Chapter 12 – Dealing with Employee–Management Issues and Relationships
16
PPT 12-13
Public Unions
PUBLIC UNIONS
12-13
LO 12-1
• For the first time in U.S. history, 7.2 million of the
14.5 union members work in government.
• Taxpayers, not stockholders, are paying the cost
of union workers wages and benefits.
• The huge state and local government revenue
losses caused by the economic crisis put
pressure to reduce wage and benefit costs.
PPT 12-14
Effects of Laws on Labor Unions
EFFECTS of LAWS on
LABOR UNIONS
12-14
LO 12-2
• Labor unions’ growth and influence has been
very dependent on public opinion and law.
• The Norris-LaGuardia Act helped unions by
prohibiting the use of Yellow-Dog Contracts — A
type of contract that required employees to agree to
NOT join a union.
• Collective Bargaining — The process whereby
union and management representatives form an
agreement, or contract, for employees.
TEXT FIGURE 12.1
Major Legislation Affecting Labor–
Management Relations
This text figure shows the five major federal laws that have
had a significant impact on labor unions’ activities.
Chapter 12 – Dealing with Employee–Management Issues and Relationships
17
collectively bargain.
B. UNION ORGANIZING CAMPAIGNS
1. The Wagner Act also established the NATION-
AL LABOR RELATIONS BOARD (NLRB), to
oversee labor–management relations.
a. CERTIFICATION is the formal process
whereby a union is recognized by the NLRB
as the bargaining agent for a group of em-
ployees.
b. DECERTIFICATION is the process by which
workers take away a union’s right to repre-
sent them.
c. The Wagner Act provided clear procedures
for both.
learning objective 3
Outline the objectives of labor unions.
C. OBJECTIVES OF ORGANIZED LABOR OVER
TIME
1. Union objectives change over time due to shifts
in social and economic trends.
2. The NEGOTIATED LABOR–MANAGEMENT
AGREEMENT (the LABOR CONTRACT) is
the agreement that sets the tone and clari-
fies the terms under which management and
labor agree to function over a period of time.
3. COMMON ISSUES IN LABOR–MANAGEMENT
AGREEMENTS
a. A UNION SECURITY CLAUSE is a provision
in a negotiated labor–management agree-
Chapter 12 – Dealing with Employee–Management Issues and Relationships
18
PPT 12-15
Collective Bargaining and the Pub-
lic Sector
COLLECTIVE BARGAINING
and the PUBLIC SECTOR
12-15
LO 12-2
• Collective bargaining among public union workers
has become a key issue today.
• One of the issues is the fact that public
employees are paid by the taxpayers.
• When it is perceived that public employees are
winning more or better health care, more or better
hours of work, and so on, some have questioned
whether or not such negotiations should be
allowed to continue.
PPT 12-16
Forming a Union in the Workplace
FORMING a UNION in the
WORKPLACE
12-16
LO 12-2
• The National Labor Relations Board (NLRB) was
created to oversee labor-management issues and
provide guidelines for unionization.
• Certification — The formal process by which a
union is recognized by the NLRB as the bargaining
agent for a group of employees.
• Decertification — The process whereby employees
take away a union
’
s right to represent them.
TEXT FIGURE 12.2
Steps in Union-Organizing and De-
certification Campaigns
This text figure describes the steps involved in a union-
organizing campaign leading to certification.
critical thinking
exercise 12-2
UNION NEGOTIATIONS
This exercise simulates the negotiations that occur between
labor and management in reaching a contract agreement. (See
the complete exercise on page 12.75 of this manual.)
PPT 12-17
Why Join a Union?
WHY JOIN a UNION?
12-17
LO 12-2
• Pro-union attitudes
• Poor management/employee
relations
• Negative organizational
climate
• Poor work conditions
• Union’s reputation
• Job security
Chapter 12 – Dealing with Employee–Management Issues and Relationships
19
ment that stipulates that employees who ben-
efit from a union must either join or pay dues
to the union.
b. A CLOSED SHOP AGREEMENT was a
clause in a labor–management agreement
that specified workers had to be members of
a union before being hired (was outlawed by
the Taft-Hartley Act in 1947).
c. The UNION SHOP AGREEMENT is a
clause in a labor–management agreement
that says workers do not have to be mem-
bers of a union to be hired, but must agree
to join the union within a prescribed period.
d. The AGENCY SHOP AGREEMENT is a
clause in a labor–management agreement
that says employers may hire nonunion
workers; employees are not required to join
the union but must pay a union fee.
