Better Employment Assignment 1
Read chapter 13-15 fully and for your week eight assignment please: Create 3 fictional scenarios in which an employer would have to deal with any of the following situations of employee poor behavior on the job, Substance Abuse, Sexual Harassment, Fighting, Work Family Conflicts, or Email (or Internet) abuse. For each case, provide details of the type of employer, the history or the worker at that company, the incident which arose, why it was a clear violation of employer policy, what would be the likely result of arbitration of this issue if the employee acknowledged his wrong doing but asked to keep his job. Explain the reasoning for your considered outcome. Remember, this is fictional. Create a believable situation, but know that you can have whatever outcome you choose! You may not work in conjunction with any other student to complete this paper.
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Union-Management Cooperation Many labor relations practices are adversarial—organizing, bargaining over wages, disputing contract interpretations, and the like. But many argue that both unions and managements can achieve improved outcomes through cooperation. The catalyst for cooperation is often the financial exigency of the employer and the specter of potentially large job losses.
This chapter explores variations in union-management cooperation and their effects, including interest-based bargaining, community-based labor- management committees, employee involvement programs, gainsharing, and work and organization redesign. In reading this chapter, consider the following questions:
1. How are cooperative problem-solving methods different from tradi- tional bargaining?
2. Can a cooperation program violate labor laws? 3. What are some results of cooperative programs? Are they equally likely
to lead to successes for both unions and managements? 4. What types of cooperation programs are in current use by employers
and unions? 5. Are union-management cooperation programs sustainable in the long
LABOR AND MANAGEMENT ROLES AND THE CHANGING ENVIRONMENT
A succession of economic cycles has influenced outcomes for labor and management. Labor supply and union power have been altered by sev- eral waves of immigration. The Railway Labor Act, Norris-LaGuardia Act, and Wagner Act strengthened labor’s ability to organize. The Taft- Hartley Act and Landrum-Griffin Act increased employer power. At various points, new production technologies substantially reduced the
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need for lower-skilled union members. Today global competition affects the survival of some employers and the jobs of a diverse set of workers. During the past 40 years, industries that virtually monopolized domestic markets, such as steel, motor vehicles, consumer electric and electronic products, textiles, shoes, and software, now either need to be globally competitive or may no longer exist in the United States. Foreign competi- tors benefited from investment, technology transfer, and, particularly, lower wages for unskilled workers that boosted their productivity or lowered costs at a faster rate than was the case for domestic producers. Some of this was due to unions’ abilities to increase wages and some to employers’ failures to invest in technology. Both groups were respon- sible for not attending to the way work and production were organized as foreign producers implemented new and improved methods. 1 Some companies failed and local unions were decimated, while others sur- vived and prospered. In most cases, companies and unions in basic industries that have survived have changed their approaches to each other considerably.
Organizing and the Evolving Bargaining Relationship U.S. employers have traditionally fought unionization. Even some employers in heavily unionized industries have implemented active union avoidance programs by fighting new organizing, shifting produc- tion from unionized plants to new greenfield operations , and reducing investment in unionized plants. 2
Adversarial relationships carry over from organizing to bargaining and implementing contracts. The union needs bargaining successes for its officers to be reelected and for the union to avoid decertification. The legal specification of mandatory bargaining issues increases the union’s emphasis on immediate economic issues and turns emphasis away from employer and union survival issues. As noted earlier, managers have generally been judged on their ability to avoid unionization or to limit its impact. In dealing with the union, managers tend to view a cooperative relationship as one in which the union has an insignificant role in deci- sion making. 3 Thus, neither party’s leaders are initially motivated to seek cooperation.
Evidence also suggests that unions win initial certification because employees are interested in exercising their voices in the employment rela- tionship. But to management, coordinating with unions to create opportu- nities for this to occur may seem like a legitimization of union efforts.
1 J. Hoerr, And the Wolf Finally Came (Pittsburgh: University of Pittsburgh Press, 1989). 2 T. A. Kochan, H. C. Katz, and R. B. McKersie, The Transformation of American Industrial Relations (New York: Free Press, 1986). 3 M. M. Perline and E. A. Sexton, “Managerial Perceptions of Labor-Management Cooperation,” Industrial Relations, 33 (1994), pp. 377–385.
Chapter 13 Union-Management Cooperation 431
Preferences of Management and Labor Management seeks the highest profit level it can achieve through investing its capital. It makes investment decisions that shift resources from product lines with lower returns to those with higher profits. To do this, it needs to be able to adapt. From an unconstrained standpoint, it would prefer to open, close, and retool plants as needed; hire labor on a flexible basis; and adjust wage rates to meet changing product market conditions and to respond to shifts in the labor market.
Employees are generally assumed to be risk-averse, while employers are assumed to be risk-neutral. This means employers are looking for the highest rate of return, consistent with the risks they expect to encounter, while employees are assumed to accept lower pay if they can simultane- ously reduce unemployment and other risks. Employees are risk-averse not because they have an inherent dislike of risk but rather because their skills are often occupationally specific, and perhaps specifically tailored to their present employer’s requirements. Thus, their human capital is not diversifiable. They depend on continued employment, often with their present employers and in their present occupations, to be able to earn a sat- isfactory return. Employees are also interested in improving their economic outcomes, particularly when the employer is able to help them do so.
Levels of Cooperation and Control Given the way mandatory bargaining issues are defined in the labor acts and employers’ antipathy toward organized labor, managers have sought to retain as much control of the workplace as possible. Labor has generally been reluctant to seek shared responsibility for decision making given its adversarial role and the economic concessions it might have to make to gain a greater say in decision making. Both employers and unions began to consider cooperation during the 1980s in situations where companies or facilities were in extremis.
In some situations, in return for economic concessions, unions have won greater claims on the rights to control processes and share in profits. Provisions have been negotiated to increase the proportion of employees’ pay that is at risk, usually to help ensure employer survival and increase employment security. The effect of participation in gaining rights can flow along two dimensions: control and return rights. Control rights involve the degree to which labor participates in organizational decision making. Unionization, in itself, introduces a degree of control rights because the employer can no longer unilaterally decide wages, hours, and terms and conditions of employment. At the extreme, control rights would include works council arrangements (as in Germany—covered in Chapter 17) and representation on corporate boards of directors. Return rights begin with wage payments and progress through incentive plans, profit-sharing and gainsharing programs, and ultimately to employee stock ownership of the
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enterprise. 4 Conflicts over control rights and unions’ general disinterest in broader return rights, the historical antipathy of employers, and adver- sarial relationships in bargaining have made the creation of joint problem solving difficult.
This chapter explores initiatives in union-management cooperation to jointly accomplish their separate goals. Part of this is done through inte- grative bargaining during contract negotiations and part through devel- oping ongoing cooperative relationships. Many cooperation experiments are initiated through side letters in the contract or through agreements to suspend contract provisions to experiment with new methods.
Integrative bargaining is a set of activities leading to the simultaneous accomplishment of nonconflicting objectives that solves a common prob- lem for both parties. 5 Conflict occurs when parties have different goals and either the need to share resources or task interdependencies block one party’s goal attainment if the other party pursues a certain course. 6 For example, shared resources may be available hours of work, and different goals may be overtime premium earnings for the union and high profits for management. One party’s accomplishment will interfere with the other party’s goals. Integrative bargaining occurs when one party’s goal will not block the other party’s goal. Parties may not immediately know integra- tive issues that might emerge from a failure of distributive bargaining to achieve the goals the parties desired.
Two major types of integrative solutions may alleviate this conflict. The first is a situation in which both parties experience an absolute gain over their previous positions. For example, in the 1980s, auto workers at Ford achieved permanent job security in return for new work rules to reduce costs. Second, integrative bargaining may involve both parties’ sacrificing simultaneously (in distributive bargaining, one’s gain is the other’s loss). 7 Steel industry wage concessions in the early 1980s reduced labor costs enough in several situations to induce employers to invest in new technol- ogy, thus lengthening the likely employment of many steelworkers.
Change processes in union employment situations require that certain conditions exist. Increasing internal or external pressures felt by both parties should lead to the consideration of new joint ventures. Multiple
4 A. Ben-Ner and D. C. Jones, “Employee Participation, Ownership and Productivity: A Theoretical Framework,” Industrial Relations, 34 (1995), pp. 532–554. 5 R. E. Walton and R. B. McKersie, A Behavioral Theory of Labor Negotiations (New York: McGraw-Hill, 1965), p. 5. 6 S. M. Schmidt and T. A. Kochan, “Conflict: Toward Conceptual Clarity,” Administrative Science Quarterly, 17 (1972), pp. 359–370. 7 Walton and McKersie, Behavioral Theory, pp. 128–129.
Chapter 13 Union-Management Cooperation 433
constituencies within the union and/or management would stimulate efforts to arrive at innovative procedures for dealing with joint problems. Where the normal collective bargaining process and its attention to crisis situations is used exclusively, innovation is less likely. Joint commitments are more likely when a program is seen as accomplishing important ends for both and when both are willing to compromise on goals they desire. Programs should enable early measurable progress toward goals for both parties to maintain support from their constituents. Many of each group’s members must experience benefits, and these benefits should not detract from accomplishing other important goals. Programs should be insulated from the formal bargaining process, and usual methods for distributive bargaining should continue. 8
While management may propose integrative bargaining when the effects of economic change need to be addressed, distributive reasons often underlie the overture. If a change can’t be negotiated, management may signal its intent to close a facility. Capital is far more mobile than labor. A plant can be sold and resources redeployed, but the financial bur- dens workers face, especially if the firm is the dominant employer in the area, are often very onerous. 9
Several conditions are necessary for facilitating problem solving. First, parties must be jointly motivated to reach a solution. Second, communica- tions between parties must reveal as much information about the problem as possible. Third, parties must create a climate of trust to deliberate over the issues without taking advantage of disclosed information. 10
Integrative bargaining is appropriate for both immediate and long-term problems. For example, an integrative solution may be appropriate when a contract issue causes grievances during the agreement. Rather than wait- ing until the next negotiation, addressing the problem immediately may lead to positive outcomes for both parties. On the other hand, anticipated consequences of technology changes may be long-term and may require an open-ended relationship extending beyond the contract period.
Mutual-Gains Bargaining A contract is based on the assumption that current conditions will con- tinue during the length of the agreement. By the time a situation reaches the point that both parties will suffer if the contract is not changed, each may have lost a substantial amount (e.g., employer profits and union members’ job security).
8 T. A. Kochan and L. Dyer, “A Model of Organizational Change in the Context of Union-Management Relations,” Journal of Applied Behavioral Science, 12 (1976), pp. 59–78. 9 E. A. Mannix, C. H. Tinsley, and M. Bazerman, “Negotiating over Time: Impediments to Integrative Solutions,” Organizational Behavior and Human Decision Processes, 62 (1995), pp. 241–251. 10 Walton and McKersie, Behavioral Theory, pp. 139–143.
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A climate in which both the employer and the union would be con- tinually concerned with problem solving and mutual improvement in their situations would call for a living agreement. 11 This would require that the parties determine, a priori, what types of events would trigger prob- lem solving. Where contracts typically include the possibility of reopeners based on the passage of time, this would require that certain employer and employee outcomes would trigger joint problem solving to deal with them. In Canada, Saskatoon Chemicals and the Communications, Energy & Paperworkers Union have agreed to continuous bargaining, particularly with relation to interest-based issues and work redesign. 12
In bargaining, withholding information or threatening opponents breaks down trust. It’s difficult to define and address problems straight- forwardly unless each party trusts the information the other provides. Principled negotiations require that bargaining be on the merits of the issue, providing information that would enable both to arrive at a mutually agree- able solution. 13 Trust does not occur spontaneously, however. It follows from attitudes toward trust itself, and the experience the parties have had with the perceived trustworthiness of their opponents. 14 Where a trust relation- ship doesn’t exist, the parties will need training and an opportunity to build trust in simulated relationships before beginning to bargain in situations where they are at risk. Even trained bargainers may encounter problems because their constituents are primarily interested in tangible outcomes, not necessarily the effort that it takes to build an infrastructure of trust.
FMCS Innovations The Federal Mediation and Conciliation Service (FMCS) has worked for over 25 years to develop tools that help parties improve their bargaining relationships. These tools include relations by objectives, bucket bargain- ing, and technology-assisted group solutions. While each of these will be examined separately, aspects of the three innovations may be combined in a particular bargaining situation.
Relations by Objectives Creating and sustaining a trusting relationship can be difficult because bargaining often involves both distributive and integrative issues simul- taneously. Relations by objectives programs train negotiators to take a problem-solving approach in negotiations and contract administration.
11 C. Hecksher and L. Hall, “Improving Negotiations: Two Levels of Mutual-Gains Interventions,” Proceedings of the Industrial Relations Research Association, 44 (1992), pp. 160–168. 12 L. Clarke and L. Haiven, “Workplace Change and Continuous Bargaining: Saskatoon Chemicals Then and Now,” Relations Industrielles, 54 (1999), pp. 168–193. 13 R. Fisher and W. Ury, Getting to Yes: Negotiating Agreement without Giving In (Boston: Houghton Mifflin, 1981). 14 S. C. Currall, “Labor-Management Trust: Its Dimensions and Correlates,” Proceedings of the Industrial Relations Research Association, 44 (1992), pp. 465–474.
Chapter 13 Union-Management Cooperation 435
The technique brings union and management members together outside a negotiating setting to mutually plan actions to reduce future conflict. The program is designed to increase the skills of union and management negotiators in communicating, mutual goal setting, and goal attainment. It assumes that improving problem-solving skills and obtaining increased information will enable each side to better appreciate the other’s positions and to specify bargaining issues. Evidence about the effectiveness of these programs is mixed, with some positive effects on the time necessary to negotiate agreements. But adverse economic conditions erase the effects, especially if the negotiator for either side changes. 15
Bucket Bargaining The bucket bargaining model is based on the idea that there are five types of issues in bargaining: minor issues, past-problem issues, change issues, discussion issues, and economic issues. The bargaining issues that emerge are screened into five “buckets”—update, repair, redesign, discussion, and economic. Figure 13.1 shows the bucket bargaining process. Bargaining begins with the update bucket and moves toward the right. The figure shows tools that are used to assist bargaining within each of the buckets. Studying how other parties have solved similar problems may reveal “best practices” that the negotiators might want to examine or adopt. Another method is to create a team with members from both parties to come up with a “straw design” that they present to the bargaining team. They don’t defend the design, but they note comments and criticisms and then modify the proposal by incorporating feedback from both sides in subsequent versions. These are labeled “wood,” “tin,” and “iron,” in turn. The iron version is not debated but is either accepted or rejected. 16
The economic portion of bucket bargaining uses established guidelines to frame the issues in the economic package, rank or prioritize them, iden- tify and define costs, identify interests of the parties, and agree on the tools for analysis. Then a straw design is developed, and the parties use their problem-solving techniques to develop standards and arrive at a solution that fits the standards. Figure 13.2 details the economic bucket process. The aim is to avoid a strictly sequential approach to bargaining and to deal first with issues that can readily be resolved and then to handle in a final reconciliation those that can’t be settled within their bucket.
Technology-Based Group Solutions Technology-based group solutions (TAGS™) provides bargainers with a net- work of laptop computers. Participants enter comments and suggestions at their keyboards that are displayed and categorized before the group.
15 R. Hebdon and M. Mazerolle, “Mending Fences, Building Bridges: The Effect of Relationship by Objectives on Conflict,” Relations Industrielles, 50 (1995), pp. 164–185. 16 K. Saunders, “Bucket Bargaining: Best Process in Interest Based Bargaining,” Labor Law Journal, 50 (1999), pp. 83–96.
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Language for proposals can be changed to reflect suggestions agreed to by the entire group. The time necessary for negotiation, a permanent record of the comments, and the ability to vote secretly all enhance the amount of information that can be transmitted quickly and enhance the ability to reach a consensus. 17
The Use and Effects of Interest-Based Bargaining The FMCS compared the results of interest-based bargaining (IBB) to negotiations where traditional methods were used. 18 The study found that unions were more likely to use IBB if they had a less experienced
FIGURE 13.1 Bucket Bargaining Process
Source: K. Saunders, “Bucket Bargaining: Best Process in Interest Based Bargaining,” Labor Law Journal, 50 (1999), p. 87.
