Union and Management: Rise of Collective Bargaining - Essay Example

?Union and management Introduction Collective bargaining is a common aspect that exists in organizations today. It can be defined as a type of negotiation that is utilized by employees and employers in an organization in their day to day undertakings especially when a problem arises. According to Silvia (1996), collective bargaining entails negotiations that relate to the terms of employment and the working conditions between an employer and representative workers’ organizations or unions with an aim of reaching an agreement. The workers or employees in a particular organization usually have some groups or unions through which they can air their views, opinions and even grievances. Whenever there is a collective bargaining negotiation, the employees’ representatives usually take a broad step and approach the employer or the management in an effort to negotiate a deal on behalf of the employees in which both sides (employer and employees) have a take and can come to an agreement. Some of the common employees-employer issues include wages and salaries, the general working conditions, the rules and regulations that govern their activities and practices, the benefits accrued to them among other issues (Wise geek 2010). This piece of work looks into the relationships between the workers unions and the management or employer with much emphasis being given to the flexibility and rigidity of both the union and the management during collective bargaining negotiations and the benefits and problems accrued to either the flexibility or rigidity of either party. Various organizational examples will be used to justify some of the arguments related to collective bargaining. Rise of Collective Bargaining Howell (1992) asserts that Collective bargaining is a concept that can be traced towards the end of the nineteenth century when most workers were now aware of their rights and hence they had the urge to demand for more rights related to their positions in the work places. They were able to recognize that they were involved in the success of the organizations and therefore they had to be treated well. It is then that most skilled personnel could use their skills and knowledge as the basis of bargaining in an effort to make the employers fulfil their workplace needs. Before, people were aware of the collective bargaining negotiations, they would engage in aspects like demonstrations, strikes and sheer numbers to air their issues and problems to the management until some labour pioneers came up and established a system that facilitated collective bargaining such that the negotiations between the employees and the employers could now run smoothly in an organized manner and better solutions would be attained. Collective bargaining acts as a means of improving the terms and conditions of trade unions and also restores the unequal bargaining position that may exist between employer and employees. It is however important to note that although the collective bargaining negotiations usually result in a conclusion they do not always lead to a collective agreement. The process of collective bargaining entails various steps for example preparation which entails composition of a negotiation team from both sides, discussion of the rules and regulations to govern the negotiations, proposal which entails bringing forth of various views and embracing aspects of brainstorming, the bargaining process and finally the settlement where the parties come to a conclusion (Industrial Relations 2007). The above chart shows clearly the general aspects that are contained in the process of collective bargaining (MetaPress 1997). Reasons and consequences of rigidity in collective bargaining negotiations According to Franz and Feiffer (2006), there are various reasons and consequences that are associated with rigidity in the collective bargaining negotiations irrespective of the party that is rigid. The employment condition that is of focus here is the wage rigidity which seems to affect most employees as they feel that they are being oppressed when they do a lot of work but receive very little in terms of benefits. There are various forms of wage rigidity and all have different consequences and ways of dealing with them. There are for example very high real wage rigidity for various levels of workers for instance the white collars and the aged workers. The real wage rigidity could however be minimized if organizations embraced collective bargaining negotiations or firm level wage agreements. Nominal wage rigidity on the other hand can be avoided through the use of flexible pay instruments which take into account the various duties performed by various employees. All in all it is evident that both the real rigidity and nominal rigidity affect organizations and employment in particular in a very negative manner with nominal rigidity affecting the labor productivity much (Agell, and Benmarker 2007). It is therefore very important for the management in any organization to look into any form of rigidity that could affect the prosperity of the activities, the employers, the employees and the organization and the industry at large. This could be achieved through embracing flexibility in the