Labor Relations
Labor Union
A group of workers who join together to influence the nature of their employment
Voice
Ability of EEs to have meaningful input into workplace decisions; Standard of EE participation
Labor Relations
About collective workrelated protection, influence, and voice
Representation Elections:
Answer question whom EEs want to represent them o Most significant is certification election (whether union certified as bargaining agent)
Attitudinal Structuring
Attitudinal creates a social contract that reflects the attitudinal quality of the relationship between labor and management · Will happen even if not trying to manage the relationship · Need to build trust
Soul of Representation:
Captures how the representation is pursued or delivered, especially regarding the extend of rankandfile participation o Rankandfile are passive in servicing model oAlternative strategies seek actively engaging the rankandfile in union activities
Major Subjects of CB
Compensation, Personnel Policies and Procedures, EE Rights and Responsibilities, ER Rights and Responsibilities, Union Rights and Responsibilities and Dispute Resolution and Ongoing Decision Making
Scope of Representation:
Describes breadth of representation activities (is union in concentrated workplace or broader political and social arenas) o Business unionism is the workplace oAlternative is aiming after the community
US Policy Regarding Collective Bargaining
Encouraging; Unions used to provide decent wages for living conditions, Unions provide voice and representation to individual workers while labor movement in politics
Equity
Fairness in the distribution of economic rewards, the administration of employment policies, and the provision of EE security; Standard of fair treatment for EEs
Industrial Unionism:
Focuses on an industry rather than a craft o Protect all occupations in one company
Bargaining in Good Faith
Four ways to not bargain in good faith: unilateral bargaining, direct dealing, refusing to provide information, and surface bargaining
Dispute Resolution and Ongoing Decision Making
Grievance procedures, committees, consultation, renegotiation procedures
Appropriate Bargaining Unit
Group of occupations and locations relevant to the certification election · Unions fare better in elections when smaller and more homogeneous · When expanding bargaining unit, can cause loss of 30%
Distributive vs. Integrative Bargaining in Labor Relations
Ideal to replace distributive with integrative · Trouble with overly simplistic illusion of forced choice between distributive or integrative o Integrative creates distributive later · Negotiators should use integrative at start and then use distributive when mutual gains exhausted o Sometimes called modified integrative bargaining · Difficult to get change o Have to deal with mythical fixed pie bias (assumed conflict of interest)
Pluralist
Industrial democracy achieved by traditional labor unions, independent of management
Supervisor Controversy
Issue with ERs giving EEs enough responsibility to be deemed a supervisor · Increase supervisory exclusions from BLRA seen as an example of continued erosion of EE rights from unions
ER Rights and Responsibilities
Management rights, just cause discipline and discharge, subcontracting, safety standards
Certification Election:
Most frequent type, used in nonunion location to see if majoritywant a union
NLRB election standards
No threats or promises can be made by ER because interfere with EE free choice · NLRB uses Laboratory Conditions Doctrine to evaluate elections o Look at proceedings in most ideal conditions as possible oThrow out and conduct new elections if break this
Union Density
Percentage of workers who are union members
Collective Bargaining
Representatives of ER and EEs negotiate the terms and conditions of employment that will apply to EEs
EE Rights and Responsibilities
Seniority rights, job standards, workplace rules
At the Bargaining Table
Side that wants changes makes the opening proposals o When company healthy à union talks about increase in wages and benefits oWhen company struggling à management talk about decreases in wages and benefits · Then have back and forth of proposals and counter proposals o Typically do easy stuff first § *Be cautious though to not set anything in stone at first
Bargaining Power:
The ability to secure another's agreement on one's own terms · Strikes most important way for unions to impose disagreement costs on ERs o Bargaining power is closely related to unions strike leverage § Increase strike leverage à increase bargaining power à increase ability to get labor's contract
Threat Effect
The threat that dissatisfied workers will unionize sometimes causes nonunion firms to at least partially match union wage and benefit terms
Illegal Bargainig Items:
Things that violate the law - closed shop provisions, policies with race discrimination, wages below the minimum wage
Today v. Past: Labor Dependence
Today modern workers and families are dependent on jobs, not property like in agrarian times. Work is a full human activity.