BUCKET BARGAINING PROCESSES
� Editorial � Housekeeping � Compliance
� Frame issue � Agree on tools
� Assign to individual or subcommittee � One text
Problems with � Intent � Application � Content
� Frame issue � Define interests � Agree on tools
� Problem-solving process � Best practice � Straw design � One text
Challenges to � New concepts � Restructured concepts
� Frame issue � List “why” interests � List “why not” interests
� One-party straw design � Reframing
� Permissive � Exploratory
� Frame issue � Stipulate intent
� Wages � Direct costs
See Figure 13.2
See Figure 13.2
17 For more information, see http://tags.fmcs.gov/IBB2.shtml. 18 J. Cutcher-Gershenfeld, T. Kochan, and J. C. Wells, “In Whose Interest? A First Look at National Survey Data on Interest-Based Bargaining in Labor Relations,” Industrial Relations, 40 (2001), pp. 1–21.
Chapter 13 Union-Management Cooperation 437
negotiator, were in a service industry, and were dealing with a manage- ment bargaining team having internal disagreements. Union negotiators’ preference for using IBB was associated with having less negotiating experience, being male, dealing with a management team having internal conflict, and not being located in the middle Atlantic states.
For management bargainers, use of IBB was associated with pressure around new technology and with not being in construction, manufactur- ing, or service industries. Preference for using IBB was associated with less negotiating experience, a perception that the bargaining relationship is cooperative following negotiations, pressure around new technology, and not being in manufacturing, construction, or service industries.
Contracts negotiated using IBB were more likely to have increased work rule flexibility, new pay arrangements, joint committees, and team- based work systems. Most economic issues were not influenced by IBB. The greatest effect seemed to be on the ability to negotiate complex issues. There are differences in goal emphasis between union and management
FIGURE 13.2 Bargaining Economics
Source: K. Saunders, “Bucket Bargaining: Best Process in Interest Based Bargaining,” Labor Law Journal, 50 (1999), p. 52.
� Agree on economic package � Frame issues in package � Rank or prioritize issues � Define unit cost of each issue � Define package interests � Agree on tools
Tools 1. Straw design 2. Expert panel 3. Problem-solving process � Develop options � Agree on standards � Apply standards
J O I N T
S E P A R A T E
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negotiators who prefer to use IBB. Management negotiators are more likely to be interested in new pay arrangements and teams, while union negotiators are less likely to be interested in those issues. Work rule flex- ibility and willingness to reduce benefits were higher for union bargain- ers preferring IBB but lower for management negotiators preferring IBB. These findings raise some caution flags regarding long-term sustainability of IBB in a particular bargaining situation.
CREATING AND SUSTAINING COOPERATION
Since the early 1980s, cooperative initiatives outside contracts and inte- grative bargains within contracts have increased, enhancing firm per- formance and improving job security. An analysis of contracts involving 1,000 or more employees and expiring between 1997 and 2007 found that 47 percent included cooperative provisions. 19 Figure 13.3 shows the coop- eration continuum, while Table 13.1 shows the incidence of cooperative clauses by levels of cooperation.
Given management’s long-standing antipathy toward unions, it’s reasonable to expect collaboration only where improved performance is expected. Cooperation has been successful where communication between the parties is open, management accepts the representational role of the union, and the union is concerned about the success of the enterprise. 20
Figure 13.4 models the proposed impact of collaboration on per- formance. It suggests that the intensity of cooperation is influenced by a cooperative structure and the relative power of the union and the company as modified by organizational constraints. Over time, the labor-management relations climate also influences intensity. Changing labor-management relations, the relative power of the company, and organizational constraints lead to changes in company performance. The availability of union and company power implies they will use it to influence cooperation. Applying relatively equal power should enhance cooperation efforts where both parties prefer it as a mode for achieving important ends for each. 21 A cooperative climate is promoted by the union’s willingness to adopt an integrative bargaining approach,
19 G. R. Gray, D. W. Myers, and P. S. Myers, “Cooperative Provisions in Labor Agreements: A New Paradigm?” Monthly Labor Review, 122, no. 1 (1999), pp. 29–45. 20 R. W. Miller, R. W. Humphreys, and F. A. Zeller, “Structural Characteristics of Successful Cases of Cooperative Union-Management Relations,” Labor Studies Journal, 22, no. 2 (1997), pp. 44–65. 21 W. N. Cooke, Labor-Management Cooperation (Kalamazoo, MI: W. E. Upjohn Institute for Employment Research, 1990), pp. 93–95.
Chapter 13 Union-Management Cooperation 439
• FULL COOPERATION • Decisions on strategic issues • High-performance practices • Guarantees of employment security • Decisions on traditional issues • Committees to review mutual concerns that arise • Statement of commitment to cooperate • INTENT TO COOPERATE
FIGURE 13.3 The Cooperation Continuum
Source: G. R. Gray, D. W. Myers, and P. S. Myers, “Cooperative Provisions in Labor Agreements: A New Paradigm?” Monthly Labor Review, 122, no. 1 (1999), p. 31.
Number of Percent of Percent of Provision Contracts All Contracts All Employees
Total in sample 1,041 100.0 100.0
All contracts with cooperative provisions 485 46.6 46.2
All contracts with explicit cooperative language 286 27.5 29.2
Stage 1: Statement of intent to cooperate only 150 14.4 9.6
Stage 2: Joint committees to review issues 163 15.7 16.0 Total at stages 1 and 2 only 160 15.4 13.1
Stage 3: Drug programs 72 6.9 4.7 Health care 16 1.5 2.2 Human relations 106 10.2 10.9 Safety 261 25.1 28.8
Stage 4: Favored “nation” 46 4.4 3.2 Neutrality toward organizing 49 4.7 4.6 No layoff 22 2.1 2.8 No subcontracting 14 1.3 0.7
Stage 5: High-performance work practices 154 14.8 19.1
Stage 6: Strategic decision making 27 2.6 4.4
TABLE 13.1 Incidence of Cooperative Clauses in Private Sector Collective Bargaining Agreements Expiring between September 1, 1997, and September 30, 2007
Source: G. R. Gray, D. W. Myers, and P. S. Myers, “Cooperative Provisions in Labor Agreements: A New Paradigm?” Monthly Labor Review, 122, no. 1 (1999), p. 33.
management’s willingness to share information freely, and perceptions of procedural justice. This study found that cooperation contributed to higher productivity and improved customer service. 22
22 S. J. Deery and R. D. Iverson, “Labor-Management Cooperation: Antecedents and Impact on Organizational Performance,” Industrial and Labor Relations Review, 58 (2005), pp. 588–609.
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METHODS OF COOPERATION
This section examines cooperation methods, covering assumptions about types of cooperation, mechanisms used to achieve it, union and manage- ment personnel involved, and results of cooperative efforts. It examines several generic approaches to labor-management cooperation, including areawide labor-management committees, productivity improvement and employee involvement plans, gainsharing, and employee stock owner- ship plans. Within firms, several of these may be combined to enhance joint outcomes. The section also covers the changing roles of managers and union officials, political changes, and the processes involved in the diffusion and institutionalization of innovation in workplace design.
Areawide Labor-Management Committees Areawide labor-management committees (AWLMCs) are jointly spon- sored by unions and employers in a local area. They don’t engage in col- lective bargaining or form multiemployer or multiunion bargaining units. Instead, they advise their members on how to deal with jointly experi- enced employment issues.
AWLMCs are most often a response to significant regional employment problems. They have been developed most frequently in the Northeast and Midwest following economic declines. There is often a history of plant closings, with parent companies expanding elsewhere. High wages and/ or adversarial labor relations are likely to be part of the problem.
The primary assumption behind the creation of AWLMCs is that labor and management representatives may pressure each other to identify sources of problems and use cooperative methods to reduce or avoid
FIGURE 13.4 Model of the Effect of Cooperation on Performance and Labor Relations Outcomes
Source: W. N. Cooke, Labor–Management Cooperation (Kalamazoo, MI: W. E. Upjohn Institute for Employment Research, 1990), p. 94. Reprinted with permission.
Intensity of cooperation
Relative power of union
Relative power of company
Change in labor-management relations
Change in company performance
Chapter 13 Union-Management Cooperation 441
conflict. They provide information to members about cooperation suc- cesses and legitimize the use of nonadversarial methods. The identifica- tion of joint issues, such as reduced profits and declining job security, may lead to joint efforts to resolve them.
An AWLMC is usually managed by an executive director hired by a coalition of business and union leaders. AWLMCs engage in four major types of activities: (1) sponsoring events to improve labor-management communications, (2) establishing committees in local plants, (3) assisting in negotiations, and (4) fostering economic development. 23 These activities aim to create a problem-solving environment and an appearance of labor- management cooperation.
Generally, evidence suggests that AWLMCs need the backing of major employers in the community and a competent executive director who is willing and able to stay in the post for an extended period to be able to accomplish the goals. 24
Joint Labor-Management Committees The retail food industry joint labor-management committee (JLMC) involves top union and management leaders and helps managers to understand the national-local union relationship in a decentralized indus- try. JLMCs have been successful with research on occupational safety and health issues, introduction of new technology, health care cost contain- ment, and issues relating to competitiveness. 25 JLMCs are most often implemented in industries with many employers and a dominant union with locals in many employers and locations.
Joint labor-management committees have most often been used to deal with specific problems rather than to address the entire scope of the bargaining relationship. Some joint efforts have led to continuing and expanded cooperation efforts. Notable among these are the cooperation between Xerox and UNITE-HERE, which began as a result of rapidly growing competitive pressure faced by Xerox in the early 1980s and the effects this was having on job security, 26 and the employee involve- ment (EI) program developed by Ford and the United Auto Workers to respond to higher levels of quality and value in imported vehicles and decreasing profits and job security in an industry under siege. Another example is the introduction of joint building trades–union contractor committees in the construction industry. Here one study
23 R. D. Leone, The Operation of Area Labor-Management Committees (Washington, DC: U.S. Department of Labor, Labor-Management Services Administration, 1982). 24 Ibid.; and R. W. Ahern, “Discussion of Labor-Management Cooperation,” Proceedings of the Industrial Relations Research Association, 35 (1982), pp. 201–206. 25 Kochan et al., Transformation of American Industrial Relations, pp. 182–189. 26 P. Lazes, “Unions and the Choice of Employee Involvement Activities,” Workplace Topics, 2, no. 2 (1991), pp. 1–12.
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found improvements in safety, training, and absenteeism; a reduction in jurisdictional disputes between unions; and a decline in jobs going to nonunion contractors. 27
A health care labor-management council in Minneapolis–St. Paul created extensive cooperation that improved hospital staffing flex- ibility, resulting in an increase in hospital income per patient of about $80 per day. 28
Among these examples, Xerox and the Twin Cities hospitals are cur- rently facing very difficult financial situations. Some Twin Cities hospi- tals have merged and nurses have struck as health care purchasers have put pressure on insurers and hospitals to cut costs and compete. The labor-management council is no longer in operation. 29 Thus, joint labor- management cooperation does not, in itself, ensure corporate survival and employee job security.
Workplace Interventions Workplace interventions are projects usually initiated at a single loca- tion within an employer and involve a single union, or they may be part of a larger joint union-management program in a single firm. Typically, changes are sought by employers to improve product quality, produc- tivity, and profitability. Unions seek enhanced employment security, an opportunity for economic gains, and continued operation of local facilities.
Workplace interventions change the design of organizations by increasing the use of lean production, cell manufacturing, self-directed work teams, and the like. Jobs are made broader and classifications are reduced, increasing the employer’s flexibility in assigning work as demands change and reducing the likelihood that layoffs might follow a reduction in demand for jobs with narrow skills. Pay programs are often changed so that employees share in productivity or profitability gains while reducing employers’ risks during periods of economic difficulty. Base pay levels are more frequently tied to skill level than to current job duties or seniority level.
A variety of workplace interventions has been implemented. Table 13.2 divides them into gainsharing and nongainsharing plans and describes their characteristics. Gainsharing plans (covered in Chapter 9) tie periodic bonuses to labor productivity improvements. Nongain- sharing approaches may include a changed reward structure (primarily
27 J. Remington and B. Londrigan, “Construction Industry Labor-Management Cooperation Committees: Defining Essential Elements,” Labor Studies Journal, 19, no. 2 (1994), pp. 67–80. 28 G. A. Preuss, “Labor-Management Cooperation and Hospital Adjustment of Practices,” Proceedings of the Industrial Relations Research Association, 51 (1999), pp. 68–74. 29 G. A. Preuss and A. C. Frost, “The Rise and Decline of Labor-Management Cooperation: Lessons from Health Care in the Twin Cities,” California Management Review, 45, no. 2 (2003), pp. 85–106.
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nonmonetary) in the intervention without a directed relationship between productivity and pay. The table summarizes the guiding philosophy of each method, primary change goal, degree of worker participation, role of supervisors and managers, any bonus formulas, the union’s role, and other characteristics.
Gainsharing plans generally benefit both employers and employees. As noted in Chapter 9, their adoption is often followed by increased profits, productivity-related bonuses for employees, and/or a greater ability for a firm to survive and employees to retain jobs during secular decline in
Program Dimension Scanlon Rucker Impro-Share
Labor- Manage- ment Committees
Employee Involvement (EI) and Quality of Work Life (QWL)
Self- Managed Work Teams
Role of super- visor
Chair, produc- tion committee
None None None No direct role No supervisor
Role of managers
Direct participa- tion in bonus committee assignments
Ideas coordi- nator evaluates suggestions, committee assignments
None Committee members
Steering committee membership
Communi- cates with work team on produc- tion targets; problem solving
Bonus formula Sales/payroll Bargaining unit payroll/ production value (sales, materials, supplies, services)
Engineered standard � BPF*/total hours worked
All savings/ improvements retained by company
All savings/ improvements retained by company
All savings/ improve- ments retained by company
Frequency of payout
Monthly Monthly Weekly Not applicable Not applicable Not applicable
Role of union Negotiated provisions, screening committee membership
Negotiated provisions, screening committee membership
Negotiated provisions, screening committee membership
Job design negotiated into collective bargaining agreement
Impact on management style
Substantial Slight None Some Substantial Substantial
TABLE 13.2 Comparative Analysis of Workplace Interventions
Source: Adapted from M. Schuster, Union Management Cooperation: Structure, Process, and Impact (Kalamazoo, MI: W. E. Upjohn Institute for Employment Research, 1984), p. 73.
*Base productivity factor.
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an industry. In addition to generally positive economic benefits, a study found that after the introduction of a Scanlon-type plan, grievance and absentee rates permanently decreased over time. 30 A long-term study of a suggestion system found that productivity improved and grievances and disciplinary problems declined but implementation costs more than offset the gains the suggestions generated. 31 The survival of gainsharing plans is related to employees’ vote to approve, new employee training, labor intensity, major capital investments, bonus performance, and use of consultants. 32
Gainsharing plans are often implemented in mature organizations in competitive product markets where there is continuous pressure on all types of costs. Unless barriers to entry exist against new firms, flexible compensation programs inevitably lead to ratchet effects, with the per- formance base on which bonuses are paid increasing following higher productivity. 33
Employee Involvement and Quality-of-Work-Life Programs Employee involvement (EI) and quality-of-work-life (QWL) programs have three components: (1) improving climate, (2) generating commit- ment, and (3) implementing change. Union participation in EI programs is related to the progressiveness of the company and increased foreign competition. The implementation of involvement programs in traditional unionized workplaces is related to deregulation, demographic change, and support (but not pressure) from a parent national union. Cooperation in strategic decision making is positively related to foreign competition and negatively related to domestic competition—probably because the national union often bargains with other companies in the industry. 34
A study of GM-UAW plants found that performance, quality, pro- ductivity, grievances, discipline, absenteeism, number of local contract demands, and negotiating time were significantly related. Grievances and absenteeism rose when production pressures increased. Product qual- ity and productivity measures decreased as labor problems increased. Managerial attitudes were positively related to both labor relations and productivity-efficiency measures. EI programs were associated with higher product quality and reduced grievances. Absenteeism and quality
30 J. B. Arthur and G. S. Jelf, “The Effects of Gainsharing on Grievance Rates and Absenteeism over Time,” Journal of Labor Research, 20 (1999), pp. 133–146. 31 D.-O. Kim, “The Benefits and Costs of Employee Suggestion under Gainsharing,” Industrial and Labor Relations Review, 58 (2005), pp. 631–652. 32 D.-O. Kim, “The Longevity of Gainsharing Programs: A Survival Analysis,” Proceedings of the Industrial Relations Research Association, 51 (1999), pp. 200–209. 33 H. L. Carmichael and W. B. McLeod, “Worker Cooperation and the Ratchet Effect,” Journal of Labor Economics, 18 (2000), pp. 1–19. 34 I. Goll, “Environment, Corporate Ideology, and Employee Involvement Programs,” Industrial Relations, 29 (1990), pp. 501–512.