collective bargaining negotiations which in a way allows for the incorporation of ideas and opinions of all the participants in the organization hence ensuring that most of the needs are looked into and people are comfortable in their undertakings. This will ensure that people put maximum efforts in their work to enhance their performance which in the long run improves the overall performance of the organization through combined efforts. This is linked to motivation and job satisfaction aspects that are very important for any organization to prosper (Dhyani n.d). Flexibility and Rigidity of the Union and the Management during collective bargaining negotiations According to Ebbinghaus and Kittel (2005) Collective bargaining can be seen as a test of strength of the parties involved. A party either loses or gains in the negotiation process. A gain for one party is in most cases a loss for the other party for example when there is an increment in the wages of the employees, it can be seen as a positive aspect in regard to the employees as it increases motivation and job satisfaction while at the same time it is an aspect that in one way or the other reduces the profit margin of the organization. Flexibility is very critical in the negotiations since it ensures that neither party is overlooked. Flexibility is a very essential element in almost all aspects of life since it allows for adjustments and taking sides so that the best option can always be reached at. When it comes to the collective bargaining negotiations, I think that it is advantageous for both the unions and the management body to be flexible enough so that a good conclusion that is reasonable for both the employees and the employer can be reached after the considerations of both sides’ ideas, opinions and views in regard to a given aspect that could be affecting either one or both sides. When a consensus is reached through negotiation, it becomes easy to fulfil as opposed to when it would be one sided or when one party would be rigid to take in the other side’s opinions. Flexibility of collective bargaining helps in ensuring that there is continued viability. For negotiations to be successful in an organization the representatives of both sides, the employer and the employees, should possess some form of authority to enable them to bargain and in the long run strike a deal that demands honour by all without any form of discrimination ( Stellman and International Labor Office 1998). Duignan, and Rabushka (1980) argues that in the event of collective bargaining, the union usually has a collective interest as it is a representative of several employees and hence should under all circumstances cater for the interests of all the employees. For there to be success in the collective bargaining negotiations, it is very important that flexibility should be maintained between the management and the union. Flexibility goes hand in hand with aspects like freedom of association where the different parties are able to negotiate freely which in return creates a sense of motivation to resolve the particular issues in question. Flexibility also ensures that both the employer and the employees are able to benefit fully from the negotiations as no side is favoured. It also instils some aspects of recognition and appreciation especially among the employees as they feel that they are deemed to be important elements of the organization which is shown by their ability to have a say where they can voice their concerns and more so to have some changes done as per their request. Rigidity in collective bargaining negotiations is a negative aspect that does not foster progress in any given organization. The rigidity could come from the trade or employees unions or from the employer or the management the latter being common. Rigidity is mostly felt where there exist a problem in an organization for example where there is some form of economic crisis which for instance affects the wages of the employees. Rigidity of collective bargaining negotiations have proven to hamper any positive adjustments for instance in the wages and other benefits which could in a way bring about some positive changes that would help deal with the economic or any other crisis in the organization. Rigidity in collective bargaining has been associated with problems of jobs in the unionized part of various industries in the economy. Rigidity reduces productive effectiveness and efficiency through the interruption and limitation of the organization’s choices and options hence having a negative impact on its overall productivity. (Epstein 2009). Example 1 looks into Gesamtmetal limited which is an organization in Germany. It touches on the flexibilities that have to be adopted in regard to the employees so as to help solve or reduce the effects that the company has suffered as a result of the economic crises that face the organization. Some of the collective bargaining that goes on between the management and the employees in the company in an effort to solve the issue include collective agreement on job security, flexible implementation of 2009 collective agreement on pay, collective agreements on restructuring and securing locations, terms of vacations and plant holidays, and net pay agreements among