HRM 4570 ILR Homework 2

8HRM4570ILRCh5.2LaborandManagementOnlineLecture2019-20audio2.pptx

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Chapter 5 Part 2

Labor and Management: Strategies, Structures, and Constraints

McGraw-Hill/Irwin

Hi Class, Welcome to Industrial and Labor Relations. Today we are going to discuss Chapter 5 Labor and Management: Strategies, Structures, and Constraints Part 2

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What are the two national union federations in the United States?

A quick recap. What are the two national union federations in the United States?

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American Federation of Labor–Congress of Industrial Organizations (AFL–CIO)

National union federations

Change to Win federation

That’s right. The two national union federations are American Federation of Labor–Congress of Industrial Organizations (AFL–CIO)

and Change to Win federation

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Many union strategies are developed in reaction to managerial strategies;

Two possible management attitudes toward labor unions include:

Union avoidance—the extent to which management works toward remaining nonunion, or becoming nonunion if already unionized.

Union acceptance—the extent to which management accepts, perhaps begrudgingly, the presence of a union or a drive to establish a union.

Management Strategies

Now let’s discuss the management strategies.

Many union strategies are developed in reaction to managerial strategies;

two possible management attitudes toward labor unions include:

Union avoidance refers to —the extent to which management works toward remaining nonunion, or becoming nonunion if already unionized.

Union acceptance refers to—the extent to which management accepts, perhaps begrudgingly, the presence of a union or a drive to establish a union.

Theoretically there is a third possibility: union encouragement, but there is little doubt that except in rare situations, U.S. corporations prefer to be nonunion

Union acceptance vs. Union avoidance

Let’s work on two exercise questions. Please click on the video. Is Southwest Airline adopting an union acceptance or union avoidance strategy?

Union acceptance

That’s right. Southwest Airline is an example of union acceptance management strategy.

Union acceptance vs. Union avoidance

International Association of Machinists and Aerospace Workers

Please click on the video. Is Boeing adopting a union acceptance or union avoidance strategy?

Union acceptance vs. Union avoidance

International Association of Machinists and Aerospace Workers

That’s right. Boeing adopts union avoidance strategy.

Boeing's newest plant in South Carolina will remain nonunion after workers there overwhelmingly rejected an effort by the Machinist union to organize the plant. According to a company statement, more than 2,000 of the nearly 3,000 Boeing workers at the plant eligible to vote in the closely watched election voted against the union, and only a bit more than 700 members voted yes.

Boeing's newest plant in South Carolina will remain nonunion after workers there overwhelmingly rejected an effort by the Machinist union to organize the plant.

According to a company statement, more than 2,000 of the nearly 3,000 Boeing workers at the plant eligible to vote in the closely watched election voted against the union, and only a bit more than 700 members voted yes.

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Table 5.5 - Human Resources Patterns and Labor Relations Strategies

Table 5.5 summarizes the Human Resources Patterns and Labor Relations Strategies

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A cost leadership seeks to minimize labor costs

Equity and voice are seen in market-based terms, and efficiency is paramount

A differentiation business strategy empowers employees to create a loyal and productive workforce

Equity and voice are important components of this strategy because of fair treatment and protective

Business Strategies

It is common to divide business strategies into the following two general types:

Cost leadership strategies (emphasizing low cost)—likely pursued through a human resources strategy that seeks to minimize labor costs; efficiency stems from low costs and high output, so labor is driven and treated as a commodity or machine; equity and voice are seen in market-based terms, and efficiency is paramount. Such approaches are consistent with the well-known Theory X of management, in which workers are assumed to dislike work and must therefore be commanded and controlled through threats of punishment. The result is a human resources approach that is largely autocratic.

Differentiation strategies (emphasizing product quality and features)—likely pursued through a human resources strategy that develops, rewards, and perhaps even empowers employees to create a loyal and productive workforce; equity and voice are important components of this strategy because fair treatment and protective benefits (equity) and individual voice mechanisms such as open-door policies can foster loyalty, satisfaction, and therefore productivity; this human resources strategy is consistent with Theory Y, in which managers motivate employees by establishing conditions of commitment and responsibility. More extensive approaches might even employ a strategic business partner HR strategy in which employees are seen as a source of competitive advantage; employees are thus empowered in high-performance workplaces. In management theory this approach is similar to Theory Z, which features participative decision making. The overall approach is paternalistic.

