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Chapter 14 Collective Bargaining and Labor Relations McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Human Resource.

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Presentation on theme: "Chapter 14 Collective Bargaining and Labor Relations McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Human Resource."— Presentation transcript:

1 Chapter 14 Collective Bargaining and Labor Relations McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Human Resource Management: Gaining a Competitive Advantage

2 Learning Objectives  Describe collective bargaining and labor relations.  Identify labor relations, goals of management, labor unions and society.  Explain legal environment's impact on labor relations.  Describe major labor-management interactions: organizing, contract negotiations and contract administration.  Describe new, less adversarial approaches to labor- management relations.  Explain how changes in competitive challenges are influencing labor-management interactions.  Explain how labor relations in public and private sectors differ. 14-2

3 Labor Relations Framework 4 Elements of John Dunlop’s Labor Relations System Environmental Context Participants Web of Rules Ideology 14-3

4 Labor Relations Framework 14-4

5 Goals & Strategies  Society- labor unions' major benefit to society has been balancing power and institutionalization of industrial conflict least costly way.  National Labor Relations Act (NLRA, 1935) provides a legal framework conducive to collective bargaining.  Management- decides to encourage or discourage unionization.  Labor Unions- seek to give workers formal and independent voice through collective action in setting employment terms and conditions. 14-5

6 Union Structure, Administration & Membership  National and International Unions  Craft unions  Industrial unions  Local Unions  Responsible for contract negotiations and day- to-day contract administration, including grievance procedure.  AFL-CIO  Not a union but rather an association that advances shared interest of its member unions at the national level. 14-6

7 Provisions of Collective Bargaining Contracts Special groups Employee benefit plans Functions, rights & responsibilities Establish & administer agreement 14-7

8 Check-off Provision Right-to- Work Laws Closed Shop Maintenance of Membership Union Shop Agency Shop 14-8

9 Reasons for Decline in Union Membership Structural Changes in the Economy Substitution with HRMWorker Views Increased Employer Resistance Substitution by Government Regulation Union Actions 14-9

10 Legal Framework  Wagner Act of 1935 (NLRA) enshrined collective bargaining as the preferred mechanism for settling labor- management disputes.  Section 7 of the NLRA: employees have the "right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing and to engage in other concerted activities for the purpose of collective bargaining." 14-10

11 Unfair Labor Practices (ULPs)  NLRA prohibits certain activities by both employers and labor unions.  Employers cannot:  interfere with, restrain, or coerce employees in exercising their Section 7 rights.  dominate or interfere with a union.  discriminate against an individual for exercising his or her right to join or assist a union.  discriminate against employees for providing testimony relevant to enforcement of the NLRA.  refuse to bargain collectively with a certified union

12 Unfair Labor Practices of Unions 1947 Taft-Hartley Act outlawed unfair labor union practices Landrum-Griffin Act regulated unions’ actions and internal affairs (financial disclosure and conduct of elections)

13 Enforcement  National Labor Relations Board (NLRB) enforces NLRA.  NLRB is a five-member board appointed by the president with 33 regional offices.  NLRB’s major functions: 1. conduct & certify representation elections. 2. prevent unfair labor practices.  ULP charges are filed and investigated by regional offices

14 Why Do Employees Join Unions? Is there a gap between pay, benefits and other conditions of employment that employees actually receive versus what they believe they should receive? If such a gap exists, is it sufficiently large enough to motivate employees to remedy the situation? 14-14

15 Organizing Process & Legal Framework  An election may be held if at least 30% of employees in the bargaining unit sign authorization cards.  Secret ballot election will be held. The union is certified by NLRB if a simple majority of employees vote for it.  Decertification election may be held if no other election has been held within the year or if no contract is in force.  Certain categories of employees cannot be included in bargaining units-agricultural laborers, independent contractors, supervisors, and managers

16 Organizing Campaigns  NLRB may set aside election results if the employer created an atmosphere of confusion or fear of reprisals.  Associate union membership-union receives dues in exchange for services but does not provide representation in collective bargaining.  Corporate campaigns bring public, financial or political pressure on employers during the organizing and negotiating process

