Week 9

week9.pdf

Answer the following questions

1. Have you had personal negotiations experience in which you either did or did not adequately prepare? Explain.

2. You will be leading collective bargaining for a union of nursing home workers at a large nursing home in San Francisco. Please tell us the first three (most important) steps you will take. Why are these the most important?

3. Based on this week’s lecture and readings etc., compare the approaches to bargaining preparation. Are there differences? Explain.

Reference: https://mronline.org/2014/04/05/rachleff050414-html-2/

https://mronline.org/2014/04/05/rachleff050414-html-2/

511Excerpt.pdf

Cornell University Press ILR Press Chapter Title: The Negotiations Process and Strikes

Book Title: An Introduction to U.S. Collective Bargaining and Labor Relations Book Author(s): Harry C. Katz, Thomas A. Kochan and Alexander J. S. Colvin Published by: Cornell University Press, ILR Press. (2017) Stable URL: http://www.jstor.org/stable/10.7591/j.ctt1vjqr3z.13

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200 Part III. The Functional Level of Labor Relations

Thus, management has tried to shift away from factors such as wages in the industry or increases in the cost of living and toward the fi rm ’ s ability to pay.

Internal Comparisons Every negotiation is carefully watched by a fi rm ’ s other employees. Management must consider how a wage settlement might infl uence the expectations and demands of other employees in the fi rm regardless of whether those employees are represented by unions. Management, for example, often considers whether wage increases for unionized hourly workers will lead to pay increases for supervisors and other white-collar employees outside the bargaining unit. One reason manage- ment give pay increases to white-collar employees is such increases weaken these employees’ potential attraction to unionization.

The Dynamics of Management ’ s Decision-Making Process So far we have painted a rather static picture of management ’ s decision making. Yet the actual process of decision making over the course of a bargaining cycle (from the pre-negotiation planning stage to the signing of the fi nal agreement) is a dynamic one. The process is replete with ambiguities over who has the authority to set policies, confl icts among decision makers over the appropriate weight to be attached to different goals, and power struggles among competing decision makers.

The process by which management establishes bargaining strategies involves extensive intraorganizational bargaining that is every bit as intense as the bargaining between the union and management. Because the successful resolution of internal differences is a prerequisite to a smoothly functioning bargaining process, it is important to understand how fi rms prepare for negotiations.

To provide a more complete picture of how management prepares for collective bargaining, Box 8.2 describes a typical case. This fi rm is preparing to negotiate a contract with the major bargaining unit in its largest manufacturing facility. The contract traditionally sets the pattern for the economic settlements with several smaller units at other locations.

Before negotiations (or very early in negotiations), the labor relations staff tries to predict as closely as possible what it will take to get a settlement. But ultimately the staff is ready at all times to revise its estimates based on new or better information about the union ’ s position as the negotiations proceed.

The case in Box 8.2 illustrates the diversity of interests that exists in the different levels of any modern company. It shows that the development of a company strategy for negotiations is a highly political process, one in which the different goals of various groups must ultimately be accommodated. Although the labor relations staff serves as a key participant in the development of the strategy, the concerns of operating management, fi nancial staff, and other interest groups in the corporation are also integral to any fi nal decision.

It is interesting to examine how preparations for traditional negotiations compare to preparation for an interest-based bargaining process. Box 8.3 draws on the experiences of the same fi rm as it prepared for a recent round of interest-based

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Diane Frey

Start Here

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The Negotiations Process and Strikes 201

BOX 8.2 Management ’ s Preparations for Negotiations in a Typical Firm

Stage One: Input from the Plants

The fi rst step in the process of preparing for negotiations takes place at the plant level. 7 The plant labor relations staff holds meetings with plant supervisors to discuss problems they have experienced in administering the existing contract. From these discussions, the staff compiles a list of suggested contract changes. At the same time, the staff also conducts a systematic review of the grievances that have arisen under the current contract and collects information on local labor market conditions and on the wages in other fi rms in the community.