Chapter 13 Union-Management Cooperation 445
were related, possibly because less careful workers were gone more. 35 A study of both unionized and nonunion firms in Canada found that in unionized firms grievance rates generally decreased following imple- mentation of EI programs but in nonunion workplaces EI was associated with the development and implementation of grievance procedures but not lower rates. 36
EI programs are associated with reductions in absences, accidents, grievances, and quits. 37 Desire for union involvement in EI programs is related to dissatisfaction, organizational commitment, and attitudes toward EI. 38 Participation in programs leads to greater loyalty to the union rather than reduced commitment. However, perceived effective- ness of the grievance procedure is a stronger predictor of attitudes toward the union than of participation in EI programs. 39 EI program participation was associated with improved job satisfaction and enhanced commu- nication skills. Union empowerment is a possible outcome. 40 EI pro- grams increased organizational citizenship behavior of participants, both through participation and through changing job characteristics requiring more task sharing. Other employment practices had little effect. 41 Local unions involved in participation programs do not change the nature of their regular functions and activities, but unless they have support from their parent national, they may have a hard time coping with both par- ticipation and representation activities simultaneously. 42 Finally, union antagonism toward EI doesn’t appear to influence employee attitudes, but it does reduce participation. 43
35 H. C. Katz, T. A. Kochan, and K. R. Gobeille, “Industrial Relations Performance, Economic Peformance, and QWL Programs: An Interplant Analysis,” Industrial and Labor Relations Review, 37 (1983), pp. 3–17. 36 A. J. S. Colvin, “The Relationship between Employee Involvement and Workplace Dispute Resolution,” Relations Industrielles, 59 (2004), pp. 681–704. 37 S. J. Havlovic, “Quality of Work Life and Human Resource Outcomes,” Industrial Relations, 30 (1991), pp. 469–479. 38 Y. Reshef, M. Kizilos, G. E. Ledford, Jr., and S. G. Cohen, “Employee Involvement Programs: Should Unions Get Involved?” Journal of Labor Research, 20 (1999), pp. 557–570. 39 A. E. Eaton, M. E. Gordon, and J. H. Keefe, “The Impact of Quality of Work Life Programs and Grievance System Effectiveness on Union Commitment,” Industrial and Labor Relations Review, 45 (1992), pp. 591–604. 40 T. Juravich, “Empirical Research on Employee Involvement: A Critical Review for Labor,” Labor Studies Journal, 21, no. 2 (1996), pp. 51–69. 41 P. Cappelli and N. Rogovsky, “Employee Involvement and Organizational Citizenship: Implications for Labor Law Reform and ‘Lean Production’,” Industrial and Labor Relations Review, 51 (1998), 633–653. 42 A. E. Eaton and S. Rubinstein, “Tracking Local Unions Involved in Managerial Decision-Making,” Labor Studies Journal, 31, no. 2, pp. 1–31. 43 R. E. Allen and K. L. Van Norman, “Employee Involvement Programs: The Noninvolvement of Unions Revisited,” Journal of Labor Research, 17 (1996), pp. 479–495.
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The evidence suggests that positive outcomes for both employers and employees result from implementing EI programs. However, a study using two large employer and employee data sets found that while employees generally feel that they benefited from EI programs, there is no measurable effect on company sales, even across a 10-year period. 44
Team-Based Approaches The organizational restructuring that began in the 1980s has been increas- ingly team-oriented. A work team is responsible for the output from an area, including work assignment. Each team member is expected to be able to perform all the tasks necessary to produce the output for which the team is responsible. The more skills employees possess, the greater the variety of tasks they can perform. As such, many team-based pro- grams are supported by skill-based pay (SBP) plans. SBP ties employees’ pay levels to the number of specific skills they have acquired. 45 Within a team, an employee who has acquired the entire set of applicable skills can perform any of the jobs. Broader skill sets mean the organization can read- ily accommodate changes in the demand for products because employ- ees can assume new responsibilities quickly. Less equipment downtime occurs because one of the skill sets includes equipment maintenance. Multiskilling also improves an individual’s job security. 46
At Chrysler’s Jefferson North plant, a “ modern operating agreement ” was implemented as the company’s quid pro quo for rebuilding the plant in Detroit. Team leaders are elected in this operation as well, but rotation is infrequent. The team structure encourages equal effort and reduced absenteeism. This plant was staffed primarily by senior employees who would have been laid off if a new plant had not been built. 47 Studies at Saturn found that quality is higher in units where the interests and goals of the management and union co-representatives, who are responsible for directing a work unit, were aligned. In addition, evidence suggests that union representatives formed more intensive lateral and vertical com- munication patterns within the plant, enabling quicker identification and solution of problems. 48
44 R. B. Freeman and M. M. Kleiner, “Who Benefits Most from Employee Involvement: Firms or Workers?” American Economic Review, 90, no. 2 (2000), pp. 219–223. 45 For additional details on skill-based pay plans, see G. T. Milkovich and J. Newman, Compensation, 8th ed. (Burr Ridge, IL: Irwin/McGraw-Hill, 2005). 46 C. Ichniowski, “Human Resource Practices and Productive Labor-Management Relations,” in D. Lewin, O. S. Mitchell, and P. D. Sherer, eds., Research Frontiers in Industrial Relations and Human Resources (Madison, WI: Industrial Relations Research Association, 1992), pp. 239–272. 47 H. Shaiken, S. Lopez, and I. Mankita, “Two Routes to Team Production: Saturn and Chrysler Compared,” Industrial Relations, 36 (1997), pp. 17–45. 48 S. A. Rubinstein, “The Impact of Co-Management on Quality Performance: The Case of the Saturn Corporation,” Industrial and Labor Relations Review, 53 (2000), pp. 197–218.
Chapter 13 Union-Management Cooperation 447
Team members are expected to learn all skills involved in the jobs per- formed by the team. The team decides how work will be accomplished. Supervisors facilitate rather than direct work. In organizations where teams have been implemented, relatively small numbers of distinct jobs exist. Employee-supervisor relations improve more when there is sub- stantial union leader participation and teams are very active. They do best where employment has not changed appreciably, where workers are experienced, and where management does not subcontract. 49
While team approaches have been broadly implemented in the auto industry, they have been controversial at GM. GM’s initial foray into cooperation involved QWL programs begun in the early 1970s. Since then, the introduction of teams at the company has been aimed at improving productivity, with more positive worker outcomes a poten- tial by-product.
Team approaches have been successful in New United Motors Manu- facturing, Inc. (NUMMI), a Toyota-managed GM-Toyota joint venture in Fremont, California. Before the joint venture, this assembly plant had GM’s worst absentee and quality record. When NUMMI began, most employees were retained and the UAW remained the bargaining agent. The team concept was agreed to before hiring and start-up, and employees were trained extensively in statistical process control and teamwork. The assembly line runs faster than it did under GM, but there is a no-layoff policy. Absence rates are very low. 50 The EI program helped improve ergonomics for the production of the 1993 models. 51
Joint labor-management teams are often established to deal with work- place issues such as safety and health. These are standing committees, co-led by labor and management. Stewards who are members of these committees become less likely to file grievances and more likely to settle them at earlier stages in the process. They see their roles as less advocative and more tied to enforcing the contract equally on labor and management. However, they aren’t more likely to adopt managerial goals related to plant or firm performance. 52
49 W. N. Cooke, “Factors Influencing the Effect of Joint Union-Management Programs on Employee-Supervisor Relations,” Industrial and Labor Relations Review, 43 (1990), pp. 587–603. 50 C. Brown and M. Reich, “When Does Union-Management Cooperation Work? A Look at NUMMI and GM–Van Nuys,” California Management Review, 31, no. 4 (1989), pp. 26–37; P. D. Staudohar, “Labor-Management Cooperation at NUMMI,” Labor Law Journal, 42 (1991), pp. 57–63. 51 P. S. Adler, B. Goldoftas, and D. I. Levine, “Ergonomics, Employee Involvement, and the Toyota Production System: A Case Study of NUMMI’s 1993 Model Introduction,” Industrial and Labor Relations Review, 50 (1997), pp. 416–437. 52 R. Bruno, “Bargaining through Cooperation: The Impact of Labor Management Teams on Steward Identity and Performance,” Proceedings of the Industrial Relations Research Association, 55 (2003), pp. 264–273.
448 Labor Relations
Alternative Governance Forms Union-management cooperation changes both the production process and workplace governance. Employee involvement in decision making shifts the focus of collective bargaining from structural rules to processes. Tra- ditional collective bargaining offers less participation than other forms of governance. 53 Table 13.3 shows the relationship between employee relations practice and various employee involvement areas influencing governance of the organization.
Union Political Processes and the Diffusion of Change Collaboration is foreign to an adversarial relationship and requires politi- cal change by local and national unions. Firm stability and progressive management ensure the safety net union leaders need to advocate change. Unions adopt one of five reactions to innovative workplace initiatives: (1) “Just say no,” (2) let management lead and see what results, (3) become involved for political protection, (4) cooperate or collaborate, or (5) assert union interests. 54 Local union defensiveness is not irrational because sometimes managers view cooperation as a signal of a willingness to make concessions and increase productivity while efforts to undermine the union continue. 55 If unions perceive an unequal power relationship exists with management, cooperation is hard to introduce. Unions can take advantage of economic problems to further worker interests. Coop- erative programs offer an opportunity to negotiate permanent participa- tion into contracts. 56
Developing cooperation programs is enhanced by international union education efforts and local willingness to risk experimenting with new forms of bargaining and work designs. 57 Participation programs can ben- efit unions since workers who are active are more satisfied with their union and involved in union activities. Union support is not undermined by member involvement. 58 Union leader involvement in participation lifts
53 A. Verma and J. Cutcher-Gershenfeld, “Joint Governance in the Workplace: Beyond Union-Management Cooperation and Worker Participation,” in B. E. Kaufman and M. M. Kleiner, eds., Employee Representation: Alternatives and Future Directions (Madison, WI: Industrial Relations Research Association, 1993), pp. 197–234. 54 A. E. Eaton and P. B. Voos, “The Ability of Unions to Adapt to Innovative Workplace Arrangements,” American Economic Review, 79, no. 2 (1989), pp. 172–176. 55 P. B. Voos and T. Y. Cheng, “What Do Managers Mean by Cooperative Labor Relations?” Labor Studies Journal, 14, no. 1 (1989), pp. 3–19. 56 J. Cutcher-Gershenfeld, R. B. McKersie, and K. R. Wever, The Changing Role of Union Leaders (Washington, DC: Bureau of Labor-Management Relations, U.S. Department of Labor, 1988). 57 A. E. Eaton, “The Extent and Determinants of Local Union Control of Participative Programs,” Industrial and Labor Relations Review, 43 (1990), pp. 604–620. 58 A. Verma, “Joint Participation Programs: Self-Help or Suicide for Labor?” Industrial Relations, 28 (1989), pp. 401–410.
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450 Labor Relations
member commitment, but members who view the company and union negatively are not changed by a program’s success. 59
Management Strategy Labor-management cooperation efforts are often focused at the plant level, although some companywide strategies, such as the Ford-UAW EI pro- gram, exist. Management may frequently encounter situations in which its employees, across plants, are represented by several different inter- national unions, each with its own approach toward union-management cooperation.
Initial research on management strategies toward collective bargaining, cooperation, union avoidance, and firm performance suggests that firms improve profitability through extensive collaboration between manage- ment and labor. Performance is also improved by closing existing union- ized facilities and opening or acquiring new nonunion plants. Deunionizing activity in any existing plant has a negative effect on performance. 60
Evidence from steel minimills indicates they follow either a cost- reduction or product-differentiation strategy. Cost-reduction strategies are associated with conflict and the use of formal grievance procedures, while product differentiation requires flexible manufacturing and is associated with employee commitment, collective bargaining, and the informal solu- tion of problems. Wages in minimills following a product-differentiation strategy are higher and employees add more value to the products. 61
Research on the Effects of Cooperation across Organizations A study of several hundred organizations has yielded important informa- tion on the effects of contextual and cooperative structures on productiv- ity and quality. The more active team-based programs are, the greater their effect. Top union leader participation is important. Larger plants have more difficulty improving productivity through cooperative efforts. Technology changes improve productivity at a rate faster than any nega- tive effects from unilateral management implementation. Higher union security predicts more positive results. Subcontracting and frequent lay- offs reduce gains. Interestingly, the larger the proportion of women in the workforce, the greater the productivity gains. 62
59 M. W. Fields and J. W. Thacker, “The Effects of Quality of Work Life on Commitment to Company and Union: An Examination of Pre-Post Changes,” Proceedings of the Industrial Relations Research Association, 41 (1988), pp. 201–209. 60 D. G. Meyer and W. N. Cooke, “Labor Relations in Transition: Strategic Activities and Financial Performance,” British Journal of Industrial Relations, 31 (1993), pp. 531–552. 61 J. B. Arthur, “The Link between Business Strategy and Industrial Relations Systems in American Steel Minimills,” Industrial and Labor Relations Review, 45 (1992), pp. 488–506. 62 W. N. Cooke, “Improving Productivity and Quality through Collaboration,” Industrial Relations, 28 (1989), pp. 299–319.
Chapter 13 Union-Management Cooperation 451
Product quality was higher where joint labor-management programs existed. Adversarial programs produced better results than programs run only by management, which were not better than having no program. Joint programs were as effective as participation programs in nonunion firms. If the firm coupled cooperation with significant capital investments, quality improved substantially. Factors reducing joint-program effective- ness included subcontracting, earlier concessions, downsizing, and larger unit size. 63 Table 13.4 shows the effects of various union-management
Program or Characteristic Improved Quality
Bonus Payout Level
Employee involvement ** ** Frequent bonus *(–) ** Employee bonus share *** — Employee bonus share squared ***(–) — Bonus payouts ** *** *** *** — Bonus payouts squared ***(–) **(–) — Small bonus group * ** Scanlon plan *** *** Modified Scanlon plan ** **(–) Rucker plan * Customized plan ** ** Consultant involvement * Employee vote *** *** * **(–) Labor intensity * ** Market growth ** ** Financial situation ** Average education *(–) Average seniority ** *** *** * Union ***(–) ***(–) **(–) ***(–) Program age *(–) **(–) * *** MU(1) *** *** *** *** *** Union support (if union present) ** * * ***
TABLE 13.4 Perceived Effectiveness of Involvement and Gainsharing Programs on Performance Measures
Source: Adapted from D. -O. Kim, “Factors Influencing Organizational Performance in Gainsharing Programs,”Industrial Relations, 35 (1996), pp. 232–233.
*Likelihood that effect of program or characteristic is zero is less than 10 percent. **Likelihood that effect of program or characteristic is zero is less than 5 percent. ***Likelihood that effect of program or characteristic is zero is less than 1 percent. (–) Direction of effect is negative. — Effect is not measured in this specification.
63 W. N. Cooke, “Product Quality Improvement through Employee Participation: The Effects of Unionization and Joint Union-Management Administration,” Industrial and Labor Relations Review, 46 (1992), pp. 119–134.
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cooperation plans, demographic characteristics, and program perfor- mance on measures of quality, productivity, cost reduction, production processes, and bonus payouts.
A study of company performance across 24 units found that adver- sarial labor-management relations were associated with higher costs, more scrap, lower productivity, and lower returns to direct labor hours than was found in areas with increased cooperation and improved grievance handling. 64 Employee involvement programs were equally likely in both union and nonunion settings, but unionized firms allowed employees less authority. EI programs were not related to return on assets. 65
EI programs influence firm performance more in unionized firms, while profit-sharing and gainsharing programs are better in nonun- ion firms in raising value added per employee. Unionized firms had higher value added, lower labor costs, and more experienced and skilled workforces. 66
Another study of outcomes across a set of employers found union officer–management relations were positively related to forming general committees but not to decisions involving profit sharing or employee stock ownership plans (ESOPs) . Grievances were reduced where commit- tees or gainsharing plans were implemented. General labor-management committees kept grievance handling more informal and resolved prob- lems more quickly. Flexibility and reduced absenteeism and turnover were related to all types of participation, as cataloged in “Workplace Interven- tions” (above). 67 Table 13.5 summarizes the results of this study.
