chapter participatory processes 12 mcgraw-hill/irwin an introduction to collective bargaining &...
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Chapter
Participatory Processes
12
McGraw-Hill/IrwinAn Introduction to Collective Bargaining & Industrial Relations, 4e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
1 - 312 -3
The Evolution of Worker and Union Participation
• Early efforts to create mechanisms for worker involvement included “Quality of Working Life” (QWL) programs
- QWL is oriented toward improving organizational performance and the working life of the employees
• The QWL programs operate at the lowest level of industrial relations activity, on the shop floor through the involvement of groups of workers
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Early QWL - Limited Success
• Efforts to create interest in QWL expanded in the early 1970s- QWL sought to address a perception that modern factories
alienated workers by providing few avenues for employee input- QWL sought to reduce worker alienation known as the “blue-
collar blues”- Early efforts had opposition from labor and management
• Neither labor nor management saw the need for change• Both labor and management felt that QWL questioned the
basic assumptions of the collective bargaining process, and feared for their roles
• Few line managers or executives saw the bottom-line relevance of QWL – but QWL was “reborn” in the 1980s as economic pressures intensified
1 - 512 -5
Quality Circles
• In a typical Quality Circle (QC) program, workers in one area of a plant meet for one or two hours per week with their supervisor
- Quality Circles allow workers and management to identify improvements in production and service delivery
- Many companies initially reported large payoffs from QC activities, with scrap rates dropping and cost savings through new processes
• The Limited Gains from Quality Circles- QC gains dissipated over time- Workers became frustrated when their suggestions were ignored- Workers ran out of suggestions or found them to be in violation
of work rules
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The Broadening of QC and QWL Programs
• The most successful QC and QWL programs involved broadening work rules, bargaining issues, and production methods
- Without the broadening of work rules, QWL programs were not able to address performance and employment security
• The Expansion of QWL at Xerox- Xerox and their union committed to expand problem-solving - Study teams of workers and management suggested changes in
work organization that required contractual changes, and thus integrated QWL into the collective bargaining process
- Unions agreed to subcontracting and management accepted a no-layoff provision
- Xerox won the Baldrige award for organizational excellence, and the participatory activities received much of the credit
• Strategic participation included top executive access by unions
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The Limits of Participation
• Events at Xerox at the start of the twenty-first century also illustrate the limits of the participatory process
- The process cannot override fundamental changes in market conditions or declines in core business caused by strategic mistakes
- By 2000, Xerox lost market share, failed in elements of restructuring, and was charged with accounting irregularities
- Employment in Rochester, NY, has been reduced by 50%- While the extent of the participation has diminished, efforts to
work together have continued
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New Channels of Communication
• The expansion of the participation processes is often associated with new communications between management and labor
- Often led to expanded communication between union officers and higher-management
• Work Organization Restructuring - Links to QWL- Work reorganization became a central part of many
participation processes due to pressures for flexibility- More easily done in new plants or those that are
completely retrofitted
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The Links between Teamwork, Participation, and Work Restructuring
• Teamwork systems require a fundamental reorganization of the workplace
- They replace multiple and narrow job classifications with jobs that are broader in scope
- Workers make discretionary judgments and an investment in training
- Some involve “pay-for-knowledge” plans
1 - 1012 -10
New Roles for Supervisors
• Traditional supervisors are sometimes replaced with team leaders
- Many team leaders are members of the bargaining unit rather than first-line management
- In some cases, such as the Saturn Corporation, union and nonunion team leaders are paired as partners who share responsibility for managing the teams
• The Expansion of Teams- Some plants have an “administrative” team which includes the
plant manager and union chairman- A key to such a team’s success is union participation in initial
design of changes
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Managing the Overlap between Participation, Work Restructuring, and Collective Bargaining
• As participatory processes expand, unions face a challenge to manage and coordinate the overlap
- Unions try to avoid grievance or collective bargaining issues in team meetings
- However, the line between collective bargaining and the participatory process blurs as the process matures
- This occurred at Xerox, where workers made recommendations that altered job descriptions and subcontracted work
- The situation at Xerox and Kaiser Permanente illustrated that some way of integrating contract negotiations with on-going participation must be found for the joint effort to survive
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Changes in Contractual Procedures that Emerge from Participation
• As labor and management participate more directly in decisions, they find the formal contractual procedures less important
- Such was the case at Dayton Power, which replaced a 114-page agreement with a 13-page “compact”
- That compact introduced a no-layoff clause and new incentive pay system
- This illustrated how increased worker and union participation can change practices
1 - 1312 -13
An Issue for Unions: How Far to Go in Lessening Formal Rules and Procedures
• Unions want more cost competitiveness and job security
- But don’t want to abandon formal negotiations and grievance procedures
- Union leaders can allow participation to proceed but coordinate the connection to collective bargaining
- Cases show that if a union maintains an arms-length distance, as some point a confrontation develops or participation withers
1 - 1412 -14
New Union Rules
• Joint steering committees can help with oversight of the participatory process
- Former union officers can make good facilitators• They tend to be respected by the work force and adept at
compromise- The result is the creation of a complex set of committees and
new jobs that coordinate participation and collective bargaining
- In many settings, union officers now spend as much of their time on joint activities as they do traditional arm’s-length activities
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The Expansion of Joint Activities
• Other joint activities tend to evolve from the participatory process