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Labor relations strategies

Autocratic and paternalistic/strategic patterns reveal the importance of managerial attitudes toward unions

Management does not seek to oust the union

Management Strategies

Labor Relations Strategies

The autocratic and paternalistic/strategic patterns help reveal the importance of managerial attitudes toward unions.

Management does not seek to oust the union

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Union acceptance: A union acceptance strategy in an autocratic organization

Adversarial negotiations; strikes and grievance activity

Management does not seek to oust the union.

Management Strategies

A union acceptance strategy in an autocratic organization would likely consist of adversarial negotiations in which labor and management negotiators challenge and threaten each other during negotiations; strikes and grievance activity would also be expected to be higher than average as management fights to keep labor costs down and unions react to this aggressiveness.

But management does not seek to oust the union.

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Union suppression: A union avoidance strategy in an autocratic organization

Tactics include

Harassment, demotion, or firing of union supporters

Plant closings, outsourcing, bankruptcies, double-breasting

To decertify (kick out) the union

Engaging in surface bargaining

(going through the motions without intending to reach agreement)

Using permanent strike replacements to take the jobs of union supporters

Management Strategies

But management does not seek to oust the union.

However, a union avoidance strategy in an autocratic organization is union suppression. Some might call this union busting. Union suppression tactics may include harassment, demotion, or firing of union supporters. This behavior is illegal in the United States, but is nevertheless common.

A set of union suppression tactics involves either proactively or reactively shifting work from locations that are unionized (or are threatening to unionize):

Union suppression Tactics include harassment, demotion, or firing of union supporters

Union suppression Tactics also include

Plant closings

Outsourcing

Bankruptcies

Double-breasting which refers to (the opening of nonunion operations in the same market, a popular strategy in construction).

An aggressive union suppression strategy in a unionized workplace might include the following tactics:

To decertify (kick out) the union

Engaging in surface bargaining (going through the motions without intending to reach agreement)

Using permanent strike replacements to take the jobs of union supporters

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Union substitution: In a paternalistic/strategic organization, a union avoidance strategy

Management adopts policies and practices to keep unions out by making them unnecessary

Employees are made to feel like they are part of the organization

They have voice, with information sharing and participatory mechanisms

Quality circles

Management Strategies

In a paternalistic/strategic organization, a union avoidance strategy is union substitution in which management adopts policies and practices to keep unions out by making them unnecessary; some of the central features of this strategy include the following:

Paying above-market wages and benefits (often comparable to unionized compensation packages)

Providing employment security

Giving employees opportunities for training and development

Instituting informal grievance procedures or at least complaint mechanisms

Authoritarian supervision is replaced with more respectful, coaching methods of supervision, and attitude surveys are used to monitor employee satisfaction.

Employees are made to feel like they are part of the organization, and have voice, with information sharing and participatory mechanisms such as quality circles.

Through these equity and voice mechanisms, employers hope to create not only loyal and productive workers, but also workers who feel they do not need a union.

Employees are made to feel like they are part of the organization

They have voice, with information sharing and participatory mechanisms

Such as Quality circles

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Exercise (Lecture Notes, Chapter 5) Table 5.6 - Union Avoidance Tactics

Union Suppression

Union Substitution?

Let’s work on an exercise to check your understanding of the two union avoidance tactics. Please take out your lecture notes and work on Table 5.6 Union Avoidance Tactics.

For each of the 16 union avoidance tactics, please indicate whether it is a case of union suppression or union substitution. Please answer all 16 questions before moving on to the answers in the next slide.