Managers perceive greater support from employees who are covered by profit-sharing and participation plans. Employee input on issues and authority to implement suggestions are related to managerial perceptions that employees support change. 68
Research on the Long-Term Effects of Cooperation Little research on the long-term effects of union-management coopera- tion has been reported. One study of cooperation initiatives found large differences in the philosophies underlying projects. Scanlon and quality
64 J. Cutcher-Gershenfeld, “The Impact of Economic Performance of a Transformation in Workplace Relations,” Industrial and Labor Relations Review, 44 (1991), pp. 241–260. 65 J. T. Delaney, C. Ichniowski, and D. Lewin, “Employee Involvement Programs and Firm Performance,” Proceedings of the Industrial Relations Research Association, 41 (1988), pp. 148–158. 66 W. N. Cooke, “Employee Participation Programs, Group-Based Incentives, and Company Performance: A Union-Nonunion Comparison,” Industrial and Labor Relations Review, 47 (1994), pp. 594–609. 67 P. G. Voos, “The Influence of Cooperative Programs on Union-Management Relations, Flexibiity, and Other Labor Relations Outcomes,” Journal of Labor Research, 10 (1989), pp. 103–117. 68 S. Schwochau, J. Delaney, P. Jarley, and J. Fiorito, “Employee Participation and Assessments of Organizational Policy Changes,” Journal of Labor Research, 18 (1997), pp. 379–401.
Chapter 13 Union-Management Cooperation 453
circle programs have the greatest participation, while Rucker and Impro- Share programs are mostly associated with economic incentives. The plans cannot substitute for good management, but where that does not exist, labor-management committees can be a springboard for progress. In the absence of management commitment to participation, Scanlon and other high-participation programs will fail. 69 Critical factors for the ongoing suc- cess of the programs are the training and commitment of supervisors and the construction and understanding of the bonus formulas.
Companies and unions generally begin programs to improve labor relations, increase the level of pay available, and so on. Motives of the parties influence the type of plan chosen. Gainsharing affects productiv- ity more than do labor-management committees or QWL programs. If a traditional bargaining relationship has enabled both the company and the union to accomplish their objectives, they do not initiate cooperation methods. Those methods are used only when the parties encounter diffi- culties in accomplishing their goals while using a traditional distributive bargaining approach.
A study of cooperation at 23 sites found productivity improvements in 12 and no change in 10 others. In 16, subsequent experience ena- bled employees to earn bonuses supplementing what they would have
69 Schuster, Union Management Cooperation.
Union Ability to Officer– Resolve Flexibility Management Grievance Grievances in Using Relations Rate Informally Labor Absenteeism Turnover
General plant committees 1.23 1.03 1.24 0.54 0.41 0.31 Specialized plant committees 0.77 0.71 0.66 0.25 0.32 0.25 Local-area cooperation committees 0.82 NS 0.36 NS NS NS Employee participation programs 0.47 0.53 0.55 0.47 0.30 0.27 Gainsharing plans 0.57 0.78 0.78 0.57 0.57 0.47 Profit-sharing plans 0.36 NS 0.28 0.20 0.25 0.46 Employee stock ownership plans 0.38 NS NS NS NS 0.23
TABLE 13.5 Managers’ Mean Evaluations of the Impact of Selected Committees and Programs on Six Labor Relations Outcomes*
Source: Adapted from P. B. Voos, “The Influence of Cooperative Programs on Union-Management Relations, Flexibility, and Other Labor Relations Outcomes,” Journal of Labor Research, 10 (1989), p. 109.
*Only relationships that are statistically significantly different from 0 are shown. NS = not significantly different from 0. Evaluations are based on the following response scale: 2 = large positive effect, 1 = small positive effect, 0 = no effect, –1 = small negative effect, and –2 = large negative effect.
454 Labor Relations
earned solely as a result of collective bargaining. Bonus levels are directly influenced by the rate of suggestions generated by the employees. 70 Employment levels are relatively unaffected by cooperative programs, and labor relations are seen as improved. 71
While it is very difficult to develop and sustain labor-management cooperation, two examples of continuing success stand out. Harley- Davidson and the IAM and PACE unions have worked together for over 10 years to increase productivity, quality, and profitability. They have implemented substantial changes in work design, worker participation, and gainsharing. Intensive involvement by top management and the national and local unions has helped this program to succeed. In the meantime, Harley-Davidson has increased its market share and reputation with consumers to an almost “cult” level. 72 The second example involves the city of Indianapolis and the American Federation of State, County, and Municipal Employees (AFSCME) locals representing employees in the transportation department. Working with the mayor and AFSCME leaders, workers improved productivity sufficiently to undercut private bidders for street maintenance and repair contracts. Several layers of mid- dle management and supervisors were eliminated in a politically vola- tile environment. Communications between management and the union were substantially enhanced and racial segregation in job assignments was successfully addressed. 73
One of the most widely followed innovative cooperative relationships was between the United Auto Workers and the Saturn division of General Motors Corporation. As noted above, managers and union leaders worked together cooperatively to operate to solve problems and operate the plant. However, in 1999, after 13 years in office, the UAW’s local leaders were voted out and replaced by new officers who favored a traditional relation- ship between the union and the company. Over the next several years, the Saturn operation was fully integrated with General Motors and the Spring Hill, Tennessee plant has now been remissioned to produce a Chevrolet crossover SUV using the same types of production methods and labor relations as the rest of the company’s assembly plants.
70 M. Schuster, “The Scanlon Plan: A Longitudinal Analysis,” Journal of Applied Behavioral Science, 20 (1984), pp. 23–38. 71 M. Schuster, “The Impact of Union-Management Cooperation on Productivity and Employment,” Industrial and Labor Relations Review, 37 (1983), pp. 415–430. 72 See J. Young and K. L. Murrell, “Harley-Davidson Motor Company Organizational Design: The Road to High Performance,” Organizational Development Journal, 16, no. 1 (1998), pp. 65–74; and R. Teerlink and L. Ozley, More Than a Motorcycle: The Leadership Journey at Harley-Davidson (Boston: Harvard Business School Press, 2000). 73 B. Rubin and R. Rubin, “Municipal Service Delivery, Collective Bargaining, and Labor-Management Partnerships,” Journal of Collective Negotiations in the Public Sector, 30 (2003), pp. 91–112.
Chapter 13 Union-Management Cooperation 455
HIGH-PERFORMANCE WORK ORGANIZATIONS
A lot of attention has been paid to the development of so-called high- performance work organizations (HPWOs). These employers have adopted many of the EI and other work practice innovations that have been discussed previously. Recent research finds strong evidence that firms need to implement a coherent set of practices to enhance firm performance.
A study of steel minimills found that plants that implemented a com- bination of problem-solving teams, flexible job assignments, training for multiple jobs, guaranteed employment security, and flexible pay plans were substantially more productive and profitable than firms that imple- mented smaller combinations of these or only single practices. Operat- ing uptime and value added were strongly influenced by these types of human resource management practices. 74
In another study, steelworkers in HPWOs who say they are able to use skills and knowledge, perceive positive employee relations, and balance work and family life are very satisfied. Predictors of satisfaction include perceptions of pay fairness, being a women, being a high school graduate, job autonomy, use of skills, employee relations, work/family balance, and low job stress. 75
Workplace Restructuring A great deal of workplace restructuring has taken place over the past 20 years. Much of this has increased the intensity of work and reduced the number of employees in production jobs. At the same time, the number of layers of management has been reduced. One study found that workplace restructuring and employer performance outcomes were more successful when the organizational structure and operation of the local union were stronger as reflected by horizontal and vertical communication network ties and internal political vitality. 76
Companies that implemented HPWOs during the early 1990s had higher layoff rates and no net compensation gain for employees during the decade. Layoffs were negatively related to sales gains, exports, skill levels, employee age, and proportion of female employees, and they were posi- tively related to the proportion of blue-collar workers and the introduction of HPWO practices. Wage gains for core employees were associated with sales gains and were negatively related to employee age and proportion
74 C. Ichniowski, K. Shaw, and G. Prennushi, “The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines,” American Economic Review, 87 (1997), pp. 291–313. 75 P. Berg, “The Effects of High Performance Work Practices on Job Satisfaction in the United States Steel Industry,” Relations Industrielles, 54 (1999), pp. 111–135. 76 A. C. Frost, “Explaining Variation in Workplace Restructuring: The Role of Local Union Capabilities,” Industrial and Labor Relations Review, 53 (2000), pp. 559–578.
456 Labor Relations
of female employees. Teams, quality circles, and total quality manage- ment (TQM) were positively associated with layoffs, while teams were negatively associated with wage gains. Clearly, HPWO practices have not increased job security or pay except in situations where the organization’s revenues were growing. 77 This evidence suggests that unions are unlikely to gain from cooperating in implementing HPWO practices. The study found that union status had no effect on layoff or wage gain outcomes among the employers studied.
THE LEGALITY OF COOPERATION PLANS
Among unionized employers, cooperation plans meet the requirements of the labor acts because they are jointly agreed to by unions and manage- ments. Many employers in nonunion companies have established joint management-employee committees to deal with a variety of production and employment issues. However, it’s possible these committees violate labor law. Section 8(a)(2) of the Taft-Hartley Act forbids employers to cre- ate and operate employer-dominated labor organizations. 78 Discussions of employment issues or proposals by committees for taking action on areas related to wages, hours, and terms and conditions of employment intrude into the mandatory bargaining issues specified in the act. 79
The NLRB was faced with ruling on the legality of an employer- sponsored committee in the Electromation case. 80 In its deliberation the NLRB asked: “When does an employee committee lose its protection as a communication device and become a labor organization?” and “What employer conduct constitutes interference or domination of such committees?”
The company had set up five volunteer committees to look at absen- teeism, pay, bonuses, and the like. The company initiated the commit- tees and drafted their goals, and management representatives facilitated discussions. The NLRB ruled this was an employer-dominated labor organization in violation of Section 8(a)(2). But in a later case, it held that employee committees that were delegated management responsibili- ties for production and personnel decisions that were reviewed by and sometimes reversed by management were not employee-dominated.
77 P. Osterman, “Work Reorganization in an Era of Restructuring: Trends in Diffusion and Effects on Employee Welfare,” Industrial and Labor Relations Review, 53 (2000), pp. 179–196. 78 A. B. Cochran, III, “We Participate, They Decide: The Real Stakes in Revising Section 8(a)(2) of the National Labor Relations Act,” Berkeley Journal of Employment and Labor Law, 16 (1995), pp. 458–519. 79 R. Hanson, R. I. Porterfiel, and K. Ames, “Employee Empowerment at Risk: Effects of Recent NLRB Rulings,” Academy of Management Executive, 9, no. 2 (1995), pp. 45–56. 80 Electromation, Inc., 309 NLRB No. 163 (1992).
Chapter 13 Union-Management Cooperation 457
However, these committees neither were elected nor made proposals to management. 81
At this point, it would be difficult to determine what a legal employee involvement program in a nonunion environment would be since pay will undoubtedly be an issue if productivity is discussed. 82 At the same time, the NLRB has accepted and pursued very few cases alleg- ing 8(a)(2) violations where employers have established teams and committees.
EMPLOYEE STOCK OWNERSHIP PLANS
Employee stock ownership plans (ESOPs) were first permitted by the Employee Retirement Income Security Act (ERISA) of 1974. Employees may receive stock through profit sharing, productivity gains, or subtrac- tions from wages. Since the early 1980s, several companies (e.g., Chrysler) have given employees stock in exchange for labor concessions. In most of these cases, particularly in the airline and steel industries, employees, in general, have experienced an erosion of their shares’ value, in some cases even going through bankruptcies.
ESOPs will not, in themselves, improve productivity. Employee-owned firms in Israel don’t function much differently than privately owned firms. Pay, productivity, and job security are somewhat higher. 83 Workers are generally productive regardless of the source of ownership. 84 Owner- ship affects workers’ attitudes by providing greater perceived influence and control and financial value. 85 A study of Ohio ESOPs found that in unionized companies, there were more shop-floor participation methods in companies where employees owned a majority of the stock. Perfor- mance was judged to be somewhat higher than that in non-ESOP firms. 86 However, workers may not automatically favor ESOPs either. The firm governance role involved in ESOPs may induce fear and anxiety as well
81 Crown Cork & Seal Co., 334 NLRB No. 92 (2001); and J. L. Ditelberg and T. J. Piskorski, “NLRB Breathes New Life into Employee Participation Committees,” Employee Relations Law Journal, 27, no. 1 (2002), pp. 127–137. 82 A. E. Perl, “Employee Involvement Groups: The Outcry over the NLRB’s Electromation Decision,” Labor Law Journal, 44 (1993), pp. 195–207. 83 A. Ben-Ner and S. Estrin, “What Happens When Unions Run Firms? Unions as Employee Representatives and as Employees,” Journal of Comparative Economics, 15 (1991), pp. 65–87. 84 J. R. Blasi, “The Productivity Ramifications of Union Buyouts,” National Productivity Review, 9 (1990), pp. 17–34. 85 A. A. Buchko, “Effects of Ownership on Employee Attitudes: A Test of Three Theoretical Perspectives,” Work and Occupations, 19 (1992), pp. 59–78. 86 J. Yates, “Unions and Employee Ownership: A Road to Economic Democracy?” Industrial Relations, 45 (2006), pp. 709–733.
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as expanded commitment. Where firm performance is linked to retire- ment security, workers may wish to avoid ESOPs since their investments lack diversification. 87
THE DIFFUSION AND INSTITUTIONALIZATION OF CHANGE
An important labor-management issue is how successful changes get diffused throughout the organization and become institutionalized. Par- ticipation needs a stable environment, especially in the composition of the management team, in order to grow. The parties need to avoid or isolate collective bargaining shocks and strategic shocks. Layoffs create problems for teams because workers use competitive seniority rights to bump in and out. Changes are aided by implementing them in new facilities with new workers. Diffusion of successes can then move toward established settings. Unions can markedly assist change when they have a role in strategic decision making such as plant locations. They may also provide needed concessions and work rule changes to make retrofitting of existing facilities economically feasible. Training to introduce new technology and increase employment security is important to employees and can help to make change permanent. Gainsharing will probably follow as a logical consequence of innovative participation. 88
The ability to institutionalize change depends on high levels of trust and commitment by union leaders and members, supervisors, plant managers, and corporate executives. Evidence shows that labor and management have substantially different perceptions in many situa- tions regarding the degree of commitment, feelings of manipulation and co-optation, and delivery on promises given that the efforts undertaken have not always followed their planned course. Establishing and con- tinuing trust are critical underlying factors in the success of cooperation programs. 89
Maintaining Union-Management Cooperation in the Face of External Change Union-management cooperation is a fragile regime. At the most basic level, the parties have different interests. Creating cooperation requires a political investment by both managers and union officers who see it as a vehicle to achieve their organization’s objectives more fully than pursu- ing a traditional approach. There are always other managers and faction
87 J. L. Pierce, S. A. Rubenfeld, and S. Morgan, “Employee Ownership: A Conceptual Model of Process and Effects,” Academy of Management Review, 16 (1991), pp. 121–144. 88 T. A. Kochan and J. Cutcher-Gershenfeld, Institutionalizing and Diffusing Innovations in Industrial Relations (Washington, DC: U.S. Department of Labor, Bureau of Labor-Management Relations and Cooperative Programs, 1988). 89 Cooke, Labor-Management Cooperation, pp. 121–136.
Chapter 13 Union-Management Cooperation 459
leaders within unions who believe that cooperation is antithetical to labor- management relations. When or if they move into leadership positions, the efforts are likely to flounder.
Besides facing internal political pressures, managers must deal with shareholder demands. Unless a firm with a cooperative labor- management relations climate performs better than comparable firms within its industry during the current operating period, there will be inevitable pressures to try different methods. While most of the evi- dence cited above suggests that cooperation is generally associated with higher worker satisfaction, lower grievances, and greater organizational commitment, there is no consistent evidence to indicate it universally improves firm performance.
In today’s environment, merger and acquisition activity occurs at a high rate. Divisions and companies are bought and sold, with performance objectives being determined by the managers employed by new owners. Usually, an acquiring firm has paid a premium over the current market value of the acquisition, increasing pressure to improve performance after a takeover. One of the companies described above, Chrysler, was taken private by Cerberus Capital in the summer of 2007. It will be interesting to see what labor relations climate develops, whether the modern operat- ing agreement will be sustained, or whether a radically changed regime will be implemented. Chrysler’s new owners were able to negotiate a new labor agreement with the UAW in 2007 after perhaps the shortest strike on record (about six hours). It’s CEO, Bob Nardelli, has no experience in the auto industry, having earlier been the CEO of Home Depot and before that a business-unit leader with General Electric. Its new co-president is James Press, who previously headed Toyota’s U.S. operations. With the exception of the NUMMI facility (described earlier), U.S. Toyota plants are nonun- ion, so the new team has little experience in dealing with the UAW.
