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Chapter 12 - Dealing with Employee–Management Issues and Relationships
1
chapter
=
Dealing with Union and
Employee–Management
Issues
what's new in this edition 12.3
brief chapter outline and learning objectives 12.5
lecture outline and lecture notes 12.7
PowerPoint slide notes 12.47
lecture enhancers 12.66
lecture enhancer 12-1: THE COMPLICATED LEGACY OF HENRY FORD 12.66
lecture enhancer 12-2: EMPLOYEES STAND BY THEIR CEO AT MARKET BASKET 12.67
lecture enhancer 12-3: ADDITIONAL LABOR–MANAGEMENT TACTICS 12.68
lecture enhancer 12-4: UNIONS TURN TO THE SERVICE INDUSTRY FOR GROWTH 12.69
lecture enhancer 12-5: PUTTING PEOPLE FIRST AT PUBLIX 12.70
lecture enhancer 12-6: REVAMPING EXECUTIVE PAY 12.70
lecture enhancer 12-7: FRENCH LAW FORCES BOSSES TO RESPECT FREE TIME 12.73
lecture enhancer 12-8: THE MALE EMPLOYMENT DROUGHT 12.73
12
Chapter 12 - Dealing with Employee–Management Issues and Relationships
2
critical thinking exercises 12.73
critical thinking exercise 12-1: ARE UNIONS GOOD OR BAD FOR BUSINESS? 12.73
critical thinking exercise 12-2: UNION NEGOTIATIONS 12.75
critical thinking exercise 12-3: EXECUTIVE PAY WATCH 12.77
bonus cases 12.78
bonus case 12-1: DO RIGHT-TO-WORK LAWS HELP STATES? 12.78
bonus case 12-2: PENSION PLANS UNDER ATTACK 12.80
Chapter 12 - Dealing with Employee–Management Issues and Relationships
3
what’s new in
this edition
additions to the 11th edition:
• Getting to Know DeMaurice Smith
• Name That Company: Whole Foods
• Adapting to Change: College Athletes: What Are They Worth?
• Video Case: Screen Actors Guild
revisions to the 11th edition:
• Spotlight on Small Business: The Factory Blaze That Fired Up a Movement
• Making Ethical Decisions: To Cross or Not to Cross?
• Statistical data and examples throughout the chapter were updated to reflect current information.
deletions from the 10th edition:
• Getting to Know David Stern
• Name That Company: Bright Horizons
• Legal Briefcase
Chapter 12 - Dealing with Employee–Management Issues and Relationships
4
Chapter 12 - Dealing with Employee–Management Issues and Relationships
5
brief chapter outline
and learning objectives
CHAPTER 12
DEALING WITH UNION AND EMPLOYEE–MANAGEMENT IS-
SUES
Getting to Know DEMAURICE SMITH of THE NFL PLAYERS ASSO-
CIATION
I. EMPLOYEE–MANAGEMENT ISSUES
learning objective 1
Trace the history of organized labor in the United States.
II. LABOR UNIONS YESTERDAY AND TODAY
A. The History of Organized Labor
B. Public Sector Union Membership
learning objective 2
Discuss the major legislation affecting labor unions.
III. LABOR LEGISLATION AND COLLECTIVE BARGAINING
A. Union Organizing Campaigns
learning objective 3
Outline the objectives of labor unions.
B. Objectives of Organized Labor over Time
C. Resolving Labor–Management Disagreements
D. Mediation and Arbitration
learning objective 4
Describe the tactics used by labor and management during conflicts,
and discuss the role of unions in the future.
IV. TACTICS USED IN LABOR–MANAGEMENT CONFLICTS
A. Union Tactics
B. Management Tactics
C. The Future of Unions and Labor–Management Relations
Chapter 12 - Dealing with Employee–Management Issues and Relationships
6
learning objective 5
Assess some of today’s controversial employee–management issues,
such as executive compensation, pay equity, child care and elder care,
drug testing, and violence in the workplace.
V. CONTROVERSIAL EMPLOYEE–MANAGEMENT ISSUES
A. Executive Compensation
B. Pay Equity
C. Sexual Harassment
D. Child Care
E. Elder Care
F. Drug Testing
G. Violence in the Workplace
VI. SUMMARY
Chapter 12 - Dealing with Employee–Management Issues and Relationships
7
Getting to Know DEMAURICE SMITH of the NFL PLAYERS
ASSOCIATION
Experienced trial attorney DeMaurice Smith faced the challenge of his career when
he faced off with NFL owners during the 2011 players lockout.
I. EMPLOYEE–MANAGEMENT ISSUES
A. The relationship of employees and their managers
has always been complex.
B. A UNION is an employee organization whose main
goal is representing its members in employee–
management negotiation of job-related issues.
1. PUBLIC SECTOR UNIONS represent govern-
ment employees like teachers, firefighters, and
police.
2. Workers originally formed unions to protect them-
selves from intolerable working conditions and
unfair treatment.
3. Labor unions are largely responsible for minimum
wage laws, child-labor laws, and other significant
worker benefits.
4. However, unions have failed to regain their previ-
ous power, and membership declined.