- They include employee assistance programs, such as alcohol and drug abuse counseling, health and safety committees, absentee programs, training and education, and community service programs
- Union officers spend more time in such roles- This trend has led to changes in job titles of workers and more
facilitation- In service industries, such as hotels or hospitals where multi-
employer bargaining structures exist, joint efforts often cut across employers
1 - 1612 -16
Worker and Union Participation in Strategic Decisions
- Some worker involvement comes from the formal participatory process
• In other cases from an informal basis- An example of this evolutionary expansion
occurred in some auto plants• Workers and union representatives now sit on
planning committees that operate at the plant level
• They assist in developing new practices to avoid outsourcing and win new business
1 - 1712 -17
The Effects of Downsizing and Outsourcing Pressures: Heightened Concern for Employment Security
- Downsizing and threats of outsourcing in the 1990s led many unions to increase their involvement in business issues
- Unions bargained for employment security clauses that included participation as well as concessions
- The process has led to extensive cooperation, including avoidance of representation elections
1 - 1812 -18
The Sources of Failure
• Joint processes seldom last forever- Many fail in the early stages because leaders are
unable to make the organizational and role adjustments needed to integrate joint efforts in union/management relationships
- Recognition that participatory process are vulnerable to business decisions traditionally under the control of top management is why some labor leaders pressed for a voice in strategic decision making
1 - 1912 -19
Worker and Union Voice in 21st Century Corporations
• The U.S. experienced a crisis of corporate confidence in the early twenty-first century
- The scandals arose from accounting and executive compensation issues in companies such as Enron, Tyco, Polaroid, and Adelphia Communications
- These scandals raised questions about the role of employees and union representatives in corporate governance
- Given the growing importance of knowledge and skills as a source of competitive advantage to corporations, this issue will be important in future debates over the roles of employees
1 - 2012 -20
The Debate Surrounding Participatory Programs
• Critics argue that participatory programs do not lead to meaningful worker involvement
- They claim that the team systems are used to put peer pressure on workers and remove the independent voice of the union
- They call such programs a “halfway house” to nonunion operations
- Proponents argue it’s a better way to reach their membership’s goals
1 - 2112 -21
Assessing the Effects of Participatory Processes
- Management seems convinced that participatory processes and work reforms can improve productivity and quality
- A number of unionists are coming to a similar judgment- Research shows that narrowly defined QC and QWL
programs have only a small positive effect on product quality and negligible effects on productivity
- Auto plants with the highest productivity and quality are not the most technologically advanced, but those that integrate human resource strategy with production processes
- The best performing plants link “humanware” and “hardware” through participation
1 - 2212 -22
Union Representation on a Company’s Board of Directors
- Formal representation on the board of directors is another way unions have achieved involvement in strategic decisions
- Started with the addition of a UAW representative on Chrysler’s board as part of the federal loan guarantees in 1980
- Not all are success stories, as with Rath Packing and Eastern Airlines
- Evidence suggests that board membership alone does not lead to substantial payoff for workers
1 - 2312 -23
Employee Ownership
- A more radical form or participation is employee ownership- In some cases, employee buyouts occurred in the face of
impending plant shutdowns- Some unions have promoted employee ownership as a way to
improve job security- The employee buyout of United Airlines is the most noteworthy
example - In 1994, United became the largest employee-owned company in
the U.S. - It is not clear that the employee ownership had a positive effect
on morale or corporate performance at United
1 - 2412 -24
The Views of Labor Toward Employee Ownership
- Unions have been traditionally unenthusiastic- Union leaders may fear that ownership will lead to a lack
of need for a union- However, studies show this may not be the case - While new forums arise in ESOPs, members still prefer
traditional bargaining for wage and benefit negotiations- Unions fear that economic pressures will bring wage and
benefit cuts to save jobs- Unions are also concerned about the effects of such wage
cuts on other unionized firms in the industry
1 - 2512 -25
The Impact of Worker Ownership on Economic Performance
• Evidence suggest that performance improves in employee-owned firms when workers have broader decision-making opportunities
- ESOPs may work best in small, stable firms, where skilled workers can improve productivity and economic performance through motivation and group performance
- Critics say ESOPs put worker pensions at risk without any real increase in decision-making
1 - 2612 -26
Participation through Industrywide Labor-Management Committees
• In some competitive industries with numerous employers and a single union or small number of unions, industrywide labor-management committees historically were used to discuss problems of mutual interest outside the collective bargaining process
• Those committees represented early efforts by unions to participate in broad strategic issues outside of formal collective bargaining
1 - 2712 -27
The Textile Industry Case
- The Amalgamated Clothing and Textile Workers Union (ACTWU - now part of UNITE) became involved at the early stage in research and development to mechanize production to help stem the flow of imported goods
- In contrast to other unions, the ACTWU became deeply involved before management’s strategic decision to implement the technology
- Later, the union agreed to an experimental program that allowed some importation of goods in exchange for a commitment to reinvest in U.S. facilities
- Joint committees can be useful in creating links between participation and the formal bargaining process
1 - 2812 -28
Summary- Experience suggest that new participatory processes cannot operate
in isolation from collective bargaining - Reforms work best when they are associated with changes across
all three levels of industrial relations activity- The ultimate success of reforms depends upon the ability to
reinforce and sustain high levels of trust - To achieve tangible benefits, participatory programs have often
been accompanied by contract changes- Shop floor participation has been spurred by strategic participation- This helps convince workers that enhanced job security will follow
strategic participation- Union critics fear that they will be co-opted by management in the
participatory process and their independence will be compromised- Participation has rarely expanded without a crisis setting
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