CHAPTER 11 Enhancing Union–Management Relations 11.7 TEXTBOOK ANSWER KEYS 11.7a Return to Inside Business National Basketball Association 1. After mediation failed to help resolve the issues between players and owners, do you think arbitration should have been the next step? Explain your answer. Students who believe arbitration should have followed the failed mediation may argue that the arbitrator would have been able to listen to what both sides wanted, ask questions, and then make a decision. If this was binding arbitration, both sides would have abided by the decision and the labor dispute would have been resolved. In this case, both sides were probably reluctant to accept binding arbitration because they weren’t sure they would get what they wanted in the final decision. Students who don’t agree that arbitration should have been the next step may suggest a different negotiating tool, such as the union calling a strike or a slowdown. Ask students to consider how the basketball season might have been affected by whatever step they believe should have followed the failed mediation. 2. What are the advantages and disadvantages of using a lockout when lengthy talks don’t lead to an argument and both players and owners will face heavy financial losses if games aren’t played? No matter which side students might think is at fault in this situation, one advantage of owners using a lockout is that it prevents players from coming to work and being paid as usual. With the possibility that fewer or no games will be played and players will continue to lose money, players should be more motivated to find common ground with the owners and end the lockout quickly. A second advantage is that the lockout will force a resolution before the NBA season begins, rather than allowing disputes between players and owners to disrupt the season after it begins. Students may offer other advantages, in addition. One disadvantage of a lockout is that sports fans will be disappointed that the NBA season is being postponed and may have to be cancelled if no agreement is reached. This might alienate the fans for the long term, which would hurt both players and owners. A second disadvantage is that taking an action like this escalates the war of words and antagonizes players even more, which could prevent them from coming to the negotiating table for talks. Students should be able to suggest other disadvantages, as well. 11.7b Review Questions 1. Briefly describe the history of unions in the United States. In the late 1800s, large-scale production required more and more skilled industrial workers. As the skilled labor force grew, craft unions were formed in more industrialized areas. The first three major unions in the United States were the Knights of Labor (1869), the American Federation of Labor (1886), and the Industrial Workers of the World (1905). By 1920, the American Federation of Labor (AFL) had become the major force in organized labor, with approximately 75 percent of all union members. During the 1930s, most labor legislation was pro-union, which made it easier for unions to organize workers. In 1938, the Congress of Industrial Organizations was formed. Since World War II, the labor union movement has undergone a number of changes. For one thing, during and after World War II, there was a downturn in public opinion regarding unions. These sentiments led to passage of the Taft–Hartley Act in 1947 and the Landrum–Griffin Act in 1959. In 1955, the AFL and the CIO merged into one union with a membership of 16 million workers, making the AFL–CIO the largest union in the world. More recently, there has been a gradual decline in union membership because (1) heavily unionized industries have been decreasing in size; (2) many firms have moved from the heavily unionized Northeast and Great Lakes regions; (3) the largest growth in employment is occurring in the service industries; and (4) management is providing benefits that tend to reduce employees’ need for unionization. Currently, union members account for about 12.1 percent of the American workforce. However, union membership is concentrated in relatively few industries and job categories. Within these industries, unions wield considerable power. 2. Describe the three characteristics common to most union–management partnerships. Discuss the benefits of union–management partnerships to management, unions, and workers. There are three characteristics common to most union–management partnerships. First, partnerships focus on relationships instead of rights. Second, partners work toward mutual gain. Third, strategic partners engage in joint decision making. For management, potential benefits include lower costs, increased revenue, improved product quality, and greater customer satisfaction. For workers, benefits include increased response to their needs, more decision-making opportunities, less supervision, more responsibilities, and increased job security. Potential benefits for unions include enhanced credibility and increased strength and membership. 3. How has government regulation of union–management relations evolved during this century? Government regulation has evolved from giving most of the power to the unions to a more equitable arrangement that strives for a balance of power between management and the union. 4. For what reasons do employees start or join unions? Employees start or join unions for reasons of perceived job security, dissatisfaction with one or more elements of their job, or personal background. They may also join because union membership is a requirement. 5. Describe the process of forming a union, and explain the role of the National Labor Relations Board (NLRB) in this process. The steps in forming a union are the organizing campaign, the signing of authorization cards, and a formal election if necessary. The NLRB’s role involves stopping questionable behavior, conducting an election within 45 days after the required number of authorization cards have been submitted, and making the final judgment on the election results. 6. List the major areas that are negotiated in a labor contract. The major areas negotiated in a labor contract are employee pay, working hours, security, management rights, and grievance procedures. 