Employee-Management Issues

Chapter 12 focuses on the relationship between employees and management. A major part of that relationship is organized labor: employee organizations that represent members in negotiations with management over job-related issues. Labor unions have played an important role in the development of workplace practices such as minimum-wage laws, overtime rules, workers’ compensation, severance pay, child-labor restrictions, and job-safety regulations.

The chapter also moves beyond unions to examine broader workplace issues managers face today, including compensation, pay equity, sexual harassment, family-care responsibilities, substance abuse and testing, and workplace violence and bullying.

Organized Labor and Its Goals

Labor unions seek to represent employees collectively rather than requiring each worker to negotiate individually with management. The chapter identifies three broad goals of organized labor: working with fair and competent management, being treated with human dignity, and receiving a reasonable share of the wealth generated by employees’ work.

Craft and Industrial Unions

A craft union is an organization of skilled specialists in a particular craft or trade. Early American craft unions included skilled workers such as shoemakers. An industrial union, in contrast, organizes workers across a mass-production industry, including unskilled and semiskilled employees.

The chapter traces the development of major labor organizations, including the Knights of Labor, the American Federation of Labor (AFL), and the Congress of Industrial Organizations (CIO). The AFL and CIO eventually joined to form the AFL-CIO. These historical developments illustrate how unions evolved as the nature of work and industry changed.

Why Labor History Matters

Historical workplace conditions help explain why unions developed. Long workweeks, low wages, child labor, and unsafe conditions created pressure for collective action and labor legislation. The Triangle Shirtwaist Factory fire is presented as an important example of the human consequences of unsafe working conditions and the continuing debate over the role of organized labor.

Labor Law and Union Organization

The influence of labor unions has been closely connected to public opinion and government policy. The chapter discusses laws that shaped the ability of employees to organize and bargain collectively.

The Norris-LaGuardia Act restricted the use of so-called yellow-dog contracts that required employees to promise not to join a union. The National Labor Relations Act, often called the Wagner Act, created the National Labor Relations Board (NLRB) to oversee labor-management issues and establish guidelines for unionization.

Certification and Decertification

Certification is the formal process through which a union is recognized by the NLRB as the bargaining representative for a group of employees. Decertification is the process through which employees remove a union’s right to represent them.

Employees may consider union representation because of pro-union attitudes, poor employee-management relations, a negative organizational climate, unsatisfactory working conditions, the union’s reputation, or concerns about job security.

Collective Bargaining and Labor Agreements

Collective bargaining is the process in which union and management representatives negotiate an agreement covering employees. The resulting labor-management agreement, or labor contract, establishes the terms under which labor and management will operate for a specified period.

A contract can address wages, benefits, hours, working conditions, job security, grievance procedures, and other employment issues. A union security clause addresses the obligations of workers who receive the benefits of union representation.

Right-to-Work and Open Shops

Right-to-work laws give workers, under an open-shop arrangement, the right to choose whether to join a union. The chapter connects these laws with the Taft-Hartley Act, which gave states authority to prohibit union-shop agreements. An open-shop agreement allows employees to join or not join a union if one exists in the workplace.

Grievances and Resolving Disagreements

A labor contract provides a guide for workplace relations, but disagreements can still occur. A grievance is a charge by employees that management is not following the negotiated agreement. Shop stewards are union officials who work within the organization and represent employee interests in day-to-day matters.

Mediation and Arbitration

When labor and management have difficulty reaching agreement, outside assistance may be used. The bargaining zone is the range between the positions each side is willing to accept before negotiations reach an impasse.

• Mediation uses a neutral third party to encourage the two sides to continue negotiating and reach their own resolution.
• Arbitration brings in a third party who renders a binding decision.

The key distinction is control of the outcome: a mediator helps the parties negotiate, while an arbitrator can determine the resolution.

Labor and Management Conflict Tactics

If negotiations fail, both labor and management have tactics they may use to increase pressure on the other side.

Union Tactics

• Strike — workers refuse to work.
• Primary boycott — a union encourages members and the public not to buy products from the firm involved in the dispute.
• Secondary boycott — labor attempts to persuade others not to do business with a firm involved in a primary boycott.
• Work slowdown and picketing — additional methods unions may use during disputes.