The staff then holds a meeting with the plant manager, who raises the industrial relations problems the company has confronted in the plant. The concerns of management are classifi ed into two groups: contractual problems and problems that should be addressed outside the negotiating process. In addition, the staff asks the plant manager to rank suggested contract changes based on their potential for making a signifi cant improvement in plant operations.

Stage Two: Input from Higher Levels of the Firm

Next, a series of meetings is held at the division level that involves the division labor relations staff, operations managers at the division level, and the corporate labor relations director and staff. From time to time, outside industrial relations consultants sit in on these division-level meetings. Here the concerns of the various plants are evaluated against two criteria: (1) the operational benefi ts expected from proposed contract changes; and (2) the likelihood that the desired changes can be achieved in the negotiations process.

The corporate labor relations staff plays a vital role in these division-level discussions, since the expected benefi ts of different contractual changes can be a matter of dispute across the various plants. In addition, the division labor relations staff is responsible for carefully examining the contract language that exists in the various local agreements for inconsistencies or problems that could be removed by clauses that refl ect corporate labor relations preferences. Sometimes the plant labor relations representatives object to changes suggested at the division level because they do not correspond to the priorities of the plant offi cials and because the existing “discrepancies” may be serving a useful purpose in the plant.

The corporate labor relations staff works closely with the vice-president for fi nance to develop wage targets. Information on plant labor costs, corporate earnings, and the long-term fi nancial prospects of the company and the industry are built into the wage target the corporate staff ultimately recommends.

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202 Part III. The Functional Level of Labor Relations

Stage Three: Input from Research

A research subgroup in the labor relations staff of the company also conducts background research that is used in management ’ s preparations for negotiations. At least a year and a half before the opening of formal negotiations, the research staff begins to prepare the background information necessary for developing the company ’ s proposals.

The researchers use a database on the demographic characteristics of employees and analyze personnel statistics such as turnover, absentee, and grievance rates. They also monitor internal union developments, specifi cally resolutions the union has passed at its conventions, union publications, and union leaders’ statements about the upcoming negotiations. In addition, they survey plant managers for their views on their relations with the union and the problems they would like to see addressed in the negotiations. The staff also consults plant labor relations staff members to obtain their suggestions. This fi rm probably invests more resources and assigns more authority for bargaining preparation to its research staff than do most other corporations.

The research staff is ultimately responsible for putting together a summary report that goes to the vice-president of industrial relations and the corporate director of compensation. These executives then work with the manager of the research and planning department to develop targets for bargaining.

Stage Four: Final Preparations

The fi nal step in management ’ s preparation for negotiations is a meeting that includes the corporate labor relations staff, the chief executive offi cer, and the board of directors. At this meeting, the corporate labor relations director presents the proposed wage targets and other proposed contract changes for board approval and states the reasons for seeking the proposed changes. Sometimes this meeting does not take place until after the fi rst negotiations session with the union. The industrial relations director might prefer to wait until then because it may be useful to hear from the union before he or she makes a fi nal recommendation to top management. This helps the industrial relations director identify the relative importance the union is likely to give to pay issues and the intensity of the union ’ s concern about other areas of the contract.

One labor relations director described to us how he presents his recom- mendation to top management in this way:

I always number my proposed target settlements as proposed settlement target number 1. Someone once asked me what that meant. I said that this is what I think it will take to get a settlement but I number it because I may have to come back to you at some point with my proposed settlement number 2 or even my proposed settlement number 3, et cetera.

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204 Part III. The Functional Level of Labor Relations

We still had discipline at the table. We had chief spokespersons. In fact, we got very upset and disappointed when at one point the process broke down. When we started talking about overtime, we had already done some joint staff work looking at some pilot programs we had started in a couple of settings to let the union handle how overtime is distributed. This is always a big problem and headache for management, and [it is] a costly issue. The staff had pretty much agreed privately to extend the pilot approach to the whole bargaining unit, but when the issue came up for discussion, the manufacturing representative on our team said: “We ’ d never agree to that!” We read him the riot act later in private for springing this on us, but it essentially killed discussion of this issue, and we never did get the job done on this issue.