Labor Union Strategies
US unions follow business unionism philosophy o Use a servicing model to pursue job control unionism § Equity achieved through generous wage and benefit packages, senioritybased layoff and promotion procedures, restrictions on discipline and discharge for just cause only, and due process protections in grievance procedure § Voice achieved through representation at the bargaining table and in grievance procedure
Union Wage Premium
Union workers in US have wage approximately 15% than comparable nonunion workers
Organizing Model:
Views unions as institutions of active worker participation, empowerment, and mobilization o To unionize nonunion members, takes effort of fulltime union staff and relies heavily on internal organizers
Unitarist
Voice provided through policies that encourage individual voice or through nonunion EE representation plan Managers control how plans are structured, meetings occur, and what topics to cover
Compensation
Wages, benefits, vacations and holidays, shift premiums, profit sharing
Mandatory Bargaining Items
Wages, hours, and terms and conditions of employment § Wage reductions, bonus plans, health insurance payments, pension contributions, work schedules and vacations, seniority provisions, just cause discipline provisions, grievance arbitration, food prices in the company cafeteria, lie detector and drug tests, subcontracting, and effects of plant closing
4.) Surface Bargaining:
When an ER or union goes through the motions of bargaining but does not sincerely try to reach an agreement o Specific tactics: delaying, unreasonable bargaining demands, failure to designate an agent with sufficient bargaining authority, withdrawal of already agreedupon provisions, making "takeit- orleaveit" offers, refusing to make counterproposals, and arbitrary scheduling of meetings
Workplace Governance
Workplace governance asks us to compare alternative rules for making rules o Has broad implications --> quality of life for retirees, spouses, dependents, and communities
ASSUMPTIONS: Nature of conflict between ER and EEs? (HRM View)
a. HRM view: i. Unitiarst view 1. Conflict due to poor HRM policies or interpersonal clashes (personality conflicts) 2. EE and ER have unity of interests à effective management aligns these interests
Five ways to create workplace rules (Independent EE Representation)
§ Have CB · Rules set up between two parties with broadly equal bargaining power
Certification Election Process: Help or Hindrance?
· Three aspects criticized: o Unequal access to EEs à ER has easier means of communication oLack of penalties for violators of NLRA à little punishment for ER oLength of election process
"Neoliberal Market Ideology"
(proponent of voluntary, market based economic transactions) support property over workers' rights ·Because competitive market and welldefined property rights achieve optimal efficiency
Five ways to create workplace rules
- Competitive labor markets - Human Resource Management - Worker Control - Independent EE Representation - Government regulation
Critical issues in HR and industrial relations
-Growing labor market disparities -Problems of low wage workers trying to move out of poverty and support families -Corporate pressures for cost control, quality, and flexibility to compete in a global information rich economy -The need to educate individuals as lifelong learners because of ever changing technologies -Problems of worklife balance, especially for working mothers
History of Labor Relations
-workers were viewed as machines
Pressures for competitiveness and quality have pressured the CB process in 3 ways
1) Business need for flexibility (efficiency) clashes with lengthy contracts that spell out detailed work rules (equity) 2.) Business need for cooperation and EE involvement clashes with traditionally adversarial bargaining process in which labor and management use aggressive tactics to extract as many gains or concessions from the other side that power will allow 3.) Need for both flexibility and involvement is not well served by a process in which contracts are renegotiated every three years or so with little productive communication (voice) between these formal negotiation periods
Bargaining Subprocesses and Strategies
4 sub categories: Distributive, Integrative, Attitudinal structuring, and intraorganizational o First two major alternatives for negotiating terms and conditions § Adversarial bargaining over conflict of interests and collaborative problem solving for issues of mutual gain o Attitudinal shapes attitudes of labor and management oIntraorganizational captures conflict resolution strategies used to reach consensus within union and within ER's management ranks · CB in both public and private sectors are mixture of these for 3 reasons o 1.) Mainstream industrial relations views employment relationship conflict as a mixed motive (mix of conflict of interests and shared opportunities for mutual gains) so both distributive and integrative are important o 2.) EREEUnion relationship is longterm, ongoing affair, so attitudinal is important o3.) Both ERs and unions have constituencies with diverse interests, so intraorganizational is important
Business need for flexibility (efficiency) clashes with lengthy contracts that spell out detailed work rules (equity)
