employer’s profitability, sales, etc. is gathered. • Members are informed of bargaining objectives. • Local officers gage members commitment throughout the process.
Initial Proposals • Chief negotiators from each side develop the bargaining agenda. • Meeting times • Order of bargaining demands • Ground rules • Opening statements • By convention, the union usually presents its initial demands.
Primary Bargaining • Management offers counterproposals ti union’s initial demands. • Union will then counter with its own counterproposals.
Primary Bargaining • Behaviors to avoid • Abusive language • Ultimatums • Personal attacks • Extreme statements • “Management absolutely refuses to grant the union a checkoff.”
Three Rules of Counterproposals • Always carefully consider the future consequences of any proposal made by the union. • Never make concessions too quickly. • If you agree to the union’s proposal, always get something in exchange.
Beware of Roll-Up Costs • Roll-up costs are those concessions that also effect the cost of other issues. • For example a wage increase will also increase: • Pension costs • Paid vacations • Paid holydays Paid sick leave • Social security (FICA & FICA-M) • Unemployment compensation.
Eleventh-Hour Bargaining • The crisis stage as negotiations as the expiration of the CBA approaches. • Bargaining tempo increases. • Concessions are made at a faster rate. • Less important issues are dropped (this is why you prioritize). • Final offers are made. • Parties reduce demands for quid pro quo. • Impasses are of great concern at this stage.
Walton & McKersie’s Behavioral Theory • Labor negotiations are a mixture of conflict and collaborative behaviors. Parties engage in the defense of each ones self-interest while attempting joint problem solving.
Walton & McKersie’s Behavioral Theory • Four bargaining sub-processes were defined • Distributive Bargaining • Integrative Bargaining • Attitudinal Structuring • Intraorganizational Bargaining
Distributive (Competitive) Bargaining • Zero-sum bargaining situations. • Bargaining issues in which the goals of the two parties to the bargaining are in direct conflict. • One party’s gain is the other party’s loss (the central issue in collective bargaining as negotiators probe for the other’s real goals). • Encourages threats, bluffs, and secrecy).
Integrative (Problem Solving) Bargaining • Bargaining issues in which the parties share a common problem requiring resolution. • Employee training programs, substance abuse issues, safety concerns. • Encourages trust, understanding, and cooperation.
Attitudinal Structuring • Activities aimed at changing the other party’s attitude during negotiations. • Assumes that a good relationship results in good concessions. • It may be positive or negative [US Steel story]. • It can be used to accomplish distributive or integrative bargaining.
Intraorganizational Bargaining • Achieving consensus within the respective organizations. • Bargaining teams (especially union teams) are not always united. • Political rivalries. • Diverse constituencies. • Resolving internal disputes before the negotiations begin is critical.