The late management consultant Peter Drucker suggested that CEOs should not earn more
than 20 times the salary of the company’s lowest paid employee. Most firms ignore his sugges-
tion but our company executive’s pay is capped at 19 times the average employee’s salary.
Still, we are one of the fastest growing companies in the United States. Name that company.
(Students should read the chapter before guessing the name: Whole Foods.)
Chapter 12 - Dealing with Employee–Management Issues and Relationships
8
PPT 12-1
Chapter Title
Copyright © 2015 by the McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin
Dealing with
Union and
Employee-
Management
Issues
CHAPTER 12
PPT 12-2
Learning Objectives
LEARNING OBJECTIVES
12-2
1. Trace the history of organized labor in the United
States
2. Discuss the major legislation affecting labor unions
3. Outline the objectives of labor unions
PPT 12-3
Learning Objectives
LEARNING OBJECTIVES
12-3
4. Describe the tactics used by labor and management
during conflicts, and discuss the role of unions in the
future
5. Assess some of today’s controversial employee–
management issues, such as executive
compensation, pay equity, child care and elder care,
drug testing, and violence in the workplace
PPT 12-4
DeMaurice Smith
DEMAURICE SMITH
NFL Players Association
12-4
• Earned his law degree in 1989
and gained a reputation as a
dedicated trial lawyer.
• He was elected director of the
NFL Players Association in
2009.
• Shortly after starting the job he
was thrown right into the middle
of the recent NFL lockout.
PPT 12-5
Name That Company
NAME that COMPANY
12-5
The late management consultant Peter Drucker
suggested that CEOs should not earn more than
20 times the salary of the company’s lowest-paid
employee. Most firms ignore his suggestion but
at our company, executive pay is capped at 19
times the average employee’s salary. Still, we
are one of the fastest growing companies in the
United States.
Name that company!
(See complete PowerPoint slide notes on page 12.47.)
PPT 12-6
Organized Labor
ORGANIZED LABOR
12-6
LO 12-1
• Unions -- Employee organizations whose main goal
is to represent members in employee-management
negotiations of job-related issues.
• Labor unions were responsible for:
- Minimum wage laws
- Overtime rules
- Workers’ compensation
- Severance pay
- Child-labor laws
- Job-safety regulations
PPT 12-7
Public Sector Labor Unions
PUBLIC SECTOR
LABOR UNIONS
12-7
LO 12-1
• Public sector union members work for
governments as teachers, firefighters, police
officers, etc.
• Many states face serious debt problems and want
to cut labor costs. But states with public sector
unions have limited ability to cut those costs.
• The Governor of Wisconsin challenged public
sector labor unions by eliminating union
bargaining rights for state and public employees.
Chapter 12 - Dealing with Employee–Management Issues and Relationships
9
5. REASONS FOR UNION DECLINE:
a. Some suggest that global competition, the
shift to a service economy, and changes in
management philosophy have caused the
decline.
b. The decline may also be because objectives
have been achieved.
learning objective 1
Trace the history of organized labor in the United States.
II. LABOR UNIONS YESTERDAY AND TODAY
A. Your opinion about unions usually depends upon
which side of the management fence you are on.
B. Most historians generally do agree on the reason
unions were started in the first place.
1. The INDUSTRIAL REVOLUTION moved work-
ers out of the field and into the factories.
2. Workers learned that STRENGTH THROUGH
UNITY (unions) could lead to improved job con-
ditions, better wages, and job security.
3. But some argue that for organized labor the real
issue of protecting workers has become sec-
ondary.
4. Critics also argue that the current legal system
and management philosophy reduce the risk of
unsafe or oppressive conditions.
C. THE HISTORY OF ORGANIZED LABOR
1. As early as 1792, CORDWAINERS (shoemak-
ers) met to discuss labor issues in Philadelphia.
Chapter 12 - Dealing with Employee–Management Issues and Relationships
10
lecture enhancer 12-1
THE COMPLICATED LEGACY OF
HENRY FORD
Henry Ford founded the Ford Motor Company in 1903, pro-
ducing an inexpensive, all-purpose car, the model T. Through-
out its history the company’s dealings with the union were
complex and contradictory. (See the complete lecture enhanc-
er on page 12.66 of this manual.)
PPT 12-8
Goals of Organized Labor
GOALS of ORGANIZED LABOR
12-8
LO 12-1
• To work with fair and
competent
management.
• To be treated with
human dignity.
• To receive a reasonable
share of wealth in the
work it generates.
critical thinking
exercise 12-1
ARE UNIONS GOOD OR BAD FOR
BUSINESS?
This exercise asks the student to consider unions from both the
manager’s and the union member’s perspective. (See the com-
plete exercise on page 12.73 of this manual.)
PPT 12-9
History of Organized Labor
HISTORY of
ORGANIZED LABOR
• Work weeks were 60+
hours, wages were low and
child labor was rampant.
12-9
LO 12-1
• Craft Union -- An organization of skilled specialists
in a particular craft or trade.
• As early as 1792, shoemakers in a Philadelphia
craft union met to discuss fundamental work
issues.