As we got into the tough economic issues, bargaining took on more traditional features. These were very tough and the union leaders needed to be able to demonstrate to their constituents [that] they squeezed us as hard as they could to get the best deal possible. We understood this.

Still, there was better communications, and we never worked past 8 p.m.

bargaining. While much of the background research and information gathering is similar, some of this is done jointly with the union. In this case, the problem- solving processes that had been put in place in the company-union relationship at the workplace provided the foundation for taking a problem-solving approach to negotiations.

UNIONS’ AND WORKERS’ PREPARATIONS FOR NEGOTIATIONS

This section reviews the common procedures unions and workers follow during the negotiation of a collective bargaining contract. This material parallels the discussion of the procedures used by management in preparing for negotiations described above.

The Role of the Union Negotiating Committee The union is represented by a negotiating committee in negotiations with manage- ment. The makeup of the union negotiating committee varies across unions, although it typically includes some union offi cers, support staff (such as members of the local or the national union ’ s research staff or both), and elected worker representatives. Often the leaders of the union ’ s negotiating committee are the highest elected offi cers of the union that is covered by the collective bargaining agreement under negotiation. Some unions, such as local construction, hotel and restaurant, or trucking unions, tend to rely on hired business agents to lead their negotiations.

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The Negotiations Process and Strikes 205

The negotiating committee will meet several times before the start of negotia- tions to formulate the union ’ s list of demands and to begin to establish expecta- tions about what the union can win in negotiations. Before these meetings, the negotiating committee will solicit demands from union members, either directly through meetings called to discuss the upcoming negotiations or through polls. In the UAW, for example, elected representatives from the local unions meet in a convention and vote on bargaining resolutions during preparations for companywide bargaining. The UAW leadership also consults union members during the negotiation of plant contracts that supplement the companywide agreements.

A union negotiating committee typically also receives information and advice from the national union ’ s research staff during its preparations for bargaining. The information provided frequently covers the fi nancial perfor- mance of the company, forecasts the future performance of the company and the economy, and summarizes recent settlements in other unions or the pay improvements unorganized workers in the same city, fi rm, or industry have received.

Some unions, such as the Air Line Pilots Association (ALPA), do extensive research and analysis of economic developments in their industry and of the fi nancial situation of each company. Prior to entering negotiations, the ALPA research staff conducts extensive briefi ngs with the bargaining committee of an airline and in some cases, such as at Continental Airlines, meets with company representatives to compare fi nancial data and analysis. It is not uncommon for union and company research staff to share information with each other if for no other reason than to avoid debates over some of the basic facts each side needs to prepare their team for negotiations.

Many unions now use surveys, focus groups, and/or direct interviews with rank-and-fi le members to gather information about their concerns and their priorities for negotiations. This serves as a two-way communications process. It both provides data on the priorities of rank-and-fi le members and begins to engage the rank and fi le in the negotiations process by informing them of some of the issues that may come up.

Acquisition of Strike Authorization If an Impasse Is Reached If the union comes to an impasse with management during the negotiations and is considering going on strike over unresolved disputes, two steps occur. In local contract negotiations, the union ’ s constitution typically requires the local to seek strike authorization from the national union. Strike approval is an important process because, among other things, it enables striking workers to receive strike benefi ts from the national union ’ s strike fund.

A union considering a strike will also typically poll its members. The strike vote serves a dual purpose: it tells the union leadership whether the union ’ s members support such an action and it helps rally the workers around the purpose of the strike.

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206 Part III. The Functional Level of Labor Relations

Contract Ratifi cation When an agreement is reached between the union ’ s negotiating committee and management ’ s representatives, the union proceeds through its contract ratifi cation procedures. Here there is much variation in the exact procedures unions use. The fi rst step some unions take is to send a proposed agreement to a council made up of lower-level union offi cers. This council includes local union offi cers when a companywide agreement is negotiated (as in the steel and auto industries). Union constitutions typically also require that the workers covered by a negotiated agreement vote on any proposed settlement.

