Business Chapter 12: Dealing with Employee-Management Issues

Figure 12.2 Issues in a Negotiated Labor-Management Agreement

1. Management rights. 2. Union recognition. 3. Union security clause. 4. Strikes and lockouts. 5. Union activities and responsibilities. 6. Wages. 7. Hours of work and time-off policies. 8. Job rights and seniority principles. 9. Discharge and discipline. 10. Grievance procedures. 11. Employee benefits, health, and welfare.

Controversial Employee-Management Issues₆

Child Care • Three-fourths of women with children under 18 (over two-thirds of mothers with children under age 6) are in the workforce. • Childcare-related absences cost businesses billions of dollars each year. • Who should pay for the cost of childcare is a dividing issue among employees and businesses.

Controversial Employee-Management Issues₇

Childcare continued • Many companies offer childcare as an employee benefit. Additional benefits can include: • Discounts with childcare providers. • Vouchers that offer payment for childcare. • Referral services identifying high-quality childcare facilities. • On-site childcare centers. • Sick-child centers.

Controversial Employee-Management Issues₉

Drug Abuse and Drug Testing • Alcohol is the most widely used drug, with 6.4 percent of full-time employees considered heavy drinkers. • Over 8 percent of workers aged 18-49 use illegal drugs and are more likely to be in workplace accidents. • Drug abuse costs the U.S. economy $820 billion in lost work, health care costs, crime, traffic accidents, and other expenses. • Over 60 percent of major companies' drug test new employees.

Controversial Employee-Management Issues₈

Elder Care • About 56 million family caregivers provide unpaid care to an elderly person. • Care giving obligations cause employees to miss about 15 million days of work per year. • Costs up to $34 billion annually in reduced productivity, absenteeism and employee turnover. • Many firms now offer employee assistance programs.

Controversial Employee-Management Issues₁

Executive Compensation • The average total CEO compensation (salary, bonuses, and incentives) is $17.2 million, compared to just over $56,000 for the average worker. • CEO compensation used to be determined by a firm's profitability or increase in stock price. • Now, executives receive stock options and restricted stock that's awarded even if the company performs poorly.

Controversial Employee-Management Issues₂

Executive Compensation cont. • Some suggest CEOs should not make more than 20 times the average salary at their company, but in reality, they make 287 times the average salary. • Government and shareholders are putting pressure to overhaul executive compensation. • The passage of the Dodd-Frank Act was intended to give shareholders more say in compensation decisions.

Labor Unions Yesterday and Today₆

Labor Legislation and Collective Bargaining • Labor unions' growth and influence has been very dependent on public opinion and law. • The Norris-LaGuardia Act helped unions by prohibiting the use of Yellow-Dog Contracts. • A type of contract that required employees to agree as a condition of employment NOT to join a union. • Collective bargaining — The process whereby union and management representatives form a labor-management agreement, or contract, for workers.

Tactics Used in Labor-Management Conflicts₂

Management Tactics • Lockout — An attempt by management to put pressure on unions by temporarily closing the business. • Injunction — A court order directing someone to do something or to refrain from doing something. • Strikebreakers — Workers hired to do the jobs of striking workers until the labor dispute is resolved; called scabs by unions.

Employee-Management Issues

Management's responsibility to produce a profit sometimes means making hard decisions, which aren't always popular with employees. Employee-management issues require open discussion, goodwill, and compromise.

Labor Unions Yesterday and Today₁₂

Mediation and Arbitration • Bargaining zone — The range of options between the initial and final offer that each party will consider before negotiations dissolve or reach an impasse. • Mediation — The use of a third party (mediator) who encourages both sides in a dispute to continue negotiating and often makes suggestions for resolving the dispute. • Arbitration — The agreement to bring in an impartial third party (a single arbitrator or a panel of arbitrators) to render a binding decision in a labor dispute.

Labor Unions Yesterday and Today₈

Objectives of Organized Labor over Time • Negotiated Labor-Management Agreement (labor contract) — Agreement that sets the tone and clarifies the terms under which management and labor agree to function over a period of time. • Union security clause — Provision in a negotiated labor-management agreement that stipulates that employees who benefit from a union must either officially join or at least pay dues to the union.

Labor Unions Yesterday and Today₉

Objectives of Organized Labor over Time cont. Union security agreements: • Closed shop agreement — Specified workers had to be members of a union before being hired; outlawed in 1947. • Union shop agreement — Says workers do not have to be members of a union to be hired but must agree to join the union within a prescribed period. • Agency shop agreement — Says employers may hire non-union workers; employees are not required to join the union but must pay a union fee.

Labor Unions Yesterday and Today₁₀

Objectives of Organized Labor over Time cont. • Right-to-work laws — Legislation that gives workers the right, under an open shop, to join or not join a union if it is present. • The Taft-Hartley Act of 1947 granted states the power to outlaw union shop agreements. • Open shop agreement — Agreement in right-to-work states that gives workers the option to join or not join a union, if one exists in their workplace.