4. The TAFT-HARTLEY ACT gave states the right
to pass right-to-work laws.
a. Twenty-four states have passed RIGHT-TO–
WORK LAWS that give workers the right,
under an open shop, to join or not join a un-
ion if it is present.
b. An OPEN SHOP AGREEMENT is an
agreement in right-to-work states that gives
workers the option to join or not join a union,
if one exists in their workplace.
5. Future labor negotiations will include issues
such as minimum wage, job security, child and
elder care, offshore outsourcing, immigration
policies, etc.
Chapter 12 – Dealing with Employee–Management Issues and Relationships
20
PPT 12-18
Labor–Management Agreements
LABOR/MANAGEMENT
AGREEMENTS
12-18
LO 12-3
• Negotiated Labor-Management Agreement
(Labor Contract) — Sets the terms under which
labor and management will function over a period of
time.
• Union Security Clause — Stipulates workers who
reap union benefits must either join the union or pay
dues to the union.
TEXT FIGURE 12.3
Issues in a Negotiated Labor–
Management Agreement
This text figure gives a list of topics commonly negotiated by
labor and management during contract talks.
PPT 12-19
Union Security Agreements
UNION SECURITY AGREEMENTS
12-19
LO 12-3
• Closed Shop Agreement — Specified workers had
to be members of a union before being hired for a job.
• Union Shop Agreement — Declares workers don
’
t
have to be members of a union to be hired, but must
agree to join the union within a specific time period.
• Agency Shop Agreement — Allows employers to
hire nonunion workers who don
’
t have to join the
union, but must pay fees.
PPT 12-20
Union Security Agreements
TEXT FIGURE 12.4
Different Forms of Union
Agreements
UNION SECURITY AGREEMENTS
12-20
LO 12-3
PPT 12-21
Right-to-Work Laws
RIGHT-to-WORK LAWS
12-21
LO 12-3
• Right-to-Work Laws — Legislation that gives
workers the right, under an open shop, to join or not to
join a union.
• The Taft-Hartley Act of 1947 granted states the
power to outlaw union shop agreements.
• Open Shop Agreement — Agreement in right-to-
work states that gives workers the right to join or not
join a union, if one exists in their workplace.
bonus case 12-1
DO RIGHT-TO-WORK LAWS HELP
STATES?
A major debate has been, Does passage of right-to-work laws
make a difference in a state’s economy? (See the complete case,
discussion questions, and suggested answers beginning on page
12.78 of this manual.)
Chapter 12 – Dealing with Employee–Management Issues and Relationships
21
D. RESOLVING LABOR–MANAGEMENT DISA-
GREEMENTS
1. The negotiated agreement becomes the basis
for union–management relations.
2. Labor and management do not always agree on
the interpretation of the labor–management
agreement.
3. If such a disagreement cannot be resolved, a
grievance may be filed.
4. A GRIEVANCE is a charge by employees that
management is not abiding by the terms of the
negotiated labor agreement.
5. The vast majority of grievances are resolved by
shop stewards.
6. SHOP STEWARDS are union officials who work
permanently in an organization and represent
employee interests on a daily basis.
E. MEDIATION AND ARBITRATION
1. The BARGAINING ZONE is the range of op-
tions between the initial and final offers that
each party will consider before negotiations dis-
solve or reach an impasse.
2. If negotiations don’t result in an alternative within
this bargaining zone, mediation may be neces-
sary.
3. MEDIATION is the use of a third party, called a
mediator, who encourages both sides to contin-
ue negotiating and often makes suggestions for
resolving the dispute.
Chapter 12 – Dealing with Employee–Management Issues and Relationships
22
PPT 12-22
Right-to-Work States
TEXT FIGURE 12.5
States with Right-to–Work Laws
RIGHT-to-WORK STATES
12-22
LO 12-3
PPT 12-23
Resolving Disagreements
RESOLVING DISAGREEMENTS
12-23
LO 12-3
• Labor contracts outline labor and management’s
rights, and serves as a guide to workplace
relations.
• Grievances — A charge by employees that
management isn
’
t abiding by the terms of the
negotiated agreement.
• Shop Stewards — Union officials who work
permanently in an organization and represent
employee interests on a daily basis.
PPT 12-24
Using Mediation and Arbitration
USING MEDIATION and
ARBITRATION
12-24
LO 12-3
• Bargaining Zone — The range of options between
initial and final offers that each side will consider
before negotiations dissolve or reach an impasse.
• Mediation — The use of a third party (mediator) to
encourage both sides to keep negotiating to resolve
key contract issues.
• Arbitration — An agreement to bring in a third party
to render a binding agreement.