17 Union and Management Interactions: Negotiation Process Distributive Bargaining - Win/Lose Intraorganizational Bargaining -Conflicting Objectives -Different Faction s Integrative Bargaining - Win/Win Attitudinal Structuring - Relationship & Trust 14-17

18 7 Steps to Prepare Managers for Negotiations 1. Establish interdepartmental contract objectives. 2. Review old contract. 3. Prepare and analyze data. 4. Anticipate union demands. 5. Establish costs of various contract provisions. 6. Make preparations for a strike. 7. Determine strategy and logistics

19 Negotiation Stages and Tactics Early includes many individuals, as union proposals are presented Middle each side makes decisions regarding priorities, theirs and the other parties Final momentum may build toward settlement or pressure may build as impasse becomes more apparent. May involve interaction with negotiators or facilitators 14-19

20 Management’s Willingness to Strike 1. Can the company remain profitable over the long run if it agrees to the union’s demands? 2. Can the company continue to operate in the short run despite a strike? Most negotiations do not result in a strike since it is often not in the best interest of either party

21 Management’s Willingness to Strike  7 Factors If Management Is Able To Strike: 1. Product Demand 2. Product Perishability 3. Technology 4. Availability of Replacement Workers 5. Multiple Production Sites and Staggered Contracts 6. Integrated Facilities 7. Lack of Substitutes for Product 14-21

22 Alternatives to Strikes  Mediation-Has no formal authority to force a solution; acts as a facilitator for parties.  Fact finder-Investigates and reports on reasons for dispute and both sides' positions.  Arbitration-Process through which a neutral party makes a final and binding decision

23 Grievance Procedure  Negotiation process occurs every three years.  Negotiation & administration processes are linked.  Effectiveness of grievance procedures’ three criteria: 1. How well are day-to-day problems resolved? 2. How well does the process adjust to changing circumstances? 3. In multi-unit contracts, how well does the process handle local contract issues?  Duty of Fair Representation-all members have equal access to & representation by the union

24 Grievance Procedure  Arbitration is a final and binding step.  7 criteria arbitrators used to reach decisions : 1. Did the employee know the rule & consequences of violating it? 2. Was the rule applied in a consistent & predictable way? 3. Were facts collected in a fair & systematic way? 4. Did the employee have the right to question facts & present a defense? 5. Does the employee have the right of appeal? 6. Is there progressive discipline? 7. Are there mitigating circumstances? 14-24

25 New Labor Management Strategies 3 signs of transformation from adversarial approach to union- management relations. increasing worker involvement & high performance work practices and systems participation Reorganizing work to increase flexibility 14-25

26 Labor Relations Outcomes Strikes impose significant costs on union members, employers, and society.  Wages and Benefits  In 2010, private-sector unionized workers received 9% higher wages that nonunion counterparts.  Total compensation was 29% higher for union-covered employees because of unions’ effect on benefits.  Productivity effects of unions is debated.  Union workers are more productive than nonunion workers.  Profits and Stock Performance may suffer under unionization if costs are raised

27 Wages and Benefits Besides pay and benefits, unions also typically influence the way pay and promotions are determined. Whereas management often seeks to deal with employees as individuals, emphasizing performance differences in pay and promotion decisions, unions seek to build group solidarity and avoid the possibly arbitrary treatment of employees. Although wages & benefits are higher for union members, job satisfaction is lower

28 International Context  Except for China, Russia and Ukraine, U.S. has more union members than any other country.  Growing globalization of markets will continue to put pressure on labor costs and productivity.  U.S. differs from W. & N. Europe in formal worker participation in decision making

29 Public Sector  In % government employees were union members.  Strikes are illegal at the federal level and in many states for government workers.  In 2010, 6 of 11 major work stoppages were in the public sector

30 Summary  Labor unions seek to represent their members’ interests in the workplace.  May witness diminished ability to compete effectively in global economy.  Management in nonunion companies feel compelled to resist unionization.  Union losses in membership and bargaining power in the private sector.  Management and unions are seeking more effective ways of working together to enhance competitiveness while giving employees a voice in workplace decisions


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