7. Explain the three issues involved in negotiations concerning employee pay. The three issues pertaining to employee pay are forms of pay, the most common of which is direct compensation; the magnitude of pay, which is the amount an employee will receive as both indirect and direct compensation; and the pay determinant, which is the criteria that determines individual pay. 8. What is the difference between job security and union security? How do unions attempt to enhance union security? Job security protects the employees, whereas union security protects the union’s position as the employees’ bargaining agent. Union security arises directly from its membership; the greater the ratio of union employees to nonunion employees, the more secure the union is. Unions attempt to establish various union membership conditions. These include union shops, in which new employees must join the union after a probationary period; agency shops, in which employees can choose not to join the union but must pay dues anyway; and maintenance shops, in which employees who join the union must remain union members as long as they are employed by the firm. 9. What is a grievance? Describe the typical grievance procedure. A grievance occurs when an employee believes he or she has been treated unfairly in violation of the labor contract. The grievance procedure consists of the original grievance, broader discussion, full-scale discussion, and arbitration. 10. What are the steps involved in collective bargaining? The steps in collective bargaining are notification to begin negotiation, agreement, and ratification. 11. Why are strikes and lockouts relatively rare nowadays? Both strikes and lockouts are relatively rare because they are so costly to all involved. In addition, they pit one side against another. One side must “win” and the other “lose,” leading to resentment, fear, and distrust on both sides. 12. What are the objectives of picketing? The objectives of picketing are (1) to arouse public sympathy, (2) to discourage nonstriking employees from reporting to work, and (3) to gain sympathy from other unions. 13. In what ways do the techniques of mediation and arbitration differ? In mediation, a neutral third party assists both the union and management with the contract negotiations. In arbitration, a neutral third party makes a binding decision. Mediation is not usually involved in a grievance procedure, whereas arbitration is used as a final step in the grievance procedure as well as in contract negotiations. 11.7c Discussion Questions 1. Do unions really derive their power mainly from their membership and labor legislation? What are some other sources of union power? Yes, unions derive their power mainly from their membership and labor legislation. However, they also derive some power from public opinion, though not as much as in times past, and from other unions that are sympathetic. Such sympathetic unions will frequently go on strike with the other union or refuse to service the struck company. 2. Which labor contract issues are likely to be the easiest to resolve? Which are likely to be the most difficult? The easiest labor contract issues to resolve are those involving a clearly defined objective that benefits both management and labor (for example, clearly defined bargaining-unit memberships) or those that are clearly defined in the law (such as collective bargaining processes). The issues that are more difficult to resolve are those that involve arbitration, strikes, grievance procedures, salaries, employee benefits, and working conditions. 3. Discuss the following statement: Union security means job security for union members. As long as the union is secure within a firm, the union believes (and usually correctly so) that it can force management to retain the workers. The union, however, can bankrupt the firm by making too many demands. If this happens, none of the union members will have a job. 4. How would you prepare for labor contract negotiations as a member of management? As head of the union negotiating committee? Management preparations involve gathering pertinent data; making contingency plans for staffing if a strike results; and deciding on the time, place, and frequency of meetings to optimize resolution. Labor preparations involve gathering pertinent data, ensuring that the strike fund and other funds are paid up, and establishing a full membership drive for information and communication. 5. Under what circumstances are strikes and lockouts justified in place of mediation or arbitration? Strikes and lockouts are justified when all of the other available methods have been tried without success. In some cases, a strike is already in progress before the negotiations move to mediation or arbitration. 11.7d Comments on Video Case 11.1 Suggestions for using this video case are provided in the Pride/Hughes/Kapoor Video Guide. Understanding Labor Unions with the Writers Guild of America 1. Should union members in nonessential industries like entertainment have the right to strike when their actions may put others out of work as well? Strikes are much less frequent than in the past, and students may be less aware of their effects. They will have different opinions about this. Some may argue that union members must have the right to strike because this is what gives them the greatest leverage over their employer when all else fails, and strikes and even just the threat of a strike have been effective more often than not. Others will find the costs to union members, nonmembers, and employers too high and may argue that other methods like slowdowns and mediation are less costly for all, if slower. 2. Do you think a labor dispute outcome that leaves both sides partly satisfied is a good outcome? Why or why not? Most labor disputes are settled in such a way that each party must compromise, giving something up in order to get something it values. For each party to get partial satisfaction is usually better (and less costly) than hardening their positions and engaging in strikes or lockouts. 3. Union membership in the United States has been on a slow decline for about 30 years. What factors do you think account for this drop? The chapter cites the following reasons: shrinkage and slowed growth in industries that have typically been heavily unionized, such as manufacturing; relocation of many firms to less heavily unionized areas of the country such as the Southeast and Southwest; relocation of many jobs abroad; rapid growth in service and high-tech industries, whose workers are typically not unionized; increase in employment benefits that reduce the need for unionization; and U.S. laws and culture that allow for quicker displacement of unneeded workers and their replacement by those who are more in demand. 