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Chapter 11 Managing Labor Relations Closing Case: “Give and Take” Case Summary The general view of management and labor unions is that they are antagonists: When one wins, the other loses—and vice versa. In reality, of course, there are many situations where businesses and unions coexist quite peacefully. One notable example came from Harley-Davidson, which needed to reduce its overall costs to remain competitive. The York factory was a key site for cost reduction. The factory was in dire need of modernization, the labor contract governing York workers called for wages above industry average, and the factory had more than sixty different job classifications, and the union contract made it nearly impossible to move workers across classifications. One of the first options Harley considered was simply closing the York plant and moving its jobs to the firm’s newest factory in Kentucky. The International Association of Machinists and Aerospace Workers, however, persuaded the company to renegotiate a new arrangement that would allow some of the union workers to retain their jobs. Case Questions 1. Do you think the Harley deal was too one-sided? Why or why not? The assessment of whether the Harley deal was too one-sided depends on the perspective from which it is viewed. From the standpoint of Harley-Davidson, the deal may have been seen as necessary to ensure the company's survival during a challenging economic period. The concessions made by the union, such as wage freezes and increased healthcare costs for workers, may have been deemed essential to maintaining operations and preventing layoffs. However, from the perspective of the union and its members, the deal may have been viewed as overly favorable to the company. The sacrifices made by workers, including reduced benefits and job security, could be seen as disproportionately benefiting Harley-Davidson's bottom line without sufficient consideration for the well-being of its employees. Ultimately, whether the deal was too one-sided depends on the balance struck between the needs of the company and the interests of its workers. If the agreement helped Harley-Davidson weather a difficult period and ultimately benefit both the company and its employees in the long run, it may be seen as a necessary compromise. However, if the deal significantly disadvantaged workers without providing commensurate benefits, it may be criticized as being too one-sided. 2. If you were a Harley or GM employee and union member, would you have voted for the new deal? Why or why not? If I were a Harley or GM employee and union member, my decision to vote for the new deal would depend on several factors. Firstly, I would consider the overall economic situation and the potential impact of the deal on job security. If the company was facing significant financial challenges and the new deal was necessary to prevent layoffs or plant closures, I might be inclined to vote in favor of it, understanding that some sacrifices might be needed for the greater good of preserving jobs. On the other hand, if I felt that the concessions being asked of employees were excessive or unfair, especially if the company's top executives were not making similar sacrifices, I might be hesitant to support the deal. Additionally, I would consider the long-term implications of the deal on employee morale and the company's commitment to its workforce. If the deal undermined trust between the company and its employees or set a precedent for future concessions without adequate benefits in return, I might be inclined to vote against it. Ultimately, my decision would be based on a careful consideration of the trade-offs involved and a determination of whether the new deal offered a reasonable balance between protecting the company's viability and ensuring fair treatment for its employees. 3. Do you think that it is appropriate for a government entity (such as the state of Pennsylvania) to take an active role in union-management negotiations? Why or why not? Two sides to these questions are apparent. (1) Government entities should become involved in union-management relations because the outcomes of negotiations affect the economic well-being of the different communities that these government entities represent. (2) Government entities should not become involved in union-management relations because these groups could adversely impact the natural economic conditions that create competition and a free-flow market. The following items appear on the in-text Instructor Prep Cards. These notes and suggested talking points should help instructors conduct these exercises with the students. Discussion Questions 1. Discuss the historical evolution of labor unions in the United States. Early organizations of labor during the Revolutionary War were known as craft unions. The first major union to have a significant impact in the United States was the Knights of Labor, founded in 1869. The Knights of Labor grew from 52,000 in 1883 to 700,000 in 1886. It favored replacing capitalism with worker cooperatives but disbanded after violence that resulted in the hanging of leaders by some of the members. Samuel Gompers founded the American Federation of Labor in 1886. The AFL was an umbrella union consisting of individual unions. It focused mostly on crafts across industries. John L. Lewis left the United Mine Workers in the 1930s to form the Congress of Industrial Organizations, which was the first union to organize workers by industry. In 1955, the AFL merged with the CIO. 2. Identify and briefly explain each of the major laws affecting unionization in the United States. The National Labor Relations Act, also known as the Wagner Act, was passed in 1935 and still is the cornerstone of contemporary labor relations law. The basic purpose of the act was