CH-10-13 Occupational Health And Safety – Management of Human Resources: The Essentials : Chapter Notes

This Document Contains Chapters 10 to 13 PART FIVE: BUILDING EFFECTIVE EMPLOYEE–EMPLOYER RELATIONSHIPS CHAPTER 10 OCCUPATIONAL HEALTH AND SAFETY LEARNING OUTCOMES 1. ANALYZE the responsibilities and rights of employees and employers under occupational health and safety legislation. 2. EXPLAIN WHMIS legislation. 3. ANALYZE in detail three basic causes of accidents. 4. DESCRIBE how accidents at work can be prevented. 5. DISCUSS six major employee health issues at work and RECOMMEND how they should be handled. 6. EXPLAIN why employee wellness programs are becoming increasingly popular. REQUIRED PROFESSIONAL CAPABILITIES  Establishes a joint health and safety committee as required by law  Prepares organizational health and safety files for investigation or for litigation  Provides information to employees and managers on available programs  Ensures compliance with legislated reporting requirements  Ensures adequate accommodation, modified work, and graduated return-to-work programs are in place  Ensures that modifications to the work environment are consistent with worker limitations  Ensures that policies for required medical testing fall within the limits of statue and contract CHAPTER SUMMARY Employers, supervisors, and employees share joint responsibility for workplace health and safety, including exercising “due diligence”, communicating and enforcing policies, and participation on joint health and safety committees. Employees have three key rights: to know about workplace safety hazards, to participate in the OH & S process, and to refuse unsafe work. WHMIS is a Canada-wide mandated system that protects workers through labelling, MSDS, and training on how to store and handle hazardous materials and substances. Three basic causes of accidents are chance occurrences, unsafe conditions, and unsafe acts by employees; other contributing factors are the job itself, the work schedule, and the psychological climate. Accidents can be reduced by a) reducing unsafe conditions by removing hazards and b) reducing unsafe acts through HR selection, placement, education and training, positive reinforcement, top-management commitment, and monitoring work overload and stress. Emerging OH & S issues are substance abuse, job-related stress, repetitive strain injuries, workplace toxins, viral pandemic, workplace smoking, and workplace violence. Ergonomics and employee wellness programs (e.g. fitness, smoking cessation, and so on) reduce costs for sickness and disability claims, workers’ compensation costs, and absenteeism. LECTURE OUTLINE I. STRATEGIC IMPORTANCE OF OCCUPATIONAL HEALTH AND SAFETY Employee health, safety, and wellness management are important determinants of employee perceptions regarding fair treatment by the organization; perceptions that affect service provided to clients and customers. Health, safety, and wellness also help to reduce lost-time injury rates and change widespread beliefs that workplace accidents are inevitable. II. BASIC FACTS ABOUT OCCUPATIONAL HEALTH AND SAFETY LEGISLATION All provinces, territories, and the federal jurisdiction have occupational health and safety (OH &S) legislation based on the principle of joint responsibility. 1. Purpose OH & S laws across Canada fall into three categories; general rules, rules for specific industries, and rules related to specific hazards; regulations that accompany each law (act) are very complex Provisions differ significantly across jurisdictions but have the following basic features in common. 2. Responsibilities and Rights of Employers and Employees Employers are responsible for exercising “due diligence” – taking every reasonable precaution to ensure health and safety of workers; includes filing accident reports, maintaining records, ensuring safety rules are enforced, using progressive discipline, and posting safety notices and legislative information. Employees are responsible for taking reasonable care for their own and co-workers’ safety, including wearing protective clothing & equipment and reporting any contravention of OH & S law or regulations. Three basic employee rights are: to know about workplace safety hazards, to participate in OH& S processes, and to refuse unsafe work, if “reasonable cause”. Teaching Tip: The law calls for employees to “tell on” their co-workers. Have students identify situations in which they would or wouldn’t feel comfortable reporting a co-worker to management. 3. Joint Health and Safety Committees (JHSC) A JHSC is a non-adversarial group composed of management and labour (min. 50% workers) that make regular inspections, evaluate hazards, investigate complaints and accidents, promote health and safety measures, and implement solutions. At least one management and one worker member must be certified in OH & S through a provincial training program. Teaching Tip: There is a least one, if not many JHSCs at most colleges/universities. Have students locate and review the college/university’s OH & S webpage (most likely under Human Resources) to find out how many there are, who the members are, and look over minutes of their meetings (if available). 4. The Supervisor’s Role in Safety Laws impose a personal duty and specific obligation on supervisors to advise and instruct workers, ensure reasonable precautions are taken, minimize risk of injuries or illnesses and enforce safety rules, but instilling a desire to work safely in all workers is the best approach. Teaching Tip: Have students describe the health and safety actions taken by their immediate supervisor (past or present). Did they think the supervisor really fulfilled their role under the law? . 5. Enforcement of Occupational Health and Safety Laws Government inspectors have power to carry out safety inspections (periodic or unscheduled) without a warrant. They can issue orders to stop work, stop using tools, install first aid equipment, and stop emission of contaminants. Penalties consist of fines and/or jail terms for individual managers, corporate executives and company directors. Bill C-45 “corporate killing” law imposes criminal liability on persons who direct others and fail to ensure an appropriate level of safety. 6. Control of Toxic Substances Most OH & S laws require basic precautions with respect to toxic substances of any kind (chemicals, biohazards, physical agents). The Workplace Hazardous Materials System (WHMIS) is a co-operatively developed, Canada-wide system designed to protect workers by providing information about hazardous materials or substances in the workplace. WHMIS has three elements: labelling of hazardous material containers (see Fig. 10.1, p 262); material safety data sheets (MSDS) which also outlines procedures for safe handling and employee training in identifying WHMIS symbols, reading WHMIS supplier and workplace labels, and reading and applying the information on MSDS. Teaching Tip: Before, during, or after class have students walk around campus and find as many different WHMIS symbols as they can, and where safely possible find out what specific substances are found in each location. 7. Occupational Health and Safety and Other Legislation OH & S legislation has to work hand-in-hand with human rights legislation, which is often difficult, because alcohol or substance abuse addictions are disabilities under human rights laws, as are the right to wear religious clothing or artifacts that might be a safety hazard. Employers also have to keep track of amendments to the legislation such as Bill 168 (June 2010) which requires a more comprehensive approach to preventing and dealing with workplace violence. III. WHAT CAUSES ACCIDENTS There are three causes: chance occurrences, unsafe conditions, and unsafe acts. By far unsafe acts are the major contributors to workplace injuries. 1. Chance Occurrences Are difficult or impossible to predict so are more or less beyond management or employee control. Employers should not confuse these with situations such as tornadoes or earthquakes, where protective measures can be put in place, even though outcomes cannot be guaranteed. 2. Unsafe Conditions Are characteristics of the situation and Include improperly guarded equipment, unsafe storage of materials, improper illumination, improper ventilation, and a work environment that is conducive to workplace violence (see Fig. 10.2, p. 263). Other work-related factors are inherently dangerous jobs, challenging work schedules (long or night shift), and negative psychological climate, along with temporary stress factors. 3. Unsafe Acts Are caused by employees not the situation, and may override otherwise safe conditions. Include throwing materials, operating at unsafe speeds, making safety devices inoperative, using unsafe procedures, taking unsafe positions, lifting improperly, and acting irresponsibly with others. Teaching Tip: Have students describe workplace accidents they have seen or experienced and classify them into caused by unsafe conditions versus those caused by unsafe acts. Is there a connection between the two causes? 4. Personal Characteristics Personal characteristics are associated with predisposition to certain behaviours tendencies that can lead to behaviours that increase the incidence of accidents (see Fig. 10.3, p. 265). Accident proneness is not situational than dispositional, but certain characteristics increase the situational risk. a. Vision – poor vision increases accidents in transport and machine operator jobs b. Literacy – low literacy increases accidents due to lowered comprehension of safety materials and tendency to be employed in more dangerous jobs c. Age - accidents most frequent in 17 – 24 age range d. Perceptual versus motor skills – slower thinking skills impair ability to react Teaching Tip: Use the Workforce Diversity Discussion Box (p. 267) to discuss health and safety of young workers. Survey students as to safety education and training received in summer jobs. IV. HOW TO PREVENT ACCIDENTS 1. Reducing Unsafe Conditions Although only 4% of accidents can be attributed to unsafe conditions, this is the first line of defense and includes job redesign, removal of physical hazards, and ensuring personal protective equipment is worn and worn properly. 