This leads to shorter, less detailed (less restrictive) contracts § Flexibility compensation systems to promote and reward highly performing EEs can clash with equity if these systems are perceived as overly subjective, competitive, or unfair
Pattern Bargaining:
Union bargains exclusively with target until agreement reached and then that target settlement is used by the union as the pattern for subsequent · When deciding which structure, look at the tradeoff between power and o Decentralized more responsive to local needs, but reduce labor's power oCentralized labor has more power, but not as responsive because more issues come up
ASSUMPTIONS: Nature of conflict between ER and EEs? (Industrial Relations School)
b. Industrial Relations School i. Pluralist view 1. Multiple interests a. Some shared and some conflict 2. Mixed motives 3. Government laws and unions help balance this conflict 4. Labor unions, independent of managerial authority, provide checks and balances in the workplace and are essential for protection and participation - equity and voice
ASSUMPTIONS: Nature of conflict between ER and EEs? (Critical Industrial Relations School)
c. Critical Industrial Relations i. Class conflict 1. Social conflict of unequal power relations 2. Pluralist view of "power" to bargaining power is superficial 3. Management always has the upperhand --> don't think about balancing conflict between management and EEs
Business climate of the 21st Century
characterized by flexible production methods, rise of knowledge workers, the blurring of traditional distinctions between brawn and brains, and intense global competition
Why private sector decline
o 1.) Employment decline in traditionally unionized industries (manufacturing), while employment is increasing in nonunion industries (services) § Structural changes (regional and demographic shifts) might be why there is a decline § Inability of unionized workplaces to compete in dynamic economy is reason for decline o 2.) Demand for union services has declined § 1.) unions not doing a good job of responding to desires of changing workforce and overcoming the negative stereotypes of unions that are common in American culture · Some unions devote few resources to organizing new workers § 2.) If employers have improved their responsiveness to EE's needs, this can reduce demand for union protection and advocacy § 3.) Increase protective legislation may have provided a substitution for unions o 3.) Employer resistance or opposition § US business is hostile to unions and use wide rand of union avoidance tactics § Businesses fight union organizing drives by firing union supporters, seeing EE support for unions, threatening and promising to hire anti-union consultants, manipulating legal system to frustrate and delay organizing campaigns, forcing strikes and hiring replacement workers to bust them
Organizing Timeline (Alternatives to Voluntary Recognition)
o If not recognized, then have options: § Recognition strike § Petition to NLRB for election --> see if union has majority of EE support
Private and Public Union Density Trends
o Private union density has declined since 1955 o Public union density jumped in early 1960s
Organizing Timeline (Building and Documenting Support)
o Signing authorization card most common way to show support § If union gets 50% of EEs to sign cards, then can ask ER to recognize them · This recognition is called card check recognition · It is voluntary · Currently the exception
Organizing Timeline (Initiating an Organizing Drive)
o Three possible iniators: EEs, union, or ER oTwo types union initiated campaigns: strategic and opportunistic § Strategic: organizing particular workplace enhance union ability to represent EEs § Opportunistic: increase union membership
Individual Voting Decisions
Age and gender not important on how people vote · Two starting points for voting decision: o Frustration § Dissatisfied EEs § *Most important cause for support a union o Personal utility maximization § Do for economic reasons · Three other features to translate into vote for unionization: o 1.) Worker needs to feel union will be effective in improving things in specific workplace (union instrumentality) o 2.) Work usually must not have negative views on unions o3.) Social environment of workplace must be favorable to unionism
Non-union employers try to prevent unions with
Aggressive union-busting tactics; Progressive HRM tactics that seek to make unions unnecessary (Unionized ER might use same strategies, but most deal with unions constructively, through CB, adhering to resulting union contracts, and resolving disputes through grievance procedures)
Three objectives of employee relationship
Efficiency, equity and voice
Scheduling the Election
Elections typically at work place and 1⁄2 are held within 38 days of petition and 90% are held within 56 days o See good voter turnout
Contracts usually include:
Compensation § Wages, benefits, vacation/holidays, shift premiums, profit sharing o Personnel Policies and Procedures § Lay off, promotion, and transfer policies, overtime and vacation rules o EE Rights and Responsibilities § Seniority rights, job standards, workplace rules o ER Rights and Responsibilities § Management rights, just cause discipline and discharge, subcontracting, safety o Union Rights and Responsibilities § Recognize as bargaining agent, bulletin board, union security, dues checkoff, shop stewards, no strike clauses o Dispute Resolution and Ongoing Decision Making § Grievance procedures, committees, consultation, renegotiation procedures