to put unions on a more equal footing with managers by giving workers the legal right to form unions, to bargain collectively with management, and to engage in group activities such as strikes to accomplish their goals. The act prohibits employers’ discriminating against union members in hiring, firing, and promotion. The National Labor Relations Board was created by the act to administer its provisions. The Labor-Management Relations Act, also known as the Taft-Hartley Act, was passed in 1947 to curtail and limit union practices. The act outlawed the closed shop, a workplace in which the employer may hire only workers who are already union members. The act permitted states to pass right-to-work laws that outlawed union-shop agreements (the requirement that employees join the union after employment). Finally, the act permits the president of the United States to request an injunction that prohibits workers’ striking during a sixty-day cooling-off period. The Labor Management Reporting and Disclosure Act, also known as the Landrum-Griffin Act, was passed in 1959 and focused on eliminating various unethical, illegal, and undemocratic union practices. The act required national labor unions to elect leaders at least once every five years and required unions to disclose certain financial information to the Department of Labor and to their members. 3. What is a shop steward? Each local elects its own shop steward, a regular employee who functions as a liaison between union members and supervisors. Shop stewards generally have the power to negotiate settlements on individual grievances. 4. Is your state a right-to-work state? What are your personal opinions about this issue? Texas and most other southern states are right-to-work states. Some states such as California are generally right-to-work states but may permit certain industries such as health-care to have union shops. Students’ answers will vary according to sections of the country and family beliefs. 5. Discuss trends in unionization. Today, only 14 percent of wage and salary workers belong to labor unions, down from 26 percent in 1977, and labor unions are winning fewer than 50 percent of certification elections. A number of factors explain the decline in membership. First, the workforce is increasingly composed of women and ethnic minorities, and these groups have a much weaker tradition of union affiliation. Second, the workforce has shifted to areas of the South and occupations in the service sector that are traditionally less unionized. Third, businesses are undertaking more aggressive, antiunionization strategies. 6. What steps would you take to increase union membership? Increasing union membership can be a complex process that requires a strategic approach. Here are some steps that can be taken: 1. Educational Campaigns: Provide information to employees about the benefits of union membership, such as better wages, benefits, and job security. Address any misconceptions or concerns they may have about unions. 2. Engagement and Communication: Establish regular communication channels to keep employees informed about union activities and issues. Engage with members to understand their needs and concerns. 3. Organizing Drives: Conduct organizing drives to recruit new members. This may involve identifying potential members, holding meetings, and collecting authorization cards. 4. Training and Development: Provide training and development opportunities for union members to enhance their skills and knowledge. This can help increase member engagement and loyalty. 5. Building Alliances: Collaborate with other unions, community organizations, and advocacy groups to build support for union membership and collective bargaining rights. 6. Campaigns for Legal Reforms: Advocate for legal reforms that strengthen workers' rights and make it easier for employees to join unions. 7. Negotiation of Strong Contracts: Negotiate strong collective bargaining agreements that provide tangible benefits to members, which can help attract new members. 8. Membership Incentives: Offer incentives for joining the union, such as discounts on goods and services, access to exclusive events, or other perks. 9. Addressing Diversity and Inclusion: Ensure that the union is inclusive and representative of the workforce, addressing the needs of all members regardless of race, gender, or background. 10. Member Mobilization: Mobilize members to take action on key issues and participate in union activities, which can help increase solidarity and membership engagement. 7. Summarize the basic steps employees must follow to create a union. First, employees express interest in forming a union or a union organizer creates interest. Then the NLRB is asked to define a bargaining unit based on the common interests shared by the workers. Organizers obtain signed authorization cards from at least 30 percent of the workers in the bargaining unit, requesting a certification election. The organizers then petition the NLRB to conduct a certification election. If a majority of those voting vote in favor of the union, the union becomes the bargaining representative of all the workers. Organizers then create a set of rules that will govern the conduct of the union. 8. What is the bargaining zone? For management, the bargaining zone and its three intermediate points include the employer’s maximum limit (the resistance point) above which it will suffer through a strike, the employer’s expectation, and the employer’s desired result (the target point) on items being negotiated. For the union, the bargaining zone consists of the union’s minimum acceptable limit (the resistance point) below which it will strike, its own expectations as to what management is likely to agree to, and the most it can reasonably expect to get from management (the target point). 