2. Reducing Unsafe Acts This is the second basic approach and includes the following four actions. a. Selection testing – screen physical abilities, Employee Reliability Inventory, demonstrate job-related skills b. Top-management commitment – involved on regular basis, priority in meetings, high rank for Safety Officer, financial bonuses for safety improvements c. Training and education – should be required for all, allow input into program design, include practical evaluation of training, safety posters (especially graphical vs. text) d. Positive reinforcement – safety goals, data collection and reporting, on-the-spot praise and recognition, Teaching Tip: The ethical dilemma on p. 269 raises the issue of English as Second Language (ESL) workers and their right to know. 3. Controlling Workers’ Compensation Costs These are often the most expensive benefit provided by an employer (avg. Ontario injury $ 59 000); indirect costs about four times direct costs. WC premiums are proportional to WC claims record. Teaching Tip: have students use the small business safety calculator (see Entrepreneurs & HR Discussion Box, p. 270) to estimate costs for a variety of small businesses e.g. auto shop, metal fabricating shop, restaurant, retail store. a. Before the accident – remove unsafe conditions, screen out accident-prone for job workers, establish safety policy and loss control goals b. After the accident – facilitating the employee’s return to work – provide first aid, get medical aid, soothe worker, document the accident, file reports, encourage speedy return to work. Three C”s of disability management – commitment, collaboration, creativity based on functional abilities evaluation (FAE) conducted by health professional V. OCCUPATIONAL HEALTH AND SAFETY CHALLENGES IN CANADA 1. Substance Abuse Effects are severe on worker and work (quality and quantity), safety is compromised, but conflicting legal obligations (disability rights versus due diligence). Drug and alcohol testing only legal under three conditions, • Test is rationally connected to performance of job • Test was adopted in honest and good-faith belief in is necessity for legitimate workrelated purpose (not to get rid of “undesirables’) • Test is reasonably necessary to the accomplishment of the work-related purpose Random drug tests are unjustifiable as are arbitrary alcohol testing (selected employees) except in safety-sensitive positions. “For cause” or “post-incident” testing is acceptable in specific circumstances, leading to accommodation but not immediate dismissal. Supervisors should ask and observe, document and follow-up, and refer the employee to available services. Four techniques for dealing with substance abuse are discipline, discharge, inhouse counselling, and referral to an outside agency; discharge only used after repeated attempts at rehabilitation have failed. 2. Job-Related Stress While some stress is good, excessive workplace stress is a pervasive problem that is getting worse and has serious consequence for employer (lost productivity, increased absenteeism and turnover) and employee (anxiety, depression, anger, cardiovascular disease, headaches, and accidents). Mental health issues are the leading cause of both short-term and long-term disability claims, but physical safety often given much higher priority. Stress is underestimated but signs are often obvious (see Fig. 10.6, p. 273). Two sources of stress are environmental factors (high demands/low control and/or high mental & physical effort/low rewards) and personal factors (Type A personality, self-esteem, tolerance for ambiguity, personal crises). a. Reducing job stress – sleep, proper eating, taking breaks/vacations, changing jobs, getting counselling, daily planning, taking advantage of EAP, treating employees fairly, giving more control over work and clarifying task and expectations b. Burnout – total depletion of physical and mental resources; solutions – break patterns, get away periodically, reassess goals, think about approach to work, reduce stress c. Workers’ compensation and stress-related disability claims – post-traumatic stress benefits but limited chronic stress benefits, “psychotoxic” jobs, lawsuits for “poisoned environments” 3. Repetitive Strain Injuries RSIs are rapidly becoming the most prevalent work-related injury – “overuse” injury suffered by knowledge workers and others. RSI’s are caused by one or more factors: repetitive actions, high pace, awkward or fixed positions, forceful movements, cold temperatures, and insufficient recovery time. These must be treated as all other workplace hazards. a. Ergonomics – art of fitting workstation and work tools to individual; ergonomic workstations and training increase productivity and efficiency, as well as reduce injuries, but best defense is short breaks and stretches. b. Video display terminals – short0term eye problems, eyestrain, eye soreness, backaches and neck aches, psychological distress, RSI (e.g. carpal tunnel syndrome), ergonomic changes needed including vision remedies (anti-glare screens and pre-placement vision exams) Teaching Tip: Have students take a photo of their work station at home (desk, bed, whatever) and if possible a photo of themselves at work. Have them exchange photos and point out potential ergonomic enhancements. Students can also do a little online research to find out the costs of ergonomic furniture and accessories (keyboard rests, wrist rests, ergonomic keyboards, and so on). 4. Workplace Toxins The leading cause of work-related deaths around the world is cancer, but carcinogen removal is costly and unions have delayed on taking action. New chemicals and substances are being introduced without testing. Firefighters can now get workers’ compensation for specific cancers. 5. Workplace Smoking Smoking leads to higher healthcare and disability costs for employers and lower productivity and increased accidents for employees who smoke, not to mention risks from second-hand smoke for co-workers. Smoking interacts with other carcinogens to greatly increase risk of lung cancer. Smoking bans and smoking cessation programs are protecting the nonsmoking Canadians (80%). Teaching Tip: Given all of the evidence regarding the negative effects and costs of smoking, maybe organizations should just hire non-smokers. Have students research the law to find out if there is any organization, industry, or jurisdiction (in Canada or elsewhere) where you can refuse to hire smokers. 6. Viral Pandemic Recent major influenza outbreaks have created awareness that a major viral pandemic is inevitable, but although many are aware, few are prepared. Organizations need a plan for isolation in order to reduce transmission (e.g. telecommuting, remote worksites, quarantine, business shutdown). Pandemic preparation should address prevention, containment, response to employee work refusals, creation of pandemic team, premises security, sickness/disability, coverage, leaves for family care, and restriction of visitors to company premises. Multi-channel communication is essential including union consultation. Provisions for extra unpaid leave are coming into law. 7. Violence at Work Workplace violence is defined by the International Labour Organization (ILO) as incidents in which an employee is abused, threatened, or assaulted in circumstances relating to work; violent acts include harassment, bullying, intimidation, physical threats, assaults, and robberies. Most violence, especially physical assaults, comes from members of the public, rather than co-workers, and is particularly prevalent for women in healthcare professions (see Fig. 10.5, p. 279). a. Workplace violence and the law – laws cover physical and sometimes psychological violence; employers liable for hiring violent individuals and not responding to violent incidents, but criminal record checking is limited under human rights legislation b. Prevention and control of workplace violence – several concrete steps such as: • Identifying jobs with high risk of violence • Instituting a workplace violence policy • Creating a healthy work environment • Heightening security measures • Providing workplace violence training • Improving employee screening VI. EMPLOYEE WELLNESS PROGRAMS There are three elements in a health workplace: the physical environment, the social environment, and health practices. Employee wellness programs take a proactive approach to all these areas of employee well-being, as opposed to EAPs which are reactive. Promoting and enabling wellness has many benefits. A focus on wellness is expected to increase in the next 25 years driven by a shrinking workforce, an increase in postponed retirement, increased awareness of mental health, and medical and technological advances. Wellness initiatives often include stress management, nutrition and weight management, smoking cessation programs, tai chi, heart health, physical fitness and workstation wellness through ergonomics. DISCUSSION BOXES WORKFORCE DIVERSITY: Guiding Young Workers in Health and Safety (p. 267) The Canadian Centre for Occupational Health and Safety suggests that accidents and injuries to young workers could be reduced through four steps: assigning suitable work, understanding young workers, providing training, and effective supervision. STRATEGIC HR: Top Management Commitment to Safety at Steelcase Canada Pays Off (p. 269) Steelcase Canada’s manufacturing facility in Markham, Ontario reduced their lost-time injuries to 79 – 87% lower than its associated rate group from 2001 to 2005. The results came from ownership by leadership, organization-wide accountability setting up a JHSC and safety & quality teams, new employee orientation, and discussing safety on a daily basis. Morale improved, the company received rebates from the Ontario WSIB, and temporary labour costs declined due to less absenteeism. ENTREPRENEURS AND HR: Small Business Safety Calculator (p. 270) Statistics from Ontario’s WSIB show that job fatality rates of small businesses are 6.7 times higher than those for larger businesses and lost-time injury rates are 10 percent higher. Through their website the Industrial Accident Prevention Association (IAPA) provides a free small business safety calculator to help businesses identify and quantify incident costs, investigation costs, damage costs, replacement costs, and productivity costs. ETHICAL DILEMMAS Is it ethical to provide safety training in English to immigrant workers who speak little English, in order to reduce costs? (p. 269) It is not ethical to provide safety training in English to immigrant workers who speak little English. The purpose of safety training is to protect the health and safety of the firm’s employees, reduce safety-related costs, and prevent any legal action against the company. It is rather pointless to go through the motions of providing training, knowing that those in the program who speak little English will learn little or nothing from it. Doing so is definitely not living up to the employer’s “due diligence” responsibilities under occupational health and safety legislation. Furthermore, while