Collective Bargaining Midterm

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industrial relations

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the interdisciplinary field of study that concentrates on individual workers, groups of workers and their unions and associations, employers and their organizations, and the environment in which these parties interact

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Key participants in the CB process

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management

labor

government

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Management

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owners and shareholders of an organization

top executives and line managers

industrial relations and human resource staff professionals

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Three levels of industrial relations activity

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Strategic Level (top tier)

Functional Level (mid-tier)

Workplace Tier (bottom-tier)

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strategic level

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* Includes the strategies and structures that exert long-run influences on collective bargainingex.] Compare the implications for collective bargaining of a business strategy that emphasizes product quality and innovation against a business strategy that seeks to minimize labor cost

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Functional level

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* Collective bargaining level —> involves the process and outcomes of contract negotiations

Discussion of strikes, bargaining power, and wage determination feature prominently here

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Workplace level

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* Involves activities through which workers, their supervisors, and their union representatives administer the labor contract and relate to one another on a daily basisAdjustment to changing circumstances and new problems occur regularly

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Father of US Industrial Relations

Identified the essence of institutional economics as “a shift from commodities, individuals, and exchanges to transactions and working rules of collective action”

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John R Commons

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5 key dimensions of external environment

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1. Economic environment (micro and macro)
2. Technological context
3. Social attitudes
4. Demographic context
5. Law and public policy

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Lloyd-Lafollette Act (1912)

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gave employees the right to organize

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Railway labor act (1926)

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right to organize and bargain collectively

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Norris-Lauardia Act (1932)

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allows private sector employees to organize and choose reps to negotiate terms and conditions of employment

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National Industrial Recovery Act (1933)

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legal protection for right to CB

no ee can be forced to join a company-dominated union

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NLRA (1935)

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unions and strikes legal in private sector

Taft-Hartley amendments (list of ULPs for unions, code of conduct for CB)

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Total bargaining power

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* Concerns the total profits (or economic rents) available to labor and management

Both labor and management prefer situations with greater total power

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The greater the total power, the more profit for labor and management to divide up

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Relative bargaining power

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* Relative strength of labor and management

The interests of labor and management conflict

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Ability of either side to gain a larger share of a given amount of profit

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determinates of total power

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Degree of competition facing the employer

state of the economy

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determinates of relative bargaining power

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strikes/strike leverage

withdraw from labor through other means: working to rule, blue flu, slowing productions

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Marshall's Four Basic Conditions

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Unions most powerful when the demand for labor is highly inelastic

1. when labor cannot be easily replaced in the production process

2. when the demand for the final product is inelastic

3. when the supply of non-labor factors of production is inelastic

4. when the ratio of labor costs to total costs is small

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Paternalistic pattern (management)

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personnel policies tend to be informally administered, and their administration involves substantial discretion by operating managers; common among small retailers; union avoidance often prime policy

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Bureaucratic pattern (management)

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highly formalized procedures; use highly detailed and formalized job classifications and job eval schemes to determine pay and job duties

believe standardization will prevent unionization by preventing favorable policies for few

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Human resource management (HRM) (management)

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relies on formal policies such as team forms of work organization, skill-or knowledge-based pay, and communication/complaint procedures; coordinates policies towards union avoidance; focuses on development of the individual; flexible and adaptable work organization

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New Deal pattern (union)

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highly detailed and formal contracts including grievance procedures, seniority based layoff, and detailed job classifications, and pay standardization; provides stable LR

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Conflict pattern (union)

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Er and labor engaged in serious struggle over basic rights; often issue disputed is will there be union rep?; often involves strikes and costly to firm

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Participatory pattern

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contingent compensation systems (link firm/work group pay to econ performance), team forms of work organization, employment security programs, and more direct involvement by workers and unions in business decision making; creates mechanisms for workers to directly solve production/personnel problems; quality circle/team meetings

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Direct union suppression approach

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actively resisting organizing drives

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indirect union substitution approach

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removing incentives for unionization

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southern strategy

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operating numerous plants in the south and resisting unionizing attempts