11.7e Comments on Case 11.2 When Nurses and Hospitals Don’t Agree 1. Identify the major issues that have led to disagreements between nurses’ unions and hospitals. Which do you think are most important for each side, and why? One issue identified in the case is nurses’ safety. The union was worried that nurses would be inadequately protected against H1N1 swine flu. Other issues that unions care about are compensation, the number of nurses on duty in a given area of the hospital during a given period, and the number of rest breaks nurses can take during a shift. The hospitals are under pressure to contain costs, which leads to difficult negotiations over nurses’ pay. Hospitals also want to be sure patients get the proper level of care. Ask students which issues each side would be likely to put the most emphasis on during contract negotiations and why. 2. Why would a nurses’ union choose an informational picket instead of a strike when it wants to call attention to important contract issues? Nurses could use informational pickets to bring their concerns to the attention of patients, hospital staff members, the public, other unions, and the media. This is a good alternative to calling a strike because it doesn’t disrupt patient care and it doesn’t hold other union members back from crossing the picket line to go to work. Information picketing also allows nurses to retain the good opinion of the public while showing hospital administrators that the union is especially concerned about certain issues. 3. Should U.S. lawmakers forbid nurses’ unions from striking unless mediation and arbitration fail to settle their disputes with management? Students who believe that nurses’ strikes should be illegal may say that the potential harm to patients in the hospital (even when replacement nurses are hired) is unacceptable. These students may also say that nurses are essential workers and if they go on strike, the public safety could be put at risk in the case of unexpected events such as a flu outbreak. Students who take the opposite view may say that many issues raised by nurses (such as staffing levels) are important to patient safety and therefore strikes should be allowed as a way to inform the public. Students who believe nurses’ strikes should remain legal may also argue that simply threatening to strike is often an effective way to show hospital management that the union is willing to go to great lengths to make its point during negotiations. 11.7f Building Skills for Career Success 1. Social Media Exercise 1. After reviewing the article, do you think unions are using social media effectively? Why or why not? It would appear that some unions are indeed using social media effectively. Some of the ways include posting videos of rallies, keeping members updated on contract negotiations, reminding members of marches and rallies, getting members to sign petitions, encouraging members to contact elected officials, calling for boycotts, and encouraging workers to organize. The article also points out that some unions are absent from social media, or they do a poor job of following accounts of those who use it. For example, the United Food and Commercial Workers International Union has 1.3 million workers in the United States and Canada, but it only follows 357 accounts and garnered less than 2,000 followers. The author states that very little retweeting is going on in several union accounts, and some have left their accounts sit dormant for years. 2. Can you think of other ways that unions can benefit by using social media? If you have difficulty answering this question, consider doing a quick search in Google or Bing to find articles that may be useful. Students’ answers will vary, but some examples may include the use of blogs, newsletters, Facebook, and YouTube. A union’s Web site can also be a rich source of information to help keep members up to date on the union’s latest news. For example, the Web site of the IBEW (International Brotherhood of Electrical Workers) has a news blog, a series of videos, links for a scholarship program, ways to donate, and many other links. The IBEW also has a Facebook page and a Twitter account. A quick search on Google revealed that several IBEW locals also have Twitter accounts. 2. Journaling for Success 1. What are the major reasons for joining and being a part of a labor union? Students are likely to mention perceived protection of benefits, job security, and stronger bargaining position versus management as reasons for joining a union. Others may come from union backgrounds or families, or may be dissatisfied with aspects of their job. In yet other cases, they may be required to join a union as a condition of employment. 2. Under what conditions would you like to be a union member? This is a personal attitude and opinion question with a wide variety of answers. Some students would not join a union under any circumstances, while some would always do so, and yet others would do so under certain conditions. The threat of globalization might be one catalyst. 3. Are there any circumstances under which a striking union member should cross a picket line and go back to work? Explain. Again, to some extent the answer will depend on individual attitudes. It is likely that students will consider both the public good (if lives are threatened by a union strike or national security, whether economic or physical) and private need (inability to take care of one’s family without work, for example). 4. Will the unions in the United States grow or decline over the next decade? Why? Based on current trends in both unionization and the structure of work in this country, it is likely that most students will predict that the decline will continue, at least in private industry. Some may, however, feel that the economic and structural work changes represented by globalization will rejuvenate the union movement. 3. Developing Critical-Thinking Skills One option is for the mechanic to do nothing and accept being passed over on the overtime list. Another option is for the mechanic to meet with her shop steward and determine if she was entitled to overtime pay. If it is determined that overtime pay is warranted, then the shop steward and the mechanic would file a grievance with the company. The shop steward would present the grievance to a company representative. If it is agreed that the company violated the union contract, the mechanic would collect the overtime pay. If the contract was not violated, the mechanic would not collect any overtime. If an agreement cannot be reached, the grievance process moves to the next level that is necessary to resolve the mechanic’s grievance. The grievance could ultimately end up in mediation and/or arbitration. In this case, the mechanic was awarded the overtime pay even though she was not at home to receive the call and did not actually work the overtime. Since time was critical in this case, the company did not take the time to locate her and, therefore, called the next available qualified mechanic. The union contract stated that overtime would be awarded according to the mechanic’s position on the overtime list. 4. Building Team Skills The “pro” group might argue that there is strength through unity that could lead to better working conditions, better wages, and more job security. With unity, ordinary workers believe they can have a voice in management, and in some companies that is the only way workers can communicate with management. Organized labor contends that unfavorable conditions still exist in the workplace and there is a need for unions. The “con” group could argue that