Controversial Employee-Management Issues₃

Pay Equity • Women earn 81 percent of what men earn. • This disparity varies by profession, experience, level of education, age, location, and other factors. • Women earn almost 60 percent of the bachelor's and master's degrees awarded, and more doctoral degrees. • Women are underrepresented in managerial positions.

Labor Unions Yesterday and Today₂

Public Sector Labor Unions • Public sector union members work for governments as teachers, firefighters, police officers, etc. • Union membership in the public sector stands at 34 percent compared to 6.2 percent in the private sector.

Labor Unions Yesterday and Today₁₁

Resolving Labor-Management Disagreements • Labor contracts outline labor and management's rights and serves as a guide to workplace relations. • Grievance — A charge by employees that management is not abiding by the terms of the negotiated agreement. • Shop stewards — Union officials who work permanently in an organization and represent employee interests on a daily basis.

Controversial Employee-Management Issues₄

Sexual Harassment • Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature that creates a hostile work environment. • Sexual harassment laws cover men, women, and foreign companies doing business in the U.S. • Violations can be extremely expensive for businesses and lead to the fall of top leadership.

Controversial Employee-Management Issues₅

Sexual Harassment cont. • Quid pro quo sexual harassment involves threats like "Go out with me or you're fired." An employee's job is based on submission. • Hostile work environment sexual harassment is conduct that interferes with a worker's performance or creates an intimidating or offensive work environment. • Many companies have sexual harassment policies, but most employees don't know what it entails.

Tactics Used in Labor-Management Conflicts₃

The Future of Unions and Labor-Management Relations • To grow, unions will need to include more white-collar, female, and foreign-born workers. • Unions will need to organize in industries such as health care and information technology. • Unions will take on a greater role in training workers, redesigning jobs, and assimilating the changing workforce.

Labor Unions Yesterday and Today₃

The History of Organized Labor • Craft union — An organization of skilled specialists in a particular craft or trade. • As early as 1792, shoemakers in a Philadelphia craft union met to discuss fundamental work issues. • Work weeks were 60+ hours, wages were low, and child labor was rampant.

Labor Unions Yesterday and Today₅

The History of Organized Labor cont. • Industrial unions — Labor organizations of unskilled or semiskilled workers in mass-production industries such as automobiles and mining. • Congress of Industrial Organizations (CIO) — Union organization of unskilled workers; broke away from the AFL in 1935 and rejoined in 1955. • In 1955, CIO and AFL groups formed the AFL-CIO. • Today, AFL-CIO has affiliations with 55 unions and about 12.5 million members.

Labor Unions Yesterday and Today₄

The History of Organized Labor cont. • Knights of Labor — The first national labor union; formed in 1869. • Knights offered membership to all private working people but fell from prominence after a riot during a labor rally in Chicago. • American Federation of Labor (AFL) — An organization of craft unions that championed fundamental labor issues; founded in 1886.

Figure 12.5 The Grievance Resolution Process

The grievance process may move through several steps before the issue is resolved. At each step, the issue is negotiated between union officials and managers. If no resolution is achieved, an outside arbitrator may be mutually agreed on. If so, the decision by the arbitrator is binding (legally enforceable).

Labor Unions Yesterday and Today₇

Union Organizing Campaigns • The National Labor Relations Board (NLRB) was created to oversee labor-management issues and provide guidelines for unionization. • Certification — Formal process whereby a union is recognized by the NLRB as the bargaining agent for a group of employees. • Decertification — The process by which workers take away a union's right to represent them.

Tactics Used in Labor-Management Conflicts₁

Union Tactics • Strike — A union strategy in which workers refuse to go to work; the purpose is to further workers' objectives after an impasse in collective bargaining. • Cooling-off period — When workers in a critical industry return to their jobs while the union and management continue negotiations. • Primary boycott — When a union encourages both its members and the general public not to buy the products of a firm involved in a labor dispute. • Secondary boycott — An attempt by labor to convince others to stop doing business with a firm that is the subject of a primary boycott; prohibited by the Taft-Hartley Act.

Labor Unions Yesterday and Today₁

Unions • An employee organization that has the main goal of representing members in employee-management bargaining over job-related issues. • Labor unions responsible for protecting employees from intolerable work conditions and unfair treatment, and to secure some say in the operation of their jobs. • Unions have lost economic and political power, and membership has declined.

Controversial Employee-Management Issues₁₀

Violence and Bullying in the Workplace • OSHA reports homicides account for 9 percent of all workplace deaths. • Companies have taken action to deal with potential problems by using focus groups and restraining orders. • According to the Workplace Bullying Institute (WBI), bullying at work involves "repeated, health-harming mistreatment." • Workplace bullying involves psychological and verbal abuse and tends to target the strongest employees.