Summary The employment environment has changed substantially during the last 15 years, spurred by global competition. Most union-management activity has been adversarial, but the needs of both parties have increasingly led to cooperative approaches in a variety of situations. Employers would like to earn as large a return as possible on their investment, while labor would like continuous economic improvements and employment security. Given the requirements for negotiations on mandatory issues and the inability of unions to demand negotiations on permissive issues, room for cooperation in traditional bargaining environments is sparse.
Integrative bargaining is the set of activities leading to simultaneously accomplishing nonconflicting objectives in solving a common problem. Mutual-gains bargaining has been increasingly practiced. To implement integrative solutions, both parties must have as much information as pos- sible on the problem they are attempting to solve.
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Employers and unions use a variety of methods to create and sustain cooperation. These include areawide labor-management committees that deal with regional employment problems in unionized environments, joint labor-management committees that operate at the industry or firm level, gainsharing plans (the Scanlon plan, Rucker plan, and Impro- Share), and nongainsharing interventions (labor-management com- mittees, quality circles, quality-of-work-life programs, and team-based approaches).
Increasing numbers of companies are working with unions to imple- ment team-based action groups to improve productivity and quality. Perceived productivity seems to increase most where the union is secure, top union officials are involved in the process, and significant numbers of union members are in team-based activities. The introduction of new technology continues to lead the way in improving productivity. Unions are learning how to participate in and benefit from cooperation while retaining their distributive bargaining roles. Innovation is institutional- ized through success and stability in organizations where experiments are tried.
Employee stock ownership plans aim to increase employee commit- ment to the company through the long-term improvement of the value of ownership gained through higher productivity.
1. Why would including such programs as QWL in the collective agree- ment be difficult?
2. Under what conditions would a Scanlon plan be likely to be effective over relatively long periods?
3. What are the potential long-term problems for unions in agreeing to labor-management cooperation programs?
4. Should unions be guaranteed a seat on an organization’s board of directors?
5. Should the Electromation decision be overturned?
Key Terms Greenfield operations, 430 Principled negotiations, 434 Relations by objectives, 434 Bucket bargaining, 435 Interest-based bargaining (IBB), 436
Areawide labor-management committees (AWLMCs), 440 Joint labor-management committee (JLMC), 441 Employee involvement (EI) program, 444
Quality-of-work-life (QWL) program, 444 Modern operating agreement, 446 Team concept, 447 Employee stock ownership plans (ESOPs), 452
Chapter 13 Union-Management Cooperation 461
Case : Continuing or Abandoning the Special-Order Fabrication Business It is about three months since the effective date of the GMFC–Local 384 contract. In GMFC’s executive council meeting this morn- ing, financial officers reported on an in-depth study on the profitability of the special-order fabrication operations. They recommended GMFC take no more orders for this area and close the operation when present commit- ments were shipped. Their data showed that the operations lost money two out of the last three years, and they argued that the Speedy- Lift assembly lines could be expanded into that area for meeting the increasing demand for GMFC forklift trucks.
Top-level managers in the special-order fab- rication operations conceded that profits, when earned, were low, but they pointed out that, from a return-on-investment standpoint, their operations had been among the best in the com- pany during the 1993 to 1998 period. Besides, they argued, many of the special orders were from some of the largest customers in the stan- dard product lines, and GMFC could not afford to lose that business if it was dependent on occasional custom orders as well.
The finance people reiterated their rec- ommendations to terminate the operations, pointing out that labor costs had risen over the past several contracts and, due to the custom nature of the work, productivity gains had been small because new technologies could not be introduced.
After both sides presented their final sum- mations, the chief executive officer announced that the firm should prepare to terminate operations. After the announcement, the industrial relations director pointed out that GMFC would have to negotiate the termina- tion with Local 384. The union might demand severance pay, job transfers, and so forth. The point was also raised that this decision offered the union and the company the opportunity to devise a method for reducing and controlling labor costs.
The CEO designated the vice president of finance, the general manager of special-order fabrications, and the industrial relations direc- tor as the bargaining team to present the com- pany’s decision and bargain a resolution. The CEO made it clear that the company intended to abandon these operations but could reverse its position with the right kind of labor cost reductions.
Although this meeting was not publicized, Local 384’s leadership had been concerned about the special-order fabrications area for some time. Management had frequently grumbled about low productivity, and stew- ards were frequently harassed about alleged slowdowns. Union members in the shop often grieved about work rule changes. The stack of grievances, coupled with management’s lack of action on them, led the leadership to request a meeting with the industrial relations director to solve the problems.
1. Rejoin your original labor or management bargaining team.
2. Reach an agreement for continuation or termination of the special-order fabrication operations. a. Company negotiators must reduce labor
costs by 10 percent and stabilize them for project bids if operations are to continue (labor costs are 30 percent of the total costs, and ROI would be 7 percent if costs were cut by 10 percent).
b. Union members are unwilling to have their pay rates cut.
c. All the employees in this area are level 2 or 3 skilled production workers, and most have more than 20 years’ experience.
3. Use the agreement you previously reached or the contract in Chapter 11 to specify cur- rent terms for these workers.
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Contract Administration After a contract is negotiated and ratified, the parties are bound by its terms. But contract clauses may be violated or interpreted differently, so disputes often arise. Almost all contracts contain a grievance procedure to resolve intracontractual disputes. This chapter identifies types and causes of disputes and the contractual means used for resolving them.
As noted in Chapter 13, team-based work designs have reduced the use of first-line supervisors. In these types of work situations, grievances or problems in implementing the contract are increasingly resolved within the work team in consultation with management.
In reading this chapter, keep the following questions in mind:
1. What areas of disagreement emerge while the contract is in effect? 2. What actions by the parties violate the labor acts? 3. Are disagreements resolved by bargaining or by evaluating the merits
of a given issue? 4. How can team-based work environments lead to proactive grievance
procedures? 5. What does the union owe individual members in grievance processing?
THE DUTY TO BARGAIN
Parties do not end their obligation to bargain by negotiating an agree- ment. The National Labor Relations Board (NLRB) and courts interpret the duty to bargain as covering the entire relationship from recognition onward. Although the parties have developed a written agreement, there may be situations in which they interpret it differently. There also may be differences about the creation and implementation of rules that are enabled by the contract but not actually within it. In order to establish an orderly process for handling intracontract disputes, the parties virtually always incorporate a grievance procedure that spells out how they will
Chapter 14 Contract Administration 463
be resolved. Thus, the duty to bargain is fulfilled by using the agreed-on steps for any dispute regarding wages, hours, or terms and conditions of employment.
Conventional Contract Administration Management takes the initiative in contract administration . It determines how it will operate facilities and discipline employees. The union reacts if it senses a result is inconsistent with its interpretation of the contract and work rules. The employer does not file a grievance when the union or a worker allegedly violates the contract; it simply acts and waits for a union response. For example, if a worker swears at a supervisor, the company might suspend the worker for five days. The company does not ask the union to discipline its members. If the union believes the discipline is unjust, it protests the action through a grievance. The contract spells out the resolution process, and the management decision stands unless and until it is reversed or modified at some step in the overall process.
When a grievance procedure exists and management changes its opera- tions, employees are expected to conform to the change. If employees believe the change violates the contract, they must grieve rather than refuse to follow orders. If the latter occurred, employees could be dis- charged for insubordination unless their conduct constituted protected concerted activity.
Empowered Work Environments Many empowered production work environments have developed self-managed work teams. Teams do not have the authority to adjust grievances within the teams. However, they may raise problems with management without making a formal grievance and use their ongoing access to management to identify the likely causes of problems and to more quickly solve them. While this reduces the formal role of the union negotiating committee in resolving grievances, a team member at a Ford stamping plant felt that the team-based approach actually increased the relevance and input of the union. 1
ISSUES IN CONTRACT ADMINISTRATION
Disputes during the contract may focus on specific contract clauses or the implementation of rules by the employer that are within the purview of the management rights clause. Following are some of the major subjects of grievances.
1 For a summary of this and other team-based environments, see M. Kaminski, “New Forms of Work Organization and Their Impact on the Grievance Procedure,” in A. E. Eaton and J.H. Keefe, eds., Employment Dispute Resolution and Worker Rights (Champaign, IL: Industrial Relations Research Association, 1999), pp. 219–246.
464 Labor Relations
Discipline Discipline imposed for infractions of rules is one of the most frequently disputed issues. Discipline often involves demotion, suspension, or dis- charge and is meted out for absenteeism, insubordination, dishonesty, rule violations, or poor productivity. Rule violations include issues such as substance abuse and sexual harassment. A discharge almost always leads to a grievance, regardless of its ultimate merit, because political solidarity often requires that the union extend itself in trying to save a member’s job.
Discipline is imposed for violations of employer rules. Employees must be aware of the rules to be able to conform to them. Employers use discipline to deter employees from behavior that would damage the employers’ performance. Before employers can impose discipline, they must observe employees behaving unsatisfactorily and violating rules. The employer must decide whether violations are important enough for action to be taken. If violations exceed the threshold for requiring punish- ment, discipline is imposed. 2 Unions want to verify that employers, when imposing discipline, have reliably observed the unsatisfactory behaviors and have consistently applied similar penalties in similar situations and that the magnitude of the penalties is commensurate with the violations.
When an employee has repeatedly breached rules and been disciplined and the employee’s behavior does not change, employers and unions may implement a last chance agreement (LCA) in an attempt to save the employee’s job. In return for not discharging the employee for the most recent offense, the employer, union, and employee draw up a written agreement stipulating that if another violation of the same rule occurs within a specified time period, the employee will be discharged automati- cally and the union will not grieve.
An LCA might be negotiated, unilaterally imposed by the employer and not grieved by the union, or it may be included in an arbitrator’s decision at the final step. LCAs save union resources on having to defend members who chronically violate rules. A study of LCAs found that the largest number involved absentee/tardiness problems (possibly result- ing from drug or alcohol abuse). Employees for whom LCAs had been implemented were more likely to be discharged in subsequent years, but a majority was able to avoid discharge. Married and older employees, nonminorities, and higher-wage employees were more likely to remain employed. 3
2 R. D. Arvey and A. P. Jones, “The Use of Discipline in Organizational Settings: A Framework for Future Research,” in L. L. Cummings and B. M. Staw, eds., Research in Organizational Behavior, 7 (Greenwich, CT: JAI Press, 1985), pp. 367–408. 3 P. A. Bamberger and L. H. Donahue, “Employee Discharge and Reinstatement: Moral Hazards and the Mixed Consequences of Last Chance Agreements,” Industrial and Labor Relations Review, 53 (1999), pp. 3–19.
Chapter 14 Contract Administration 465
Incentives A contract may have an incentive scheme whereby employees are paid by the piece or receive bonuses for productive efficiency. Frequently, these contracts establish groups of jobs that work on incentive rates and identify others that don’t. If an employee is moved from an incentive job to a nonincentive job, wages will probably decrease. If the job seems highly similar to the incentive job, grievances may result. A grievance might also result if the assignment is considered arbitrary or punitive. Problems also may arise if a new production process is introduced and management seeks to establish higher base rates or time standards before incentive earnings begin. New standards must be bargained collectively.
Work Assignments Disputes may occur over which job classification is entitled to per- form certain work. For example, assume that an electrical generating plant using coal-fired boilers to generate steam shuts down a boiler for rebricking. To do this, a wall has to be knocked down with some care to avoid damage to other boiler parts. Who should do the work? General laborers might do the work under a supervisor’s direction. But the work requires some care and is preparatory to rebricking, so the job might be assigned to skilled masonry workers. The company may assign the job to helpers because the cost is less and it believes the skill requirements are low. But masons may believe the task is an integral part of their job and thus grieve.
Individual Personnel Assignments Personnel assignment grievances most often concern promotions, lay- offs, transfers, and shift assignments. Most contracts specify that senior- ity, seniority and merit, or experience on a particular job will govern personnel assignments. Disputes often relate to layoffs and shift pref- erence. People who are laid off may believe they are entitled to jobs of junior workers in other departments who have been retained. While contracts normally specify that employees must be qualified for a job, if a junior employee is bumped by a senior employee, there may be a dispute regarding whether the senior employee actually possesses the claimed qualifications.
Hours of Work Hours grievances involve overtime requirements and work schedules. For example, if the firm has maintained an 8 a.m. to 4 p.m. shift to mail cus- tomer orders, and its freight company moves its shipping schedule from 4 p.m. to 3 p.m., then a 7 a.m. to 3 p.m. shift better meets its needs. This change will affect employees, and grievances may result.
466 Labor Relations
Supervisors Doing Production Work Most contracts forbid supervisors to perform production work except when demonstrating the job to a new employee or handling an emergency. An employee’s absence is usually not considered an emergency. This is basically a job security issue.
Production Standards Employers and unions often agree on output rates in assembly-line technologies or standards for incentives in piece-rate output. If manage- ment speeds up the line or reengineers the standards, employees must put forth more effort for the same amount of pay, and grievances often result.
Working Conditions Working-condition issues involve health, safety, and comfort concerns. This is one of the few areas in which employees might be justified in uni- laterally refusing a work assignment they have a valid reason to believe could lead to injury. Arbitrators who hear cases involving grievances against discipline for refusing to perform unsafe work tended to rule nar- rowly when upholding a worker’s right to refuse. They tended to rule for an employee if there was no insubordination, if there was a major danger or reasonable cause to believe that there may have been, if the employee has been loyal, if the employee reported the danger, if the manager was at fault, or if the manager was not at fault but did not respond to the identi- fied problem. 4
Subcontracting Unless the contract allows complete discretion to the company in sub- contracting, work done by bargaining-unit members may not be subcon- tracted before bargaining with the union. 5 Subcontracting can affect job security, and if grievances result, management would be involved in a refusal to bargain if it did not discuss the subcontracting issue.
4 M. Harcourt and S. Harcourt, “When Can an Employee Refuse Unsafe Work and Expect to Be Protected from Discipline? Evidence from Canada,” Industrial and Labor Relations Review, 53 (2000), pp. 684–703. 5 The Supreme Court decision in Fibreboard Paper Products v. NLRB, 379 U.S. 203 (1964) requires bargaining by management if a union requests when subcontracting is being considered, unless the union has expressly waived its right in this area; however, this rule has been relaxed somewhat by First National Maintenance v. NLRB, 452 U.S. 666 (1981) and later by the NLRB when it held that removal of union work to another facility of the company would be permissible if bargaining has reached an impasse [Milwaukee Spring Div. of Illinois Coil Spring Co., 115 LRRM 1065 (1984), enforced by the U.S. Court of Appeals, District of Columbia Circuit, 119 LRRM 2801 (1985)] or for a legitimate business reason if there were no antiunion animus [Otis Elevator Co., 115 LRRM 1281 (1984)].
Chapter 14 Contract Administration 467
Outsourcing Outsourcing is a form of subcontracting. In this case, part or all of certain processes are subcontracted to another employer that may or may not operate on the current employer’s premises and may or may not hire some or all of the current employer’s employees who work on that pro- cess. An example of this might involve outsourcing call center work cur- rently done by bargaining-unit members to another firm with employees in India.
Past Practice Many employment practices are not written into contracts, but unions consider them to be obligations. For example, an employer may provide cafeteria food services below cost to workers. If the cafeteria is closed, the union may grieve even though there is no contract language on food services, and management must respond. 6 If stopping work 15 minutes before the end of a shift to wash up is usual practice, then extending work- ing time to the shift’s end changes past practice.
Rules Employers occasionally institute rules to improve efficiency or to govern the workforce. Many contracts establish the employer’s right to do so under the management rights clause. Employees may grieve the establish- ment of rules as altering a term or condition of employment.