Chapter 12 - Dealing with Employee–Management Issues and Relationships
11
a. The cordwainers were a CRAFT UNION,
that is, an organization of skilled workers in
a particular craft or trade.
b. A craft union usually met to achieve a specif-
ic goal and then disbanded.
2. The Industrial Revolution changed the economic
structure of the U.S.
a. With the Industrial Revolution intensified, la-
bor problems were NO LONGER SHORT
TERM.
b. Workers who failed to produce lost their
jobs.
c. The average workweek in 1900 was 60
hours.
d. Wages were low, child labor existed, and
unemployment benefits were nonexistent.
e. There was a need for an organization that
would attack LONG-TERM PROBLEMS
such as child labor and subsistence wages.
3. The first national labor organization was the
KNIGHTS OF LABOR formed by URIAH SMITH
STEPHENS in 1869.
a. It included employers as well as workers,
and promoted social, labor, and economic
causes.
b. After they were blamed for the Haymarket
Square bombing in 1886, the Knights of La-
bor fell from prominence.
4. The AMERICAN FEDERATION OF LABOR
Chapter 12 - Dealing with Employee–Management Issues and Relationships
12
SPOTLIGHT ON
small
business
PPT 12-10
The Factory
Blaze That Fired
Up a Movement
The FACTORY BLAZE that
FIRED UP a MOVEMENT
12-10
• On March 25, 1911, 146 women
were killed in a fire at the Triangle
Shirtwaist Company in New York
City.
• The women were trapped by a
door that was kept locked to
prevent theft.
• Today labor leaders say that the
Triangle fire is proof of why labor
unions are crucial to maintaining
workplace balance in the U.S.
PPT 12-11
Emergence of Labor Organizations
EMERGENCE of LABOR
ORGANIZATIONS
12-11
LO 12-1
• Knights of Labor -- First national labor union
(formed in 1869).
• Knights attracted 700,000 members, but fell
from prominence after a riot in Chicago.
• American Federation of Labor (AFL) -- An
organization of craft unions that championed
fundamental labor issues (formed in 1886).
Chapter 12 - Dealing with Employee–Management Issues and Relationships
13
(AFL) was formed in 1886 under the leadership
of SAMUEL GOMPERS.
a. The AMERICAN FEDERATION OF LABOR
(AFL), an organization of MANY INDIVIDU-
AL CRAFT UNIONS, championed funda-
mental labor issues.
b. An unauthorized committee in the AFL be-
gan to organize workers in INDUSTRIAL
UNIONS, labor organizations of unskilled
and semiskilled workers in mass-production
industries such as automobiles and mining.
5. When the AFL rejected these unions, JOHN
LEWIS, president of the UNITED MINE WORK-
ERS UNION, formed a new, rival organization.
a. The CONGRESS OF INDUSTRIAL OR-
GANIZATIONS (CIO), a union organization
of unskilled workers, broke off from the AFL
in 1935 and rejoined it in 1955.
b. Membership in the CIO soon rivaled that of
the AFL.
c. The AFL and CIO struggled for power in the
labor movement until the TWO ORGANIZA-
TIONS MERGED in 1955 under the leader-
ship of GEORGE MEANY.
d. Recently, the AFL-CIO’s influence has
weakened but it’s trying to regain strength.
6. The AFL-CIO maintains affiliations with 56 na-
tional and international labor unions and has
about 12.5 million members.
Chapter 12 - Dealing with Employee–Management Issues and Relationships
14
PPT 12-12
Industrial Unions
INDUSTRIAL UNIONS
12-12
LO 12-1
• Industrial Unions -- Labor unions of unskilled or
semiskilled workers in mass production industries.
• Congress of Industrial Organizations (CIO) --
Union organization of unskilled workers; broke away
from the AFL in 1935 and rejoined in 1955.
• The AFL-CIO today has affiliations with 56 unions
and has about 12.5 million members.
Chapter 12 - Dealing with Employee–Management Issues and Relationships
15
D. PUBLIC SECTOR UNION MEMBERSHIP
1. For the first time, 7.2 million of the 14.5 million
union members work in the government.
2. Unfortunately, huge state and local revenue
losses have put pressure on governments to cut
wages and benefits.
learning objective 2
Discuss the major legislation affecting labor unions.
III. LABOR LEGISLATION AND COLLECTIVE
BARGAINING
A. The growth and influence of organized labor in the
U.S. has depended on two major factors: the LAW
and PUBLIC OPINION.
1. The NORRIS-LAGUARDIA ACT paved the way
for union growth.
a. It prohibited employees from using contracts
that forbid union activities.
b. A YELLOW-DOG CONTRACT is a type of
contract that requires employees to agree as
a condition of employment not to join a un-
ion; prohibited by the Norris-LaGuardia Act.
2. The NATIONAL LABOR RELATIONS ACT (or
WAGNER ACT) provided legal justification for
union activities.
a. COLLECTIVE BARGAINING is the process
whereby union and management represent-
atives form a labor–management agree-
ment, or contract, for workers.
b. The Wagner Act expanded labor’s right to