Firing or harassing union supporters

Screening out pro-union applicants

Above-market pay and benefits

Opportunities for training and development

Union Avoidance Tactics Union Suppression vs. Union Substitution

Firing or harassing union supporters

Screening out pro-union applicants

Are Union Suppression

Above-market pay and benefits

Opportunities for training and development

Are Union Substitution

Plant closings or bankruptcy

Subcontracting or outsourcing

Respectful supervision

Complaint or grievance procedures

Union Avoidance Tactics Union Suppression vs. Union Substitution

Plant closings or bankruptcy

Subcontracting or outsourcing

Are Union Suppression

Respectful supervision

Complaint or grievance procedures

Are Union Substitution

Investing in nonunion sites

Surface bargaining

Employment security

Attitude surveys

Union Avoidance Tactics Union Suppression vs. Union Substitution

Investing in nonunion sites

Surface bargaining

Are Union Suppression

Employment security

Attitude surveys

Are Union Substitution

Using permanent strikes replacements

Facilitating decertification

Information sharing

Consultation/ participation mechanisms

Union Avoidance Tactics Union Suppression vs. Union Substitution

Using permanent strikes replacements

Facilitating decertification

Are Union Suppression

Information sharing

Consultation/ participation mechanisms

Are Union Substitution

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Table 5.6 - Union Avoidance Tactics

Here is the answer. The 8 tactics on the left are union suppression tactics. The 8 tactics on the right are union substitution tactics.

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Employee involvement programs

Work teams, and other practices are jointly established by representatives of management and workers

A union has the potential to better articulate true employee concerns

Individuals will speak more freely when employees are not afraid of management reprisal

Management Strategies

Employee involvement programs

Work teams, and other practices are jointly established by representatives of management and workers

A union has the potential to better articulate true employee concerns

Individuals will speak more freely when employees are not afraid of management reprisal

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Labor relations strategies in practice

The history of human resources and industrial relations in the U.S. automobile industry provides examples of different labor relations strategies

In the postwar period the United Auto Workers (UAW) became entrenched at Ford

Resistance to unions became prohibitively expensive

Auto and other manufacturing industries are no longer the pacesetters for the American business

Management Strategies

Henry Ford implemented a form of paternalistic welfare capitalism with his $5-a-day plan in 1914. After a recession in the early 1920s, however, Ford adopted a more antagonistic strategy and aggressively fought any attempts at unionization by its workers for the next 20 years. Ford became famous for its so-called Service Department—essentially an internal police force composed of criminals and informers—which used spying, intimidation, and violence to suppress union activity.

In the postwar period the United Auto Workers (UAW) became entrenched at Ford, and resistance to unions became prohibitively expensive; Ford then adopted a union acceptance strategy that accepted, but sought to contain, the presence of the UAW.

The auto and other manufacturing industries, however, are no longer the pacesetters for the rest of American business.

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Labor relations strategies in practice

Some argue that Wal-Mart is creating the template for 21st-century capitalism in the United States and around the world.

Wal-Mart’s human resource strategies fit with the business strategy where policies are centralized and standardized, store managers’ labor costs are carefully policed by Wal-Mart’s headquarters, worker behavior is tightly proscribed, and wages and benefits are low.

Wal-Mart is also aggressively antiunion

Management Strategies

Rather, some argue that Wal-Mart is creating the template for 21st-century capitalism in the United States and around the world.

Wal-Mart is also aggressively antiunion; if a manager suspects any union activity, a rapid response team is dispatched from headquarters to squelch this threat; antiunion videos are shown, supervisors meet with employees one-on-one, employees are closely watched, and union supporters are reportedly fired.

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Labor and management must contend with the conflicting strategies, pressures and, opportunities of the labor relations environment

Dimensions include legal, economic, sociopolitical, and ethical

The legal environment

The legal system in every country establishes the framework for labor–management interactions

Clearest component of the legal environment is the set of laws explicitly pertaining to labor relations

The Labor Relations Environment

Labor and management must contend not only with each other’s sometimes conflicting strategies but also with the pressures, constraints, and opportunities of the labor relations environment; the four important

dimensions of this environment are—legal, economic, sociopolitical, and ethical.

