Chapter

A Framework for Analyzing Collective Bargaining and

Industrial Relations

1

McGraw-Hill/IrwinAn Introduction to Collective Bargaining & Industrial Relations, 4e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

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The Participants

• Management• Labor• Government

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Management

- Responsible for promoting the goals of employers and their organizations

- Composed of at least three groups:• Owners and shareholders• Top executives and line managers• Industrial relations and human resource staff

professionals

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Labor

• Encompasses both employees and the unions that represent them

• Employees influence whether the firm meets its objectives

• Shapes the growth and demands of unions

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Assumptions About Labor and Conflict

• Labor is more than just a commodity- Some acquired skills are of unique value to the

employer- Skills may not be easily marketable- Not always easy to change jobs

• A Multiple Interest Perspective- Industrial relations policies must consider both

employer and employee interests

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The Inherent Nature of Conflict

- There is an inherent conflict of interest between employer and employees

- It is economic, not pathological- Arises from a clash of economic interests

• Workers seek higher pay and job security• Employers pursue profits

- Society has an interest in limiting the intensity of work conflicts

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Common as Well as Conflicting Interests

• Both management and labor can benefit from increasing productivity

- It can produce both higher wages and higher profits

• No single best objective satisfies all parties- Successful relationships occur when both parties

resolve issues and pursue joint gains

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Trade-Offs among Conflicting Goals

• Focusing on any single goal is inappropriate- It would destroy collective bargaining as an

instrument for accommodating the multiple interests of workers and employers

• Unions would not survive if suppressed• Management could not compete in the global

market with excessive labor costs

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The Three Levels of Industrial Relations Activity

• Strategic Level- Strategies and structures of long-term influence

• Functional Level- The process and outcomes of collective

bargaining• Workplace

- The daily union/employer interaction and contract administration

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Conceptual framework for the study of collective bargaining

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The Institutional Perspective

• Developed by “institutional” economist John Commons - the father of industrial relations

• Described as “a shift from commodities, individuals, and exchanges to transactions and working rules of collective action”

• Placed great value on negotiation and compromise among the divergent interests

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Sidney and Beatrice Webb

• Institutionalists in the U.S. were influenced by these two British economists & reformists

• They rejected Marx’s theory that exploitation of workers would lead to the overthrow of the system

• They shared Marx’s belief that workers have unequal bargaining power and needed protection

• Institutionalists advocated legislation for the right to join unions, and workplace issues such as safety, health, child labor laws, and minimum wages

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The Performance of Collective Bargaining

• Measured by how well it serves the parties and the public

- Labor’s Goals: Wages, benefits, safety conditions, and employee satisfaction, and quality of life

- Management’s Goals: Costs, productivity, profit, quality, managerial control, employee motivation and turnover

- Public’s Goals: Industrial peace & union democracy; balance and fairness. Security without corruption

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The Environment

• The external environment sets the context for collective bargaining & influences outcomes

• It includes five key dimensions – - The economic environment- Law & public policy- The demographic context- Social attitudes- The technological context

• Laws and macroeconomic conditions can alter the balance of bargaining power

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The Strategic (Top) Tier

• Involves strategies and structures that guide the long-term direction of industrial relations

• Management: Committed to working with the union, or seeking non-union alternatives?

• Labor: Is leadership adversarial or flexible?

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The Functional (Middle) Tier

• The process of contract negotiations takes place here & the terms and conditions of the labor agreement are established

• In the middle tier we find:- Union organizing & bargaining structure- The negotiations process- Impasse resolution- Bargaining outcomes

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The Workplace Tier

• The workplace tier involves issues such as:- management of conflict- delivery of due process- motivation, participation, supervision of workers,

and the structuring of jobs• Administration of the bargaining agreement is an

important part of this tier

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Public Sector Collective Bargaining

- Chapter 13 addresses the rules and procedures of public sector collective bargaining

• The chapter identifies the differences from the private sector

• For example, public employees are not covered by the National Labor Relations Act (NLRA)

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International and Comparative Industrial Relations

• The changes occurring globally warrant the special attention given in Chapter 14

• The labor movement has been at the forefront of the sweeping political changes in the former Communist bloc nations and newly-industrialized countries such as South Korea

• International trade and competitiveness have moved to the forefront of economic policy in the U.S.

- In particular, there is much discussion about whether globalization has fundamentally increased management's power and advantage

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Labor Policy

- Chapter 15 assesses the broad public and social issues and their impact on industrial relations

- Reviews the many changes emerging in U.S. collective bargaining

- Considers the various policy options- Addresses the merits and implications of the

alternative policies

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Summary

• There have been many changes in the workplace in recent years, including:

- The expansion of the participatory process- The team form of work organizations- Globalization has increased management’s advantage

• A shift in American industrial relations from the middle level to both the strategic and workplace levels

• Concern for job security, union decline, and participation programs are all part of a transformation in industrial relations