Contemporary US Labor Relations
Corporations have too much power --> doesn't achieve the three objectives · US labor relations processes tightly regulated by the legal system o Laws are more focused on regulating than maintaining fairness
Gissel Bargaining Order
Requires ER to recognize and bargain with union even though usual election results are lacking
Decertification Election:
Decertification Election: Determine whether majority of unionized EEs no longer wish to be represented by a union o If choose new union, then raid election
Distributive Bargaining:
Distribute shares of the fixed pie o Sometimes called zerosum bargaining · BATNA determines what terms are minimally accepted · BATNA thought as threat point or resistance point o If no overlap, then go BATNA oWant to try and assume the other side's resistance point · Major tactics are rooted in power: o Controlling and selectively presenting info to the other side oReacting emotionally to statements made by the other side o"Educating" other side on implications of their proposals oStaking out strong positions · Pressure tactics include increasing other side's costs of not making an agreement · Careful sequencing of offers, counteroffers, and concessions lie at the heart of CB o Quicken the pace and generosity of other side while minimizing your own concessions · Hardball tactics (lies, bluffs, threats, and intimidation) can achieve these ends, but may do more harm than good
Representation Gap
EEs say they want more representation in workplace then they have o Approximately 1/3 of nonunion workers would like a union § This would make private section union density 40% · Union membership trends might be in decline o Sharp increase in workers who never been unionized § Might appreciate a union more if they experience one o Young workers are less likely to be a part of a union than older workers
Through CB:
ERs and unions negotiate terms and conditions of employment, put terms into contracts, or collective bargaining agreements (CBA)
Objectives of the Employee Relationship (Conflict)
Equity may reduce flexibility --> harm efficiency *Conflicts typically between efficiency and equity/voice Equity conflicts with voice when unions centralize power to better achieve equity but in process become less responsive to individual needs and voices
Permissive Bargaining Items:
Everything not in the other two § Union representation on board of directors, drug and alcohol screening for applicants, benefits for retirees, interest arbitration, bargaining unit expansion, contract ratification procedures, plant closings · "Effects Bargaining" is where company need not bargain over deciding to shut down plant, but must bargain over layoff procedures, severance packages, and other effects of these closings
Union Campaigning
Excelsior List: List of names and addresses of all those eligible to vote for a union o Available once election is scheduled · Unions can visit homes · Focusing on tactics where you get a personal connection is more effective · Serving Model of union representation o Passive campaign tactics oSay management is the enemy · Organizing model o Unions vehicle for empowerment and worker participation § Workers involved in solving own problems o More personal campaign tactics oFollow "iron rule of organizing" à get existing workers to talk to/campaign to coworkers
Getting NLRB to Conduct and Election
File petition with at least 30% for sufficient interest · NLRB will not allow for more than one election in a 12 month period · Elections will not be authorized within 12 months of any union certification · Decertification election not held when valid CB agreement is in place o This is called the contract bar doctrine · NLRB must define occupations and geographical locations included in a certification election
The Organizing Timeline
I.) Initiating an Organizing Drive o Three possible iniators: EEs, union, or ER oTwo types union initiated campaigns: strategic and opportunistic § Strategic: organizing particular workplace enhance union ability to represent EEs § Opportunistic: increase union membership II.) Building and Documenting Support o Signing authorization card most common way to show support § If union gets 50% of EEs to sign cards, then can ask ER to recognize them · This recognition is called card check recognition · It is voluntary · Currently the exception III.) Alternatives to Voluntary Recognition o If not recognized, then have options: § Recognition strike § Petition to NLRB for election à see if union has majority of EE support
Raid Election
If a new union is chosen (after decertification of previous union)
Business Unionism:
Key to achieving equity and voice is CB in workplace o Accepts legitimacy of capitalism and ERs needing to make a profit § Labor's goal is to secure fair share of profits through CB § *Businesslike approach to EE representation or unionism · "HoldUp Unionism" or "Jungle Unionism" o Abusive variant of business unionism oDone if unrestrained competition, especially in high unemployment oTake whatever you need or can by whatever means necessary · To carry out business unionism, unions have represented workers using servicing model
Class Conflict
Labor unions inadequate to challenge power of ERs
Personnel Policies and Procedures
Layoff, promotion, and transfer policies, overtime and vacation rules
ASSUMPTIONS: What is the nature of labor?