there might be short-term cost savings involved in providing training in English only, accidents are extremely costly – in terms of human suffering, workers’ compensation expenses, training replacement workers, or potential lawsuits. Occupational health and safety legislation requires that employers take “all reasonable precautions” to protect the health and safety of its workers, which would include offering safety training and providing safety materials in the most common languages. Visual/graphic materials are often an effective way to overcome language issues. Is it ethical for an organization or company to create high work volume and uncertain job demands employees during economically volatile times, if they plan to lay off the employees? (p. 274) It is not ethical for an organization or company to create high work volume and uncertain job demands employees during economically volatile times, if they plan to lay off the employees. Employees will generally understand uncertainty and volatility. Most of the time, employees will be willing to take on a heavy workload during volatile or uncertain times with the expectation of continued employment and more normal workload when the environment in which the employer operates stabilizes. If a firm anticipates workload in excess of an ongoing norm for a period of time, the use of temporary workers should be considered rather than hiring people on an ongoing basis when the employer knows that the workers will be laid off when the period of volatility ends. KEY TERMS burnout The total depletion of physical and mental resources caused by excessive striving to reach an unrealistic work-related goal. (p. 275) due diligence Employer’s responsibility regarding taking every reasonable precaution to ensure the health and safety of their workers (p.259) employee wellness program A program that takes a proactive approach to employee health and well-being. (p. 281) ergonomics An interdisciplinary approach that seeks to integrate and accommodate the physical needs of workers into the design of jobs. It aims to adapt the entire job system 0 the work, environment, machines, equipment, and processes, - to match human characteristics. . (p. 276) lost-time injury rate Measures any occupational injury or illness resulting in an employee being unable to fulfill the work full work assignments, not including any fatalities (p. 258) occupational health and safety legislation Laws intended to protect the health and safety of workers by minimizing work-related accidents and illnesses. (p. 258) reasonable cause A complaint about a workplace hazard has not been satisfactorily resolved, or a safety problem places employees in immediate danger (p.259) repetitive strain injuries (RSIS) Activity-related soft-tissue injuries of the neck, shoulders, arms, wrist, hands, back, and legs. (p. 403) Workplace Hazardous Materials Information System (WHMIS) A Canada-wide legally mandated system designed to protect workers by providing information about hazardous materials in the workplace. (p. 261) CHAPTER 11 MANAGING EMPLOYEE SEPARATIONS: FOUNDATIONS OF EMPLOYEE ENGAGEMENT, COMMUNICATION, AND TURNOVER MANAGEMENT LEARNING OUTCOMES 1. DEFINE voluntary and involuntary turnover and explain the impact of each turnover method. 2. ANALYZE important HR considerations in ensuring fairness in dismissals, layoffs, and terminations. 3. DEFINE wrongful dismissal and constructive dismissal. 4. DISCUSS the three foundations of a fair and just disciplinary process. 5. EXPLAIN various techniques for ensuring effective employee communication in organizations to help manage turnover. 6. EXPLAIN the six steps in the termination interview. REQUIRED PROFESSIONAL CAPABILITIES  Recommends or initiates actions in response to known or suspected incidents of misconduct  Provides advice on issues relating to labour and employee relations, including hiring, discipline, and termination  Participates in the termination process by preparing termination notices, conducting exit interviews, and arranging outplacement services  Develops processes to engage and involve employees in achieving the objectives of the organization  Develops and implements programs for employee involvement  Uses communication strategies to advance organizational objectives  Develops and maintains the trust and support of collaborators, including the immediate supervisor, subordinates, and internal clients  Gathers and analyzes information on organizational content (climate, culture) to highlight key issues CHAPTER SUMMARY HR considerations, whether turnover is voluntary or involuntary, are ensuring sufficient talent is still available and turnover costs are minimized. Three prerequisites for a fair and just disciplinary process are rules and regulations, progressive penalties, and an appeals process. Employees who are dismissed without just cause must get reasonable notice and compensation. Employees may file wrongful dismissal or constructive dismissal suits if they believe the employer has not followed the law or breached the employment contract. Termination interviews should be carefully planned and executed. Organizational factors can increase employment engagement, which can improve productivity, retention, customer service, and financial performance. Techniques for effective employee communication include suggestion programs, employee opinion surveys, and communication from management. LECTURE OUTLINE I. THE IMPORTANCE OF MANAGING EMPLOYEE SEPARATIONS The role of HRM is often overlooked in managing employee engagement and communication during a time of employee separation (dismissals, layoffs, quits, resignations, and so on). Who leaves, how they are treated, the cause/nature of the exit, and how remaining employees perceive the process and events all impacts the long-term sustainability of the organization. II. MANAGING TURNOVER Improperly managed employee exits incur lost costs for the organization, disrupt normal operations, and, in the case of mass exits, derail the focus on larger strategic issues. Turnover is termination of an individual’s employment and the reasons are varied (see Fig. 11.1, p. 287); exits come from both voluntary turnover (e.g. quitting or retiring) and involuntary turnover (dismissal/firing or layoff). Organizational tenure is negatively related to quitting, being dismissed or being laid off. Those in “white collar” managerial and administrative positions are also less likely to be laid off, but higher education increases the probability of quitting, as does employment in the service sector. 1. The Cost of Turnover Canadian statistics for the period 1978 – 1985 showed that 30 – 40% of employees were affected by temporary or permanent separation. Over 50% of Canadian organizations admit that they experience difficulties recruiting and retaining talent, which is problematic given that the costs of turnover range from 150% to 250% of salary. Turnover costs can be grouped into four main components: • Separation costs – cost of exit interviews, administrative costs, separation/severance pay • Vacancy costs – increased overtime, temporary workers, loss of sales • Replacement costs – recruitment, selection, relocation expenses, administrative costs • Training costs – formal and informal 2. Voluntary Turnover Voluntary turnover presents an immediate challenge, because it is employee-initiated and therefore often unexpected. It can be functional (bad performers leave) or dysfunctional (good performers leave). The individual-level predictors of voluntary turnover are: low organizational commitment, low role clarity, low tenure, high role conflict, and low overall job satisfaction. Age and marital status are negatively correlated with voluntary turnover, but education is positively linked to voluntary turnover. Teaching Tip: Ask students how they think is most likely to leave, good or bad performers, and explain why and the ultimate outcome if you don’t manage turnover. The group- and organizational-level predictors of voluntary turnover are: suboptimal hiring practices, difficult managerial style, lack of recognition, lack of competitive compensation systems, and toxic workplace environments. Unexplained reasons are grouped under the term “hobo phenomena”. While unexpected in terms of specific departures, trends and early warnings of pending voluntary turnover can be identified through exit interviews, staff surveys and annual HR reviews. Teaching Tip: Ask students to contact (call or text) a friend or relative who has quit a job in the last year and ask them if it was just one reason or a combination of reasons and what they were. In many cases there is a “final straw”, but the seeds were sown much earlier. a. Quits – voluntary resignation, no legislative requirement for notice period, most often caused by low job satisfaction combined with perceived ease of employment, “cradle to grave” with one organization is gone. (Table 11.1 p. 288) b. Retirement – mandatory retirement was abolished in Canada, avg. age 60 in public sector and 62 in private sector, range 40 – 87+, retirees on call and phased retirement used to manage labour shortage and knowledge transfer, employers required to help with retirement planning (e.g. pre-retirement counselling for groups and individuals) Teaching Tip: China still has a mandatory retirement age for men (55) and a slightly lower one for women (50) but there is fierce debate going on as to whether this should be abolished, modified or maintained. Have students, as class preparation or a follow-up exercise, find an article about the issue that explains the background and why change is being suggested but also resisted. If you have students from China who are willing to speak on the issue ask them in advance to prepare a short 5 minute information session with examples of family members. 