9. Identify and describe the three general areas that relate to collective bargaining. Collective bargaining involves negotiations between employers and a group of employees (often represented by a labor union) to determine the conditions of employment. Three general areas that relate to collective bargaining are: 1. Wages and Benefits: One of the primary focuses of collective bargaining is the negotiation of wages, including hourly rates, annual salary increases, bonuses, and other forms of compensation. Benefits such as healthcare, retirement plans, paid time off, and other perks are also commonly negotiated. 2. Working Conditions: Collective bargaining often addresses working conditions such as hours of work, overtime pay, rest periods, and safety regulations. Employers and unions may negotiate on issues related to workplace health and safety, ergonomic standards, and other factors that affect the well-being of employees. 3. Grievance Procedures and Dispute Resolution: Collective bargaining agreements typically include procedures for addressing grievances and resolving disputes between employees and management. These procedures may outline steps for filing complaints, conducting investigations, and resolving conflicts through mediation, arbitration, or other means. 10. Identify and discuss the methods for resolving impasses. Unions use tactics such as strikes, picketing, boycotts, slowdowns, and sickouts in an attempt to break negotiation impasses with management. Management can use a lockout as a defensive measure as long as it is not used in an attempt to break the union itself. It can also hire temporary replacement workers during strikes. Mediation takes place when a neutral third party listens to both sides, reviews all the evidence, and advises both parties as to what should be done. The advice is not binding on either party. In arbitration, both parties agree in advance that they will accept the recommendations made by an independent third-party arbitrator. In final-offer arbitration, both parties submit their final offers to the arbitrator and he or she selects one that becomes binding on both parties. Ethical Dilemmas in HR Management Scenario Summary An employer has given the student a list of things to do to thwart union organization, including giveaways, overstated promises of benefits, and termination of an organizer. The employer states that he is doing these things for the good of the employees, since he believes that the plant will close if it is unionized. Though the student only 14 percent of wage does not believe the plant will close, does the student believe some jobs will be lost? Questions 1. What are the ethical issues in this situation? One issue is whether the supposedly good end justifies the proposed means; that is, if it is true that unionization may cause the plant to close, is it then ethical to deceive the workers into voting against the union? Some would say that if one told the workers the truth about the possibility of closing, they would not believe it, and therefore one must trick them into doing what is best for them. On the other hand, the plant may not close as a result of unionization. In fact, the plant may prosper as a result of a new labor agreement. Such a possibility makes the deceit appear to be selfserving. As long as union organizers are acting within the law, it would be unethical to terminate any of them. If their activities are in violation of the law, the employer has avenues through the NLRB to resolve unfair labor practices. 2. What are the basic arguments for and against taking extreme measures to fight unionizationefforts? For: • Workers are often not well enough informed to make decisions regarding unionization. They are often persuaded by highly emotional speeches given by union organizers who benefit from increasing union membership. • Labor negotiations do not take place in a vacuum. If the union is using extreme measures, often the only method of persuasion remaining is one at the extreme. It is similar to negative political campaigning. Both sides argue against it, but once it starts, the only way to answer it is negatively. Against: • Labor laws prohibit certain activities by employers. The NLRB has the power to levy fines against employers and unions for unfair labor practices and to invalidate certification elections because of actions by the parties. • If the workers find out that the employer has used unfair or fraudulent tactics, such behavior will be used against the employer in the next campaign. 3. What do you think most managers would do in this situation? What would you do? In addressing an ethical dilemma in HR management, such as those related to managing labor relations, most managers would likely approach the situation with a focus on upholding ethical principles and balancing the interests of all stakeholders involved. Their actions would be guided by the organization's code of conduct, relevant laws and regulations, and ethical standards in the field of HR. 1. Assess the Situation: Managers would likely assess the specific ethical dilemma at hand, considering factors such as the impact on employees, the organization, and other stakeholders. 2. Seek Guidance: Managers may seek guidance from HR professionals, legal counsel, or ethical advisors to understand the ethical implications of the situation and explore potential courses of action. 3. Consider Stakeholder Perspectives: Managers would consider the perspectives of all stakeholders involved, including employees, management, unions (if applicable), and the broader community, to ensure that their decisions are fair and equitable. 4. Act Responsibly: Managers would strive to act responsibly and ethically, making decisions that are consistent with the organization's values and ethical standards. 