federal laws and regulations protect workers, and unions serve no real purpose. Competition is difficult under strict union conditions. Unions are an outgrowth of earlier economic conditions, which no longer exist in plants. If management focused on training their workers and improving skills, workers would be less likely to organize to preserve their jobs. 5. Researching Different Careers The application letter should be clear and straightforward and should follow good business-letter form. Address the letter to the human resources manager, by name if possible. The first paragraph should indicate the job title and how you learned about the job. The second paragraph summarizes the applicant’s skills, abilities, and work experience specific to the job. The third paragraph focuses on how the applicant will be an asset to the company. The last paragraph asks for an interview and provides contact information, such as telephone numbers and times to be contacted. The purpose of the letter is to sell the applicant to the potential employer; therefore, it should grab the attention of the reader. Keep the letter clear, concise, and confined to one page. Refer to the example of an application letter in web Appendix A of the textbook. Another excellent source is entitled, 201 Winning Cover Letters for $100,000+ Jobs by Wendy S. Enelow (Impact Publications). The guide is written by a top résumé and letter writer, and it illustrates different types of letters for upscale jobs. The examples are organized by career fields. 11.8 QUIZZES I AND II Quiz I True-False Questions Select the correct answer. 1. T F The first president of the American Federation of Labor was Uriah Stephens. 2. T F Changing trends in business over the last 20 years have resulted in an increase in union membership. 3. T F The Wagner Act (1935) allows states to enact right-to-work laws. 4. T F During first contract negotiations, the firm is typically represented by managers from the industrial-relations, human resources, and legal departments. 5. T F A strike that is not union approved is referred to as a wildcat strike. Multiple-Choice Questions Circle the letter before the most accurate answer. 6. The first significant national labor organization was the a. Industrial Workers of the World. b. American Federation of Labor. c. Congress of Industrial Organizations. d. Teamsters. e. Knights of Labor. 7. Another name for the Wagner Act is the a. Wage and Hour Law. b. NLRA. c. LMRA. d. Prevailing Wage Law. e. Antitrust Law. 8. If the employees at the Commercial Marine Shipbuilding plant were to gain union representation, the union would select a committee to begin negotiating a labor contract with management. This process is referred to as a. contract analysis. b. joint negotiation. c. labor–management relations. d. collective bargaining. e. joint sessions. 9. The length of time an employee has worked for an organization or in a department is commonly referred to as a. tenure. b. hire ship. c. seniority. d. jurisdiction. e. longevity. 10. A fund used to provide financial support for striking union members is called a(n) __________ fund. a. slush b. offense c. task d. wildcat e. strike Quiz II True-False Questions Select the correct answer. 1. T F The Knights of Labor was the first significant national labor organization. 2. T F Unions derive their power to negotiate effectively with management from two sources: membership and financial resources. 3. T F A court order requiring a person or group either to perform some act or to refrain from performing some act is known as a subpoena. 4. T F Contract negotiations must be completed before the NLRB can pass final judgment on the election results. 5. T F The Taft–Hartley Act outlawed the closed shop. Multiple-Choice Questions Circle the letter before the most accurate answer. 6. Labor’s early attempts to organize resulted in the formation of __________ in industrialized areas. a. agency shops b. closed shops c. craft unions d. industrial unions e. union shops 7. Recently, the AFL–CIO allocated a significant portion of its budget to organizing efforts in order to increase membership. Judging from recent demographic trends, the AFL–CIO should focus on which one of the following industries? a. Service b. Steel and auto c. Computer/technology d. Health care e. Entertainment 8. Union organizers at the Maytag plant have just been informed that management has rejected their request to be recognized as the bargaining representative for plant employees. Which of the following will occur next? a. The NRLB will conduct a formal election. b. The NRLB will conduct an organizing campaign. c. Union organizers will conduct a formal election. d. Union organizers will conduct an organizing campaign. e. Management will conduct a formal election. 9. Unions often include in their contracts a clause that ties periodic pay increases to increases in the cost of living. This is known as a __________ clause. a. magnitude of pay b. job security c. seniority d. cost-of-living e. union security 10. All of the following are union weapons except a. wildcat strikes. b. slowdowns. c. boycotts. d. picketing. e. strikes. 11.9 ANSWER KEY FOR QUIZZES I AND II Quiz I True-False Multiple-Choice 1. F 6. e 2. F 7. b 3. F 8. d 4. T 9. c 5. T 10. e Quiz II True-False Multiple-Choice 1. T 6. c 2. F 7. a 3. F 8. a 4. F 9. d 5. T 10. a 11.10 CLASSROOM EXERCISES 11.10a Homework Activities • Have students bring in an article that shows an example of some aspect of unionization. Hint: Have students look for Supreme Court or NLRB rulings. • Researching and Following a Company Throughout the Course (continuing assignment). Have students research whether the company is affected by any union issues. • Have students visit the AFL–CIO Web site and answer these questions: What is the general “feel” of the site? How does organized labor seem to view itself? Is it different from your personal view of unions and their role in society? What do the hot issues for organized labor seem to be today? 