3. Involuntary Turnover Involuntary turnover is employer-initiated termination of an employee, usually for performance reasons, but can also be for economic/financial pressures to downsize the organization. Dismissal for performance should not occur until all reasonable steps have been taken to rehabilitate or salvage the employment relationship (through discipline). A fair and just process has three foundations: a. Rules and regulations – written descriptions of unacceptable behaviours/actions (employee handbook, employee orientation, code of conduct) b. Progressive discipline – verbal warning, written warning (s), suspension (paid/unpaid), dismissal, must include appeals process c. Dismissal for just cause – no severance, no notice period, no additional payments beyond what has been earned (e.g. wages/salary, earned vacation), onus of proof is on management, examples include disobedience, incompetence, dishonesty, fighting, persistent absence or lateness, employee theft and fraud, and insubordination. Insubordinate behaviours include direct disregard of supervisor’s authority, deliberate defiance of policy/rules/regulations/procedures, public criticism of supervisor, contemptuous displays of disrespect, disregard for chain of command, participation in/leadership of an employee mutiny. Teaching Tip: Have students discuss how insubordination is/was dealt with in the places where they have worked/currently work. Use the Ethical Dilemma (p. 291) to decide how to handle situations that are related to prohibited grounds (family status). d. Layoff – temporary withdrawal of employment for business/economic reasons, aka “downsizing/rightsizing/reduction in workforce”; three conditions: no available work, short-term expectation, intent to recall when work reappears; standard seniority-based process for unionized workers, non-standard process for non-unionized workers; Alternatives to layoffs include: voluntary pay reduction, vacation scheduling, voluntary time off, contingent employees, and work-sharing programs. Teaching Tip: The text defines layoff in terms of temporary separation, but organizations often lay off workers for years with what seems to be no clear vision of when work will once again become available. Some may claim it is to avoid having to pay severance. Is it fair to keep employees in “limbo” like this? 1. Providing Reasonable Notice In Canada, the employer-employee relationship is governed by an employment contract (in writing or based on mutual understanding); this is different from “at will” employment in USA. If contract has end date the employee cannot be dismissed before the end of the contract without just cause, if not (implied contract reasonable notice is needed for either party to terminate the contract. Employees who terminate without notice can be subject to reimbursement fees. Wrongful dismissal occurs when reasonable notice is not given (except in cases of termination for just cause) and group termination laws call for a longer notice period for mass terminations (e.g. 10 or more, or 25 or more, depending on jurisdiction). Rule of thumb for reasonable notice is 3 – 4 weeks per year of service (more than legal minimum, typical max. 24 months); conditional lump-sums are paid if employee is to cease work immediately. a. Bad-Faith Damages – employers must be candid, reasonable, honest and forthright, not misleading, untruthful or unduly insensitive; applies only to extreme conduct and financial compensation is remedy (Supreme Court, 2008) b. Punitive Damages – for harsh and vindictive treatment of an employee or damages for aggravated or mental distress due to lack of notice; applies only in exceptional cases and for malicious and outrageous wrongful acts Teaching Tip; Have students consult past issues of the Law Reporter section of the Canadian HR Reporter (and possibly other source) to gather recent examples of wrongful and constructive dismissal cases (see below). 2. Constructive Dismissal Constructive dismissal is seen to have occurred when the employer makes substantial, unacceptable, unilateral changes to the employment contract (e.g. demotion, pay reduction, benefits reduction, forced resignation, forced early retirement, forced transfer, changes in job duties and responsibilities). Often judged by lack of future plans for employee. Teaching Tip: The actions that are seen as constructive dismissal are often intended to make life so uncomfortable that the employee quits ending their misery. Ask students if they know someone who has gone through this experience and what they did – did they sue or just go and find another job. 3. Avoiding Wrongful Dismissal Suits Wrongful dismissal accusations content that the termination was in violation of relevant law (e.g. human rights), the contract of employment (implied or explicit), or the employers’ own dismissal procedures. Steps for avoiding wrongful dismissal suits include: • Use employment contracts with termination clause and probation period (often 90 days, during which the employee can be dismissed without cause) • Document all disciplinary action • Have proof for all cases of just cause dismissal • Avoid dismissal on birthdays or holidays • Use termination letters in all cases, with written settlement offer (if applicable) • Schedule termination interviews in a private location and a time of day that minimizes contact with other employees while removing personal belongings • Include two members of management (one can be HR) in the termination meeting Teaching Tip: Ask students if they have seen dismissed employees have to do the “walk of shame” or whether the dismissal was done in private – the employee just disappeared. Use the Ethical Dilemma (p. 431) to discuss misleading reference letters. If a wrongful dismissal suit is made – carefully review the claim first and investigate for other improper conduct; retain an employment lawyer and ask for a legal opinion on the case’s merits; provide all relevant facts and documentation to the lawyer and discuss letter of reference; avoid allegations of cause (if none exists) and defamatory statements, consider offer to settle or mediation (save time and money) Teaching Tip: Have students contact DIFFERENT employment lawyers to find out the hourly fees and minimum # of hours generally involved in a wrongful dismissal claim. What are some ways that small firms can ensure they have money for a lawyer if they are sued for wrongful dismissal? Yes, this is a finance question in an HR course! III. FAIRNESS IN EMPLOYEE SEPARATIONS Employee engagement is a positive, fulfilling, work-related state of mind characterized by vigour, dedication and absorption (a heightened emotional and intellectual connection), resulting in additional discretionary effort (see Figure 11.2, p. 296). One of the most effective drivers of employee engagement is effective, honest, and open, and ideally face-to-face communication. Unfair treatment of terminated employees can produce a “vendetta effect” (increased wrongful dismissal claims) and also affects surviving co-workers. Organizational justice has three components: distributive justice (same behavior, same outcome?), procedural justice (fair/unbiased processes), and interactional justice (maintains dignity and respect). Effective management of employees’ separations includes reasonable notice for exiting employees and maintaining employee engagement of survivors. IV. EFFECTIVE EMPLOYEE COMMUNICATION 1. Suggestion Programs Provide opportunities for employees to offer well-informed, thoughtful, and creative suggestions on a whole range of organizational issues; implemented suggestions can be accompanied by cash rewards. 2. Employee Opinion Surveys Many firms also administer periodic anonymous employee opinion surveys (e.g. Employee Feedback System (EFS); work best if done regularly and results communicated to participants. Employee blogs are another way to obtain feedback, but need clear blogging policy. Teaching Tip: This is a great opportunity to warn students about the potential consequences of venting about your boss, your co-workers, and/or your organization on social media. 3. Communication from Management Management communication includes traditional newsletters and presentations, but also videos, email, intranets, and senior manager blogs. Teaching Tip: Survey students to find out how their company communicates, and whether they receive or pay attention to communications from senior management. Do they know the name of their company’s CEO and would they recognize him/her if they walked through the door? 4. The Termination Interview One of the most difficult managerial tasks; employee show disbelief and can act violently, even if ample warnings were provided. Guidelines for the termination interview include: • Plan the interview for a day early in the week (not Friday or pre-holiday, pre-vacation day) • Get to the point • Briefly describe the situation (3 – 4 sentence explanation of reason for termination) • Listen, be ready for any one of five major reactions: hostility & anger, defensive bargaining, formal controlled manner, stoic façade, tears & sadness • Review all elements of severance package and reference letters; avoid additional promises • Identify the next step (e.g. where to go now, who to contact with follow-up questions) Teaching Tip: Discuss why it is so important (for all parties) to have two members of management in the interview. Role plays of termination interviews are a great way to see if students can respond effectively to each of the different reactions. ETHICAL DILEMMAS Is it ethical to apply disciplinary action in cases of ongoing absenteeism and tardiness due to family responsibilities? What other approach could be used? (p. 291) While firms cannot function if there are employees who are frequently late or absent, most will agree that disciplinary action should be a last resort, especially in cases where the underlying reason is family responsibilities or something of a similar nature, and not simply a lack of employee commitment or sense of responsibility to the firm. The approach taken will need to be individualized, based on the employee’s circumstances and needs. Sometimes, for example, a leave of absence may be the best solution – until the crisis at home has been resolved. In other situations, flexible hours or working shorter hours for a period of time may assist the employee to more effectively balance his or her work and family responsibilities. Is it ethical to “buy out” an undesirable employee with severance pay and a good letter of reference in order to avoid prolonged wrongful dismissal litigation, even if you know the letter is misleading to potential future employers? (p. 299.) While many firms choose to “buy out” an undesirable employee with severance pay to avoid prolonged wrongful dismissal litigation, most students will argue that providing such an employee with a good letter of reference that will be misleading to potential future employers is not ethical. Although the firm should not stand in the way of the terminated employee’s future employment, deliberately misleading future employers is not an appropriate strategy to adopt. If the employee is insistent that he or she will not accept the severance package unless the firm agrees that it will not provide negative reference information, it is far better to agree that the firm will adopt a “no reference” policy for this particular employee, rather than supplying misleading information that could result in negligent hiring on the part of another