Work rules relating to smoking, drug testing, and sexual harassment have the potential to create divisions within the bargaining unit depend- ing on employee attitudes and how the rules are implemented. While a large majority of union members questioned in one survey approved of limited drug testing, those who were subject to testing were more negative about probable cause testing, random testing, and terminating those who tested positive. 7
Prevalence of Issues Grievances are filed over a number of issues, as noted previously. A study of four organizations in different industries found that the seven largest grievance categories were distributed as follows: pay (17 percent), work- ing conditions (16 percent), performance and permanent job assignments (16 percent), discipline (14 percent), benefits (14 percent), management rights (7 percent), and discrimination (6 percent). 8
6 Ford Motor Co. v. NLRB, 441 U.S. 448 (1979). 7 M. H. LeRoy, “The Presence of Drug Testing in the Workplace and Union Member Attitudes,” Labor Studies Journal, 16, no. 3 (1991), pp. 33–42. 8 D. Lewin and R. B. Peterson, The Modern Grievance Procedure in the United States (Westport, CT: Quorum, 1988).
468 Labor Relations
Most contracts specify procedures for resolving intracontract disputes. While contracts vary, most procedures contain four or five steps. In the absence of a grievance procedure, the employee is still entitled to file grievances individually under guarantees contained in Section 9 of the Taft-Hartley Act. Individual employees may also file grievances if the contract has such a procedure, but they generally do not, depending on which union represents them.
Steps in the Grievance Procedure The usual steps in the grievance procedure are as follows.
Step 1 This step varies considerably across companies. In some, an employee who believes the company has violated the contract complains to the union steward, who may accept or assist in writing up a grievance. Then the steward presents the grievance to the grievant’s supervisor, who has the opportunity to answer or adjust it.
In some companies, few grievances are settled at step 1. The company won’t delegate power to supervisors because their decisions can estab- lish precedents for future grievance settlements. Thus, supervisors often simply deny grievances at step 1. In other companies, an oral grievance is presented directly to the supervisor, and settlements can be negotiated immediately. ( Figure 14.1 is an example of a fairly complex grievance at its first step.)
Supervisory style affects grievance rates and their disposition. In a large manufacturing plant, autocratic supervisors had fewer grievances overall and fewer overtime, supervisor-related, and discipline grievances than did democratic supervisors. Higher management was less likely to reverse grievance decisions for autocratic supervisors. 9 But supervisors and stewards usually do not understand the contract well. Stewards may have more knowledge of the contract if they are experienced and contract administration is their full-time job. About 7 of 10 grievances examined in one study were screened by stewards, and about half of these stewards used their authority to adjust grievances. Steward training is equally likely to be provided by the employer or the union. 10
Presenting grievances in an informal oral manner may allow supervisors and stewards greater latitude for reaching a quick solution before a written record is established. One study found that supervisors, stewards, union leaders, and top management favored moving toward oral grievances 9 R. L. Walker and J. W. Robinson, “The First-Line Supervisor’s Role in the Grievance Procedure,” Arbitration Journal, 32 (1977), pp. 279–292. 10 S. Briggs, “The Steward, the Supervisor, and the Grievance Process” Proceedings of the Industrial Relations Research Association, 34 (1981), pp. 313–319.
Chapter 14 Contract Administration 469
and away from written ones but ultimately failed due to opposition from plant managers who felt their authority was undermined. 11
Several levels of activity may lead to filing grievances. Stewards may act on complaints from members. A large-scale study of Canadian bargaining units found that stewards reported more complaints from members if the supervisor had little knowledge of the contract and if the work unit was rel- atively larger. Informal grievance resolution was related to the supervisor’s knowledge of the contract and the steward’s commitment to the employer, education, and training. The likelihood of a steward initiating a grievance when a union member declined to do so or when the steward observed a contract violation and filed on behalf of the group increased if the supervi- sor used a considerate supervisory style and had little contract knowledge. It was positively related to union commitment and a contested vote in the unit for the steward’s position and negatively related to employer com- mitment. Grievance rates were related to many of these same factors but were reduced by informal settlements and increased by steward initiation. Steward and supervisor behavior was a more important predictor of initia- tion and settlement than were workplace characteristics. 12
11 V. G. Devinatz, “A Program for Building Cooperative Shop Floor Labor Relations: The UAW, The International Harvester Corporation and the ‘New Look’ Procedure,” Labor Studies Journal, 20, no. 3 (1995), pp. 5–18. 12 B. Bemmels, Y. Reshef, and K. Stratton-Devine, “The Roles of Supervisors, Employees, and Stewards in Grievance Initiation,” Industrial and Labor Relations Review, 45 (1991), pp. 15–30.
FIGURE 14.1 Example of a Written Grievance
Source: M. S. Trotta, Handling Grievances: A Guide for Labor and Management (Washington, DC: Bureau of National Affairs, 1976), pp. 141–142.
I have just been given a job review, as a result of which I am now on the second highest eligibility list. I now want clear and accurate answers with supporting information to the following questions:
1. Why was this job review given five months after its effective date and on the day before my vacation?
2. Why change my rating for “manner and interest” from excellent to good? It was admitted that I am excellent in this category, but only to those whom I think will buy, and that the reviewer did not know of any mistakes in judgment I had made.
3. Why change “alertness to service” from excellent to good? Since I was told by the reviewer that I was too “selective” in both this and the previous category, I think that (a) one or the other should be eliminated, or (b) perhaps they should be combined, or (c) both reviewer and employees should be made aware of whatever difference there may be.
4. Why change “cooperation” from excellent to good? Since I was told that my cooperation with the other eight people in the department was excellent, I would like to know exactly what incidents took place and who was involved, resulting in this change.
It also seems that there is a clear, consistent pattern of downgrading everyone in the department from their previous ratings and that job reviews will be given to employees just prior to their going on vacation. It is my distinct impression that the present reviewers are not only ignorant of previous reviews but also feel that they do the job much better than the previous reviewers. If they can’t come up with some better reasons for the changes than those I have heard, then I think they are doing a remarkably poor job.
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Stewards are generally more satisfied in their grievance processing roles if the procedure permits oral grievances and if some grievance com- mittee screening takes place. Dissatisfaction is related to high grievance rates and large work groups. Satisfaction is higher if a larger proportion of grievances are resolved, and resolved successfully for the grievant. 13
Step 2 Many grievances are settled at step 1. If denied there, the steward pre- sents the grievance to a plant industrial relations (IR) representative. Both are very familiar with the contract, and both are aware of how previous grievances have been settled. In routine cases, the company allows the IR representative to apply and create precedents. If a grievance has major precedent-setting implications or involves potentially major costs but may have merit, the IR representative may deny it. If the case involves an employee discharge, the union is likely to send it to step 3.
Step 3 Most grievances have been settled by step 2. The step 3 participants vary depending on the contract. The grievance may be settled locally, with the union represented by its local negotiating committee and management by its top IR manager or plant manager. In more complex situations or in larger firms, the parties may be an international union representative with or without the local negotiating committee and a corporate-level IR direc- tor. Most unresolved grievances are settled at this stage.
Step 4 When a grievance is unresolved at the third step, the parties submit the dispute to an arbitrator who hears evidence from both sides and renders an award. A number of methods are available for choosing an arbitrator. First, the parties may name a permanent arbitrator ( umpire ) in their contract. Second, they may ask a private agency, such as the American Arbitration Association, for a panel of arbitrators. A panel has an odd number (usually five) from which each party rejects arbitrators in turn until one remains. The remaining person becomes the arbitrator unless one party objects, in which case a new panel is submitted. Third, the same process may be followed by petitioning the Federal Mediation and Conciliation Service, which also supplies panels of arbitrators listed by the agency. A hearing date is set, and the arbitrator renders an award some time after the evidence is pre- sented. Chapter 15 examines arbitration as a separate topic. Figure 14.2 is an example of a contract clause dealing with grievance handling.
The operation of the grievance procedure is very important to local union leaders. Between negotiations this is the area in which the union and employer are most engaged and where “wins” and “losses” may be
13 B. Bemmels, “Shop Stewards’ Satisfaction with Grievance Procedures,” Industrial Relations, 34 (1995), pp. 578–592.
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politically critical for current officers. Satisfaction of union leaders with the process was positively related to autonomy and the proportion of griev- ances resolved and negatively related to the size of the unit. Satisfaction with the step 1 process was negatively related to unit size and the rate of griev- ances and positively related to the importance of issues and early settle- ment. Satisfaction with the step before arbitration was positively related to issue importance and resolution rate and negatively related to the size and proportion of women in the bargaining unit. Satisfaction with outcomes was positively related to the importance of the issues, the resolution rate, and the union success rate and negatively related to size of the unit and cost. 14
Grievance rates in unionized employers probably run about 10 per 100 employees per year. Of each 100 grievances, between 0.5 and 2.5 require arbitration for resolution. 15 About half of all written grievances are settled
14 B. Bemmels and D. C. Lau, “Local Union Leaders’ Satisfaction with Grievance Procedures,” Journal of Labor Research, 22 (2001), pp. 653–657. 15 Lewin and Peterson, Modern Grievance Procedure, p. 89.
FIGURE 14.2 Grievance Procedure Clause
Step 1 The employee and the departmental steward, if the employee desires, shall take the matter up with his or her supervisor. If no settlement is reached in Step 1 within two working days, the grievance shall be reduced to writing on the form provided for that purpose.
Step 2 The written grievance shall be presented to the supervisor or the general supervisor and a copy sent to the production personnel office. Within two working days after receipt of the grievance, the general supervisor shall hold a meeting, unless mutually agreed otherwise, with the supervisor, the employee, the departmental steward, and the chief steward.
Step 3 If no settlement is reached in Step 2, the written grievance shall be presented to the departmental superintendent, who shall hold a meeting within five working days of the original receipt of the grievance in Step 2 unless mutually agreed otherwise. Those in attendance shall normally be the departmental superintendent, the general supervisor, the supervisor, the employee, the chief steward, the departmental steward, a member of the production personnel department, the president of the UNION or his representative, and the divisional committeeman.
Step 4 If no settlement is reached in Step 3, the UNION COMMITTEE and an international representative of the UNION shall meet with the MANAGEMENT committee for the purpose of settling the matter.
Step 5 If no settlement is reached in Step 4, the matter shall be referred to an arbitrator. A representative of the UNION shall meet within five working days with a representative of the COMPANY for the purpose of selecting an arbitrator. If an arbitrator cannot be agreed upon within five working days after Step 4, a request for a list of arbitrators shall be sent to the Federal Mediation and Conciliation Service. Upon obtaining the list, an arbitrator shall be selected within five working days. Prior to arbitration, a representative of the UNION shall meet with a representative of the COMPANY to reduce to writing wherever possible the actual issue to be arbitrated. The decision of the arbitrator shall be final and binding on all parties. The salary, if any, of the arbitrator and any necessary expense incident to the arbitration shall be paid jointly by the COMPANY and the UNION.
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at step 1, 60 percent of open grievances at step 2, and 80 percent of the rest at step 3. 16 Higher-level settlements are associated with the requirement of written grievances, rigid procedural rules, larger bargaining units, adver- sarial bargaining relationships, low costs, and low supervisor and steward knowledge of the contract. 17 One study of several employers found that settlement at the first step is higher with written grievances and autho- rization by management and/or the union to allow supervisors and/or stewards to settle at the first step. Settlement before arbitration is higher where units are larger and where more grievances are filed. 18
Grievances may be granted, denied, partially granted, or withdrawn at any step in the process. A study of grievances in a Canadian firm found 46 percent were denied, 36 percent partially or fully granted, and 18 percent withdrawn at the first step. Of those proceeding to the second step (which could include some of those partially granted at step 1), 62 percent were denied, 24 percent partially or fully granted, and 14 percent withdrawn. At step 3, 4 percent were partially or fully granted, 80 percent denied, and 16 percent withdrawn. Prior decisions on a particular type of grievance reduce that type’s submission for a period of time. 19
Time Involved Generally, speedy resolution of grievances is preferred. Typical contracts allow 2 to 5 days for resolution at the first two steps and 3 to 10 days at step 3. If management denies a step 3 grievance, the union has 10 to 30 days to demand arbitration. If the union does not make a timely demand, the dispute may no longer be arbitrable. If arbitration is demanded, the time frame is less rigid because a panel must be requested and received, an arbitrator selected, hearing dates arranged, the hearing held, and a final award written and rendered. While an unresolved dispute could conceivably be arbitrated in two months or less, the time lapse is usually considerably longer. (See Chapter 15 for information on the length of the entire process when a grievance goes to arbitration.) One study found the average grievance was settled in between 10 and 14 days. 20 Settlements take longer where bargaining units are large, the union requires written grievances, both parties follow procedures closely, an adversarial bargain- ing relationship exists, and a supervisor’s contractual knowledge is low. 21
16 Ibid., p. 170. 17 Ibid., pp. 98–100. 18 J. A. Davy, G. Stewart, and J. Anderson, “Formalization of Grievance Procedures: A Multi-Firm and Industry Study,” Journal of Labor Research, 13 (1992), pp. 307–316. 19 R. P. Chaykowski, G. A. Slotsve, and J. S. Butler, “A Simultaneous Analysis of Grievance Activity and Outcome Decisions,” Industrial and Labor Relations Review, 45 (1992), pp. 724–737. 20 Lewin and Peterson, Modern Grievance Procedure, p. 89. 21Ibid., pp. 98–100.
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Most contracts rely on a four-step procedure, settlement rates are higher in steps 2 and 3, contractual procedures and time schedules are closely fol- lowed, and few differences exist in filing periods when disciplinary and other contractual grievances are compared. 22 Figure 14.3 presents the flow of decisions in a typical grievance process.
22 J. A. Davy and G. W. Bohlander, “Recent Findings and Practices in Grievance-Arbitration Procedures,” Labor Law Journal, 43 (1992), pp. 184–190.
FIGURE 14.3 Grievance Procedure Steps
Employee files grievance
Steward presents to supervisor
Steward submits to IR
Steward submits to negotiating committee
Submits to IR
Requested relief granted
Stop process Arbitration
Submits to arbitration
IR director denies
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METHODS OF DISPUTE RESOLUTION
Intracontract disputes not resolved through the prescribed steps in the grievance process are generally resolved by arbitration (see Chapter 15). As noted, arbitration is used sparingly by both parties because the process is costly (particularly for the union in a relative sense) and often involves a substantial time lag between the grievance and its resolution. Strikes may be used by the union to pressure management to grant requested relief, but only in situations where a no-strike clause has not been negotiated. Strikes are most likely where time is of the essence. Unions in the building trades seldom avail themselves of arbitration due to the short periods their members work for a given employer. By the time a grievance is arbitrated, the job would be completed, the employer having dictated the working conditions.
The same holds for safety and working-condition grievances in which stable employment relationships exist. When these conditions occur, the union may use a strike to force the employer to interpret the contract as the union demands. With a contract in effect, these strikes may or may not be breaches of the agreement if it contains a no-strike clause.
Project Labor Agreements Recently, building trades unions and contractors have often negotiated project labor agreements (PLAs) prior to bidding on major projects. PLAs cover pay rates, hiring procedures, work rules, and the like, that will apply to a specific project during its duration. A PLA also includes dispute reso- lution procedures, and, per the agreement, unions agree to forgo strikes during its term. 23
Grievance Mediation An experiment in the mediation of grievances found costs and time to settlement were reduced by using a mediationlike process to deal with contract disputes. Grievance mediation tends to shift the focus from a “rights” (who wins) orientation toward a problem-solving mode. In the experiment, a large share of the grievances headed for arbitration were settled with the help of mediation. The union was highly satisfied with mediation, especially if it believed that the mediator understood the grievance. Mediation may allow the parties to uncover and deal with the real reason for the conflict rather than requiring that the conflict be framed as a specific contract violation. Mediation did not increase the likelihood of settlements at lower levels and was not used for discharge grievances or those involving financial claims of more than $5,000. 24
23 See Journal of Labor Research, 19, no. 1 (1998), for additional details. 24 S. B. Goldberg and J. M. Brett, “An Experiment in the Mediation of Grievances,” Monthly Labor Review, 106, no. 3 (1983), pp. 23–30.