11.10b Classroom Activities • Union Facts Quiz. Hand out a copy of the “Union Facts Quiz” to students just before beginning discussion of the chapter. As individuals or in groups, give the students 10 minutes to attempt to answer the questions. Once they are finished, use the information from the instructor notes as a basis for discussion. • Confronting Union Possibilities Exercise. Have students do one or more of the role plays on the following pages. Assign the role of the human resources manager to a member of the class and the first employee role to another. Give the role players and the rest of the class time to familiarize themselves with the roles. (You may want to assign the roles one class session prior to performing the role play.) Role play a meeting between the human resources manager and the employee in front of the class. Discussion questions appear at the end of the role play. If you have time, assign the human resources manager role to another member of the class and assign the second employee role to another, and repeat for all four employee roles. Students who are not actively participating in the role play should take careful notes so they can participate in the debriefing discussions. • Negotiation Classroom Exercise. Have students do the “Negotiation Application” on the following pages. Directions are provided in the exercise. • To Strike or Not to Strike! Exercise. Place students into groups and hand out a copy of the “To Strike or Not to Strike!” exercise. The students should be given 10 to 15 minutes to decide if the occupational groups listed should be allowed to strike at all or only under certain circumstances. Follow up with discussion. • So You Think Collective Bargaining Is Easy? Exercise. Place students into groups and hand each group the description of the group’s bargaining issues and priorities. Each group has different priorities from the others. In addition to examining the difficulties of prioritizing competing needs, this exercise also allows for coalition building if time permits. • Right-to-Work Debate. Show the class two brief videos on the right-to-work issue. Each video lasts less than five minutes. The first video is about Jean Kidd who is a captain in the Minneapolis Fire Department. She is an opponent of right-to-work laws. The Web site for this video is: http://www.weareminn esota.org/2012/04/video-firefighter-how-my-union-supports-me-why-right-to-work-doesnt/. The second video is about Mark Mix who is president of the National Right to Work Foundation. He is in favor of right-to-work laws. The Web site for this video is: http://www.youtube.com/watch ?v=_Qgn6wTHELs. Then lead the class in a discussion of whether they are in favor of right-to-work laws or not. These questions may assist you: ○ Opponents of right-to-work laws believe these laws are a right to freeload—workers receive the benefits of a union workplace but do not have to pay union dues. Those in favor of right-to-work laws say it is unethical to force employees to pay dues to a union if they do not want to join. What is your take on this issue? ○ Those in favor of right-to-work laws say it attracts new business to a state because businesses want to move to a location where they do not have to negotiate with a union that makes unfair demands. Opponents say that, by negotiating fair wages and benefits, unions keep employers from taking advantage of their workers. What do you think? 11.10c Exercise Handouts Follow on Next Pages UNION FACTS QUIZ 1. What is America’s largest and most powerful trade union? 2. How many Americans belong to a union? 3. What is the AFL–CIO? 4. When were the first unions formed in the United States? 5. Are Americans more or less unionized than Europe? Than Asia? 6. In the United States, are workers in private industry or government/public agencies more unionized? 7. Are older or younger workers more likely to join unions in the United States? 8. What are the most unionized states in the United States? The least unionized? 9. What are the most unionized occupations in the United States? The least? 10. Is union membership increasing or decreasing in the United States? Union Facts Quiz Answers 1. What is America’s largest and most powerful trade union? National Education Association (teachers) with 3 million members 2. How many Americans belong to a union? In 2011, 16.3 million wage and salary workers were represented by a union. 3. What is the AFL–CIO? The American Federation of Labor–Congress of Industrial Organizations (AFL–CIO) is the voluntary federation of 56 American unions, representing more than 12 million workers. 4. When were the first unions formed in the United States? The trade union movement in the United States originated during the early years of the republic. As in other countries, skilled workers were the first to organize and form unions. During the 1790s, unions were formed by the carpenters and shoemakers of Philadelphia, the tailors of Baltimore, Maryland, the printers of New York City, and groups of craft workers in other large cities. These unions, usually small, were organized to conduct particular strikes, after which they were dissolved. 5. Are Americans more or less unionized than Europe? Than Asia? According to the Organisation for Economic Cooperation and Development, union membership rates in 2010 ranged from 8 percent in Estonia to 70 percent in Finland. Unionization in some other European countries was as follows: Austria (28.1%), Germany (18.6%), Italy (35.1%), Poland (15%), and the United Kingdom (26.5%). Labor statistics from other areas of the world include: Japan (18.4%), Australia (18%), New Zealand (20.8%), Canada (27.5%), and Mexico (14.4%). The Scandinavian nations have the highest rates: Finland (70%), Sweden (68.4%), and Norway (not reporting in 2010, but 2009 rate was 54.4%). 6. In the United States, are workers in private industry or government/public agencies more unionized? 6.9 percent of workers in the private sector were unionized in 2011, compared to 37.0 percent in federal, state, and local governments. 7. Are older or younger workers more likely to join unions in the United States? Young workers are far less likely than those in any other age category to be unionized. In 2011, 4.4 percent of workers aged 16 to 24 were unionized. The union membership rate was highest among workers 55 to 64 years old—15.7%. 8. What are the most unionized states in the United States? The least unionized? Three states had union membership rates over 20 percent in 2011—New York (24.1%), Hawaii (21.5%), and Alaska (22.1%). • Seven states reported union membership rates below 5 percent in 2011. North Carolina had the lowest rate at 2.9 percent. Other states with union membership rates below 5 percent include Arkansas (4.2%), Georgia (3.9%), Louisiana (4.5%), South Carolina (3.4%), Tennessee (4.6%), and Virginia (4.6%). • • State union membership levels depend on both the overall employment levels and union membership rates. The largest numbers of union members lived in California (2.4 million) and New York (1.9 million). Over half of the 14.8 million union members in the United States lived in just seven states (California, 2.4 million; New York, 1.9 million; Illinois, 0.9 million; Pennsylvania, 0.8 million; Michigan 0.7 million; and New Jersey and Ohio, 0.6 million each), though these states accounted for only about one-third of wage and salary employment nationally. 