firm. KEY TERMS constructive dismissal When the employer makes unilateral changes in the employment contract that are unacceptable to the employee, even though the employee has not been formally terminated. (p.295) dismissal Involuntary termination of an employee's employment. (p.291) dismissal for just cause An employer-initiated termination based on an employee’s poor behaviours, in these situations, no severance, reasonable notice periods, or additional payments beyond what he employee has already earned are owed. (p. 291) distributive justice Fairness of a decision outcome. (p. 297) employee engagement The emotional and intellectual involvement of employees in their work, such as intensity, focus, and involvement in his or her job and organization. (p .296) employee opinion surveys Communication devices that use questionnaires to ask for employees’ opinions about the company, management, and work life. (p. 298) group termination laws Laws that require an employer to notify employees in the event that they decide to terminate a group of employees. (p.294) insubordination Wilful disregard or disobedience of the boss's authority or legitimate orders; criticizing the boss in public. (p.292) interactional justice Fairness in interpersonal interactions by treating others with dignity and respect. (p.297) involuntary turnover Employer-initiated termination of employment, such as dismissal or layoff. (p. 287) layoff The temporary withdrawal of employment to workers for economic or business reasons. (p. 293) phased retirement Potential retirees gradually reduce the number of hours worked per week over time. (p. 290) pre-retirement counselling Counselling provided to employees some months (or even years) before retirement, which covers such matters such as benefits advice, second careers, and so on. (p. 290) procedural justice Fairness of the process used to make a decision. (p. 297) quitting Voluntary employee-initiated resignation.(p. 288) retirees on call A program where retirees can continue to work on a part-time or as needed basis post-retirement. (p. 290) termination interview The interview in which an employee is informed of the fact that he or she has been dismissed. (p.299) turnover The termination of an individual’s employment with an organization. (p. 286) voluntary turnover Employee-initiated termination of employment, such as quits, retirement, or resignation. (p.287) wrongful dismissal An employee dismissal that does not comply with the law or does not comply with a written or implied contractual arrangement. (p.294) CHAPTER 12 LABOUR RELATIONS LEARNING OUTCOMES 1. DISCUSS the key elements of Canada’s labour laws. 2. OUTLINE the five steps in the labour relations process. 3. DESCRIBE the five steps in a union organizing campaign. 4. OUTLINE the three ways to obtain union recognition. 5. DESCRIBE the three steps in the collective bargaining process. 6. EXPLAIN the typical steps in a grievance procedure. 7. DESCRIBE the impact that unionization has had on human resources management. REQUIRED PROFESSIONAL CAPABILITIES  Analyzes and provides advice on employment rights and responsibilities  Provides advice on the interpretation of the collective agreement  Collects and presents information required for decision making in the bargaining process  Effectively handles disagreements and conflicts CHAPTER SUMMARY Canada’s labour laws provide a common set of rules for fair negotiations, which helps to prevent labour disputes from inconveniencing the public. Tripartite labour relations boards balance employees’ rights with employers’ management rights. The five steps in the LR process are: employees’ decision to seek collective representation, union organizing campaign, official union recognition, negotiation of collective agreement, and day-to-day contract administration. The five steps in the organizing process include: employee-union contact, initial meeting, formation of in-house organizing committee, organizing campaign, and outcome (certification, recognition, or rejection).Three means of recognition are voluntary recognition, regular certification, and a pre-hearing vote. Three steps in the collective bargaining process are negation preparation, face-to-face negotiation, and obtaining approval of negotiated agreement. Third party assistance and strike/lockout or interest arbitration may also be needed. A grievance begins in writing to the immediate supervisor, then to an HR/LR specialist, then to senior management, and, if necessary to an arbitrator for final and binding rights arbitration. LECTURE OUTLINE I. INTRODUCTION TO LABOUR RELATIONS Workers join labour unions to influence HR policies and practices (pay, benefits, and so on), to achieve greater control over jobs, greater job security, improve working conditions, increase job satisfaction and meet needs for affiliation. Labour-management relations involve ongoing interactions between union representatives and management. Collective bargaining agreements (union contract) negotiated through a collective bargaining process dictate terms and conditions of employment for members of a bargaining unit, reducing managerial discretion and flexibility. Labour relations (LR) strategy can be one of union acceptance or union avoidance (union substitution or union suppression). 1. Canada’s Labour Laws Canada’s labour laws have two general purposes, which are to: • Provide a common set of rules for fair negotiations • Protect the public interest by preventing the impact of labour disputes from inconveniencing the public Common characteristics of LR legislation across jurisdictions are: • Union certification procedures • Minimum term of one year for collective agreements • Strike and lockout procedures • Prohibition on strikes and lockouts during the life of a collective agreement • Requirement for final and binding arbitration in rights (interpretation) disputes • Prohibition on “unfair practices” by labour and management • Establishment of a tripartite labour relations board (LRB) or equivalent 2. The Labour Movement in Canada Today Primary goal – obtain economic benefits and improvement treatment for its members (business unionism). Also involved in influencing government policies (social (reform) unionism). Teaching Tip: Have students look up different labour union websites to see what type of policy issues they are working on for their members. 3. Types of Unions Worker Type: craft unions and industrial unions Geographical scope: local, national, and international Labour congress affiliation: CLC, CSN/CNTU, AFL-CIO A union steward represents members of a local bargaining unit (e.g. UNIFOR Local 555) Teaching Tip: Many of the large unions (e.g. UNIFOR) are representing members from industries unrelated to their original membership base. Have students pick an occupation and find out what union is representing them in labour negotiations. 4. Membership Trends 31.5% of Canadian employees were unionized (2010), but declining trend (See Table 12.1, p.307); part of reason is decline of manufacturing, increase in service sector and more effective HR practices. Canadian decline less than other countries due to 3 factors: a. Global competition – unions have made concessions in Canada to keep jobs b. Demographics – retention of aging workforce achieved through mgmt. concessions c. Unionization of white-collar employees – service sector, public sector, educational sector Teaching Tip: The CBC produced a great set of interactive charts that track changes in union membership up to 2011 (e.g. by industry, by sector, by gender, by age, and so on). http://www.cbc.ca/news/interactives/labour-demographics/ II. THE LABOUR RELATIONS PROCESS The five steps to the LR process are shown in Fig. 12.1 (p. 309) and described below. Step 1: Desire for Collective Representation Three reasons why individuals join unions are: dissonance-based reasons (unmet expectations), utility-based reasons (cost-benefit), and political-ideological reasons. Demographics are not a consistent predictor except for those over 60 and black workers. Wage rates are higher for unionized workers and help females achieve pay equity. Dissatisfaction PLUS powerlessness beliefs are strongest influences. Teaching Tip: Generate a lively debate on recent actions by teachers unions. Why do these otherwise fairly well paid workers feel they need collective representation? What are their issues? Step 2: Union Organizing Campaign Five steps involved in a union organizing process are: • Employee-union contact • Initial organizational meeting • Formation of an in-house organizing committee • The organizing campaign including authorization cards • The outcome (certification, recognition or nothing) a. Signs of organizing activity – disappearance of lists/directories, increased pay/benefits inquiries, questions about position on unions, increase in complaints, change in lunch/coffee groups, increased popularity of informal leaders, cessation of conversation, change in behaviour towards management, strangers in parking lot, union materials (table 12.2) b. Employer response to an organizing campaign – often led by HR (with external advice), supervisory training is essential, obtain union info and plan communication strategy, do not violate employer rights (e.g. no unexpected wage hikes or promotions, no mandatory anti-union meetings) Step 3: Union Recognition There are there ways that a union can obtain recognition and bargaining rights can also be terminated. a. Voluntary recognition – rare, union acceptance strategy (saves time and money) b. Regular certification – automatic certification by LRB based on sufficient authorization cards (four out of every 5 applications), or representation vote supervised by LRB c. Pre-hearing votes – used when evidence of unfair labour practices early in campaign d. Termination of bargaining rights – decertification through worker application (secretballot vote) held by LRB or union declines to represent anymore (termination on abandonment) Step 4: Collective Bargaining Collective bargaining is the process by which a formal collective agreement is established between management and labour. Good faith bargaining involves communication & negotiation, matching proposals with counter-proposals, and making every reasonable effort to arrive at an agreement. a. Preparation for negotiations – planning bargaining strategy & process, assembling data (economic & bargaining trends, grievances, competitor actions, costs), and formation of negotiation team who presents initial proposal (Figure 12.2 p. 313) b. Face-to-face negotiations • Location – generally neutral and offsite plus extra room for caucus sessions • Frequency & Duration – as often & as long as either/both parties desire • Initial session – establishes climate, involves exchange of demands (if not already done) and establishment of rules & procedures • Subsequent sessions – arguments for own demands, arguments against others’ demands, resolution can only be reached if demands fit within bargaining zone (see Fi. 12.3, p. 315). Three types of bargaining: distributive, integrative, or mutual gains (interest-based); latter requires more training and is difficult to implement but becoming more popular c. The contract approval process – reduced to memorandum of settlement for submission to constituent groups; to senior management team for approval and to bargaining unit members for ratification (secret ballot vote often required). Then formal collective agreement is written up in full. d. Third-party assistance and bargaining impasses – as needed conciliation and/or mediation may be used, and conciliation is often required before strike/lockout. Strike often requires a strike vote by members to signal support for possible strike. Members can also picket or boycott to put pressure on management. Strikes are illegal during a collective agreement and at any time for essential workers. Lockouts are not common in Canada but are legally permissible – can affect both unionized and non-unionized workers. Arbitrators (single or 3 person board) can investigate an interest dispute and through interest arbitration impose a final and binding settlement regarding the terms of a collective agreement; used in back-to-work cases and for essential workers who cannot strike. e. The collective agreement: Typical provisions • Union recognition clause • Union security/check off clause (closed shop, union shop, modified union shop, maintenance-of-membership arrangement, Rand formula, open shop) • No-strike-or-lockout provision • Management rights clause • Arbitration clause Teaching Tip: The ethical dilemma on p. 320 deals with the Rand formula. Step 5: Contract Administration The bulk of labour-management relations occur through day-to-day contract administration, because differences of opinion arise regarding application and interpretation of the collective agreement. a. Seniority – unions favour seniority (objective) over merit/ability to avoid favouritism b. Discipline – requirement for proof of just cause for disciplinary action, issues include both whether misconduct occurred and whether penalty/sanction was appropriate c. Grievance resolution and rights arbitration – a grievance is a written allegation of contract violation filed by either individual member or the union (policy grievances) settled through multi-stage grievance procedure (see Fig. 12.4, p. 322) Grievances related to interpretation or administration of the collective agreement are known as rights disputes and if not resolve internally are resolved through rights arbitration, which can involve more or less severe penalties. III. THE IMPACT OF UNIONIZATION ON HRM A union has an impact on the way in which managers perform their HR responsibilities; when union leader are treated as partners, they can provide a great deal of assistance with HR functions. Unionized organizations tend to have an LR specialist or section, and in large firms a labour relations or industrial relations division is set up separate from the HR division. Management has less freedom but more responsibility for understanding and administering the agreement include more documentation in the case of grievances and hearings. All HR policies must be consistent with the collective agreement; union representatives are often involved in policy formulation. DISCUSSION BOX SUMMARIES WORKFORCE DIVERSITY: Collective Agreement Puts Aboriginals First (p. 306) This box describes the impact collective agreement at Voisey’s Bay Nickel Company that ensures that the Innu and Inuit people, regardless of whether or not they are employees, are always first in line whenever a position, a training opportunity, or a promotion comes up. It also discusses the effects of the Impacts and Benefits Agreements (IBAs) on Aboriginal benefits, training, and employment opportunities. This ensures skill development and retention of wages in the local community. STRATEGIC HR: UFCW Forms a “SuperLocal” (p. 307) Two United Food and Commercial Workers union merged in late 2011 to form a single local representing over 60,000 workers (majority are Loblaws’ employees). Pooling resources allows for better service, sometimes lower union dues, and the ability to maintain in-house legal expertise and add more professional training. The line between local and national is becoming blurred as Canadian unions try to remain viable in tough times. ETHICAL DILEMMAS Knowing that head office plans to close the facility should a unionization bid be successful, how should you as a manager respond to inquiries from employees about the impact of a union? (p. 311) The best course of action is to answer honestly, stating the belief that the firm wishes to remain union-free and restate the benefits of being a non-unionized worker. If you are not a senior manager then you should not comment on plans to close the facility as this may or may not actually happen. If employees ask about closure rumours they should be referred to Human Resources who will work with senior management to prepare a response. Employers have the right to hold an optional meeting to inform employees of the benefits of staying non-unionized but are not allowed to make threats or promises. Is it ethical for a firm to close the establishment during a labour dispute if that results in non-striking employees being laid off? (p. 318) A strike situation is never easy on an employer. Strikes cause serious losses to business in terms of loss of production, loss of valued clients, loss of reputation, and many more. If the bargaining power of the union is high during a strike situation, the employer will be at a disadvantage and that could potentially lead to serious financial losses which could threaten the viability of the business. If a company is unable to sustain itself during a strike, it may decide to close the business resulting in the loss of jobs for those employees who were not involved in strike action. Though this is unfair on the part of the employees, the company has the right to decide whether it wants to continue the business. However this should be done as a last resort. One could also argue that non-unionized workers should be aware that the presence of unionized colleagues means that they could be affected by labour-management relations. Given the fact that some workers have religious or other objections to unions, is the Rand formula ethical? (p. 320) The Rand formula is the most popular union security arrangement. It does not require union membership, but does require that all members of the bargaining unit pay union dues. It is a compromise arrangement that recognizes the fact that the union must represent all employees in the bargaining unit and should therefore be entitled to their financial support, but also provides the choice to join or not join the union. As a result, those who have religious or other objections to unions have the option of joining or not joining the union subject to them paying union dues, which can be considered as a fair compromise. Because gains such as salary/wage increases benefit everyone in the bargaining unit the union cannot allow free-loaders. KEY TERMS arbitration The use of an outside third party to investigate a dispute between an employer and union, and to impose a settlement. (p. 319) authorization card A card signed by an employee that indicates his or her willingness to have the union act as his or her representative for purposes of collective bargaining. (p. 310) bargaining unit The group of employees in a firm, plant, or industry that has been recognized by the employer and certified by a Labour Relations Board (LRB) as appropriate for collective bargaining purposes. (p. 304) bargaining zone The area defined by the bargaining limits (resistance points) of each side, in which compromise is possible, as is the attainment of a settlement satisfactory to both parties. (p. 314) boycott An organized refusal of bargaining unit members and supporters to buy the products or use the services of the organization whose employees are on strike, in an effort to exert economic pressure on the employer. (p. 318) business unionism The activities of labour unions focusing on economic and welfare issues, including pay and benefits, job security, and working conditions. (p. 305) caucus session A session in which only the members of one’s own bargaining team are present. (p. 314) certification The procedure whereby a labour union obtains a certificate from the relevant LRB) declaring that the union is the exclusive bargaining agent for a defined group of employees in a bargaining unit that the LRB considers appropriate for collective bargaining purposes. (p. 311) collective bargaining Negotiations between a union and an employer to arrive at a mutually acceptable collective agreement. (p. 304) collective bargaining agreement (union contract) A formal agreement between an employer and the union representing a group of employees, regarding terms and conditions of employment. (p. 304) conciliation The often mandatory use of a neutral third party who has no direct input on the negotiation process to help an organization and the union representing a group of its employees communicate more effectively with the aim of coming to a mutually satisfactory collective agreement. (p. 316) craft union Traditionally, a labour organization representing workers practising the same craft or trade, such as carpentry or plumbing. (p. 305) decertification The process whereby a union is legally deprived of its official recognition as the exclusive bargaining agent for a group of employees. (p. 312) distributive bargaining A win–lose negotiating strategy, where one party gains at the expense of the other. (p. 315) grievance A written allegation of a contract violation, filed by an individual bargaining unit member, the union, or management. (p. 322) industrial union A labour organization representing all workers eligible for union membership in a particular company or industry, including skilled trades people. (p. 305) integrative bargaining A negotiating strategy in which the possibility of win–win, lose–win, win–lose, and lose–lose outcomes are recognized, and there is acknowledgement that achieving a win–win outcome will depend on mutual trust and problem solving. (p. 315) interest arbitration The imposition of the final terms of a collective agreement. (p. 319) interest dispute A