Presentation on theme: "BUILDING UNION ENGAGEMENT IN EXXONMOBIL"— Presentation transcript:
1 BUILDING UNION ENGAGEMENT IN EXXONMOBIL William R. VickersAugust 2012
2 ExxonMobil in Australia Number of employees 1700Cumulative investment >$16 billionAnnual payment to Government $202 billion23 Offshore Oil and Gas FacilitiesGas and oil Refining facilities onshoreDistribution TerminalsMajor investment in Gorgon and PNG projectsGlobal Corporate Earnings US$41 billion for 2011
3 Why build engagement?History of “forced” change had mixed results and created baggageProductivity and “discretionary effort” maximised when people feel valuedConservative: pragmatic not ideologicalStrong safety culture and positive lessonsUnions are entrenchedIs it worth it?
5 Key DriversA “burning bridge” promotes (temporary) engagement and allignment with corporate goalsPassionate management leadership and continuity of “message”Open and transparent communication with employeesBusiness education/literacyBuilding an enduring relationship with influential union officials/delegatesDo what you say
6 The Esso and Mobil Experience Highly unionised since Bass Strait oil/gas field developedProfitable businessLegacy of resistance to changeLow workforce turnoverManagement turnoverWorkforce insulated from competitive pressures
7 The Esso & Mobil Experience Opportunities created by enterprise bargainingWorkforce exposed to domestic and international competitionContinuity of line managementSenior union leadership alignment with business interestsOpen and transparent communication with workforceManagement commitment to drive change and acceptance of risk
8 “Happy Talk” or Actual Outcomes Restructuring and downsizing of Altona RefineryIntroduction of performance linked payIntroduction of annualised salariesAnnual refinery operator pay reviews tied to non-unionised remuneration systemALL IMPLEMENTED WITHOUT INDUSTRIAL ACTION, UNFAIR DISMISSAL CASES OR FEDERAL COURT INTERVENTIONS
9 Impact of Fair Work Act A major shift in bargaining power of unions Removal of alternative agreement making options: IFA shamIFAs ineffectiveOpportunity for unions to rebuild membership base and “grow their business”Major impact on cost of new projects via Greenfield agreement provisionsUnion influence enhanced via expanded scope of agreement content and availability of protected actionCollective bargaining promoted at the expense of productivityFWA appointments have devalued independent and objective expertise
10 What Does This Mean for Corporate Relationships With Unions? A positive relationship almost obligatory in unionised industryNon-unionised workplaces face more pressure to maintain direct relationship with employeesIR skills gap after an era of declining private sector union membershipPressure on line management to exercise leadership in non-familiar territoryResponsibility on union leadership NOT to abuse post FWA leverage
11 Experience Post FWA We are not interested in an ideological debate No “bonus points” for our business decision to maintain constructive engagement during WorkchoicesSome unions cannot resist short term leverage opportunities
12 The Challenge of Major Projects A Different Set of Rules
14 Our Engagement Initiative Poor relationship between Union and lead contractorEM Management safety priorityA legitimate safety initiative was undermined by pursuit of an industrial agendaConcession in WA Project Negotiations established precedentFair Work Act provides zero protection
15 Esso’s People Strategy: From Adversarial Bargaining to Interest-Based Problem-Solving Approach developed independently of IR legislationConsistent with long term business focus and approach to management of riskStructured problem solving process based on recognition of joint interestsWhy Now?
16 “Trying to get to heaven before they close the door” Bob Dylan
17 Adversarial Bargaining versus Interest-Based Problem-Solving What is IBPS?Adversarial Bargaining versus Interest-Based Problem-SolvingParties develop independent negotiation position(s) and fallbacks (ambit)Parties use power, influence and “facts” to achieve own desired outcomeParties accept, deny or discredit “facts” to achieve own desired outcomeParties win, lose or compromise for settlementParties may distort settlement throughout implementationParties agree upon issue(s) to be addressedParties identify shared and separate interests and concernsParties identify options which may address interests or concernsParties agree key Criteria for acceptable solution(s)Parties develop options into draft solution(s)Jointly document, plan and implement best solution(s)
18 How we apply the Process SCHNEIDERAUSTRALIACONSULTINGBuilding High performance Organization's
19 Outcomes: Report CardImproved relationships: transparent communicationMeasurable business gains limitedManagement turnover inhibits changeCulture change in a profitable, low turnover company a marathon not a sprintExtensive use of contractors adds significant complexity
20 Barriers to Building Engagement History of Adversarial Industrial RelationsCareer Shop stewardsManagement turnover in key leadership rolesCultural norms : “win/lose” mentalityRisk aversion : short tem expediencyNo obvious imperative to drive changeTraditional methods delivered union gains
21 Agreement-Making and Change Management Keys to successBe clear on overall positioning of negotiations within business strategyEBAs should be an enabler of change not a barrierArticulate business requirements and performance objectives to all employeesBuild internal management and union alignmentSet realistic expectationsAllocate and manage resources/timelinesDon’t take first-line Supervisors for grantedCompetitive Remuneration Package
22 A Warning from Bob Dylan UNION SUNDOWNWell, my shoes, they come from VietnamMy flashlight’s from ChinaMy tablecloth’s from CambodiaMy belt buckle’s from the AmazonYou know, this shirt I wear comes from the PhilippinesAnd the car I drive is a ChevroletIt was put together down in MexicoBy a guy makin’ 30 cents a dayWell, its sundown on the unionAnd what’s made in the USASure was a good idea‘Til greed got in the way
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