There are some notable exceptions to the normal pattern of union members voting on proposed contracts. But in the usual case, workers must approve contract settlements, often by majority vote. This sort of voting is an example of participatory democracy in this critical aspect of union decision making.

The Role of Union Leaders in Shaping Strategies The actual bargaining demands of unions refl ect more than just an averaging of their members’ preferences. Several factors combine to produce the complex process by which union leaders arrive at their bargaining objectives.

First, in addition to considering the preferences of their members, union leaders must evaluate how likely it is that objectives can be attained. Unrealistic goals must be discarded during pre-negotiation planning sessions or early on in negotiations.

Second, union leaders must take into account the varying political infl uence of subgroups within the union. Older or more skilled workers, for example, may be more politically infl uential than other members. Thus, the objectives leaders ultimately select may refl ect some workers’ goals more than others.

Third, union leaders must also be concerned about the long-term survival of the union and must take steps to preserve those interests. However, there is always the risk that union leaders will emphasize union security at the expense of member preferences.

Finally, a central job for union leaders, like all leaders, is to lead! Union leaders must weigh strategic options, make decisions, and secure the ongoing support of their members for the decisions they make.

One of the keys to union leadership is effective internal communication. Union leaders need regular upward communication from the rank and fi le and from local union offi cers. Effective union leadership also requires that decision makers communicate their activities and decisions back to the members. Unions use such techniques as opinion surveys, satellite hookups, television advertising, and the Internet to communicate with their members. Indeed, the Internet is becoming a key resource in bargaining today. Union leaders are learning that they must develop the skill to use this tool to communicate with members, for it is certain that rival groups in the union will have those skills. In one case, ALPA found that the tentative wage agreement it had reached with Delta Airlines was criticized on a rival group ’ s website before the union team could even describe its terms to union members! Thus, the means of communication in unions and the role

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The Negotiations Process and Strikes 207

of communications in negotiations in general are changing rapidly in the age of the Internet.

THE CYCLE OF TRADITIONAL NEGOTIATIONS

Negotiations often proceed through a cycle in which the four subprocesses of bargaining emerge and interrelate. 8 A typical cycle for a traditional negotiations process is described below.

The Early Stages In the initial stage of a traditional negotiation, the parties present their opening proposals. This stage often involves a larger number of people than will be involved in the negotiations of the fi nal agreement. The union, for example, may bring in representatives from various interest groups and several levels of the union hierarchy. These people participate in developing the initial proposals and later become involved in securing ratifi cation of any agreement. The involvement of all these different representatives can smooth the process of intraorganizational bargaining in the union.

The union then presents proposals that cover the entire range of its concerns. Some of the proposals will be of critical importance and will be at the heart of the discussions as the strike deadline approaches. Some are important but may be traded off at the last minute. Some may be translated into more specifi c demands at a later stage of bargaining or may be issues to which the union will assign a high priority in some future round of negotiations. Other issues are of low priority and will be dropped as negotiations proceed into the serious decision- making stages.

The Presentation of a Laundry List The union ’ s presentation of a laundry list of issues serves several purposes. It allows union leaders to recognize different interest groups by at least mentioning their proposals. Some unrealistic demands will be aired, the problems underlying these demands can be explored, and the employer can then reject these demands. This process takes the pressure off union offi cers who might otherwise appear to have arbitrarily nixed some group ’ s pet proposal. In a laundry list, either side also could introduce issues that it hopes will be pursued in future negotiations.

Presenting a long list of proposals and infl ated demands as a fi rst step might also be a useful way to camoufl age the real priorities of the union. Or a long list of proposals could be helpful in integrative bargaining by facilitating trades across issues.

Behavior of the Employer in the Early Phase The behavior of employers at the outset of bargaining varies considerably. Some employers will present a set of proposals to counterbalance the union demands. Other employers will receive the union demands and promise a response at a future negotiating session. Many management representatives prefer to delay