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A follow-up study of grievance mediation in coal mining found that about 85 percent of mediated grievances were resolved at an average third-party cost of $500 versus $2,674 for arbitration. 25 Recently, a further follow-up study was done on almost 23 years of experience with griev- ance mediation in coal mining. General findings indicated that 86 percent of cases potentially headed for arbitration were settled through mediation at substantially lower cost and much more quickly. In addition, the par- ties learned how better to resolve grievances at lower levels because they learned more about the interests of their opposite number in grievances and grew in their beliefs about the trustworthiness of information sup- plied by their counterpart. 26
In a utility setting where suspension and discharge grievances were included in grievance mediation, managements were equally satisfied with mediation and arbitration processes but not with the settlements when mediation was used. About two-thirds of all final-step grievances were settled by mediation; thus, the number going to arbitration was cut to one-third. But the overall rate of grievances did not decline as a result of mediation. 27 Evidence from one plant indicates that mediation is unrelated to “win” rates of management or the union. 28
Wildcat Strikes If a no-strike clause coupled with the opportunity for binding arbitration has been negotiated, a strike during the agreement period is a wildcat strike because it violates the contract and is unauthorized by the parent national union. Wildcats are particularly prevalent in coal mining. 29
Research on the characteristics of wildcat strikes in coal mining found that high-strike mines were larger than low-strike mines, perhaps reflect- ing the increased formality of grievance handling in large mines. Working conditions were not related to wildcat strikes, but supervisory friction was. Strikes were higher where miners perceived supervisors as being unable to handle grievances and in mines where disputes could not be dealt with locally. Confidence in the grievance procedure did not relate to strike incidence. Miners at both high- and low-strike mines believed
25 P. Feuille, “Grievance Mediation,” in A. E. Eaton and J.H. Keefe, eds., Employment Dispute Resolution and Worker Rights (Champaign, IL: Industrial Relations Research Association, 1999), pp. 187–218. 26 S. B. Goldberg, “How Interest-Based, Grievance Mediation Performs over the Long Term,” Dispute Resolution Journal, 59, no. 4 (2004), pp. 8–15. 27 M. T. Roberts, R. S. Wolters, W. H. Holley Jr., and H. S. Feild, “Management Perceptions of Grievance Mediation,” Arbitration Journal, 45, no. 3 (1990), pp. 15–23. 28 R. N. Block and A. R. Olson, “Low Profile/High Potential,” Dispute Resolution Journal, 51, no. 4 (1996), pp. 54–61. 29 J. M. Brett and S. B. Goldberg, “Wildcat Strikes in Bituminous Coal Mining,” Industrial and Labor Relations Review, 32 (1979), pp. 465–483.
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strikes resolved disputes in the miners’ favor, but high strike incidence rates appeared related to perceptions that this was the best method for getting management to listen. 30
When companies agree to submit unresolved grievances to arbitration, they are giving up some of their freedom to initiate change. As a quid pro quo, they usually demand and win a no-strike clause. In that case, the union agrees not to strike during the term of the contract, because it has an arbitral forum available. But what if the union strikes? Does the company have a legal recourse? The Norris-LaGuardia Act prohibits injunctions against lawful union activity, which includes strikes. However, the Supreme Court ruled that where a bona fide no-strike clause exists, a grievance procedure terminating in arbitration is available, and the union has not sought to arbi- trate its dispute, federal courts could enjoin a wildcat strike. 31
Discipline for Wildcat Strikes What tools do employers have to counteract a wildcat strike? First, if the strike was over an unfair labor practice and the union correctly judged that the practice was illegal, the strike would be protected and the employer could not legally retaliate. But if the strike was in violation of a no-strike clause, several factors would come into play.
Both the national and local unions participate in ratifying an agreement. They have a joint responsibility for enforcing it. Unfortunately for man- agement, little can be gained in damages unless a union’s leaders clearly fomented a wildcat strike. 32 However, if a union demands that its members return and they fail to obey, they are subject to union discipline as well as to employer retaliation. But employers cannot sue individual union members for breach of contract for violating a no-strike clause. 33 Where a union defies an injunction to return to work, it may be found in contempt of court and fined. 34
EMPLOYEE AND UNION RIGHTS IN GRIEVANCE PROCESSING
One important grievance issue concerns an employee’s right to union representation in disciplinary proceedings. For example, if a supervisor suspects an employee of leaving work early, which normally merits a suspension, can the supervisor confront and interrogate the employee without allowing union representation? The Supreme Court ruled that members of the bargaining unit who are suspected of offenses that could result in discipline are entitled to union representation if they
30 Ibid. 31 Boys Markets, Inc. v. Retail Clerks Union Local 770, 398 U.S. 235 (1970). 32 Carbon Fuel Co. v. United Mine Workers, 444 U.S. 212 (1979). 33 Complete Auto Transit v. Reis, 451 U.S. 401 (1981). 34 United Mine Workers v. Bagwell, 512 U.S. 821 (1994).
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request it. 35 The employer cannot proceed with the interrogation unless a union steward is present to advise its member. However, neither union nor nonunion employees are entitled to legal counsel during an employ- ment investigation by the employer. 36
To What Is the Employee Entitled? Not every grievance constitutes a bona fide contract violation, and not every legitimate grievance is worth pursuing to arbitration. For example, suppose a supervisor performed bargaining-unit work during a short- term peak production period. The union may have a legitimate grievance with workers entitled to be paid for the period the supervisor worked. If it is an isolated incident, bringing it to management’s attention should reduce the likelihood of its recurrence, even if management denies the relief requested. The importance of individual cases varies. For example, a discharge is more serious than a claim of entitlement to two hours’ pay for overtime given to another employee.
How far can an individual union member pursue a grievance or force a union to process it through arbitration? This subject is not entirely resolved, but opinions of legal experts and court discussions provide some direction. The issue is referred to by terms such as individual rights and fair representation. In the discussion, the latter term is applied to the vigor and equality of the union’s advocacy, not necessarily its competence. (The competence issue is covered in Chapter 15.)
Occasionally a union activist receives harsh discipline for a rule viola- tion. If the individual charges the company with an unfair labor practice (ULP), the NLRB applies the following test: There must be a prima facie case that the discipline was motivated by the employee’s union activity. Then the employer could rebut a ULP charge if it can show the same pun- ishment would have occurred in the absence of union activity. 37
Fair Representation Fair representation is a complex issue in which the rights and duties of those involved are not completely spelled out. 38 All employees, repre- sented or not, are able to seek legal redress for employer actions violating
35 NLRB v. J. Weingarten, Inc., 420 U.S. 251 (1975). The NLRB has ruled that nonunion employees are not entitled to have another employee present during a disciplinary investigation [IBM Corp., 341 NLRB 148 (2004), which reversed Epilepsy Foundation of Northeast Ohio, 331 NLRB 676 (2000) enforced, which had extended “Weingarten” rights to nonunion employees]. 36 P. E. Starkman, “The Good, the Bad, and the Uncooperative: Dealing with the Uncooperative Employee during an Internal Investigation,” Employee Relations Law Journal, 25, no. 1 (1999), pp. 69–92. 37 Wright Line, 251 NLRB 1083 (1980). 38 For a detailed review of fair representation issues, see E. C. Stephens, “The Union’s Duty of Fair Representation: Current Examination and Interpretation of Standards,” Labor Law Journal, 44 (1993), pp. 685–696.
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civil rights, wage and hour, or health and safety laws; but in other areas, unrepresented employees have no legal right to review an arbitrary decision.
Individual Rights under the Contract Several decisions clarify individual rights under collective bargaining agreements. Major decisions before Taft-Hartley helped to specify minor- ity rights in grievance processing. In Elgin, Joliet, and Eastern Railway v. Burley , the Supreme Court held that the concession of a grievance by the union does not necessarily insulate the employer from being sued. 39 The employees must have authorized the union to act for them, and some vig- orous defense must be shown. Because the union is the exclusive bargain- ing agent for all employees, the courts will watch to ensure that all classes and subgroups are entitled to and receive equal protection and advocacy from their representatives.
Taft-Hartley enables represented employees to grieve directly to employers. However, employers cannot process grievances without union observation, if demanded by the union, or adjust the grievance in a man- ner inconsistent with the contract. For example, if the contract entitles senior employees to promotions, a junior employee cannot personally insist on receiving a promotion to which a senior employee is entitled.
Individual rights under the contract are not clearly established. Three possible positions might be suggested: (1) Individuals have a vested right to use the grievance procedure through arbitration if they choose; (2) indi- viduals should be entitled to process grievances for discharge, seniority, and compensation cases; and (3) the union as a collective body should have freedom to decide what constitutes a meritorious grievance and how far the grievance should be pursued. 40
The NLRB and courts seldom assert jurisdiction over the merits of grievances. But a few rulings help explain employee entitlements and employer and union responsibilities. In Miranda Fuel Company , an employee was permitted to start vacation before the date in the contract. 41 After a late return caused by illness, other bargaining-unit members demanded that the union require his discharge. The NLRB ruled this was an unfair labor practice because the union acquiesced to the majority even though the discharged employee had seniority. The second case involved a merger. 42 Here the same union represented employees of both acquired and surviving companies. After the merger, the union credited the senior- ity of the workers from the acquired company rather than starting at the
39 325 U.S. 711 (1945). 40 B. Aaron, “The Individual’s Legal Rights as an Employee,” Monthly Labor Review, 86 (1963), pp. 671–672. 41 140 NLRB 181 (1962). 42 Humphrey v. Moore, 375 U.S. 335 (1964).
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acquisition date. Several employees from the surviving company claimed they were unfairly represented because their union granted seniority to employees coming from the other firm. The Supreme Court held the employees must use Taft-Hartley remedies for breach of contract rather than using state courts to redress unfair representation.
In Vaca v. Sipes , an employee returning from sick leave was discharged because the employer believed he was no longer capable of holding a job. 43 He filed a grievance and the union pressed his case, obtained medi- cal evidence, and requested he be given a less physically demanding job. Doctors’ reports conflicted on whether the employee could safely continue working. Although the union vigorously pursued the grievance through the final step before arbitration, it did not demand arbitration when the company refused to reinstate the grievant.
The grievant sued his union for unfair representation and his employer for breach of contract. The court held an employee may not go to court on a grievance unless contractual remedies have been exhausted, except where the employer and/or the union have refused to use these remedies. If the grievant contends that the union has unfairly represented the employee, he or she must prove this. The court found that individual bargaining-unit members have no inherent right to invoke arbitration. In representing all bargaining-unit members, the union is both an advocate and an agent that must judge whether claims are frivolous or inconsistent with past practice or contract interpretation. If the union weighs the grievance’s merit and treats the grievant similar to others in the same situation, then the repre- sentation isn’t unfair.
An appeals court decision can place the union “between a rock and a hard place.” 44 In this case, the contract provided that promotions would be based on seniority and merit. When the company promoted junior employees, the union processed grievances of senior employees to arbitra- tion. The arbitrator awarded the senior employees the jobs. The displaced junior employees sued their union for failing to represent their positions in the arbitration. The court held that the union owed equal obligations to both groups. Although the union certainly favored seniority as the basis for promotion, it must advocate management’s position as well because the contract provides benefits to two potential groups with oppo- site interests.
Another case extends union liability for damages. If an employee can prove the employer violated the contract to the employee’s detriment and the union dealt with the grievance in an arbitrary and capricious manner, the employee can collect damages from both. The employee
43 386 U.S. 171 (1967). 44 Smith v. Hussman Refrigerator Co. & Local 13889, United Steelworkers of America (U.S. Court of Appeals, 8th Circuit, 1979); certiorari denied by U.S. Supreme Court, 105 LRRM 2657 (1980).
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collects damages from the employer up to the point at which the union fails to process a meritorious claim and from the union until relief is granted. 45
Supreme Court decisions on fair representation yield the following six principles: (1) Employees have the right to have contract terms enforced to their benefit; (2) an employee has no right to insist on a personal inter- pretation of a contract term; (3) no individual can require that a union process a grievance to arbitration, but each should have equal access to grievance procedures; (4) settlement on the basis of personal motives by union officials constitutes bad faith; (5) the individual should have a grievance decided on its own merits, not traded for other grievance settlements; and (6) while the union is entitled to judge the relative merit of grievances, it must exercise diligence in investigating the situation that led to the grievance. 46
GRIEVANCES AND BARGAINING
As noted in the chapters on union structure, organizing, and negotiating, the processes involved can be specified, but the actual behavior does not always duplicate the model. The grievance procedure, as described, pro- vides a method for resolving intracontract disputes. The model consigns the union to the role of responding to management’s actions. Grievance resolution has been dealt with as a serial process, from both the steps involved (which duplicate reality rather closely) and the presentation order (first in, first out, which is unlikely). This section looks at grievances from a political standpoint and as a bargaining tool.
Union Responses to Management Action Grievances have a number of ramifications for the union. A novel griev- ance may establish a precedent for or against the union if it is arbitrated. A situation may have been handled informally on a case-by-case basis, usually favorably for the union, so the risks of pursuing it may be too great. Other grievances may lead to internal union disputes, such as entitlements to work or overtime. Politically powerful minorities within the union may need to be accommodated. Upcoming elections may influence grievance activity resolution rates. Candidates may be more militant, and management may grant less relief or take more time, par- ticularly in areas where a candidate it would like to see defeated is lead- ing the advocacy.
45 Bowen v. U.S. Postal Service, 459 U.S. 212 (1983). 46 C. W. Summers, “The Individual Employee’s Rights under the Collective Agreement: What Constitutes Fair Representation?” in J. T. McKelvey, ed., Duty of Fair Representation (Ithaca, NY: New York State School of Industrial and Labor Relations, Cornell University, 1977), pp. 60–83.
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Besides the responses of union officials, rank-and-file members may engage in tactics affecting the grievance process. If a large number of griev- ances builds up, or if settlement is slow (particularly for those alleging a continuing violation), then pressure tactics such as slowdowns, quickie strikes, and working to rules may be used to pressure management to set- tle or grant the grievances. 47 Grievants might not wait passively for an ulti- mate response but rather may use tactics to speed a favorable settlement.
Evidence indicates the union gains bargaining power by shaping employee complaints so that they fit a clear grievance category. At the same time, the union is more successful in winning its grievance if the category is different from one particularly important to the employer. 48
Fractional Bargaining Because most grievances concern an individual employee or a single work group and relate only to one or a few contract terms, tactics aimed at modifying the way the contract is administered are called fractional bargaining. 49 Fractional bargaining affects an establishment in the same way that an employer with multiple bargaining units suffers a reduction in bargaining power. An organization consists of interdependent parts, and if one part is embroiled in disputes that lessen its productivity, it will affect the remainder.
Fractional bargaining occasionally poses problems for the union because one critical group may win grievances that others fail to achieve. If a negotiat- ing committee stops grievances of a powerful small group, internal political pressures increase. A steward of a powerful small group may successfully pressure for settlement at lower levels to avoid local officer involvement. The company may accede to lessen chances of production disruptions.
Management may also take the initiative by treating political opponents of the existing union leadership differently and by handling some disci- plinary cases by the book and being lenient with others. These practices may increase internal political pressures and cause more of the union’s energies to be devoted to healing such rifts rather than to engaging in additional grievance activity. Thus, as in contract negotiations, each side pressures the other, but some mutual accommodation that enables both to survive is usually reached.
Union Initiatives in Grievances The union may take the initiative with grievances. Stewards may solicit grievances looking for potential contract violations. 50 A violation does not actually need to occur to file a grievance; there need be only the belief that
47 J. W. Kuhn, Bargaining in Grievance Settlement (New York: Columbia University Press, 1961). 48 P. Suschnigg, “Measuring Bargaining Power through Grievance Outcomes: Results from an Ontario Steel Mill,” Relations Industrielles, 48(1993), pp. 480–500. 49 Kuhn, Bargaining in Grievance Settlement, p. 79. 50 Ibid., p. 14.
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one did occur and a linking of that belief to some contract clause. If the union believes it has problems with one area or supervisor, it may simply flood management with grievances. These create work for management because they must be answered in a certain time frame under the contract. If higher management has to spend more time on grievances, it may sim- ply tell supervisors to “clean up their act,” which usually results in a more lenient approach to demonstrate to management that supervision has “cured” the grievance problem.
Union stewards may stockpile grievances as threats or trade-offs for larger issues. If an issue of importance to the steward comes up, the super- visor may be told informally that unless a change is made, a number of grievances will be filed with higher-ups later in the day.
In large plants, the steward has an advantage over the supervisor. Many contracts allow the steward to be a full-time union representa- tive, although the steward is paid by the company. As such, a steward’s full-time work involves contract administration, while the supervisor is responsible for personnel, equipment, production, and other matters.
