Management Strategies and Structures for LIR

1. Management Strategies and Structures for LIR • Selective focus on aspects of management most closely related to LIR • Recall earlier discussion of management as an actor in the IR system, diversity masked by generic “management” label • Levels (1st-level supervisor vs. CEO) • Industries • Workplace size (number of EEs) • Managers as agents for owners

2. Paternalistic Informal rules, high discretion, no formal complaint system, low skill, piece rates, low job security, hierarchical and personal relations Bureaucratic Formal, rule-bound, complaint system, detailed job lines, job evaluation, cyclical insecurity, hierarchical impersonal relations HR Management Flexible, strong culture, ombudsperson, teams, pay-for-knowledge/contingent, career development, individual rltns. Conflict Inflexible, aggressive, excess delays, detailed job lines, job rates, unstable job security, combative relations New Deal Formal, adversarial, GP/Arbitration, detailed job lines, job rates, seniority for layoffs, arms-length relations Participative (Ch. 12) Flexible, high-involvement, contiuous problem-solving, teams, pay-for-knowledge/contingent, employment security, overlapping roles Alternative Company-Level IR Systems Nonunion Patterns Union Patterns

3. Management AttitudesToward Unions • Underlying philosophical differences • ERs stress profits as return for risk-taking • Unions stress labor as the source of value • Recall inherent conflicts assumed earlier • Economic: shareholder profits vs. EE compensation • “Frictional” in the course of giving and taking direction • Does management’s taste forcontrol go deeper than running the enterprise efficiently? • Two distinct union avoidance strategies growing • Union suppression -- attacking the symptoms • More in competitive, resource-poor firms (“bullets are cheap”), where broader environment (“community”) allows • Union substitution -- attacking the causes • Resource-intensive, HR staff intensive, more with high-skill workforces “justifying” HR investments

4. Union Avoidance -- Brief History Recap • A sort of truce existed in the 1950s-60s. (Low competitive pressures?) Unions and mgmt accepted each other’s legitimacy and worked for the best bargain possible under the circumstances • Starting in the 1970s and accelerating in the 1980s, ERs took a more aggressive stance, with more emphasis on union avoidance, maintaining “union-free” workplaces, and ousting existing unions • Even between 1978 and 1983, surveys showed a marked ER shift toward preference for union avoidance over getting the best bargain

5. Union Avoidance Emphasis Varies - Top executive attitudes and union ability to influence management strategic levels are key factors Which is more important? Keeping as much of the company as possible nonunion, or achieving the most favorable bargain possible?

6. Are Union Workers More Productive? (And if so, why does management “hate” unions?) • Despite anecdotal evidence, several studies show that union workers are more productive than nonunion workers • This is beyond capital-for-labor substitution higher pay would spur • Results vary by industry and over time, with IR climate, but net effect seems to be a positive union productivitydifferential • Alternative explanations (both may have merit) • “It’s real” -- Lower turnover, higher quality workers, faster pace, voice vs. exit mechanisms • “It’s an illusion” -- Higher union compensation drives out inefficient unionized producers whereas inefficient producers can survive and drag down the average in the low-compensation nonunion sector • But, if productivity advantages are exceeded by compensation differentials, profits will be lower. Labor productivity is not the same as bottom-line efficiency (minimum cost per unit) • It could be true that union workers are more productive, but yet more costly to management and shareholders

7. Different Motivations? • Doctrinaire approaches: Staying nonunion is an end in itself. Union substitution or union suppression policies and tactics are adopted to serve that end • Philosophy Laden approaches: Treating employees right is the objective because of belief that it makes good business sense and/or because of organizational culture (e.g., values of top execs). Nonunion status is merely a byproduct of good HR • Note that both approaches suggest union substitution, though for different reasons • Being Philosophy Laden is still more fashionable than being Doctrinaire, but Doctrinaire approaches became more accepted in 80s • Foulkes’ study of large nonunion ERs: Don’t underestimate union threat effect as a motivator

8. Voice mechanisms Employee involvement in decisions, i.e., participation, teams Dispute resolution (e.g., open door policies, formalized grievance mechanisms) Good compensation Pay Benefits Training provided Career advancement opportunities Internal promotions Open posting and bidding for vacancies Job security An influential HR department “Progressive” HR/HR Management: Union Substitution?

9. “No solicitation” rules Plant siting and sizing carefully consider union implications Propaganda Frequent communication Stress on unity of EE (“associate”) and ER interests, union as unneeded “outsider” Union vilification “Union-busting” consultants Legal maneuvers to block and delay unionization efforts Unfair labor practices (threats, intimidation, bribes, firings, etc.) “Surface bargaining” to avoid a first contract (also a ULP) Union Avoidance Strategies: Union Suppression?

10. Union Avoidance -- Impact • 70-80% of workers think ER illegal retribution for union activity is commonplace • Worker perceptions of theirown employer • 1984 poll: 60% say their ER would resort to threats, bribes, or both in response to a union organizing drive • 1994 poll: Most workers (62-66%) say their ER would mount an anti-union campaign, but only about 20% think their ER would resort to threats or physical violence • Why do U.S. workers have such a harsh view of employers, even their own employers?

11. Some Possible Reasons • Four-fold increase in ER ULPs between 1960 and 1980 while elections held steady • Illegal firings for union activity occur in 25-33% of elections (vs. 8% in 1960) • Taking into account multiple firings, this works out to roughly one per election • Put another way, 1 in 20 union supporters got fired; chances of firing for an outspoken activist are probably quite high • ERs spend $300 million a year on “union-busting” consultants • 91% of ERs require one-on-one meetings between supervisors and workers • 50% threaten to shut down if workers choose a union • 25-33% of union election wins never result in a contract

12. Union Avoidance : Final Thoughts • All’s not fair in labor wars … there is a disturbing trend of management coercion that inhibits workers. … The U.S. wouldn’t tolerate companies that intimidated employees who supported a politician management disliked. The standard of fairness should be no less democratic for workplace elections -- Business Week (July 19, 1999) • A “secret war” on American worker rights?

13. Management Structures for Collective Bargaining and Contract Administration • Large companies tend to have “LR” (as distinct from HR) staff at all levels (plant, division, HQ) • One LR staff per 200-400 union members • Compared to 1 HR/IR staff per 100 EEs • Centralization in decisions • No. of local agreements (100,000?) a bit deceiving • Studies of management decisions suggest heavy HQ involvement • Specialization and erosion of LR functions • Trend of power shifting to line managers, to HR to a lesser extent • But HR power has been shifting to line and out-sourced more too