dispute between an organization and the union representing its employees over the terms of a collective agreement. (p. 319) labour–management relations The ongoing interactions between labour unions and management in organizations. (p. 304) labour union (union) An officially recognized association of employees, practising a similar trade or employed in the same company or industry, who have joined together to present a united front and collective voice in dealing with management. (p. 304) local A group of unionized employees in a particular location. (p. 306) lockout Temporary refusal of a company to continue providing work for bargaining unit employees involved in a labour dispute, which may result in closure of the establishment for a time. (p. 318) mediation The often voluntary use of a neutral third party who has direct input on the negotiation process to help an organization and the union representing its employees to reach a mutually satisfactory collective agreement. (p. 316) memorandum of settlement A summary of the terms and conditions agreed to by the parties, which is submitted to the constituent groups for final approval. (p. 316) mutual gains (interest-based) bargaining A win–win negotiating approach, based on training in the fundamentals of effective problem solving and conflict resolution, in which the interests of all stakeholders are taken into account. (p. 315) picket Stationing groups of striking employees, usually carrying signs, at the entrances and exits of the struck operation to publicize the issues in dispute and discourage people from entering or leaving the premises. (p. 318) pre-hearing vote An alternative mechanism for certification, used in situations in which there is evidence of violations of fair labour practices early in the organizing campaign. (p. 312) ratification Formal approval by secret-ballot vote of the bargaining unit members of the agreement negotiated between union and management. (p. 316) representation vote A vote conducted by the LRB in which employees in the bargaining unit indicate, by secret ballot, whether or not they want to be represented, or continue to be represented, by a labour union. (p. 312) rights arbitration The process involved in the settlement of a rights dispute. (p. 322) rights dispute A disagreement between an organization and the union representing its employees regarding the interpretation or application of one or more clauses in the current collective agreement. (p. 322) seniority Length of service in the bargaining unit. (p. 321) social (reform) unionism Activities of unions directed at furthering the interests of their members by influencing the social and economic policies of governments at all levels, such as speaking out on proposed legislative reforms. (p. 305) strike The temporary refusal by bargaining unit members to continue working for the employer. (p. 316) strike vote Legally required in some jurisdictions, it is a vote seeking authorization from bargaining unit members to strike if necessary. A favourable vote does not mean that a strike is inevitable. (p. 316) union security clause The contract provisions protecting the interests of the labour union, dealing with the issue of membership requirements and, often, the payment of union dues. (p. age 320) union steward A union member elected by workers in a particular department or area of a firm to act as their union representative. (p. 306) wildcat strike A spontaneous walkout, not officially sanctioned by the union leadership, which may be legal or illegal, depending on its timing. (p. 318) PART SIX: GLOBAL ISSUES IN HUMAN RESOURCES MANAGEMENT CHAPTER 13 MANAGING HUMAN RESOURCES IN A GLOBAL BUSINESS LEARNING OUTCOMES 1. EXPLAIN how global movement of labour has an impact on HRM in Canada. 2. DESCRIBE the influence of intercountry differences on the workplace. 3. EXPLAIN how to improve global assignments through employee selection. 4. DISCUSS the major considerations in formulating a compensation plan for international employees. 5. DESCRIBE the main considerations in repatriating employees from abroad. 6. DISCUSS challenges immigrants to Canada face and IDENTIFY the role of multiple stakeholders in ensuring successful integration of talent in Canada. REQUIRED PROFESSIONAL CAPABILITIES  Contributes to an environment that fosters effective working relationships  Researches, analyzes, and reports on potential people issues affecting the organization  Provides support and expertise to managers and supervisors with respect to managing people  Keeps current with emerging HR trends CHAPTER SUMMARY Globalization affects HR in two significant ways 1) international recruitment, retention and relations and 2) integration of immigrants who come to Canada. Intercountry differences include cultural factors (e.g. power distance, individualism/collectivism, and gender egalitarianism), economic systems, labour cost factors, and industrial relations factors. Global relocation strategies must consider all aspects of HRM and take a balance sheet approach to help expatriates maintain their standard of living. Repatriation problems are common but can be minimized through repatriation agreements, home-country sponsors/mentors, career counselling, return trips and reorientation programs. Newcomers to Canada are often underemployed; issues include lack of Canadian experience, limited transferability of foreign credentials and English/French language skills. This further exacerbates the skills shortage faced by Canadian employers. Solutions include modifications to recruitment and selection procedures to assess immigrant skills, use of apprenticeships, partnerships with assessment centres and, educating employers, recruiters, and managers about how to recognize and interpret skills from another country. LECTURE OUTLINE I. THE GLOBALIZATION OF BUSINESS AND STRATEGIC HR Globalization of business is now the norm and companies need to market and mange overseas operations. Workforce mobility programs focus on managing the recruitment, relocation, and retention of employees who completed work-related task and activities outside of the core or primary head office or region of the company. In addition, special programs target expatriates who are going overseas and immigrants who have come to Canada. Teaching Tip: Use a “show of hands” to illustrate how many students are or have a family member who is/was an immigrant. Ask if anyone knows someone who has worked overseas, even on a short-term basis (e.g. working while backpacking round the world). II. HOW INTERCOUNTRY DIFFERENCES AFFECT HRM Companies who operate only within Canada’s border have the luxury of dealing with a relatively limited set of variables that influence HR policies and practices, but the same is not true when a company operates in more than one country. Companies need to decide if HR policy and practices need to be modified in light of: 1. Cultural Factors Differences in cultural values (e.g. power distance, individualism/collectivism, and gender egalitarianism) have HR implications for training, pay, promotions and selecting expatriate employees who will be able to operate effectively within that culture. Teaching Tip: As a refresher for students who have already taken an Organizational Behaviour course or for those who haven’t, have students go to Dr. Geert Hofstede’s website (http://geerthofstede.com), click on “National Culture” to read about the five dimensions on which cultural values differ, and select a few pairs of countries for comparison purposes. 2. Economic Systems Capitalist (free enterprise), socialist, and communist economies require slightly different HR policies and practices. 3. Legal Systems Labour laws vary considerably around the world (e.g. age discrimination protection, termination requirements, and health and safety laws). Where laws are similar enforcement may still vary. 4. Labour Cost Factors Differences in labour costs may also produce differences in HR practices (e.g. degree of investment in training and development or use of pay for performance programs). 5. Industrial Relations Factors The relationship among workers, unions, and the employer can vary dramatically from country to country affecting HRM practices in terms of worker voice and representation in labour disputes. 6. Summary Intercountry variations complicate the task of selecting, training, and managing employees abroad and make the job of expatriate manager more difficult. Teaching Tip: Provide (or have students create) a list of socialist and communist countries, and then have them locate a guide to HR for each country on the Web and identify notable differences in HR practices and HR legislation. III. GLOBAL RELOCATION The number of expatriates working abroad is continuing to increase and includes traditional expatriates as well as “global nomads” and previously underrepresented female expatriates. Relocation policies are becoming more flexible, but family issues are a major issue in reluctance to accept an expatriate assignment, along with financial concerns. Pressing challenges for organizations include: • Candidate identification, assessment and selection • Cost projections • Assignment letters • Compensation, benefits, and tax programs • Relocation assistance • Family support Teaching Tip: Have students write down a list of three countries (besides their home country) where they would consider working and three countries where they would refuse an international assignment. Discuss the factors that come into their decision. 1. Why Expatriate Assignments Fail The cost of expatriate assignment failure (early return) can reach a million dollars, but can be mitigated by more careful selection of and more support for expatriates (and their families). Reasons for expatriate failure include being lower in desired personality traits (extroversion, agreeableness, and/or emotional stability), lacking desire for expatriate career, family pressures, expatriate nationality (Canadians are more adaptable than Americans), and length of the assignment. Solutions include shorter assignment length with family remaining at home as well as strong support for every expatriate employee. Teaching Tip: Organizations tend to screen for the current job and not for future jobs, but expatriate failure might be reduced if management candidates were screened for cross-cultural personality and aptitude when they first applied for a job with the organization (even straight out of college/university). Have students debate the pros and cons of early screening compared to leaving the screening until much later in the person’s career. IV. CONSIDERATIONS IN GLOBAL HRM Considerations include careful screening, special training, and formulation of international HR policies for compensation and labour relations. 