Chapter 12 – Dealing with Employee–Management Issues and Relationships
23
4. The mediator makes SUGGESTIONS, not DE-
CISIONS, for settling the dispute.
5. The National Mediation Board provides federal
mediators when requested by both sides.
6. ARBITRATION is the agreement to bring in an
impartial third party (single arbitrator or a panel)
to render a binding decision in a labor dispute.
7. Many negotiated labor–management agree-
ments call for the use of arbitration in disputes.
learning objective 4
Describe the tactics used by labor and management during conflicts, and dis-
cuss the role of unions in the future.
IV. TACTICS USED IN LABOR–MANAGEMENT
CONFLICTS
A. Both sides use specific tactics if labor and manage–
ment reach an impasse in collective bargaining.
B. UNION TACTICS
1. The strike has always been the most powerful
tactic unions use to achieve their objectives.
a. A STRIKE is a union strategy in which work-
ers refuse to go to work; the purpose is to
further workers’ objectives after an impasse
in collective bargaining.
b. Strikes can slow down or stop operations in
a company.
c. Strikers may also PICKET, or walk around
outside the firm carrying signs and talking
with the public about the issues in the labor
dispute.
Chapter 12 – Dealing with Employee–Management Issues and Relationships
24
PPT 12-25
The Grievance Resolution Process
TEXT FIGURE 12.6
The Grievance Resolution Process
The GRIEVANCE RESOLUTION
PROCESS
12-25
LO 12-3
Chapter 12 – Dealing with Employee–Management Issues and Relationships
25
d. Strikes have led to resolution of labor dis-
putes, but have also generated violence and
RESIDUAL BITTERNESS.
e. The public often realizes how important a
worker is when he or she goes on strike.
f. Many states PROHIBIT JOB ACTIONS by
state workers even though they can union-
ize.
g. Often police, teachers, or others engage in
SICKOUTS (or the BLUE FLU) when union
members don’t strike but refuse to come to
work on the pretext of illness.
2. Under the provisions of the Taft-Hartley Act, the
president can request a COOLING-OFF PERI-
OD to prevent a strike in a critical industry.
a. In a COOLING-OFF PERIOD, workers in a
critical industry return to their jobs while the
union and management continue negotia-
tions.
b. Cooling-off periods can last up to 80 days.
3. Very FEW LABOR DISPUTES LEAD TO A
STRIKE, but it still remains a powerful weapon.
4. PRIMARY AND SECONDARY BOYCOTTS
a. A PRIMARY BOYCOTT is when a union en-
courages both its membership and the gen-
eral public not to buy the products of a firm
involved in a labor dispute.
b. A SECONDARY BOYCOTT is an attempt by
labor to convince others to stop doing busi-
Chapter 12 – Dealing with Employee–Management Issues and Relationships
26
PPT 12-26
Tactics Used in Conflicts
TACTICS USED in CONFLICTS
12-26
LO 12-4
• Tactics used by labor unions
include:
– Strikes
– Boycotts
– Work Slowdowns
– Pickets
PPT 12-27
Strike and Boycotts
STRIKES and BOYCOTTS
12-27
• Secondary Boycott — An
attempt by labor to convince
others to stop doing business
with a firm that is the subject of
a primary boycott.
LO 12-4
• Strikes — A strategy in which workers refuse to go to
work.
• Primary Boycott — When a union encourages both its
members and the general public not to buy the products
of a firm in a labor dispute.
lecture enhancer 12-2
EMPLOYEES STAND BY THEIR CEO
AT MARKET BASKET
With their CEO forced out of his position by his cousin, Mar-
ket Basket employees asked the community to boycott the
store. (See the complete lecture enhancer on page 12.67 of this
manual.)
Chapter 12 – Dealing with Employee–Management Issues and Relationships
27
ness with a firm that is the subject of the
primary boycott.
c. Labor unions can legally authorize PRIMA-
RY boycotts, but the Taft-Hartley Act prohib-
its the use of SECONDARY boycotts.
C. MANAGEMENT TACTICS
1. A LOCKOUT (rarely used today) is an attempt
by management to pressure on unions by tem-
porarily closing the business.
2. An INJUNCTION is a court order directing
someone to do something or refrain from doing
something.
a. Management can seek injunctions to order
striking workers back to work or limit the
number of pickets.
b. To get an injunction, management must
show “just cause.”
3. The use of STRIKEBREAKERS, workers hired
to do the jobs of striking workers until the labor
dispute is resolved, has been a source of hostili-
ty in labor relations.
