Industrial and Labor Relations - Report Example

Labor Relations It is universally conceded that labor unions have served the needs of the ‘working man’but the extent to which they positively affect the overall welfare of the nation’s economic structure is called into question by some, especially business leaders. A union is a group of workers who form a formal association with the intention to protect the interests of that group with respect to safe and equitable working conditions and fair compensation. The union also represents their members’ interests by intervening in employee grievances with the company (Noe, Hollenbeck, Gerhart & Wright, 2004). This discussion examines the various union operations including the organizational campaigns, elections, contract negotiations, grievance handling, arbitrations, labor relations and strikes in addition to how the changes in employee relations strategies, policies and practices impact an organization’s performance. It will also address questions regarding the relevance of unions today. Unions originated in response to unscrupulous actions from employers such as substandard pay practices and allowing hazardous working conditions. Unions provide a place for employees to receive better pay and health benefits as well as guaranteed safety regulations. Craft Unions are one of many types of unions. They consist of members with one specific skill such as carpentry or an electrical worker. Craft unions train their members through apprenticeship programs then find employment for their members. The employees are directly represented while at work by the member-elected shop steward who relays their concerns to the employer. “Issues include complaints of work rules being violated or workers being treated unfairly in particular situations. A formal grievance procedure is typically used to resolve these issues” (Noe, Hollenbeck, Gerhart & Wright, 2004). The management at the union hall conducts labor relations which include many different types of activities on many levels of involvement within the labor-management relationship. One of the most important responsibilities of union management is contract negotiations which involves decisions regarding pay structures, employment security, workplace regulations, safety and numerous other concerns. Decisions made during contract negotiations affect the employee/employer relationship for the duration of the agreement. Union representatives hold ‘organizing campaigns’ in an attempt to recruit workers in a particular industry or corporation. They explain to employees the benefits of union membership which include higher pay, increased health and retirement benefits and wide-ranging working conditions. The union may begin the process of unionizing an organization if 30 percent of the particular workforce signs an authorization card. When 50 percent or more of workers sign up, the union then requests the employer to voluntarily acknowledge that their workers are unionized. However, employers may continue to resist unionization and initiate measures such as pay raises and other incentives in an effort to counteract the union offers. If a company does not recognize the worker’s desire to organize, the union then convenes a secret election. If the majority votes for a union, the union representatives begin collective bargaining negotiations with the employer. “Collective bargaining is when the union and the management representative negotiate terms for an employment contract. This contract consists of pay, benefits, work regulations and how workers will resolve grievances” (Noe, Hollenbeck, Gerhart & Wright, 2004). Reaching an agreement on a contract is essential for the employer/employee relationship to operate effectively. Both employer and union representative must prepare for collective agreements. Union representatives should be aware of precisely what the employees need and want in their particular workplace situation and must know what concessions can be made during negotiations. Following unionization, employees that believe the employer has in some way violated the union contract first speaks with their manager then, if necessary, the union steward. The steward will submit the complaint in writing to the appropriate level of management then meets with company representatives in an effort to resolve the matter. The outcome of this meeting is also put in writing.  If the union and company representatives cannot reach an agreement, the membership may resort to a work stoppage, going ‘on strike,’ and begin gathering in front of their place of employment with their grievances spelled out on signs, ‘picketing.’ However, it is in neither the union members’ nor the corporate management’s best interest to stop production because both sides lose money. Therefore, each side generally makes attempts to settle an issue before it reaches this point. Strikes are the only recourse of a union but this tactic is rarely utilized today though there are significant exceptions. For example in 2005 the New York City transit unions, which represents more than 33,000 members, threatened to strike the bus subway lines (“NYC”, 2005). Prior to a strike’s official beginning, independent arbitration is often used to settle the differences between the union and company. The arbitrator is a third party that hears the arguments from both sides and decides on a resolution that is legally binding to both parties. A mediator may also be used by the parties prior to arbitration. Though it is not binding, the results of the mediation may help further the negotiations. Those opposed to the unionization of workplaces maintain that while they were once relevant, they are now an ineffective relic of the past. Since unions were first formed to force employers to provide fair pay and safe working conditions, they reason that laws today enforce safe working conditions and a minimum wage requirement which negates the usefulness of unions. Though they admit unions have improved safety and pay for workers worldwide in the past, they state that today’s competitive marketplace will not allow unions to regain the size or power they once enjoyed. The presence of unions, it is feared, could cause a slow growth in employment and smaller corporate profits because of inflated labor costs. “The existing literature suggests that union wage premiums are large, and that unions have significant effects on profitability” (Ruback & Zimmerman, 1984). Another and maybe the most prominent reason employers oppose unions is that they must relinquish the total control over the workplace to an outside group (Clark, 2003). In spite of employer fears, proponents of unions argue that businesses are not more susceptible to failure and point out that there is little evidence to indicate anything other than modest wage increases related with newly unionized workplaces. Furthermore, raising the standard of living ultimately stimulates the economy which serves to pump money back into businesses (Freeman & Kleiner, 1990). In addition, a union provides a kind of checks and balance system restraining somewhat the total authority of big business, a function that is proving increasingly important following the recent revelations of abuses of power by many large firms such as WorldCom and Enron (Clark, 2003). The issue of employee productivity has also been greatly debated by both sides of unionization. “On one hand union employees have workload limits that they abide by as well as unionized strikes which can completely shut down organizations. On the other hand unions can reduce turnover by allowing the employee-employer relationship to grow by being an outlet for both sides” (Noe, Hollenbeck, Gerhart & Wright, 2004). Unions have largely influenced the mindset of organizations. Employee concerns are an important focal point along with the bottom line. Employers that wish to avoid unionization are ensuring that safe working conditions and fair pay are offered. Through direct or indirect means, unions have secured enhanced working environments in businesses all over the U.S. (Noe, Hollenbeck, Gerhart & Wright, 2004).  Still today, unions play a vital role in the economy and in society as a whole. Their impact has continued to extend well past those dues paying members. This has occurred because non-union employers have been passively forced to improve pay and benefits, job security and working conditions to levels close to union members in a similar industry. The ‘union threat effect’ is the name economists have tagged such an occurrence. Though only about 15 percent of Americans are union members, the continued union effect impacts more than the pay and conditions of nonunion employees. Many receive health insurance, sick leave, paid vacations and pensions not because of their employers generosity but because unions successfully negotiated these things for its members. If unions did not exist today, no other employer would likely offer benefits or compensation at present levels as there would be no need to remain competitive with a unionized competitor. The labor movement remains an important facet of society but not simply to ensure equity and fairness in all workplaces, union or not. Today, when revelations of corporate crime are a seemingly a part of everyday life and the Bush administration seems to be enabling rather than regulating white collar crime on the grandest of scales, the role of the union movement as an overseer makes its current relevance undeniable. References Clark, Paul F. (31 August 2003). “Look for the Union Influence.” Post Gazette. Pittsburgh, PN. Retrieved 7 January 2007 Freeman, Richard B. & Kleiner, Morris M. (July 1999). “Do Unions Make Enterprises Insolvent?” Industrial and Labor Relations Review. Vol. 52, No. 4, pp. 507- 524. “NYC Official Transit Workers Rejected Final Offer.” (2005). MSNBC. Retrieved 7 January 2007 Noe R, Hollenbeck J, Gerhart B, & Wright P. (2004). Fundamentals of Human Resource Management. New York: McGrawHill. Ruback, Richard & Zimmerman, Martin. (1984). “Unionization and Profitability: Evidence from the Capital Market.” Journal of Political Economy. Vol. 92, pp. 1134-1157. Read More