The legal environment

The legal system in every country establishes the framework for labor–management interactions

Clearest component of the legal environment is the set of laws explicitly pertaining to labor relations

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U.S. employment standards are established by

Fair Labor Standards Act

Civil Rights Act

Occupational Health and Safety Act

Family and Medical Leave Act

The U.S. employment relationship is governed by the employment-at-will doctrine

The Labor Relations Environment

Following are some of the laws that establish some of the U.S. employment standards:

The Fair Labor Standards Act (minimum wages and overtime payments)

The Civil Rights Act (nondiscrimination)

The Occupational Health and Safety Act (workplace safety)

The Family and Medical Leave Act (unpaid leave)

The U.S. employment relationship is governed by the employment-at-will doctrine

The employment-at-will doctrine which govern the U.S. employment relationship is the most significant in labor relations; in the absence of legislative (especially antidiscrimination laws) or contractual restrictions (most widely associated with union contracts), employees can generally be discharged or quit at any time for any reason. This at-will relationship is established by the legal environment.

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The economic environment includes:

The labor market

The market for the employer’s products or services

Markets for other factors of production, and

the state of the overall economy

The Labor Relations Environment

The economic environment includes:

The labor market

The market for the employer’s products or services

Markets for other factors of production, and

the state of the overall economy

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The economic environment critically determines workers’ employment options

Unemployment is low and jobs are easy to find

A frustrated employee might quit and find a better job elsewhere

labor demand—the strength of an employer’s need for employees

Concession bargaining: Many unions agree to wage, benefit, and work rule concessions to try to save jobs

The Labor Relations Environment

The economic environment critically determines workers’ employment options

If the labor market is tight—that is, if unemployment is low and jobs are easy to find—

a frustrated employee might quit and find a better job elsewhere.

In a weak labor market with high levels of unemployment, employees might be reluctant to form a union for fear of being fired and unable to find a new job; similarly, employees might be less willing to strike when the labor market is weak, and collective bargaining settlements are therefore expected to favor employers.

Another important factor is labor demand—the strength of an employer’s need for employees; it is a demand derived from employers’ competitive positions in markets for their goods and services

Concession bargaining: occurs when Many unions agree to wage, benefit, and work rule concessions to try to save jobs

The sharp increase in the employment in the early 1980s, accompanied an intense period of concession bargaining in which many unions agreed to wage, benefit, and work rule concessions (or givebacks) to try to save jobs; this is a scenario that was recently repeated in the first decade of the 21st century as the major auto companies, airlines, and newspapers teetered on the edge of survival.

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Technology affects the relative supply of and demand for various occupations

Skill-biased technological change upgrades the skill requirements of technical jobs

Results in greater demand for high skills

Deskilling technological change reduces the skills required for a specific job

The Labor Relations Environment

Technology also affects the relative supply of and demand for various occupations and is therefore an important element of the labor relations environment; the central debate over technology is whether technological change is skill-biased or deskilling.

Skill-biased technological change—upgrades the skill requirements of technical jobs and results in greater demand for high skills; it is biased in favor of skilled workers; often associated with information technology and is a leading explanation for the increased wage gap between low- and high-skilled workers.

Deskilling technological change—reduces the skills required for a specific job; often associated with scientific management efforts to reduce complex jobs to simple, repetitive tasks and is argued to be a management tool for gaining control of the workplace and enhancing its bargaining power.

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The sociopolitical environment

Captures factors from the social and political arenas

Influence labor and management

Employment outcomes can be influenced by public attitudes toward labor unions.

Labor relations environment can favor labor or management depending on the extent of social support for each group

Employment outcomes can be influenced by public attitudes toward labor unions

The Labor Relations Environment

The sociopolitical environment captures factors stemming from the social and political arenas that influence labor and management.

Employment outcomes can be influenced by public attitudes toward labor unions.

Labor relations environment can favor labor or management depending on the extent of social support for each group

Employment outcomes can be influenced by public attitudes toward labor unions

Business and labor can also lobby political leaders for favorable treatment.

Political environment can affect the labor relations environment by making it easier for unions to organize new workplaces.

Some employee groups rely on political lobbying rather than collective bargaining to improve wages and working conditions; because of their shunning of collective bargaining, such groups are often referred to as associations rather than unions; associations can grow into “full-fledged” unions that engage in collective bargaining.

