14-1McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All Rights Reserved.

fundamentals of

Human Resource Management 4th editionby R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright

CHAPTER 14

Collective Bargaining and Labor Relations

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What Do I Need to Know?

1. Define unions and labor relations and their role in organizations.

2. Identify the labor relations goals of management, labor unions, and society.

3. Summarize laws and regulations that affect labor relations.

4. Describe the union organizing process.

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What Do I Need to Know? (continued)

5. Explain how management and unions negotiate contracts.

6. Summarize the practice of contract administration.

7. Describe more cooperative approaches to labor-management relations.

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Role of Unions

• In the U.S., most workers act as individuals to select jobs that are acceptable to them and to negotiate pay, benefits, flexible hours, and other work conditions.

• At times, workers have believed their needs and interests do not receive enough consideration from management.

• One response by workers is to act collectively by forming and joining labor unions.

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Unions and Labor Relations

• Unions – organizations formed for the purpose of representing their members’ interests in dealing with employers.

• Labor relations – field that emphasizes skills managers and union leaders can use to minimize costly forms of conflict (such as strikes) and seek win-win solutions to disagreements.

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Labor relations involves three levels of decisions:

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National and International Unions

• Most Union members belong to a national or international union. These unions may be:– Craft unions: labor unions whose members all

have a particular skill or occupation.– Industrial unions: labor unions whose members

are linked by their work in a particular industry.• Most national unions are affiliated with the

American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).

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Figure 14.1: 10 Largest Unions in the United States

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Figure 14.2: Union Membership Density among U.S. Wage and Salary Workers, 1973-2009

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The decline in union membership has been attributed to:

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Figure 14.3: Union Membership Rates and Coverage in Selected Countries

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Many Union Workers Hold Government Jobs

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Impact of Unions on Company Performance

• Harley-Davidson and the International Association of Machinists and Aerospace Workers have cooperated to produce good results.

• In general, though, companies wishing to become more competitive need to continually monitor their labor relations strategies.

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Goals of Management

• Management goals are to increase the organization’s profits. Managers tend to prefer options that lower costs and raise output.

• When an employer has recognized a union, management’s goals continue to emphasize restraining costs and improving output.

• Managers prefer to keep their organization’s operations flexible.

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Goals of Management (continued)

• In their labor relations, managers prefer to:– Limit increases in wages and benefits, and– Retain as much control as they can over work rules

and schedules.

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Goals of Labor Unions

• Labor unions have the goals of obtaining pay and working conditions that satisfy their members and of giving members a voice in decisions that affect them.

• They obtain these goals by gaining power in numbers.

• Unions want to influence the way pay and promotions are determined.

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Goals of Labor Unions (continued)

• The survival and security of a union depend on its ability to ensure a regular flow of new members and member dues to support the services it provides.

• Unions place high priority on negotiating two types of contract provisions that are critical to a union’s security and viability:– Checkoff provisions– Union membership or contribution provisions

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Goals of Labor Unions (continued)

Checkoff Provision• Contract provision

under which the employer, on behalf of the union, automatically deducts union dues from the employees’ paychecks.

Membership Security• Closed shop• Union shop• Agency shop• Maintenance of

membership

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Goals of Society

• The activities of unions and management take place within the context of society.

• Society’s values drive the laws and regulations that affect labor unions.

• Society’s goal for unions is to ensure that workers have a voice in how they are treated by their employers.

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Laws Affecting Labor Relations

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Laws Affecting Labor Relations (continued)

• Right-to-work laws: state laws that make union shops, maintenance of membership, and agency shops illegal.

• National Labor Relations Board (NLRB): Federal government agency that enforces the NLRA by conducting and certifying representation elections and investigating unfair labor practices.

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Figure 14.4:States with Right-to-Work Laws

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Test Your Knowledge

True (A) or False (B)1. The NLRA established unfair labor practices on the part

of the union.2. The NLRB determines which states are Right-to-Work3. In Right-to-Work states, employees do not have to

become members of the union4. In states without Right-to-Work laws unions can refuse

to hire non-union members.5. Protection from union misconduct was established by

the Landrum-Griffin Act.