9. What are the most unionized occupations in the United States? The least? Within the public sector, local government workers had the highest union membership rate, 43.2 percent. This group includes several heavily unionized occupations, such as teachers, police officers, and fire fighters. Private-sector industries with high unionization rates included transportation and utilities (21.1%) and construction (14%), while low unionization rates occurred in agriculture and related industries (1.4%). Among occupational groups, education, training, and library occupations (36.8%) and protective service occupations (34.5%) had the highest unionization rates in 2011. Sales and related occupations (3%) and farming, fishing, and forestry occupations (3.4%) had the lowest unionization rates. 10. Is union membership increasing or decreasing in the United States? According to the Bureau of Labor Statistics, the union membership rate in 2011 was 11.8 percent, essentially unchanged from 11.9 percent in 2010. However, the rate has declined from a high of 20.1 percent in 1983, the first year for which comparable union data were available. Sources: Bureau of Labor Statistics—Union Members 2011, accessed July 7, 2012, from http://www.bls.gov/news .release/pdf/union2.pdf; National Education Association Web site, accessed July 7, 2012, from http://www.nea.org/ home/2580.htm; AFL–CIO Web site, accessed July 7, 2012, from: http://www.aflcio.org/About; Organisation for Economic Cooperation and Development Stat Extracts, accessed July 7, 2012, from http://stats.oecd.org/Index.aspx?DatasetCode=UN_DEN. CONFRONTING UNION POSSIBILITIES Background Federal laws closely regulate what companies can and cannot do when confronted with the possibilities of unionization. These constraints can often create pitfalls for the unwary human resources manager. This exercise seeks to raise your awareness of some of those pitfalls. The Task Following are five role descriptions: one for a human resources manager and four for employees. Students who are assigned to act out the role plays should read and think about both their own role and that of the other player. Students who are not actively participating should pay close attention so they can participate in the discussion following each role play. Roles Human Resources Manager. You are in an industry that has become highly unionized in many geographical areas. Only recently, however, has your company been approached by union organizers. At a recent meeting, upper management made clear that you are to do everything in your power to dissuade unionization. Employee 1. You are an active and vocal union organizer. You have been in your job as a machine operator for 22 years. Currently, new technology is being phased in. It requires fewer operators and higher skill levels. With the new equipment, your skills will become obsolete. You have come to the human resources manager to talk about job security. Employee 2. You are a department secretary who does not want the union to come in. You think unions mean nothing but trouble, and you can’t afford to pay union dues. You have come to ask the human resources manager what you might do to help keep the union out. Employee 3. You are part of an antiunion group of about 15 employees and have been assigned to talk to the human resources manager to get permission to use the company copy machine to print antiunion fliers, to insert messages about your meetings into the workers’ pay envelopes, and to use the management dining room for meetings. Employee 4. Since your supervisor was assigned to your units 18 months ago, you have had increasingly negative performance reviews, have been written up for minor infractions nine times, and have been told that next time you will be fired. You think you are being harassed because you are an active union organizer. You have come to the human resources manager to talk about it. Discussion Questions 1. What problems or potential problems were raised by the situation presented? 2. What did the human resources manager handle well? Why? What should he or she have done differently? Why? 3. Now that the meeting is over, what should the human resources manager do? NEGOTIATION APPLICATION Divide the group into Management and Union. List first and last names for each side. Read the data below. Negotiate a new contract. Produce one written version listing the following in order (using the worksheet on the following page): length of contract (in years), base pay, annual increases, shift differential, number of workers for each shift, benefits percentage of salaries, annual paid sick days, annual paid holidays, how much any increases will cost, and where the money comes from. Note: You must work within the parameters of the assignment. You cannot, for example, decide that sales will soar to $500,000,000 next year and everyone gets a monster raise . Last Contract • Started in 2002. [Union conceded 100 jobs (layoffs) in 2000–2001 contract] • Remaining workers took 10 percent pay cut to help company • Sick days went from 10 to 6; Holidays from 10 to 6 paid/year • Shift differential: 2000–2001 2002 3 – 11 $1.00 $0.50 11 – 7 $2.00 $0.70 • Benefits were 28 percent of total salaries Current Salaries: (2,080 Hours Per Year, Base Pay $20/Hr.) Shift Workers 7 – 3 500 workers $20,800,000 3 – 11 300 workers $12,792,000 11 – 7 150 workers $6,458,400 Total $40,050,400 Managers 100 @ $60K 10 @ $80K 2 @ $100K President $150K Benefits: 24 percent of salaries Sales and Profits Sales Profits 2009 $80,000,000 $8,601,400 2010 $118,224,888 $13,800,000 2011 $123,350,000 $15,801,000 Economic Outlook Uncertain. Sales may fall to 2009 level, but new 2012 model widgets are coming out and sales may stay at 2011 level. HR Issues • Management does all scheduling, hiring, firing, and promotions. • Currently, it is very difficult to get people to work 3–11 and 11–7, and then absenteeism is high on these shifts and productivity is lower than on 7–3. DUE AT THE END OF CLASS TODAY. NEGOTIATION APPLICATION WORKSHEET Union Members Management Members Length of contract (in years) Current: 3 years Negotiated (circle one): 1 2 3 years Base pay Current: $20/hr. Negotiated: $______/hr. Annual increases Current: 10% Negotiated: _____% _____% _____% Shift differential Current: 3–11 $0.50; 11–7 $0.70 Negotiated: 3–11 $_____; 11–7 $_____ Number of workers for each shift Current: 7–3 = 500, 3–11 = 300; 11–7 = 150 Negotiated: 7–3 = _____ 3–11 = _____ 11–7 = _____ Benefits percentage of salaries Current: 24% Negotiated: _____% Annual paid sick days Current: 6 Negotiated: _____ Annual paid holidays Current: 6 Negotiated: _____ How much any increases will cost $__________________________ Where the money will come from $ $ $ $ To Strike or Not to Strike! In your groups, come to a consensus as to whether and under what circumstances the following worker groups should be allowed to strike. You have 10 minutes. Occupation Strike? Never Under these circumstances Always Pilots Trash collectors Teachers City police State troopers Auto workers Discount store clerks Weather forecasters Newspaper reporters Nurses So You Think Collective Bargaining Is Easy? The first step in the collective bargaining process is for