5. Communicate Effectively: Managers would communicate openly and transparently with all stakeholders, explaining the rationale behind their decisions and addressing any concerns or questions that may arise. 6. Monitor and Evaluate: Managers would monitor the outcomes of their decisions and evaluate their effectiveness in addressing the ethical dilemma. They would be prepared to adjust their approach if necessary. As for what I would do in this situation, I would approach it with a commitment to ethical conduct and responsible decision-making. I would carefully consider the ethical implications of the situation, seek input from relevant stakeholders, and strive to find a solution that upholds the organization's values and principles. I would also be prepared to seek guidance from HR experts or ethical advisors if needed to ensure that my actions align with best practices in HR management. Assignment This exercise provides students with insights into the bargaining process. It should take approximately 40 to 50 minutes. Step 1 (5 minutes): Divide the class into groups of three, with any extra students joining existing groups. Step 2 (3 minutes): Recommend that students make the experience as realistic as possible by attempting to base the experience on the bargaining-zone model. Step 3 (5 to 10 minutes): Student groups should then develop a list of basic arguments to be used to elicit information concerning the three points that make up the bargaining zone. Step 4 (10 to15 minutes): The teams will then conduct a labor negotiation. It should be stressed that the object of the exercise is not to win the negotiation but to get a feel for how far the other party is willing to compromise. Nothing will be gained by students steadfastly refusing to budge from their predetermined points. Step 5 (10 to 15 minutes): Each group should summarize for the class the agreement they negotiated. Step 6 (10 minutes): Student groups should then respond to the three discussion questions below. Depending on the amount of time left in the class session, instructors may allow the student groups to fully develop and discuss answers within their groups, or if instructors have less time left, instructors may allow fewer minutes for the groups to answer the questions and then lead into a full class discussion. 1. Explain differences and/or similarities in negotiated agreements. Similarities are that both management and labor are attempting to reach a mutually acceptable wage increase agreement. Usually, both sides begin negotiating at the most or least acceptable wage increase, each knowing what their expectations really are. They bargain with each other until an acceptable agreement is met. The differences are that the actual negotiation process revolves around each party trying to discover the other’s resistance point without revealing its own. Since this point represents the least favorable settlement the party is willing to accept, the opponent who discovers that point makes a “final” offer exactly at the resistance point. 2. How useful did you find the bargaining-zone model? Without using this model, would your bargaining have been more or less difficult? The bargaining-zone model is a useful framework for understanding negotiation dynamics, as it helps identify the range within which an agreement is possible. Without this model, negotiating might have been more difficult because it provides a structured approach to determining each party's reservation price and the zone of potential agreement. This can help negotiators make more informed decisions and potentially reach a mutually beneficial outcome. 3. Can you see other areas of applicability besides collective bargaining for the bargaining-zone model? Yes, the bargaining-zone model, which is often used in the context of collective bargaining, can be applied to other areas of negotiation and conflict resolution within organizations. Here are some areas where the bargaining-zone model could be applicable: 1. Contract Negotiations with Suppliers or Vendors: Organizations often negotiate contracts with suppliers or vendors. The bargaining-zone model could help both parties identify areas of overlap and potential agreement, leading to more efficient and effective negotiations. 2. Employee Performance Reviews and Salary Negotiations: When discussing performance reviews or negotiating salary increases with employees, the bargaining-zone model could help managers and employees identify areas where expectations align and find mutually beneficial solutions. 3. Conflict Resolution within Teams: In cases of conflict within teams, the bargaining-zone model could help team members and leaders identify common interests and find solutions that address the needs of all parties involved. 4. Negotiations with Regulatory Agencies: Organizations often negotiate with regulatory agencies over compliance issues or regulatory requirements. The bargaining-zone model could help identify areas where organizations can meet regulatory requirements while minimizing costs and disruptions. 5. Mergers and Acquisitions: During mergers or acquisitions, organizations negotiate terms with other companies. The bargaining-zone model could help identify areas of agreement and facilitate the negotiation process. 6. Union-Management Cooperation: Beyond collective bargaining, the bargaining-zone model could be used to foster cooperation and collaboration between unions and management on other issues, such as workplace safety, training programs, or organizational policies. Overall, the bargaining-zone model's principles of identifying common interests, exploring alternatives, and finding mutually beneficial solutions can be applied to various negotiation scenarios within organizations, leading to more effective outcomes and stronger relationships between parties involved. Solution Manual for Human Resources Angelo Denisi, Ricky Griffin 9781285867571