Management Tactics

• Lockout — management closes the business to put pressure on employees by cutting off work and pay.
• Injunction — a court order directing someone to take an action or refrain from an action.
• Strikebreakers — replacement workers hired to perform the work of striking employees until a dispute is resolved.

The Changing Role of Labor Unions

The chapter describes union membership as changing over time and notes that economic shifts from manufacturing toward service and knowledge work have affected traditional union strength. Some workers and unions have agreed to givebacks, returning gains won in earlier negotiations in an effort to protect jobs or help an employer remain viable.

The presentation suggests that future unions may represent a workforce that is increasingly white-collar, female, and foreign-born and may take greater roles in training workers, redesigning jobs, improving job security, and negotiating compensation.

Executive Compensation and Pay Equity

Employee-management issues are not limited to unions. The chapter raises questions about executive compensation, including how boards determine executive pay and how compensation should relate to company performance. The underlying management issue is how an organization can design compensation that attracts leadership while remaining accountable to shareholders and other stakeholders.

Pay equity concerns fairness in compensation. The presentation identifies skill, effort, responsibility, and working conditions as factors used when evaluating whether jobs warrant different pay. Managers must base compensation decisions on legitimate job-related considerations and comply with applicable employment law.

Sexual Harassment

Sexual harassment includes unwelcome sexual advances, requests for sexual favors, or other verbal or physical conduct that creates an improper or hostile work environment. Organizations should take complaints seriously and establish procedures for preventing, reporting, and investigating harassment.

Two Forms Discussed in the Chapter

• Quid pro quo harassment occurs when employment consequences or benefits are tied to submission to sexual demands.
• Hostile work environment harassment involves conduct that interferes with an employee’s work or creates an intimidating or offensive environment.

Child Care and Elder Care

Family-care responsibilities can affect attendance, scheduling, retention, and employee well-being. The chapter discusses employer responses to child-care needs, including discounts with providers, vouchers, referral services, on-site child-care centers, and sick-child care.

As the population ages, elder care is also an important workplace concern. Employees who care for aging parents or relatives may need flexibility and support. Employers must balance employee needs with staffing and productivity requirements.

Substance Abuse and Drug Testing

Substance abuse can create safety, attendance, productivity, and health concerns for employers and employees. The chapter discusses alcohol and illegal-drug use as workplace issues and introduces employer drug testing as one response. Policies in this area should be clear, consistently administered, and consistent with applicable law and workplace requirements.

Workplace Violence and Bullying

Organizations also have a responsibility to address threats, violence, and bullying. The chapter encourages managers to be proactive rather than waiting until a serious incident occurs. Potential warning signs discussed in the presentation include unprovoked anger, threats or verbal abuse, repeated suicidal comments, paranoid behavior, and increasing domestic problems.

Workplace bullying can include repeated psychological or physical mistreatment. Positive employee relations, clear policies, reporting procedures, and appropriate management response can help create a safer workplace.

Putting Employee-Management Relations Together

Effective employee-management relations require more than knowing the terms of a labor contract. Managers must understand the historical role of unions, the legal framework for organizing and bargaining, methods for resolving disputes, and the human issues that affect employees every day.

The goal is not to eliminate disagreement. Employees and management will sometimes have different interests. The challenge is to manage those differences through fair policies, lawful practices, constructive negotiation, and respect for the people involved.

Common Mistakes to Avoid

• Assuming all employees or all workplaces are unionized in the same way.
• Confusing certification with collective bargaining.
• Confusing mediation, where the parties retain control of the agreement, with arbitration, where a third party renders a binding decision.
• Confusing a strike, which is a labor tactic, with a lockout, which is a management tactic.
• Confusing a primary boycott with a secondary boycott.
• Assuming right-to-work means that labor laws or workplace rules do not apply.
• Treating sexual-harassment complaints casually or failing to follow established reporting and investigation procedures.
• Relying on dated statistics from instructional examples rather than focusing on the underlying management concepts.
• Waiting for workplace conflict or safety problems to become severe before responding.