the union negotiating team to determine the needs of its members so that demands can be presented to management. However, not all employees have the same needs. Your instructor has divided the class into four groups, representing a group of discount retail store workers. Each of four groups has been given a brief description of the issues they consider most important. After reviewing the descriptions, each group will have 10 minutes to decide how to persuade the other three groups to make their primary issue the union’s number one priority. After each group makes its presentation, the other three groups each have the opportunity to ask questions. Finally, each group will reconvene to determine what, if any, compromises they will accept. Description of Priorities Group Alpha Priorities: Group Alpha employees are primarily young and single, and many are going to school at the same time they are working. Many are still on their parent’s health care plans. Their primary interests are to retain flexibility in job hours, both in terms of scheduling and number worked as well as increased wages. They would also like the opportunity to make extra money working shifts and times other workers may find undesirable. Group Beta Priorities: Group Beta employees are those with young children. Some are married, others are single parents. While increased wages are important to them, they are equally interested in on-site child care as well as increased health care benefits. Particularly, they would enjoy a dental plan. They like the store and would like to continue working there indefinitely. Group Gamma Priorities: Group Gamma employees are working at the retail store to augment their retirement income. They are receiving social security and Medicare benefits. They have little interest in benefits in the upcoming negotiations. Their number one priority is an increase in salary, preferably a large one. Group Kappa Priorities: Group Kappa employees are long-term employees of the retail store. They have seniority over the other three groups of employees. They range in age from 40 to 60. Some are single and others are married. Job security is the most important thing to them, and they enjoy the health care benefits the store offers. They would like an increase in salary, but not at the expense of benefits or job security. So You Think Collective Bargaining Is Easy? Instructor Notes The purpose of this exercise is to demonstrate the difficulty in coming to a unified set of negotiation priorities with a diverse workforce. Management will not accede to all union demands, especially in tough economic times. Trade-offs will have to be made and coalitions formed. RUNNING A BUSINESS—PART 4 Suggestions for using this video case are provided in the Prides/Hughes/Kapoor Video Guide. At Graeter’s, Tenure Is “a Proud Number” 1. Imagine that you’re a human resources manager for Graeter’s. If you were writing the job specification for an entry-level, part-time employee who will serve customers in one of the scoop shops, what qualifications would you include, and why? Because Graeter’s wants customers to feel that being in its scoop shops is fun, students may want to include in the listing of qualifications a positive attitude, high energy level, strong interpersonal and communication skills, and the ability to work well under pressure. In addition, they may include qualifications such as being able to work well in a team and being able to work well under pressure (when the shop gets busy). 2. Food production facilities like the three Graeter’s factories must comply with strict regulations to ensure purity and safety. What kinds of teams might Graeter’s use in these facilities, and for what specific purposes? Graeter’s might want to have a problem-solving team ready to investigate if quality control complications arise in a particular facility. It might also have a cross-functional team in each facility to assess production operations and recommend improvements for management to consider. Ask students whether self-managed work teams would be a good option for Graeter’s, and why. Virtual teams would be unnecessary, given the location of the three factories. 3. Graeter’s is currently a non-union company. How might the experience of working there change if a union were to be introduced? The presence of a union would introduce enforceable seniority rules that could offer some job security; possible improvements in pay, benefits, or working conditions; employment contracts; grievance procedures; a shop steward; and collective bargaining. BUILDING A BUSINESS PLAN—PART 4 Project Overview The Building a Business Plan project appearing at the end of each part in Business, 12e, offers students a unique opportunity to create an actual business plan document. The goal is to help your students work through the process of creating a business plan by directing them to research and write parts of their plan as they work their way through the textbook and your course. There are seven exercises that appear at the end of each part of the textbook. You may choose to assign the project as individual or group work. Either way, this can be a large undertaking, so we recommend that you assess each part of the plan as your students complete it so that you can redirect them in case they veer off in an inappropriate direction. As students approach each new section of the plan, encourage them to revisit the sections they wrote earlier so that they can refine their plan based on their new knowledge and on their continuing research about their business. In addition to assessing the written document in pieces and in its entirety at the end of the course, you may wish to require that students present their completed business plans to the class as if they were applying for loans to start their businesses. Be sure to make your expectations for the completed business plans clear at the beginning of the course by telling students how and when you plan to evaluate their work. Before you assign the project, we suggest you read through all the exercises and the notes that follow so that you can point out potential trouble spots to your students along the way. To help give your students an overview of the project, refer them to Chapter 5 and to Table 5.3, “Components of a Business Plan,” and Table 5.4, “Business Plan Checklist.” You might also tell them that, although the exercises include questions that should be addressed in the business plan, the final document should not be written in question/answer format. The final business plan should be a comprehensive document, written in paragraph form (with bulleted and/or numbered lists where appropriate), including the major sections noted in the exercises. The Human Resources Component In this section of the business plan, students should expand on the type and quantity of employees that are required to operate the