On-Line Human Resource Management Experiences

On-Line Human Resource Management Experiences

Unions: Negotiating a New Labor Contract for Mega Manufacturing

The collective bargaining agreement at one of Mega Manufacturing’s plants will expire soon, and you’ve been hired to help with the contract negotiations. Recall that Mega follows a Free Agent HR strategy with an external labor orientation and a focus on differentiation. Mega’s management has several concerns about the upcoming negotiations. For one thing, a major increase in health care costs needs to be passed along to the employees, at least to some extent. In addition, the union and its members will expect bigger raises in this contract due to the current labor market. Both sides have traditionally bargained in good faith, but these contract negotiations will be especially challenging, and rumblings of a strike have already surfaced. To make matters worse, the employees at another of Mega’s plants are starting a union organizing campaign. What bargaining approach will you recommend that Mega follow in the contract negotiations?

What Action Do You Take?

A. Have a strong plan regarding the potential issue of short-term relationships of employees that places emphasis on recognizing performance differences across employees.

B. Have a strong plan regarding the misfit between labor unions and innovation.

C. Have a strong plan regarding how to handle having so many long-term employees and too much equality.

Incorrect Responses

B. Companies using a Committed Expert HR strategy can have problems with unions because of innovation issues even though they emphasize long-term relationships that unions strive for. These organizations tend to invest less of their profits back into the business, spend less on new construction, and spend less on R&D which can be a problem for companies seeking to innovate and differentiate. / C. Companies using a Loyal Soldier HR strategy are most compatible with labor unions so there is generally not a big issue in working with them. Even though the union may result in higher labor costs, a stable workforce can increase quality. Cost-focused organizations can thus achieve higher productivity by working with unions to reduce costs and create more efficient processes to better satisfy customer needs.

On-Line Human Resource Management Experiences

Unions: Negotiating a New Labor Contract for Mega Manufacturing

Summary of Steps Taken:

1. Have a strong plan regarding the potential issue of short-term relationships of employees that places emphasis on recognizing performance differences across employees.

Unfortunately, the Free Agent HR strategy utilized by Mega Manufacturing is the least compatible with labor unions because these companies combine a desire for short-term relationships with an emphasis on recognizing performance differences. Mega may truly be in for a very challenging set of contract negotiations in order to successfully avoid the strike that has been rumored.

Knowing what you do about the Bargain Laborer strategy, which of the mandatory topics would you recommend to Mega as the best place to start the negotiations with if they want to begin with the easiest topic?

What Action Do You Take?

A. Encourage Mega to begin with the negotiations regarding wages (base pay, bonuses, and employee benefits).

B. Encourage Mega to begin with the negotiations regarding hours (schedules, shifts, and paid time off).

C. Encourage Mega to begin with the negotiations regarding working conditions (safety, promotions, layoffs, and grievance procedures).

Incorrect Responses

A. This is definitely not the category to begin the negotiation process on if Mega is hoping to get off to a quick resolution on something. Because of the focus on reducing labor costs and knowing that big raises are already expected due to the labor market and that they have a benefits increase to pass along to the employees, this will be by far the toughest of the three mandatory topics to reach an agreement on. The outcome of the negotiations in this category will likely determine whether the strike indeed occurs. / B. This category will likely not be nearly as difficult to reach agreement as the wages will be, but there are still a few potential problem areas in the area of paid time off due to the emphasis on reduced labor costs. Paying employees for additional time away from work will only lead to Mega having to pay overtime to current employees or bring in temporary workers (neither of which is cost-effective). The schedule and shift topics may be okay though since their focus on short-term relationships means there are constantly new employees who can be placed on 2nd and 3rd shifts.

On-Line Human Resource Management Experiences

Unions: Negotiating a New Labor Contract for Mega Manufacturing

Summary of Steps Taken:

1. Have a strong plan regarding the potential issue of short-term relationships of employees that places emphasis on recognizing performance differences across employees.

2. Knowing what you do about the Bargain Laborer strategy, you encourage Mega to begin with the negotiations regarding working conditions (safety, promotions, layoffs, and grievance procedures) to have the best chance of starting the negotiations with a topic that is likely to go fairly smoothly.

Mega is likely to have the most success on the dealings with the labor union regarding the working conditions topic (safety, promotions, layoffs, and grievances). Simplified work tasks and hiring experienced workers should limit the number of potential injury situations they’ll have to deal with. Having employees frequently leaving the company will likely mean that there are several opportunities for promotion that can be determined by seniority since there is an emphasis on limiting employee differentiation in performance. Layoffs are not likely to be a concern as Mega could simply institute a hiring freeze and not replace outgoing employees if it needs to cut back on workforce. The emphasis on consistent and fair processes will limit the number of potential grievance situations that Mega may encounter.

