Chapter 12 Understanding Unions and Their Impact on HRM

1. Chapter 12Understanding Unions and Their Impact on HRM

2. Chapter Outline • 12-1 Gaining Competitive Advantage • 12-2 HRM Issues and Practices • 12-3 The Manager’s Guide

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. 12-2b Labor Law • Early judicial decisions • Allowed employers to issue yellow-dog contracts, workers’ promises that they would not organize, support, or join a union if the company hired them. • Key legislative actions pertaining to unions: • The Railway Labor Act • The Norris-LaGuardia Act • The National Labor Relations Act (Wagner Act) • Labor-Management Relations Act (Taft-Hartley Act) • Labor-Management Reporting and Disclosure Act (Landrum-Griffin Act)

12. 12-2b Labor Law (cont.) • The Railway Labor Act • Passed in 1926. • Provides a federal guarantee of railroad employees’ rights to choose a bargaining agent. • Compelled the railroads to bargain with the employees’ representative. • Established federal machinery to resolve labor disputes.

13. 12-2b Labor Law (cont.) • The Norris-LaGuardia Act • Passed in 1932. • Limits judges’ powers to issue injunctions that restrained worker job actions. • Declared yellow-dog contracts unlawful.

14. 12-2b Labor Law (cont.) • The National Labor Relations Act (Wagner Act) • Passed in 1935. • Gave workers in most industries the right to form unions and bargain collectively without being subject to coercion by their employers. • Established the certification election process to determine whether a majority of workers in a company want union representation. • Created the National Labor Relations Board (NLRB) to supervise certification elections and enforce the law.

15. 12-2b Labor Law (cont.) • Labor-Management Relations Act (Taft-Hartley Act) • Passed in 1947; it amended the NLRA. • Tried to restore balance of power between employers and unions. • Made it possible for union members to rid themselves of their union by means of a decertification election. • Gave the U.S. president the right to intervene in national emergency strikes. • Allowed states to pass legislation outlawing “closed shops,” companies that require union membership as a condition of employment.

16. 12-2b Labor Law (cont.) • Labor-Management Reporting and Disclosure Act (Landrum-Griffin Act) • Passed in 1959. • Regulated the internal affairs of unions. • Required unions to submit reports of all financial expenditures to discourage officers from using union funds for personal matters.

17. 12-2c Becoming Unionized • Benefits of joining a union • Higher salaries; better benefits. • Ability to speak one’s mind without fear of reprisal. • Better job security. • Protection against unfair treatment. • Gaining a sense of identity/unity. • Two important reasons for joining unions are job dissatisfaction and union instrumentality. • Union instrumentality is the perceived ability of the union to provide important benefits to the worker.

18. Figure 12-2 A Union Organizing Campaign

19. 12-2c Becoming Unionized (cont.) • Petition phase • Workers express initial interest in union representation by signing authorization cards that empower a union to represent them in collective bargaining with the employer. • At least 30 percent of eligible workers must sign authorization cards for there to be a sufficient ‘‘showing of interest’’ to trigger NLRB involvement in the certification process. • Culminates when the union asks the employer for recognition as the bargaining representative of the workers.

20. 12-2c Becoming Unionized (cont.) • Election phase • Step 1: The NLRB conducts representation hearings to determine the appropriate bargaining unit. • The bargaining 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: Election • Typically held on-site at the company. • The voters must be the members of the sanctioned bargaining unit.

22. 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 5 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.

23. 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.

24. 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.

25. 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.

26. 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

27. 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.

28. 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.

29. Figure 12-4 Steps in a Grievance System

30. 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.

31. 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.

32. 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.

33. 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 do 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.

34. 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.

35. 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.