business. Their human resources requirements are determined by the type of business and by the size and scale of its operation. Students should have a good idea of how many people they will need from Part 3. To answer the questions for this component, refer students to Part 4 of the textbook, especially Chapter 9, “Attracting and Retaining the Best Employees,” and Chapter 10, “Motivating and Satisfying Employees and Teams.” Make sure that students adequately address at least the following issues related to the human resources requirement: • The number of employees required and their qualifications and skills. Will jobs be full or part time? • Job descriptions for each position • Job application forms • Criteria for selecting employees • Orientation and training programs • Wages and salaries • Employee evaluations • Delegation of any authority • Disciplinary rules • Exit interviews Review of Business Plan Activities Make sure that students resolve any issues in this component of their business plan before beginning Part 5. Again, make sure that their answers in each part are consistent with the entire business plan. They should write a brief statement that summarizes all the information for this part of the business plan. Chapter 11 Video Case: Understanding Labor Unions with the Writer’s Guild of America RUNNING TIME: 14:15 Chapter 11 discusses enhancing union–management relations. A labor union is an organization of workers who act together to negotiate wages and working conditions with their employers. Labor relations are the dealings between labor unions and business management. The power of unions to negotiate with management comes from two sources. The first is the size of their membership. The second is the groups of laws that guarantee unions the right to negotiate and that regulate the negotiation process. Important laws that affect union power are the Norris–LaGuardia Act, the Wagner Act, the Fair Labor Standards Act, the Taft–Hartley Act, and the Landrum–Griffin Act. Steps to forming a union include (1) an organizing campaign, (2) signing authorization cards, (3) a formal election, and (4) receiving NLRB certification. Once a union is established, it may negotiate a labor contract with management through collective bargaining. Management and unions can use certain tools to sway one another, including advertising and publicity, pressure through strikes, slowdowns, or boycotts, as well as mediation and arbitration. Concepts Illustrated in the Video • Arbitration • Credit • Entertainment Industry • Grievance • Negotiation • Solidarity • Strike • Unionization • Writing VIDEO CASE SUMMARY The Writers Guild of America (WGA) has been protecting and advocating for creative workers across the United States for over 50 years. The Guild consists of two separate unions: the Writers Guild East and the Writers Guild West. This not-for-profit organization includes thousands of graphic artists and writers for motion pictures, television, radio, newscasts, and the Internet. The main purpose of the Writers Guild union is to protect its members and to make sure they get proper credit for their work and are properly paid. Compensation typically consists of two parts: up-front money and residuals. In the event of disagreements, the Guild will take the case to arbitration to ensure the writer gets what he or she has earned. One direct result of the three-month writers’ strike in 2008 was the Guild’s extension of its jurisdiction to include Internet content. WGA strikes, while costly to all parties, can get good, if imperfect, results for union members. The 2008 writers’ strike, for instance, sought a penny increase in the fee writers earned from the sale of movie videos and a percentage of the income from foreign sales of films. After three months, only the goal of increasing the percentage of foreign sales was met. Union officials were satisfied with the deal, and from that perspective it was a good outcome. Critical-Thinking Questions Using information from the case and the video, answer the following questions: 1. Should union members in nonessential industries like entertainment have the right to strike when their actions may put others out of work as well? Strikes are much less frequent than in the past, and students may be less aware of their effects. They will have different opinions about this. Some may argue that union members must have the right to strike because this is what gives them the greatest leverage over their employer when all else fails, and strikes and even just the threat of a strike have been effective more often than not. Others will find the costs to union members, nonmembers, and employers too high and may argue that other methods like slowdowns and mediation are less costly for all, if slower. 2. Do you think a labor dispute outcome that leaves both sides partly satisfied is a good outcome? Why or why not? Most labor disputes are settled in such a way that each party must compromise, giving something up in order to get something it values. For each party to get partial satisfaction is usually better (and less costly) than hardened positions and engaging in strikes or lockouts. 3. Union membership in the United States has been on a slow decline for about 30 years. What factors do you think account for this drop? The chapter cites the following reasons: shrinkage and slowed growth in industries that have typically been heavily unionized, such as manufacturing; relocation of many firms to less heavily unionized areas of the country such as the southeast and southwest; relocation of many jobs abroad; rapid growth in service and high-tech industries, whose workers are typically not unionized; increase in employment benefits that reduce the need for unionization; and U.S. laws and culture that allow for quicker displacement of unneeded workers and their replacement by those who are more in demand. Chapter 11 Lecture Launcher: Why Not Start with a Clear Contract? VIDEO SUMMARY Aron, one of Urban Farmz’s employees, talks to Thalia, Jake and Caleb’s lawyer, about the merits of the firm’s workers joining the United Farm Workers union. But Jake is totally against the idea. “Do I not treat you guys with the utmost respect? I mean, this is just going to cause problems,” he tells Aron. Aron says the move would ensure that all of Urban Farmz’s workers in various regions are treated the same and send the message that the business is socially responsible. “Raises, an employee bill of rights, guarantees of health insurance and other benefits would all be sewn up in the union rules,” he counters. Caleb likes the idea. Thalia vows to do some research on the implications of unionizing. Solution Manual for Business William M. Pride, Robert J. Hughes, Jack R. Kapoor 9781133595854, 9780538478083, 9781285095158, 9781285555485, 9781133936671, 9781305037083
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