Union Approval

Let’s look at two Gallup poll results. The first question asks do you approve or disapprove of labor unions?

Sixty-two percent of Americans approve of labor unions today, which is consistent with the 61% who approved last year and up from 56% in 2016. Before 2017, public support for unions hadn't exceeded 60% since 2003, when 65% approved.

Union Approval

The second question asks would you, personally, like to see labor unions in the United States have more influence than they have today, the same amount as today or less influence than they have today?

More Want Union Strength to Grow Than Shrink

Although a majority of Americans approve of labor unions, fewer want unions' influence

to grow. About four in 10 (39%) would prefer to see unions have more influence than

they have today; 26% want their influence to stay the same, and 29% would prefer that

they have less influence.

Americans' preference for union power is nearly identical to what Gallup found a year ago

and represents greater support for strengthening unions than was the case for most of

the previous decade.

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Unions represent workers at public utilities

Phone companies can lobby for rate increases and mandated service improvements

Some employee groups rely on political lobbying rather than collective bargaining to improve wages and working conditions

Political environment affected the labor relations environment by making it easier for unions to organize new workplaces

The Labor Relations Environment

Unions represent workers at public utilities

Phone companies can lobby for rate increases and mandated service improvements

Some employee groups rely on political lobbying rather than collective bargaining to improve wages and working conditions

Political environment affected the labor relations environment by making it easier for unions to organize new workplaces

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The ethical environment

Business ethics studies moral standards as they apply to the business context

Business ethics is an important motivating force for and potential constraint on behavior

Arguments against labor unions on the grounds that they impair efficiency or intrude on property rights reflect utilitarian and libertarian ethical beliefs.

Arguments for labor unions because they provide equity and voice that respect human dignity, fairness, and the importance of community reflect the ethics of duty, justice, virtue, and care.

The Labor Relations Environment

Business ethics studies moral standards as they apply to the business context and is therefore important for understanding and evaluating labor relations behaviors, policies, and outcomes.

Business ethics should be viewed as a motivating force for and potential constraint on behavior.

The external environment establishes the parameters for decision makers, but specific actions within these parameters result from choices made by individual employees, managers, union leaders, and shareholders; one important influence on these choices is ethics.

Ethics is not just philosophy; it provides an additional framework for a better understanding of labor relations.

Arguments against labor unions on the grounds that they impair efficiency or intrude on property rights reflect utilitarian and libertarian ethical beliefs.

Arguments for labor unions because they provide equity and voice that respect human dignity, fairness, and the importance of community reflect the ethics of duty, justice, virtue, and care.

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Table 5.7 - Six Ethical Frameworks

Table 5.7 summarizes six key ethical theories.

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The ethical environment: six ethical theories

Utilitarianism - Ethical actions that maximize aggregate welfare

Libertarianism - Emphasizes property rights and freedom from governmental interference

Kantian ethical theory—individuals have a duty to respect human dignity; highlights a concern with how workers are treated.

The Labor Relations Environment

Utilitarianism defines ethical actions as those that maximize aggregate welfare (“utility”) so aggregate economic prosperity is highlighted, irrespective of how it is achieved.

Libertarianism sees actions that infringe on others’ freedoms as unethical, and therefore emphasizes property rights and freedom from governmental (or labor union) interference.

Kantian ethical theory suggests that individuals have a duty to respect human dignity; highlights a concern with how workers are treated.

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The ethical environment: six ethical theories

Rawlsian justice ethics—there is an ethical concern for the least well-off; highlights a concern with how workers are treated.

The ethics of virtue and care—highlight the ethical value of our individual actions and our special relationships with others.

The continuing managerial drive for greater flexibility in deploying labor, and the continued resistance by workers and unions, reflect in part a clash between utilitarian concerns with efficiency and Kantian concerns with the quality of human life.

The Labor Relations Environment

Rawlsian justice ethics suggests that there is an ethical concern for the least well-off; highlights a concern with how workers are treated.

The ethics of virtue and care highlight the ethical value of our individual actions and our special relationships with others.

We have come to the end of our lecture today. If you have any questions, please feel free to email me.

See you next class!