In order to try to influence cooperation in the negotiations, Mega does a good job of focusing on trust developed between management and the union from prior negotiations, relying on the expertise and style of its negotiators, and its ability to use problem-solving techniques. It also plans to conduct an interest-based negotiation where each side explains the factors they consider to be most important. You’re asked to recommend which step of that process is the most critical.

What Action Do You Take?

A. Convince Mega that the most important step will be how they open the negotiations at the bargaining table.

B. Convince Mega that the most important step in the process is the preparation for negotiations that will be done prior to meeting with the labor union.

C. Convince Mega that the most important step will be the actual back-and-forth negotiation itself.

Incorrect Responses

A. This stage will start with each side presenting an opening statement that lists its major interests. It also clarifies the scope of problems that need to be addressed. Clearly defining issues is also very important here. While the opening statement is of significant importance, it is likely not the most critical step. / C. You may be right, but it’s quite possible that this is not the best choice for a Bargain Laborer. This step will include discussing interests behind the issues, brainstorming, setting standards, and arriving at a consensus. What if adequate preparation was not done in the very beginning though?

On-Line Human Resource Management Experiences

Unions: Negotiating a New Labor Contract for Mega Manufacturing

Summary of Steps Taken:

1. Have a strong plan regarding the potential issue of short-term relationships of employees that places emphasis on recognizing performance differences across employees.

3. In order to try to influence cooperation in the negotiations, Mega does a good job of focusing on trust developed between management and the union from prior negotiations, relying on the expertise and style of its negotiators, and its ability to use problem-solving techniques. It also plans to conduct an interest-based negotiation where each side explains the factors they consider to be most important. You recommend that the most critical step of that process is the preparation for negotiations that will be done prior to meeting with the labor union.

If adequate preparation is not done in advance, Mega will have no way to know whether they may have left more at the bargaining table than they should have or whether they had very unrealistic expectations. Interest-based negotiations rely on accurate data to identify key concerns, so an important step is to collect as much data as possible. The data should include information about the interests of both sides. It can be gathered through formal surveys or informal conversations. Once gathered, it will be shared with the other side.

Great news! The strike was avoided as both sides reached a win-win in the negotiation process. But wait. Did you forget about that other plant which is starting a union organizing campaign? Nearly half the workers signed authorization cards and the petition for election has been filed with the NLRB. If you want to avoid having to work with another labor union, recommend a strategy.

What Action Do You Take?

A. Issue wage increases immediately in hopes that it will discourage the employees from feeling that a labor union is necessary.

B. Ask employees about union activities that have been going on to see if the company even has anything to worry about.

C. Recommend that management attempt to thwart unionization by grouping employees who are sympathetic to a union with employees who are not.

Incorrect Responses

A. While it may sound like a good plan, this action is actually an unfair labor practice as set forth by the Wagner Act. It will be enforced by the NLRB. / B. While it may sound innocent enough, this action is actually an unfair labor practice as set forth by the Wagner Act. It will be enforced by the NLRB.

On-Line Human Resource Management Experiences

Unions: Negotiating a New Labor Contract for Mega Manufacturing

Summary of Steps Taken:

1. Have a strong plan regarding the potential issue of short-term relationships of employees that places emphasis on recognizing performance differences across employees.

4. Great news! The strike was avoided as both sides reached a win-win in the negotiation process. You still have to deal with that other plant which is starting a union organizing campaign. Nearly half the workers signed authorization cards and the petition for election has been filed with the NLRB. To try to avoid having to work with another labor union, recommend that management attempt to thwart unionization by grouping employees who are sympathetic to a union with employees who are not.

Well done! Because large groups of employees are often difficult to organize, this is a legitimate strategy for Mega. It is also permissible for supervisors to make employees aware of factual information about the union (frequency of strikes, cost of dues, etc.). The other two choices listed were both unfair labor practices as are threatening employees with loss of job or benefits if they join, threatening to close the plant, and spying on union gatherings. Keep in mind that a primary objective of unions is to provide employment security and long-term employment as well as to secure fair wages and benefits for all workers. Effective organizations manage relationships with labor unions to ensure high productivity and fair treatment of all workers. Only one more stop left on your journey through Strategic HR. The last step will align strategy with practice and recap what you’ve learned along the way.

For More Information:______

A number of Web sites are available for more information on labor unions, legislation, union trends, negotiation and collective bargaining, and the grievance process:

· http://www.shrm.org/ - Society for Human Resource Management (SHRM) website that provides information on a variety of HR disciplines.

· http://www.workforce.com/ – Information on a variety of HR functional areas and employment law topics.

· www.hr-guide.com – Information on a variety of HR functional areas and employment law topics.

· http://www.unions.org/home/ - Union Directory.

· http://www.aflcio.org/ - American Federation of Labor website.

· http://www.nlrb.gov/ - National Labor Relations Board.

· www.flra.gov – Federal Labor Relations Authority.

· www.nrtw.org – National Right to Work