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double-breasted strategy

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running of separate union and nonunion divisions

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labor relations staff

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those with responsibility for handling for handling union organizing attempts, negotiations, contract admin, and litigation

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7 factors for recent union declines

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1. structural changes in the economy and the labor force

2. union avoidance through employer election campaign practice

3. employer substitution through personnel practices

4. government substitution

5. american worker ideology

6. internal union affairs and action

7. limitations of the standard organizing and representation model

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servicing model of unionism

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focus extensively on contract negotiations and contract administration, and the provision of various services to union members

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organizing model of unionism

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focuses a substantial share of unions activity and resources on organizing

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Dunlop commission

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suggested labor law reforms but were ignored in the end

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Corporate campaigns

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unions bringing public, financial, and political pressures to top management (non-traditional organizing tactic)

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formal bargaining structure

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the bargaining unit, the employees and employers who are legally bound by the terms of an agreement

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informal bargaining structure

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employees or employers who are affected by the results of a negotiated settlement, through either pattern bargaining or some other nonbinding process

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decentralized bargaining structure

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prevalent in the US as compared to other countries. Not all companies in a particular sector (auto, metalwork etc) are unionized.

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coalition bargaining

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a number of unions representing employees sit at the negotiating table even though the contract is only with one of the unions

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fractional bargaining

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individual supervisors and work groups negotiate unwritten side agreements or ignore certain parts of the contract

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whipsawing

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occurs when a union negotiates a bargain at one plant or company and then puts pressure on the next plant or company to match or increase the contract terms of the first site

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pattern bargaining

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an informal means for spreading the terms and conditions of employment negotiated in one formal bargaining structure to another

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intra-industry pattern bargaining

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1.

bargaining across firms in the same industry

Drawbacks: some firms can't absorb the costs, overextension can reduce employment opportunities, encourage the entrance of new competition into the industry and ultimately reduce the union's ability to increase wages across all of the competition

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distributive bargaining

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one side wins while the other loses

usually involves wage rates and fringe benefits

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integrative bargaining

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joint-gain, win-win

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intra-organizational bargaining

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occurs when internal differences in expectations come about

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attitudinal structuring

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the degree of trust the respective sides feel or develop toward each other

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strike authorization

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local union must receive permission from the national union to strike if negotiations reach an impasse, and some may poll its members to rally them and to show nationals that the workers want to strike

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contract ratification

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usually goes through lower-level union management and the workers affected usually take a vote to ratify it

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interest-based bargaining

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an alternative to traditional negotiations

Interest-based (mutual-gains) bargaining is an effort to apply integrative bargaining to the overall negotiations process

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contract zone

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Hick's Model of Strikes

the difference between what unions and management are willing to accept

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Institutionalist (pluralist)

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John R Commons, Sydney and Beatrice Webb

competition is imperfect; power imbalanced; need institutions regulating markets; bargaining between labor-management

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neoclassical economics (egoist)

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emphasizes unconstrained competitive labor markets; labor as a commodity, utility maximizing exchanges

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Managerialist (unitarist/HR)

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management key, not just the market; labor and management have common not opposing interests

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marxist (critical)

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segmentation of society into dominant and subordinate groups; labor versus capital; fundamental conflicts

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top 5 unions by membership

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1. National education association (NEA)

2. Service Employees International Union (SEIU)

3. American Federation of State, County, and Municipal Employees (AFSCME)

4. International Brotherhood of Teamsters (IBT)

5. United Food and Commercial Workers (UFCW)

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mediation

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a process by which a third party tries to lead labor and management to a negotiated settlement through enhanced communication and recommendations

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Federal Mediation and Conciliation Service

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must be notified 30 days prior to a strike

are a resource of mediators

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fact-finding

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a third party is (fact finder) is called in to study the issues that are in dispute between labor and management negotiators who have reached an impasse in their negotiations

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interest arbitration

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involves the use of a third party (arbitrator) who is empowered to impose a settlement in a contract dispute

-sets terms of contract