others. These adjustments were made in agreement with the trade union and the employer’s association and although most of them seemed to affect the employees negatively, they were able to accept them due to the collective bargaining negotiations that aimed at improving the organization’s situation after which the situation would be brought to normal and the employees would be compensated (Gesamtmetal n.d) The General Motors Corporation, one of the leading automobile in the world, is the number 2 example that can be used to explain the concept of collective bargaining negotiations. Towards the end of the year 2007, there existed a collective bargaining agreement between the General Motors Corporation and the United Auto workers which is known for causing a very complex bargaining process. Competition from Japan led to a decline in the company’s market share which in return affected most aspects of the company including those related to the employees. This in a way led to the formation of an agreement between the Company and the United Auto workers in an effort to improve the situation. This had an effect on the labour union and it helps us understand that collective bargaining negotiations are very helpful and they help solve various problems. It is however important to note that flexibility is very essential as it allows all parties to come to a conclusion that not only benefit them but also the organization at large as opposed to where some parties would be very rigid to accept some aspects deemed to be useful especially in times of problems (ICMR n.d, Collective Bargaining: The General Motors-United Auto Workers Deal). The third example where collective bargaining negotiation can be spotted is the Honda Motorcycle & Scooter India limited. The company faced some human resource problems which caused some disputes between the management and the workers. The disputes went to the extent of leading to strikes among the workers. The inability to deal with this situation caused a lot of damage in the organization in terms of affecting its activities negatively leading to low productivity. There were many aspects that led to the labour unrest for instance external parties like political parties and the trade unions. After the problems experienced, the only solution was to solve the problems internally through collective bargaining negotiations where both parties were to air their views and opinions and a consensus reached. This shows that collective bargaining negotiations are very helpful in organizations as they help bring an understanding between the management and the employees where the working conditions of both parties are improved hence making them work comfortably and result to maximum productivity. Both the unions and the management should be flexible enough so that the positive ideas and opinions can be adopted irrespective of their origin, that is, either from the management / employer or the employees since both are equally important and they contribute substantially to the success and progress of an organization and an absence of either party would incapacitate the organization (ICRM n.d. Labour Unrest at Honda Motorcycle & Scooter India (Private) Limited) Another example is the Belgian Food Industry. According to Wiuame (1993), there is equal opportunities and collective bargaining in the European Union, Belgian Food Industry being a case study. The focus is the collective agreement of 16 February the year 1993 which emphasizes on positive action regarding the female employees in the industry. Collective bargaining negotiations took place in the company with an aim of ensuring that equal opportunities were given to both the men and women. This was a positive step as it ensured that all the parties were given a chance to participate in making the changes and hence they voluntarily adopted the changes to make the industry a favourable environment for everybody involved. If all parties were not engaged in the negotiations, the results would not be good as some would feel that it was not the right step. In Canada, I take an example of multiple employer collective bargaining which entails systems of bargaining where representatives of a group of companies act as a unit in the process of negotiating with the various representatives of workers in the different companies (Adell et al. 1972). This could take the printing industry in Toronto, the pulp and paper industry located in eastern Canada and the interurban trucking industry in the southern part of Ontario. Although these organizations are completely distinct, a study was carried out in regard to multiple employer collective bargaining and different perspectives were considered in each. In each a certain degree of flexibility in the negotiations is adopted and various results attained and the more flexibility was embraced, the better the results attained (Eastman 1952). Ritz-Carlton Hotel is another good example. We find the hotel protesting the decision of the National Labour Relations Board (NLRB) director to certify a union that was to represent a group of employees. The protest was based on the fact that the union was supposed to represent all employees as opposed to a section of them to ensure equality and justice. This is a condition that