D. THE FUTURE OF UNIONS AND LABOR–
MANAGEMENT RELATIONS
1. Organized labor is at a crossroads—only about
7% of workers in the private sector are union-
ized.
2. Many unions have even granted GIVEBACKS,
concessions made by union members to man-
agement.
3. The largest labor union in the U.S. is the NA-
Chapter 12 – Dealing with Employee–Management Issues and Relationships
28
lecture enhancer 12–3
ADDITIONAL LABOR–
MANAGEMENT TACTICS
In addition to those discussed in the text, there are other tools
that labor and management use in certification campaigns.
(See the complete lecture enhancer on page 12.68 of this man-
ual.)
PPT 12-28
Tactics Used in Conflicts
TACTICS USED in CONFLICTS
12-28
LO 12-4
• Tactics used by management include:
– Lockouts
– Injunctions
– Strikebreakers
PPT 12-29
Lockouts, Injunctions, and
Strikebreakers
LOCKOUTS, INJUNCTIONS and
STRIKEBREAKERS
12-29
LO 12-4
• Lockout — An attempt by management to put
pressure on workers by closing the business, thus
cutting off workers
’
pay.
• Injunction — A court order directing someone to do
something or refrain from doing something.
• Strikebreakers — Workers hired to do the work of
striking workers until the labor dispute is resolved;
called scabs by unions.
MAKING
ethical
decisions
PPT 12-30
To Cross or Not
to Cross?
To CROSS or NOT to CROSS?
12-30
• Shop-Til-You-Drop is seeking workers to fill the
jobs of striking workers.
• Many students at your college are employees
and others are supporting the strike.
• You need money and legally it is permissible for
you to replace striking workers.
• What will you do? What are the consequences?
PPT 12-31
Challenges Facing Labor Unions
CHALLENGES FACING LABOR
UNIONS
12-31
LO 12-4
• The number of union workers is falling.
• Many workers (like airline employees) have
agreed to Givebacks — Gains from labor
negotiations are given back to management to help
save jobs.
PPT 12-32
Labor Unions in the Future
LABOR UNIONS in the FUTURE
• Union membership will include more white-collar,
female and foreign-born workers than in the past.
12-32
LO 12-4
• Unions will take on a greater
role in training workers,
redesigning jobs and
assimilating the changing
workforce.
• Unions will seek more job
security, profit sharing and
increased wages.
lecture enhancer 12–4
UNIONS TURN TO THE SERVICE
INDUSTRY FOR GROWTH
This reading focuses on how labor unions can reverse their
membership slide—organize service workers. (See the com-
plete lecture enhancer on page 12.69 of this manual.)
PPT 12-33
UNION MEMBERSHIP BY STATE
TEXT FIGURE 12.7
Union Membership by State
UNION MEMBERSHIP by STATE
12-33
LO 12-4
Chapter 12 – Dealing with Employee–Management Issues and Relationships
29
TIONAL EDUCATION ASSOCIATION (NEA)
with 3.2 million members.
4. To grow, unions will have to BROADEN THE
TYPE OF WORKERS they represent.
5. Unions have taken on NEW ROLES helping
management in training workers and redesign-
ing jobs.
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 vio-
lence in the workplace.
V. CONTROVERSIAL EMPLOYEE–
MANAGEMENT ISSUES
A. EXECUTIVE COMPENSATION
1. The U.S. free-market system was built using in-
centives such as large salaries for performance.
2. However, today’s government, boards of direc-
tors, stockholders, unions, and employees have
argued that executive compensation is GET-
TING OUT OF LINE.
a. The average total compensation for a CEO
is $12.3 million.
b. Even after adjustments for inflation, this is an
enormous increase over time.
3. In the past, an executive’s compensation and
bonuses were determined by the FIRM’S PROF-
ITABILITY or INCREASE IN STOCK PRICE.
a. The assumption is that the CEO will improve
the performance of the company and raise
the price of the firm’s stock.
b. Today, many executives receive STOCK
Chapter 12 – Dealing with Employee–Management Issues and Relationships
30
test
prep
PPT 12-34
Test Prep
TEST PREP
12-34
• What are the major laws that affected union
growth, and what does each one cover?
• How do changes in the economy affect the
objectives of unions?
• What are the major tactics used by unions and by
management to assert their power in contract
negotiations?
• What types of workers do unions need to organize
in the future?
PPT 12-35
Compensating Executives
COMPENSATING EXECUTIVES
12-35
LO 12-5
• CEO compensation used to
be determined by a firm’s
profitability or increase in
stock price.
• Now, executives receive
stock options and restricted
stock that’s awarded even if
the company performs
poorly.