Mainstream Economic: i. Work is unpleasant activity that one endures only to make money to then buy things ii. No intrinsic rewards Other three: i. Labor as humans with aspirations, feelings, and rights ii. Work fulfills important psychological and social needs and provides more than extrinsic, monetary rewards that support consumerism
Four Schools of Thought About Employment Relationship
Mainstream Economics School, Human Resource Management School, Industrial Relations School, Critical Industrial Relations School
Why change union strategies in 21st century
Management is fighting rigidities of job control unionism since 1980s because greater needs for flexibility and quality that have risen with increase in foreign and nonunion competition o Unions apathetic of servicing model oCriticism on longstanding business unionism philosophy · Traditional union strategies combine workplace focus with passive rankandfile participation
Need for both flexibility and involvement is not well served by a process in which contracts are renegotiated every three years or so with little productive communication (voice) between these formal negotiation periods
More bargaining relationships are establishing mechanisms to foster ongoing communication, such as labormanagement partnerships
Labor Negotiations as Theater
Need to put on good show for constituents (other negotiators) · Backstage aspect where lead negotiators meet with each other in private · Have to deal with drama too and decide if other negotiators are putting on show or making a legitimate point
Preparing to Bargain
Preparation is the longest time · First, team assembles · Second, collect information o Both sides should review expiring CBA on how it performed, and sections that created problems Info determines five things: § 1.) Their interests (what are you really concerned about) § 2.) Options for achieving their interests § 3.) External benchmarks of fairness § 4.) The other side's interests § 5.) Their best alternative to a negotiated agreement (BATNA) · Third, each side develops targets, priorities, and strategies · Fourth, create a strike contingency plan · Fifth, 60 days before contract expires, parties notify each other and Federal Mediation and Conciliation Service that they intend to negotiate a new contract · Sixth, bargaining teams establish bargaining schedule for sessions and set ground rules
Shock Effect
Presence of a union shocks managers out of complacency and forces them to develop better managerial practices and policies that improve workplace efficiency, including more formal HR policies
Efficiency
Productive, profit maximizing use of labor to promote economic prosperity; Standard of economic or business performance
Union Rights and Responsibilities
Recognition as bargaining agent, bulletin board, union, security, dues checkoff, shop stewards, no strike clause
Integrative Bargaining:
Seeks to unify the common interests of the parties to a negotiation so that all can become better off (winwin bargaining) o Joint problem solving that relies on trust and full communication · Key principle to focus on interests rather than positions o First step is to identify issues · Second key step is trying to understand each side's fundamental interests · Third step: Generating options for satisfying these interests using basic problemsolving strategies (i.e. brainstorming) · Step Four: Select strategy à use objective criteria to determine which one
ER Campaigning
Send out letters and have captive audience meetings o Meetings that EEs have to attend and listen to ER · Can deny access to outside organizations à must be equally enforced though · Can restrict using an email to promote a union · Union avoidance consultants à help with captive audience meetings, train supervisors in union avoidance method, and delay
Craft Unionism:
Sometimes called occupational unionism, involves a single union representing only workers in a single occupation or craft Might be useful for the future if workers are increasingly mobile and identify more with occupation than a company
Bargaining Environment:
The diverse set of external influences on labor and management as they sit at a bargaining table negotiating a contract · Bargaining Environment applies equally well to private and public sectors o Laws determine what public sector ERs and unions can and cannot do oLabor market determines how easily striking workers can be replaced or find jobs elsewhere oLaborsaving technology affects both
Bargaining Structure:
The resulting organizational structure for the CB process · ER prefer decentralized bargaining structures to have local unions compete against one another for jobs ("whipsawing") and to tailor contracts to local situations · Unions prefer centralized structures because consolidate power and prevent whipsawing by negotiating uniform contracts ("taking wages out of competition") · US typically decentralized o See ERs use bargaining power leverage to cause more decentralized structures § Firms and EEs like the flexibility of decentralized structure
Intraorganizational Bargaining:
The subprocess of the bargaining process that takes place within an organization - within the union and within ranks of management o Comes from diverse interests of constituency · Along with various interests, might see disagreement about strategies · Conflict of interests between union leaders and rankandfile workers · Conflict of interest between many levels of unions · See intraorganizational in management side too
Business need for cooperation and EE involvement clashes with traditionally adversarial bargaining process in which labor and management use aggressive tactics to extract as many gains or concessions from the other side that power will allow
This can lead to "win-win" results
Contemporary Pressures: The Labor Union Perspective
Unions criticize labor law for being too weak Weak US labor movement (on the decline since 1970s)
Job Control Unionism:
Unions negotiating detailed, legalistic union contracts that tie EE rights to narrowly defined jobs while removing labor from business decisions o Equity and voice pursued through predictable wage increases, generous benefits, seniority- based layoff and promotion systems, limitations on discipline and discharge for just cause only, and grievance procedures
Contract Costing:
Used to evaluate proposals by estimating their monetary costs o Bargaining book=Binder with complete record of negotiation, including: § Agenda, proposals, supporting documents, proposals and materials received from the other side, and minutes of each bargaining session § Can track proposals, counterproposals and agreements · Including their status
Unilateral Bargaining:
When an ER changes wages, benefits, or other terms and conditions of employment without first bargaining with the union o Includes during negotiation and contract in force oMake changes once ER fulfilled bargaining obligation by bargaining to an impasse
Direct Dealing:
When an ER illegally tries to circumvent and undermine a union by interacting directly with EEs with respect to bargaining issues o Ex: Surveying EE support for X issue
3.) Refusing to Provide Info
When requested, ER must provide information § Ex: wage info, job evaluations, standards for merit raises, results of local wage raises, health and safety statistics § Most contentious is when a union requests for corporate financial data · Not needed for CB, so not required to give it § *Required to give something if side cannot pay for something § *Not required to pay if it will not pay for something
Society has an impact on labor relations
When strikes happen, possible harm to society due to low work Labor-management relationships that produce welltrained motivated unionized EEs produce clear benefits LR can serve democracy by allowing labor unions to promote decent working and living conditions that free and equal citizens deserve, and to provide a voice for workers in the political arena
Industrial Democracy
Workers in a democratic society are entitled to the same democratic principles of participation in the workplace This relates to voice ● Work not only about wage, but also involves dignity, voice, and freedom ● 63% of workers want influence over company decisions · Managers prefer workers one on one, while workers want to deal with management in groups · Workers want representation independent of management · Centrality of voice is promoted through a labor organization
ASSUMPTIONS: ER and EE equals in labor market and legal arena?