brought about of problems since no party was ready to take in the others views and opinions but rather they all wanted to win the battle. This shows rigidity which does not lead to success but wastage of time in the struggle to reach to a conclusion. Flexibility in the collective bargaining negotiations could solve this (South Western Cengage Learning 1997) Baker concrete company in Ohio also faced some human resource related problems. This was about some compensation of workers for their time spent in transit from the parking region all the way to the construction site. The contention came up because the security part of their work was not under the employer’s control and hence the employer claimed it was not responsible for the transit time. According to the employer’s conditions, the employees were not supposed to be compensated although they felt that it was their right. In reality the employees working conditions should enhance safety while at work and adequate compensation should be granted. A case like this could be solved by the employer coming a little bit low to consider the safety of the employees through collective bargaining negotiations. Another example is that of AngloGold Ashanti which is a company that operates in South Africa and Ghana. In the year 2007, the company was involved in collective bargaining with major focus being on the wages and the general working conditions of the employees in the two countries. The collective bargaining levels of the company in the two countries are quite different with South Africa having a well established collective bargaining system where there is a lot of flexibility and interactions between the different parties. The situation in Ghana on the other hand is a bit different with the collective bargaining system being a level lower than that in South Africa although it is in the process of growth. In South Africa there was the founding of the national union of mineworkers in the year 1982 to represent the workers and act on their behalf in regard to dealing with the management. There is generally good communication in the form of collective bargaining negotiations between the representatives and they are all directed towards reaching a fair, mutually acceptable and all encompassing outcome. Ghana is a country that is well known for a relatively long history in regard to trade unionism. In respect to Ashanti Goldfields organization, there are very good relationships established between the employers and the employees through good leadership that embrace flexibility in the collective bargaining negotiations. All in all there still exist some problems for instance there have been conflicts between the management and the unions in regard to wage increment with the management bidding lower than the unions. To deal with the situation, the national labour commission came up with a considerable wage increase and although it did not meet the expectations of the employees there was effective communication which touched on the inflation in the country. All parties easily accepted the conclusion reached by the commission without any problem since all sides were considered. AngloGold Ashanti is an organization that deems the employees to be important and engage them in various negotiations (Anonymous 2007) In India there has been a lot of trade unions all directed to assist in ensuring that the working conditions of the employees are looked into. The trade unions are formed to represent the workers in various aspects of employment for instance the wage issues and the general working conditions for instance the rules and regulations that pertain to their practices and activities. Some of the notable organizations that can be referred to include the Karol Leather Karamchari Sangathan, Liberty footwear company where the aspect of collective bargaining is taken as a tool through which problems are solved. Collective bargaining is taken as a very essential tool which has greatly improved the employment situations in the country. In Bharat Iron Works v. Bhagubhai Balubhai Patel 5, it was held that “Collective bargaining, being the order of the day in the democratic, social welfare State, legitimate trade union activities, which must shun all kinds of physical threats, coercion or violence, must march with a spirit of tolerance, understanding and grace in dealings on the part of the employer. Such activities can flow in healthy channel only on mutual cooperation between the employer and the employees and cannot be considered as irksome by the management in the best interests of its business (Articles base 2008). Most of the organizations in India embrace collective bargaining negotiations and flexibility is adequate with all parties having authority in bargaining hence allowing for better agreements and solutions for different problems in the organizations. Conclusion Collective bargaining is a very essential negotiation tool in the employment relationship especially to the employees as it helps in improving their working conditions. The workers benefit much from the unity they have through the various unions that they form as they allow them to speak as a unit so that their rights can be maintained. The employers or the management also benefit from the collective bargaining