The steward’s personality may also play a role in grievance resolution. One study found that stewards who informally settled grievances with supervisors were likely to have higher needs for autonomy, affiliation, and dominance than those who used formal processes. The study also found that stewards who had higher needs for achievement and domi- nance were involved in greater numbers of grievances. 51 Higher com- mitment to the union predicted higher grievance activity levels, while higher company commitment and job satisfaction were related to lower grievance activism. 52
Higher grievance rates are related to inexperienced stewards, union policies that influence grievance filing, and periods close to negotiations or political choice within the union. 53 A longitudinal study of an auto plant with a single UAW local found that grievances with high factual clarity were decided for the union more often when they occurred during periods of high production importance, such as during model change- overs and heavy schedules; when few grievants were involved; when the steward was politically entrenched; and when they occurred in nonas- sembly plants. In cases where grievances had low factual clarity, politi- cal issues had more effect, such as the shorter the time until the next union election, the lower the settlement rate; the more the grievances, the lower the union win rate; the more likely the grievance claimed a right given to another bargaining-unit member, the lower the union win
51 D. R. Dalton and W. D. Todor, “Manifest Needs of Stewards: Propensity to File a Grievance,” Journal of Applied Psychology, 64 (1979), pp. 654–659. 52 D. R. Dalton and W. D. Todor, “Antecedents of Grievance-Filing Behavior: Attitude/Behavioral Consistency and the Union Steward,” Academy of Management Journal, 25 (1982), pp. 158–169. 53 C. E. Labig Jr. and C. R. Greer, “Grievance Initiation: A Literature Survey and Suggestions for Future Research,” Journal of Labor Economics, 9 (1988), pp. 1–27.
Chapter 14 Contract Administration 483
rate; and the more entrenched the steward, the lower the win rate. Other factors involved with low-clarity outcomes for the union included high- production pressure situations and skilled-trades occupations. 54 All these indicate management’s response could be seen as pressuring the union politically and facilitating the production process.
Management practices also have an influence on grievance rates. A study of grievances and productivity in an aircraft manufacturing plant found that highest productivity occurred at a grievance rate significantly above zero. Very low grievance rates might indicate less monitoring and enforcement by management, while high levels consume extra effort in their settlement. 55
Political competition within a local union may also affect labor rela- tions and contract settlements. A comparison of internal democracy in two UAW locals in aircraft manufacturing found that the one that had well-developed internal political “parties” and frequent changes in local leaders also had better contract settlements but more strikes. The economic gains came at the cost of lost wages during strikes and also through the firm’s greater use of subcontracting. 56
Stewards are often elected. Grievance handling influences the election process. Stewards who file more grievances, who resolve them at lower levels, and who take more time with them are more frequently reelected, with higher margins. As the relationship between supervisors and stew- ards matures, the process becomes more efficient and effective. 57
Individual Union Members and Grievances Employees unionize to exercise a voice in governing the workplace. The negotiation and ratification of a contract by the bargaining unit create an employment equilibrium. This equilibrium reflects the bargaining power of both parties and their preferences for the structure of the agreement. In grieving, an individual member exercises a voice to express dissatisfaction or to take advantage of an opportunity for gain that a specific situation, such as increased production rates, might allow. Workers in high-paying jobs or those with few alternative job opportunities are more likely to use the grievance process and less likely to be absent or quit. 58 The strength
54 D. Meyer and W. Cooke, “Economic and Political Factors in Formal Grievance Resolution,” Industrial Relations, 27 (1988), pp. 318–335. 55 M. M. Kleiner, G. Nickelsburg, and A. Pilarski, “Monitoring, Grievances, and Plant Performance,” Industrial Relations, 34 (1995), pp. 169–189. 56 M. M. Kleiner and A. M. Pilarski, “Does Internal Union Political Competition Enhance Its Effectiveness?” in S. Estreicher, H. Katz, and B. Kaufman, eds., Internal Governance and Organizational Effectiveness of Unions (New York: Kluwer Publishing, 2001). 57 D. Meyer, “The Political Effects of Grievance Handling by Stewards in a Local Union,” Journal of Labor Research, 15 (1994), pp. 33–51. 58 P. Cappelli and K. Chauvin, “A Test of an Efficiency Model of Grievance Activity,” Industrial and Labor Relations Review, 45 (1991), pp. 3–14.
484 Labor Relations
of the grievance procedure influences the beliefs that employees have about their ability to influence outcomes within their employers since quit rates, in one study, were negatively related to the strength of the griev- ance procedure. 59 Figure 14.4 portrays a model of the grievant’s choices and potential outcomes. Some grievance opportunities occur because of workplace changes or actions taken against the grievant. The model sug- gests that negative outcomes will occur to the employee and employer unless the process leading to the ultimate outcome is perceived to be procedurally just. 60
Differences exist among employees in grievance behavior and char- acteristics. Demographic and job-related aspects are generally poor pre- dictors of grievance activity, 61 although evidence finds that younger, 62 male, 63 minority, 64 and better-educated employees 65 have higher grievance rates. An attitudinal study examining employees across many employers found that grievants were more likely to have lower job satisfaction, have higher satisfaction with the union, and be active participants in union affairs. 66 Another study using the same sample found that employees who filed more grievances had declining job satisfaction during the four years between the waves of the study, were in larger plants, perceived them- selves as expending lower effort, and anticipated working for the same employer in five years. Factors relating to perceived union effectiveness, poor or changing working conditions, or the openness of the supervisor
59 D. I. Rees, “Grievance Procedure Strength and Teacher Quits,” Industrial and Labor Relations Review, 45 (1991), pp. 31–43. 60 B. S. Klaas, “Determinants of Grievance Activity and the Grievance System’s Impact on Employee Behavior: An Integrative Perspective,” Academy of Management Review, 14 (1989), pp. 445–458. 61 Labig and Greer, “Grievance Initiation”; and S. Bacharach and P. Bamberger, “The Power of Labor to Grieve: The Impact of the Workplace, Labor Market, and Power Dependence on Employee Grievance Filing,” Industrial and Labor Relations Review, 57 (2004), pp. 518–539. 62 P. Ash, “The Parties to the Grievance,” Personnel Psychology, 23 (1970), pp. 13–38; J. Price, J. Dewire, J. Nowack, K. Schenkel, and W. Ronan, “Three Studies of Grievances,” Personnel Journal, 55, no. 1 (1976), pp. 32–37; Lewin and Peterson, Modern Grievance Procedures, p. 174; M. E. Gordon and R. L. Bowlby, “Reactance and Intentionality Attributions as Determinants of the Intent to File a Grievance,” Personnel Psychology, 42 (1989), pp. 309–329; and D. Lewin and R. B. Peterson, “Behavioral Outcomes of Grievance Activity,” Industrial Relations, 38 (1999), pp. 554–576. 63Lewin and Peterson, Modern Grievance Procedures, p. 174; and Lewin and Peterson, “Behavioral Outcomes.” 64 Ibid.; Ash, “Parties to the Grievance”; and Lewin and Peterson, “Behavioral Outcomes.” 65 Ash, “Parties to the Grievance”; Lewin and Peterson, Modern Grievance Procedures, p. 174; Price et al., “Three Studies”; but Lewin and Peterson, “Behavioral Outcomes,” found the opposite. 66 R. E. Allen and T. J. Keaveny, “Factors Differentiating Grievants and Nongrievants,” Human Relations, 38 (1985), pp. 519–534.
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486 Labor Relations
did not influence grievance-filing behavior. 67 An experimental study using a hypothetical situation found that union members were more likely to indicate they would file grievances when the situation evoked strong reac- tions and when management’s action was perceived to be intentional. 68
EFFECTS OF GRIEVANCES ON EMPLOYERS AND EMPLOYEES
Both employers and employees may be influenced by the filing, process- ing, and outcome of grievances. A study of grievances in a government agency found that employees filing two grievances within one rating period received lower performance ratings. Winning or losing the griev- ance was not associated with the rating. Employees who grieved were no more likely to transfer; however, employees who filed a second grievance were more likely to receive a disciplinary sanction, and a second negative adjustment to a grievance was associated with an increased probability of quitting. From the employer’s standpoint, grievance filing was associ- ated with higher absenteeism and fewer production hours. 69 Absenteeism appears to increase with policy grievances and is reduced by disciplinary grievances. Absenteeism falls following negative outcomes from disciplin- ary grievances, possibly due to escalating consequences for further disci- pline problems. 70 In a study of a steel mill, grievants were usually better employees during the year in which they grieved; and if their grievance was settled at a low level and/or they lost the grievance, they were more likely to be rated higher, have better attendance, have lower turnover, and be promoted in the subsequent year. 71 Managers and supervisors of units in which grievance rates were higher were somewhat more likely to be rated lower in the next period. 72 In another study, both supervisors and grievance filers were likely to have lower performance ratings, fewer promotions, and higher turnover after they were involved in grievance activity, as compared with employees who were not. 73
67 B. Klaas and G. G. Dell’Omo, “The Determinants of Grievance Filing Behavior: A Psychological Perspective,” paper presented at the Academy of Management meetings, Anaheim, CA, 1988. 68 Gordon and Bowlby, “Reactance and Intentionality Attributions.” For an excellent review of research on the grievance procedure, see D. Lewin, “Theoretical and Empirical Research on the Grievance Procedure and Arbitration: A Critical Review,” in A. E. Eaton and J. H. Keefe, eds., Employment Dispute Resolution and Worker Rights (Champaign, IL: Industrial Relations Research Association, 1999), pp. 137–186. 69 B. S. Klaas, H. G. Heneman III, and C. A. Olson, “Grievance Activity and Its Consequences: A Study of the Grievance System and Its Impact on Employee Behavior,” unpublished paper, University of South Carolina, Columbia, 1988. 70 B. S. Klaas, H. G. Heneman III, and C. A. Olson, “Effects of Grievance Activity on Absenteeism,” Journal of Applied Psychology, 76 (1991), pp. 818–824. 71 Lewin and Peterson, Modern Grievance Procedures, pp. 185–187. 72 Ibid., p. 189. 73 Lewin and Peterson, “Behavioral Outcomes.”
Chapter 14 Contract Administration 487
A study of public sector management and union representatives found explicit performance and disciplinary standards were associated with higher grievance rates. Rivalry between unions within the same employer increased grievances. Positive management attitudes and willingness to compromise were related to lower rates, but consultation with the union about items of mutual interest did not reduce grievances. 74
Managerial perceptions of the effectiveness of discipline systems was related to being in a nonunion organization, having either a very permis- sive or very restrictive set of rules, high monitoring costs, and pressures for performance. Managers in organizations that invested in training on solving workplace problems were more positive. 75
Grievance resolution provides information to help resolve subsequent cases at lower levels. Evidence suggests that only management uses prior decisions to guide initial decisions on a grievance. The higher the level of settlement of a grievance, the more likely the parties were to use formal settlements of previous grievances as precedents. Earlier decisions are used most frequently as precedents in discipline and work assignment cases. 76 In a Canadian public sector union, grievances were more likely to be settled favorably in the early steps, for more highly paid employees, and for working-condition rather than work assignment issues. 77 Manage- ment may settle grievances to the grievant’s and union’s benefit “without precedent” for similar future cases.
Employees who frequently grieve do not necessarily have better work outcomes. But what effect do grievances have for employers? Each griev- ance requires involvement of stewards, the grievant, and supervisors at the first step; industrial relations representatives, national union repre- sentatives, and the union negotiating committee at subsequent steps; and attorneys or representatives, witnesses, and an arbitrator at arbitration. A study of 10 paper mills (9 union and 1 nonunion) found higher grievances associated with lower plant productivity. The presence of a grievance pro- cedure (only in the union mills) was associated with higher productivity, perhaps because employees had an outlet for complaints that would oper- ate while production continued. 78
When management and union representatives approach grievance resolution in a cooperative relationship, they are better able to achieve
74 C. E. Labig Jr. and I. B. Helburn, “Union and Management Policy Influences on Grievance Initiation,” Journal of Labor Research, 7 (1986), pp. 269–284. 75 B. S. Klaas, T. W. Gainey, and G. G. Dell’Omo, “The Determinants of Disciplinary System Effectiveness: A Line Management Perspective,” Industrial Relations, 38 (1999), pp. 542–553. 76 T. R. Knight, “Feedback and Grievance Resolution,” Industrial and Labor Relations Review, 39 (1986), pp. 585–598. 77 I. Ng and A. Dastmalchian, “Determinants of Grievance Outcomes: A Case Study,” Industrial and Labor Relations Review, 42 (1989), pp. 393–403. 78 C. Ichniowski, “The Effects of Grievance Activity on Productivity,” Industrial and Labor Relations Review, 40 (1986), pp. 75–89.
488 Labor Relations
integrative resolutions. Those with competitive goals are more likely to take a closed-minded approach. Seniority issues can be dealt with cooper- atively more often, while disciplinary issues are often competitive. Coop- erative approaches tend to settle at lower steps and lead to more positive reactions among the parties. Competitive approaches are used more often when the parties want to establish a precedent. 79
Summary Contract administration is the joint activity in which labor and manage- ment spend the most time. Not only do the parties respond voluntarily to differences in interpretation, but they also must, by law, bargain on prac- tices related to mandatory items over the life of the contract.
Both sides deal with a variety of issues, of which job security, seniority, and discipline are among the most important. Methods for handling dis- putes involve the presentation and resolution of grievances in a stepwise manner, culminating in arbitration, if necessary.
Unions must represent employees in a consistent manner in grievance proceedings, and employees who can show they were not accorded fair treatment may hold the union and the employer in breach of contract.
All grievances are not equally meritorious, and political factions within unions may obtain power to gain more favorable outcomes. Grievances also may accompany periodic union political elections. Management may influence these by the way in which it responds to the source of grievances during campaigning.
Grievants are less satisfied with their jobs, more satisfied with their unions, and more involved in union activities. They are more likely to grieve if they see fewer alternatives (such as quitting) available to them. Grievances, in general, do not lead to stronger positive outcomes for employees. Employers with high grievance rates appear to have slightly lower productivity.
79 D. Tjosvold and M. Morishima, “Grievance Resolution: Perceived Goal Interdependence and Interaction Patterns,” Relations Industrielles, 54 (1999), pp. 527–548.
1. Should management be required to consult with the union about dis- cipline before it is imposed rather than simply providing for grievance processing after its imposition?
2. Should unions be allowed to drop an employee’s grievance if the employee desires arbitration?
3. How does the grievance procedure make subtle changes in the meaning of the contract possible over time?
4. What are the advantages and disadvantages of a program for reducing the number of written grievances?
Chapter 14 Contract Administration 489
Case: New Production Equipment: Greater Efficiency with Less Effort or a Speedup?
Key Terms Contract administration, 463 Last chance agreement (LCA), 464
Umpire, 470 Project labor agreements (PLAs), 474
Fair representation, 477 Fractional bargaining, 481
Carolyn Foster had just returned to her office from the weekly plant IR representatives’ meeting. Her secretary had left a note to call George Lowrey, the superintendent of the forklift assembly operation. She called back and immediately recognized from the serious- ness of George’s tone that a major problem must be brewing in his area. They both agreed she would come right over.
After George had welcomed her into his office, he leaned forward and, putting his chin in his hands, said, “Carolyn, I feel like I’m sit- ting on a powder keg here. Last year we put in the new Simplex Process assembly line for our forklifts. It had a rated capacity of 35 units an hour. When we installed it, we started up at 28 units, which is the same as the old line, to shake it down and get the bugs out. The new line automates more of the assembly, so each worker has less of a physical demand than before. Well, last week we figured we had all the bugs ironed out, so we raised the speed to 35. We figure each worker has to put out about the same amount of effort as under the old system.
“This morning, Steve Bonneville, the shop steward, and three of my general supervi- sors came in, all arguing. Bonneville had a fistful of grievances and was yelling about a ‘speedup.’ Anyway, the upshot is that he wants the employees to be advanced one skill level to compensate for the additional effort and more difficult working conditions under Section 7.03 of the contract.
“Carolyn, we can’t give them a penny more and remain competitive. Besides that, if they get a raise, the whole plant will paper us with classification grievances. Bonneville is running for union president because Matt Duff is retiring, and if he’s successful with this grievance, he’s a shoo-in. All we need is a long strike over some penny-ante issue and a bunch of hotheads like him running the show. What can you do to help me?”
Carolyn had been busy taking notes about the problem. She asked, “Do you have the grievances?” George nodded and handed them to her. Then she said, “I’ll study the grievances, the contract, and the union situ- ation and get back to you in time for us to plan a step 3 response. I’ll be back to you this afternoon.”
1. Draft a strategy for the company to fol- low. Consider the immediate problem and the possibilities of precedents being set by your action. List the advantages and disad- vantages of your chosen strategy.
2. Prepare a scenario in which your response is presented to Steve Bonneville. How is he likely to react? What steps do you expect he will take as a result of your response?
3. What conditions do you consider neces- sary for these grievances to be resolvable at step 3?
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