a. Mainstream Econ: i. Yes, they are with perfect information and no transaction costs b. Other three: i. Not equals in labor market or legal arena 1. Labor market a. Imperfect information, mobility costs, and tilted benefit structures 2. Legal arena a. Imperfect information and lack resources to purchase legal expertise
Two key differences between public and private sector bargaining environment
oTwo key differences between public and private sectors: § 1.) Although same services can be privatized or outsourced, essential services must still be provided · Public sector management does not have option of moving location in search of lower labor costs § 2.) Public services are not bought and sold in economic markets; instead the levels of services are ultimately determined by voters, taxpayers, and elected officials in political arena § *Some say public sector should have no CB because public sector unions are too powerful · *Evidence does not point to them being too powerful though o Overpaid workers can be replaced by those willing to work less oPublic limited tolerance for paying for government services
Servicing Model
under business unionism Like insurance company, pay dues à receive protection · Workers consume union services, but do not participate in the union · *Problems solved for workers not by workers o Workers serviced by union officials
Five ways to create workplace rules (Worker Control)
§ EE control over organizational objectives and rule making § More than just stocks --> workers unilaterally establish terms and conditions of employment · Can have delegates elected to workers' council
Five ways to create workplace rules (Government regulation)
§ Ideally, protects everyone with standards determined by debate rather than bargaining or market power § But standards determined by central authority, not workplace participants · Difficult to shape particular needs and situations · Enforcement can be inconsistent, lax, and expensive
Five ways to create workplace rules (Competitive labor markets)
§ Mainstream economic theories and common law legal rules that protect individual liberties with freedom of contract § Workplace rules result from self interested individuals and organizations interacting in competitive markets § Favor management when labor demand is low and/or labor supply is high § Rules favor EEs when labor demand is high and/or labor supply is low
Five ways to create workplace rules (Human Resource Management)
§ Managers establish employment conditions § Prime mover of workplace rules is management § Any voice mechanism established by and directed by management · Can be union or nonunion
Solving Labor Problems
· 1800s and early 1900s dominated by laissex faire views with mainstream economic school · New Deal laws that follow reflect industrial relations school (more bargaining power) · Latter 20th Century, we see HRM take over o See growth of nonunion companies oNew government laws to strengthen bargaining power become nonexistent · Now see finance dominating, so public policies support free trade and deregulation because emphasis on competitive markets · Laissez faire emphasis of mainstream economics dominates national and international policy debates · Today's corporate HRM policies rooted in HRM school of thought · Critical model underlies movement to revitalize unions to make them aggressive for the working class · Industrial relations seen around the globe though · Workers in US want more of a voice · Private and public sector organizations struggles with competitiveness, productivity, and quality
Critical Industrial Relations School
· Capitalist institutions are created by society · School of thought focuses on how dominant groups design and control institutions to serve their own interests · Corporations can shape the broader social context o labor relations to serve their own interests and perpetuate their control over labor · Division of labor seen as making labor easily replaceable, thus weak · Fair treatment through progressive HRM, etc. seen as strategies to prevent workers from unionizing · Labor Problem: Stems from the control of society's institutions and the means of production by specific groups or classes · Solution: Restructuring the nature of capitalism (i.e. Socialism) · Labor unions can be important à strong, militant unions o Anarchosyndicalist perspective sees unions as revolutionaries § Some argue it should be a political and not a revolutionary movement · CB not enough to challenge capitalists' power
Mainstream Economics School
· Focus on economic activity of self-interested agents -firms and workers—who interact in competitive markets · Achieve equity, efficiency, and voice through fierce market consumption · No one better off without making someone worse off · Price = value, so outcomes are efficient · Competitive outcomes are fair because price of labor equals the value labor contributes · Voice expressed through freely participating or abstaining from transactions · Conditions of labor problem are not exploitative if sufficient labor market competition · Other ERs are greatest protections for EEs à need competition · Unions are seen as labor market monopolies that restrict the supply of labor and interfere with the invisible hand of free market competition o Raising wages via strike causes wages to go above competitive levels · View work only to earn money o Companies rely on threat of unemployment oUnions protecting lazy workers · *Unions harm economy and public · Same arguments against unions can be applied to the government with minimum wage laws o Government role supposed to be about promoting competition and protecting freedoms necessary for that competition
Industrial Relations School
· Labor problem believed to stem from unequal bargaining power between corporation and individual workers · Labor market characterized by bargaining power o Society worse of if either side has more power § Corporation too much power: despotism § Labor too much power: anarchy · *If problem unequal bargaining power, the solution is to increase workers' bargaining power by forming independent labor unions and pursuing collective bargaining
Human Resource Management School
· Labor problems from poor management o Get better management § *Align the interests of workers and the firm via better management · Because management policies responsive to the needs of EEs, equity will be achieved · Efficiency achieved by designing and implementing better supervisory methods, selection procedures, training methods, competitive systems, and evaluation and promotion mechanisms · Voice is informal · Independent unions o Elect own leader, collect and spend their dues, establish organizational objectives, and lead strikes · Nonindependent labor o Lack authority and are controlled by ERs · Independent unions seen as adversarial and inimical in this school of thought o Workers should be satisfied and not support a union if there is effective management o HR used as an anti-union device · Independent unions are unnecessary "third parties" that prevent ER/EE relationship o Thus, we have nonindependent unions because workers should have some representation
