Chapter 12 – Dealing with Employee–Management Issues and Relationships
46
test
prep
PPT 12-52
Test Prep
TEST PREP
12-52
• How does top-executive pay in the U.S. compare
with top-executive pay in other countries?
• What is the difference between pay equity and
equal pay for equal work?
• How is the term sexual harassment defined and
when does sexual behavior become illegal?
• What are some of the issues related to childcare
and elder care and how are companies
addressing those issues?
Chapter 12 – Dealing with Employee–Management Issues and Relationships
47
PowerPoint slide notes
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
Chapter 12 – Dealing with Employee–Management Issues and Relationships
48
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!
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
Chapter 12 – Dealing with Employee–Management Issues and Relationships
49
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.
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.
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
50
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).
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
51
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.
Today, at least seventeen states are trying to restrict union
rights and cut labor 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.
PPT 12-15
Collective Bargaining and the Public
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.
Chapter 12 – Dealing with Employee–Management Issues and Relationships
52
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.
The National Labor Relations Act (often referred to as the
Wagner Act) created the NLRB.
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
1. This slide lists some of the key reasons why a per-
son might consider joining a union.
2. The power of unions has waned as the economy
has shifted from an industrial economy into a ser-
vice-based economy.
3. Ask students: Are unions necessary in today’s
modern working environment?
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.
Unions attempt to address their most pressing concerns in
the labor contract.
Chapter 12 – Dealing with Employee–Management Issues and Relationships
53
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
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.
Chapter 12 – Dealing with Employee–Management Issues and Relationships
54
PPT 12-22
Right-To-Work States
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
55
PPT 12-25
The Grievance Resolution Process
The GRIEVANCE RESOLUTION
PROCESS
12-25
LO 12-3
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
Strikes 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.
Chapter 12 – Dealing with Employee–Management Issues and Relationships
56
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.
Employers have had the right to replace striking workers
since a 1938 Supreme Court ruling, but this tactic was used
infrequently until the 1980s.
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?
Chapter 12 – Dealing with Employee–Management Issues and Relationships
57
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.
The percentage of union membership has fallen over the
past 50 years. In 1945, 35.5% of all workers were union-
ized; today that number stands at only 12.4%.
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.
Both public and private sector union members now face
challenges as they try to maintain remaining wage and
fringe benefit gains achieved in past negotiations.
PPT 12-33
Union Membership by State
UNION MEMBERSHIP by STATE
12-33
LO 12-4
1. The slide presents union membership by state in
the U.S.
2. Washington, California, New York, Hawaii and
Alaska lead the states with unionization rates
greater than 17%.
3. Most of the Southern states (Arkansas, Louisiana,
Tennessee, Mississippi, North Carolina, South
Carolina, Virginia, and Georgia) have the lowest
percentage of union workers with unionization
rates less than 4.9%.
4. Today the largest union in the United States is the
Service Employees International Union (SEIU)
with 2.2 million members.
Chapter 12 – Dealing with Employee–Management Issues and Relationships
58
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?
Chapter 12 – Dealing with Employee–Management Issues and Relationships
59
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.
Peter Drucker suggested CEO pay should be no more than
20 times the lowest-paid employee. The average is now
350 times.
PPT 12-36
College Athletes: What are They Worth?
COLLEGE ATHLETES:
WHAT are THEY WORTH?
12-36
• Regional economies in college
towns reap huge revenues on
sports weekends.
• The players, however, cannot
draw a salary.
• Northwestern University’s football
players won a ruling that gave
them the right to unionize.
• The university is appealing the
ruling.
What do you expect to make when you graduate? What do
these rates say about what society values? (Student answers
will vary.)
PPT 12-37
Play Ball!
PLAY BALL!
Salaries in Professional Sports
Source: Bloomberg Businessweek, www.businessweek.com, accessed November 2014. 12-37
Player Payment for…League
David Ortiz $406,250 per home runMLB
Matt Bonner $28,571 per three-pointer NBA
Sebastian Janikowski $121,212 per field goal NFL
George Parros $32,407 per fight NHL
What do you expect to make when you graduate? What do
these rates say about what society values? (Student answers
will vary.)
Chapter 12 – Dealing with Employee–Management Issues and Relationships
60
PPT 12-38
Compensating Executives in the Future
COMPENSATING EXECUTIVES
in the FUTURE
• The passage of the Dodd-
Frank Act was intended to
give shareholders more say
in compensation decisions.
12-38
LO 12-5
• Boards of directors are being challenged
concerning executive contracts.
• Government and shareholders are putting
pressure to overhaul executive compensation.
PPT 12-39
The Question of Pay Equity
The QUESTION of PAY EQUITY
12-39
LO 12-5
• Women earn 77% of what
men earn.
• This disparity varies by
profession, experience and
level of education.
• Young women actually earn
8% percent more than male
counterparts due to their
higher graduation rates.
Today women earn almost 60 percent of the bachelor’s and
master’s degrees awarded.
PPT 12-40
Equal Pay for Equal Work
EQUAL PAY for EQUAL WORK
Equal Pay Act Factors that Justify Pay Differences
12-40
LO 12-5
• Skill
• Effort
• Responsibility
• Working Conditions
1. This slide presents the Equal Pay Act factors that
justify pay differences: skill, effort, responsibility,
and working conditions. The Equal Pay Act pro-
hibits unequal pay to men and women who perform
jobs that require substantially the same skills, ef-
forts, responsibilities, etc.
2. Ask the students: Is it fair that different genders re-
ceive different pay? (Most will say “NO.”)
3. Yet, in the U.S., women earn only about 80% of
what men earn. There are, however, significant
disparities by profession, education level, etc.