1. Global Staffing Policy The three international staffing policies are ethnocentric (home country managers), polycentric (host country managers), and geocentric (best manager for position regardless of country of origin). Teaching Tip: Consider using the Ethical Dilemma on p. 334. 2. Selection for Global Assignments International managers can be home country expatriates, locals (host country), or thirdcountry nationals (from a country other than home or host). These days most managerial positions are filled by locals due to lower cost, availability and government pressure/regulations. However, expatriates are still used when specific technical competence is needed that is not available locally, when an overseas assignment is being used as a developmental opportunity for a high potential employee, and as a means of exerting control through enforcement of organizational policies and culture. 3. Orienting and Training Employees for Global Assignments In-depth, careful cross-cultural training helps to create realistic expectations, which facilitates cross-cultural adjustment. A four step approach to cross-cultural training includes: (figure 13.1 p. 335) • Level 1 – awareness of cultural differences • Level 2 – link between attitude and behaviour, especially unfavourable stereotypes • Level 3 – factual knowledge about the target country • Level 4 – skill-building (language including non-verbal, adjustment and adaptation skills) In addition, leadership development opportunities (rotating assignments, management development centres, high-level classroom programs) help overseas executives hone their functional and leadership skills for a global economy. Teaching Tip: Have students contact local companies who are doing business overseas to find out how they prepare their employees for cross-cultural business interactions, whether they are just dealing with overseas suppliers or are being sent on an overseas assignment. 4. International Compensation International compensation management can present some unexpected and complicated problems, due to the need to have compensation be both integrated and differentiated. While executive pay plans are becoming more uniform around the world, the general policy is to pay expatriates according to home country compensation levels (see Fig. 13.2, p. 336), with allowances for cost-of-living differentials. a. The balance sheet approach – equalizes purchasing power, maintains standard of living b. Variable pay – now common in many countries c. International EAPs – provide mental health support/treatment to expatriates and families Teaching Tip: Consider using the Ethical Dilemma on p. 337. 5. Performance Appraisal of Global Managers Several issues complicate the task of appraising an expatriate’s performance, such as who does the appraisal and local events that impact performance in ways not visible to home country managers. V. REPATRIATION Repatriation is the process of moving the expatriate and his or her family back home, and can often be more difficult than going abroad. Up to half of expatriates leave the organization following repatriation, often taking their new knowledge and skills to the competition. Repatriation problems include fears of having been “out of sight, out of mind”, placement in mediocre/makeshift jobs upon return, loss of executive perquisites, more rapid promotion of those who stayed behind, task of picking up old friendships and starting new schools. Steps to avoid these problems include: • Writing repatriation agreements • Assigning a sponsor • Providing career counselling • Keeping communication open • Offering financial support • Developing reorientation programs • Building in return trips Teaching Tip: Have students find and share repatriation stories from expatriates on the Web and identify what the most common issues were that these people faced upon their return. In addition, they can research local or regional companies to find out about their repatriation programs. VI. MANAGING GLOBAL WORKERS WITHIN CANADA Successful integration and utilization of immigrants and foreign workers Is essential to Canada’s economy, but many are underemployed (overqualified but in lower wage positions) or unemployed. Main obstacles to employment are: Barrier 1: Lack of Canadian Experience Two in every three new immigrants fails to find employment in their field. Solutions include: • educating employers, recruiters, and hiring managers in recognition and interpretation of skills from different countries • providing clear descriptions of required experience in job descriptions, and offering opportunities to demonstrate skills in simulated/field setting • using apprenticeships and providing opportunities to write certification examinations • partnering with industry-based assessment centres to develop bridging programs Barrier 2: Poor Transferability of Foreign Education or Training Licensing bodies of certain trades and professions may not accept foreign-obtained certification and employers have difficulty assessing foreign education in a meaningful way. Prior learning assessment and recognition (PLAR) methods can help because they standardize the recognition of skills and abilities. Barrier 3: Lack of Literacy Skills Literacy is the ability to identify, understand, interpret, create, communicate, compute, and use printed and written materials associated with varying contexts. Employees must be able to express themselves in the official language(s) of the country they are employed in, but only three in every five immigrants report that they can speak English very well and only one in five can speak French. Roughly 45% of new immigrants participate in English language training once employed and 10% are trained in French after employment. Language abilities increase likelihood of gaining employment, advancing in an organization, and closing the wage gap. Teaching Tip: Have students research immigration trends in the local area and if/how these have changed over the past ten years. Bring in or have students contact local community groups who assist immigrants in finding employment to obtain concrete and local examples of success stories and also ongoing challenges in the local community. Teaching Tip: Depending on the class, consider developing a service learning activity where students proofread and provide feedback on cover letters and résumés, as well as help with mock interviews for a local immigrant support group. DISCUSSION BOX SUMMARIES WORKFORCE DIVERSITY: Mummy Crew in Monster Trucks (p. 329) Mining bosses in Australia have realized that women are better and safer drivers of the massive dump trucks than men, which reduces the cost of the highly expensive truck tires. Consequently, initiatives have been undertaken to encourage more women to take on this important job, such as the “Mummy Crew” shift from nine am to three p.m. Global HRM: Successful Integration of Immigrants in Canada (p. 343) Innovative initiatives to aid in successful integration of immigrants into Canadian workforces include cross-cultural training for recruiters, managers, and employees, mentorship/buddy programs, and paid internships for those with international experience. ETHICAL DILEMMAS How ethical is it for a multinational organization to recruit expatriate staff for managerial positions when similarly qualified staff can be identified in the host country? (p. 334) The demands of the assignment may be such that an expatriate manager is required, due to a high need for organizational knowledge, not just technical knowledge and skills. It may also be an essential developmental assignment, in which case opportunities should be offered to high potential host country staff to also gain international experience. In many situations it would not only be ethical to appoint host country staff to managerial positions, but it also would make sense to optimize on local knowledge and experience. Is it ethical to pay expatriates using the balance sheet approach when local staff at the same level receives far less compensation? (p. 337) Some students may argue that, in absolute terms, it may be unethical to use the balance sheet approach for expatriate staff compensation. Expatriate staff tends to be an assignment for a finite period of time, with the expectation of returning to their home country, so the pay difference is temporary. In comparison to host country staff, expatriates may have established financial commitments that require a certain level of income, and without an assurance of financial continuity and maintenance of a comparable standard of living it would be difficult to attract employees to take on international roles. Also, they are dislodged from their normal social environment of (extended) family and friends, and from their cultural environment. As such, a higher level of compensation can be arguably ethical. Where organizations are open to assigning local staff to other expatriate offices and apply the same principles in a transparent and even-handed way, their ethical position would be strengthened. KEY TERMS balance sheet approach Expatriate pay based on equalizing purchasing power across countries. (p. 337) ethnocentric staffing policy Policies that align with the attitude that home-country managers are superior to those in the host country. (p. 334) expatriate Employees who are citizens of the country where the parent company is based, who are sent to work in another country. (p. 328) expatriate assignment failure Early return of an expatriate from a global assignment. (p. 333) geocentric staffing policy Policies that align with the belief that the best manager for any specific position anywhere on the globe may be found in any of the countries in which the firm operates. (p. 334) immigrant A person residing in Canada who was born outside of Canada (excluding temporary foreign workers, Canadian citizens born outside of Canada, and those with student or work visas). (p. 328) polycentric staffing policy Policies that align with the belief that only host-country mangers can understand the culture and behaviour of the host-country market. (p. 334) repatriation Process of moving the expatriate and his or her family back home from the foreign assignment. (p. 338) workforce mobility The focus on managing the recruitment, relocation, and retention of employees who complete work-related tasks and activities outside of the core or primary head office or region of the company. (p. 328 ) Instructor Manual for Management of Human Resources: The Essentials Nina D. Cole, Gary Dessler, Nita Chhinzer 9780132114905, 9780133807332, 9780134305066