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The Process of Organizing

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Signing Authorization Cards

• A document indicating that an employee wants to be represented by a labor organization in collective bargaining

• Is there sufficient interest on the part of employees to justify the unit

• Evidence of interest when at least 30 percent of the employees in a work group sign an authorization card

• Usually need 50% to proceed

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Figure 14.5:Example of an Authorization Card

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Petition for Election

• After authorization cards have been signed, a petition for election is made to the regional NLRB office

• NLRB will ordinarily direct that an election be held within 30 days

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Election and Certification

• NLRB monitors the secret-ballot election on the set date

• Board will issue a certification of the results to the participants

• Majority of the employees vote for union. NLRB will certify.

• Process does not require either party to make concessions; it only compels them to bargain in good faith

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Table 14.1: What Supervisors Should and Should Not Do to Discourage Unions

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Union Strategies

• Organizers call or visit employees at home to talk about issues like pay and job security.

• Offer workers associate union membership.• Conduct corporate campaigns.• Negotiate employer neutrality and card-check

provisions into a contract.

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Union Decertification

• Taft-Hartley Act made it possible for employees to decertify a union

• Essentially the reverse of the process that employees must follow to be recognized as an official bargaining unit

• Employees have used decertification petitions with increasing frequency and success

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Decertification Procedure

• At least 30 percent must petition for election• Petition submitted 60-90 days prior to

expiration of current contract• Schedule decertification election• If majority votes against union, employees will

be union free

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Collective Bargaining

• In collective bargaining a union negotiates on behalf of its members with management representatives to arrive at a contract defining:– Recognition– Management Rights– Union Security– Compensation and Benefits– Grievance Procedure– Employee Security

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Table 14.2: Typical Provisions in Collective Bargaining Contracts

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Test Your Knowledge: Which of the Following is an Unfair Labor Practice (ULP)?

1. Enforcing disciplinary policies only to those who have expressed interest in a union

2. Showing employees articles about negative aspects of unions that occurred elsewhere

3. Email employees asking them to respond with how they plan to vote in the union election

4. Tell employees the disadvantages of having a union5. Enforcing disciplinary policies when deserved to a pro-union

employee6. Promise employees an additional week of vacation if they

vote against the union

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Bargaining Over New Contracts

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When Bargaining Breaks Down

Strikes• Strike: a collective

decision by union members not to work until certain demands or conditions are met.

Alternatives to Strikes• Mediation• Fact Finder• Arbitration

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Figure 14.6:Strikes Involving 1,000 or More Workers

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Alternatives to Strikes

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Contract Administration

Contract Administration

• Includes carrying out the terms of the agreement and resolving conflicts over interpretation or violation of the agreement.

Grievance Procedure• The process for

resolving union-management conflicts over interpretation or violation of a collective bargaining agreement.

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Figure 14.7: Steps in an Employee- Initiated Grievance Procedure

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Labor-Management Cooperation

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Test Your Knowledge

True (A) or False (B)1. Mediation requires each party to abide by the

mediator’s decision.2. Clearly written contracts require less contract

administration time due to fewer disagreements over interpretation.

3. Integrative bargaining involves a win-lose approach because the issues are considered a fixed pie.

4. A union steward represents the issues concerning union employees and is elected by them.

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Summary

• A union is an organization formed for the purpose of representing its members in resolving conflicts with employers.

• Labor relations is the management specialty emphasizing skills that managers and union leaders can use to minimize costly forms of conflict and to seek win-win solutions to disagreements.

• Management goals are to increase the organization’s profits. Managers generally expect that unions will make these goals harder to achieve.

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Summary (continued)

• Labor unions have the goal of obtaining pay and working conditions that satisfy their members. They obtain these results by gaining power in numbers.

• Society’s values have included the hope that the existence of unions will replace conflict or violence between workers and employers with fruitful negotiation.

• In contrast to the traditional view that labor and management are adversaries, some organizations and unions work more cooperatively.