negotiations since they allow for agreements that stipulate clearly the expectation of all the parties in the organization hence allowing for easy fulfillment of the needs which in the long run leads to achievement of job satisfaction among the people and hence excellent performance which leads to maximum productivity in organizations. Flexibility should always be maintained in the collective bargaining negotiations so as to ensure that the interests of all parties are taken into account and hence all involved individuals feel represented in the decisions made and even if a collective agreement is not reached, they all feel part of the decision. Rigidity in the process of collective bargaining negotiations can cause some form of enmity between the employers and the employees as they feel unequal where one party is not ready to negotiate hence success in the organization is usually reduced. Most organizations and employer associations have however known and appreciated the aspect of flexible collective bargaining negotiations. The concept of collective bargaining negotiations has been viewed differently in various countries and organizations as shown in the various organizational examples evaluated earlier in this paper. Nonetheless, it is evident that most countries have appreciated the concept and witnessed a dramatic shift in regard to the willingness of employers and also other bodies like the government to facilitate flexibility in bargaining at all levels or relationships. References Adell, B.L et al. 1972. Collective Bargaining for University Faculty in Canada. Industrial Relations Centre, Queen's University. Agell, J. and Benmarker, H. 2007. Wage Incentives and Wage Rigidity: A Representative View from Within. Labor Economics, 14(3), 347-369. Anonymous 2007. Case study: Towards collective bargaining – The View of the Group and a Comparison between South Africa and Ghana. AngloGold Ashanti Report to society. [Online] Available at: http://www.anglogoldashanti.com/subwebs/informationforinvestors/reports07/reporttosociety07/files/collective_bargaining.pdf [Accessed 9th April 2011]. Articles Base 2008. Collective Bargaining Process in India: a Critique. [Online] Available at: http://www.articlesbase.com/organizational-articles/collective-bargaining-process-in-india-a-critique-539870.html [Accessed 9th April 2011]. Dhyani , S.N. n.d. Trade Union and the Right to Strike, S. Chand & Co. (Pvt.) Ltd. New Delhi, PP. 374-380. Duignan, P. and Rabushka, A. 1980. The United States in the 1980s. 5th ed. New York, Taylor & Francis. Ebbinghaus, B. and Kittel, B. 2005. European Rigidity versus American Flexibility? The Institutional Adaptability of Collective Bargaining. Work and Occupations vol. 32 no. 2 163-195 Eastman, M.S. 1952. An Analysis of Multiple-employer Collective Bargaining Based on Three Case Studies. The Canadian Journal of Economics and Political Science. Vol. 18 No. 4 Epstein, R. 2009. Obama's Welcome Silence on The Employee Free Choice Act. [Online] Available at: http://www.forbes.com/2009/02/09/card-checks-efca-opinions-columnists_0210_richard_epstein.html [Accessed 9th April 2011]. Franz, W. and F. P. Feiffer. 2006. Reasons for Wage Rigidity in Germany, Labour (20): 255- 284 Gesamtmetal . n.d. Flexibility in Times of Crisis. [Online] Available at: http://www.ioe-emp.org/fileadmin/user_upload/documents_pdf/globaljobscrisis/documentsfrommembers/ioemembers_gesamtmetall.pdf [Accessed 9th April 2011]. Howell, C. 1992. Regulating Labour: The State and Industrial Relations Reform in Post-war France. USA, Princeton University Press. ICMR, n.d. Collective Bargaining: The General Motors-United Auto Workers Deal. [Online] Available at: http://www.icmrindia.org/casestudies/catalogue/Human%20Resource%20and%20Organization%20Behavior/HROB109.htm [Accessed 9th April 2011]. ICRM, n.d. Labour Unrest at Honda Motorcycle & Scooter India (Private) Limited. [Online] Available at: http://www.ecch.com/casesearch/product_details.cfm?id=78519 [Accessed 9th April 2011]. Industrial Relations 2007. Collective Bargaining Process. [Online] Available at: http://industrialrelations.naukrihub.com/process.html [Accessed 9th April 2011]. MetaPress. 1997. Journal of Collective Negotiations in the Public Sector, Volume 26; University of Michigan : Baywood Pub. Co Silva, S. 1996. Collective Bargaining Negotiations. [Online] Available at: http://www.ilo.org/public/english/dialogue/actemp/downloads/publications/srscbarg.pd f [Accessed 9th April 2011]. South Western Cengage learning 1997. No Timely Appeal Means No Appeal of NLRB Decision. [Online] Available at: http://www.swlearning.com/blaw/cases/no_timely.html [Accessed 9th April 2011]. Stellman, M.J. and International Labour Office. 1998. Encyclopedia of Occupational Health and Safety, Volume 1; Volume 5.4th ed. New York : International Labour Organization. Wise geek. 2010. What is collective bargaining? [Online] Available at: http://www.wisegeek.com/what-is-collective-bargaining.htm [Accessed 9th April 2011]. Wiuame, N. 1993. Equal Opportunities and Collective Bargaining in the European Union A Case Study on the Belgian Food Industry from Belgium Phase III. [Online] Available at:http://www.eurofound.europa.eu/pubdocs/1997/67/en/1/wp9767en.pdf [Accessed 9th April 2011]. Read More