1. Copyright Atomic Dog Publishing, 2004 Chapter 12 Understanding Unions and Their Impact on HRM

2. Copyright Atomic Dog Publishing, 2004 Outline 12-1 Gaining Competitive Advantage 12-2 HRM Issues and Practices 12-3 The Manager’s Guide

3. Copyright Atomic Dog Publishing, 2004 12-1 Gaining Competitive Advantage Unions  Labor organizations “of any kind…in which employees participate and which exist for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work” Containing HR Costs  Employers can contain HR-related costs by maintaining a union-free environment  Costs of operating a unionized environment are considerably higher -Due to higher salaries and more generous benefit plans

4. Copyright Atomic Dog Publishing, 2004 Gaining Competitive Advantage Enhancing productivity  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  Increases in productivity rarely offset the increased HR- related costs

5. Copyright Atomic Dog Publishing, 2004 12-2 HRM Issues and Practices Local unions National unions AFL-CIO Membership patterns Decline in union membership

6. Copyright Atomic Dog Publishing, 2004 Local Unions Where workers and their representatives interact most frequently and, consequently, it is the focus of everyday union-management relations Members must pay dues to the local for the representation it provides Local unions play two roles:  Identify and negotiate plant (local) issues in national collective bargaining agreements  Administer collective bargaining agreements or contracts

7. Copyright Atomic Dog Publishing, 2004 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 Charter local unions

8. Copyright Atomic Dog Publishing, 2004 AFL-CIO American Federation of Labor and Congress of Industrial Organizations Promotes cooperation among national unions in order to pursue organized labor’s common objectives Represents organized labor in political forums  Provides lobbyists for legislative bodies  Supports pro-union candidates for elected public office

9. Copyright Atomic Dog Publishing, 2004 Union Membership Patterns Bureau of Labor Statistics reports that:  31.4% of employed wage and salary workers were represented by unions in 1960  This number dropped to 14% in 1999 Unions continue to represent a large number of workers in the following industries:  Government  Manufacturing  Transportation/public utilities

10. Copyright Atomic Dog Publishing, 2004 Decline in Union Membership Shift in employment away from manufacturing, a traditional union stronghold, to service occupations, a sector where unions have had little appeal Employers generally oppose unions and have always taken an aggressive stance against them Employers find permanent replacements for striking employees

11. Copyright Atomic Dog Publishing, 2004 Labor Laws 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. Copyright Atomic Dog Publishing, 2004 The Railway Labor Act Passed in 1926 Provided 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. Copyright Atomic Dog Publishing, 2004 The Norris-LaGuardia Act Passed in 1932 Limiting judges’ powers to issue injunctions that restrained worker job actions Declared yellow-dog contracts unlawful  Workers’ promise that they would not organize, support, or join a union if the company hired them

14. Copyright Atomic Dog Publishing, 2004 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  Determined whether a majority of workers in a company wanted union representation Created the National Labor Relations Board (NLRB)  Supervised certification elections and enforced the law

15. Copyright Atomic Dog Publishing, 2004 Labor-Management Relations Act (Taft-Hartley Act) Passed in 1947 Amended the National Labor Relations Act Tried to restore balance of power between employers and unions Established a decertification process 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. Copyright Atomic Dog Publishing, 2004 Labor-Management Reporting and Disclosure Act (Landrum-Griffin Act) Passed in 1959 Passed after a series of publicized hearings dealing with corruption in organized labor 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. Copyright Atomic Dog Publishing, 2004 Why Do Workers Join Unions? Two important reasons:  Job dissatisfaction  Union instrumentality Major benefits accrued by 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

18. Copyright Atomic Dog Publishing, 2004 How Do Workers Become Unionized? Petition phase Election phase Certification phase

19. Copyright Atomic Dog Publishing, 2004 Petition Phase Workers express initial interest in union representation by signing authorization cards At least 30% of eligible workers must sign authorization cards for there to be a sufficient “showing of interest” to trigger NLRB involvement Petition phase culminates when the union asks the employer for recognition as the bargaining representative of the workers

20. Copyright Atomic Dog Publishing, 2004 Election Phase Step 1: The NLRB conducts representation hearings to determine the appropriate 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

21. Copyright Atomic Dog Publishing, 2004 Certification Phase NLRB certifies the results A simple majority by either party is required to win the election  Assuming no misconduct The employer or the union may file objections to the election within 5 days  Objections may be related to conduct by either party that affects the outcome of the elections

22. Copyright Atomic Dog Publishing, 2004 Negotiating a Collective Bargaining Agreement Preparing for collective bargaining Establishing a bargaining agenda Choosing a bargaining strategy Engaging in good faith bargaining

23. Copyright Atomic Dog Publishing, 2004 Categories of Bargaining Items 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

24. Copyright Atomic Dog Publishing, 2004 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”

25. Copyright Atomic Dog Publishing, 2004 Grievance System Grievance system  Provide due process for claims of contract violations Grievance  Can be filed by either employees or employers  An allegation that contract rights have been violated

26. Copyright Atomic Dog Publishing, 2004 Role of Grievance System Provide a forum in which disagreements concerning violations of contract rights can be adjudicated Influence the way workers view organized labor

27. Copyright Atomic Dog Publishing, 2004 How Grievance Systems Operate Step 1: Informal stage  An attempt to resolve the matter before it is written up and becomes an official grievance Step 2: Written grievance Step 3: Higher level bilateral discussion Step 4: Arbitration  Calls for a neutral third party to settle matters that cannot be resolved by bilateral discussions between union and management representatives

28. Copyright Atomic Dog Publishing, 2004 12-3 The Manager’s Guide Line managers in a union setting Line managers in a nonunion setting HRM department in a union setting HRM department in a nonunion setting

29. Copyright Atomic Dog Publishing, 2004 Line Managers 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

30. Copyright Atomic Dog Publishing, 2004 Line Managers in a Nonunion Setting Must fairly allocate rewards and punishment Must cultivate a climate that stresses open communication These practices can help a firm avoid unionization, they also improve morale and productivity and thus enhance competitive advantage

31. Copyright Atomic Dog Publishing, 2004 HRM Department 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

32. Copyright Atomic Dog Publishing, 2004 HRM Department in a Nonunion Setting Help devise strategies to prevent unionization Provide workers with a greater voice in determining work conditions Allow employees to assist in installing their own formal grievance systems Utilize labor relations consultants