Chapter 12 Lecture
Outline
I.
EMPLOYEE-MANAGEMENT ISSUES.
A. The relationship
of employees and their managers has always been filled with discussion of
certain issues.
1. The text
discusses several of the key employee-management issues of the 1990s: unions,
ESOPs, comparable worth, executive pay, and other issues affecting
employee-management relations.
2. These issues
must be worked out through open discussion, goodwill, and compromise.
B. The discussion
of employee-management relations begins with a discussion of unions.
1. UNIONS are
employee organizations that have the main goal of representing members in
employee-management bargaining over job-related issues.
2. Historically,
employees turned to unions to gain specific rights and benefits.
3. However, in the
1990s, unions failed to regain their previous power.
II. LABOR UNIONS
FROM DIFFERENT PERSPECTIVES.
LEARNING GOAL 1.
Trace the history of organized labor in the United States and discuss the major
legislation affecting labor unions.
A. One's opinion
concerning the needs for unions usually depends upon which side of the
management fence one is on.
B. The one thing
about unions that most people do agree on is the reason unions were started in
the first place.
1. The INDUSTRIAL
REVOLUTION moved workers out of the field and into the factories.
2. Factory
conditions were deplorable, and the hours were long (the average work week was
60 hours, but 80 hours was not unusual.)
3. Workers were at
the mercy of management.
4. UNIONS IMPROVED
JOB CONDITIONS and won better wages and job security.
C. THE EARLY
HISTORY OF ORGANIZED LABOR.
1. As early as
1792, the CORDWAINERS (shoemakers) met to discuss labor issues in Philadelphia.
a. The cordwainers
were a CRAFT UNION, that is, an organization of SKILLED WORKERS in a specific
trade.
b. Usually a craft
union met to deal with a SPECIFIC PROBLEM AND THEN DISBANDED.
2. The Industrial
Revolution changed the economic structure of the U.S.
a. As the
Industrial Revolution intensified, the PROBLEMS WERE NO LONGER SHORT-TERM.
b. 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 NOBLE ORDER OF THE KNIGHTS OF LABOR formed
by URIAH SMITH STEPHENS in 1869.
a. It included
employers as well as workers.
b. The Knights of
Labor were short-lived.
4. THE AMERICAN
FEDERATION OF LABOR (AFL) was formed in 1886 under the leader ship of SAMUEL
GOMPERS.
a. The AFL was an
organization of craft unions.
b. An unauthorized
committee in the AFL began to organize workers in INDUSTRIAL UNIONS, that is,
organizations of UNSKILLED WORKERS.
5. When the AFL
rejected these unions, JOHN LEWIS, president of the UNITED MINEWORKERS UNION,
formed a new, rival organization.
a. THE CONGRESS OF
INDUSTRIAL ORGANIZATIONS (CIO) soon rivaled the AFL in membership.
b. The AFL and CIO
volleyed for leadership of the labor movement until THE TWO ORGANIZATIONS MERGED
in 1955 under the leadership of GEORGE MEANY.
c. The AFL-CIO now
has 78 labor unions including the Teamsters.
III. LABOR
LEGISLATION AND COLLECTIVE BARGAINING.
LEARNING GOAL 2.
Outline the objectives of labor unions.
A. The growth and
influence of organized labor in the U.S. has depended on two major factors: the
law and public opinion.
B. The NATIONAL
LABOR RELATIONS ACT (WAGNER ACT) gave employees the right to form or join
unions.
1. COLLECTIVE
BARGAINING is the process whereby union representatives sit down with
management and work out a mutually agreed-upon contract for the workers.
2. The Warner Act
also established the National Labor Relations Board (NLRB), to oversee
labor-management relations.
3. CERTIFICATION is
the process of a union becoming recognized by the NLRB as the bargaining agent
for a group of employees.
4. DE-CERTIFICATION
is the process, which takes away this union's right.
C. OBJECTIVES OF
ORGANIZED LABOR.
1. Union objectives
change according to the needs of the workers.
a. In the 1970s the
primary objective of labor unions was additional pay and benefits.
b. Throughout the
1980s, objectives shifted to job security and union recognition.
c. The 1990s also
focused on job security, complicated by the issue of global competition.
2. The NEGOTIATED
LABOR-MANAGEMENT AGREEMENT sets the tone and clarifies the terms and conditions
under which management and labor agree to function over a specific period of
time.
3. COMMON TYPES OF
LABOR-MANAGEMENT AGREEMENTS:
a. UNION SECURITY
CLAUSES stipulate that employees who reap benefits from a union must either
join or pay union dues.
b. A CLOSED-SHOP
AGREEMENT specified that workers had to be members of a union before being
hired for a job.
c. Under the UNION
SHOP AGREEMENT, workers do not have to be members of a union to be hired, but
must agree to join.
d. Under the AGENCY
SHOP AGREEMENT, employers may hire nonunion workers who are not required to
joint the union, but must pay a union fee.
4. Twenty-one
states have passed RIGHT-TO- WORK LAWS which give workers the right to have the
option to join a union, if one exists, or to not join.
a. In a
right-to-work state, workers are required to work under the OPEN SHOP AGREEMENT
and have the option to join or not join a union.
b. If they choose
not to join a union they cannot be forced to pay a union fee.
D. RESOLVING
LABOR-MANAGEMENT DISAGREEMENTS.
1. Labor and
management do not always agree concerning the interpretation of the
labor-management agreement.
2. If such a
disagreement cannot be resolved, a grievance may be filed.
3. A GRIEVANCE is a
charge by employees that management is not abiding by the terms of the
negotiated labor agreement.
4. STEWARDS (union
officials who represent employee interests on a daily basis) negotiate the
majority of these grievances.
E. MEDIATION AND
ARBITRATION.
1. The BARGAINING
ZONE is the range of options between the initial and final offers that each
party will consider.
2. If negotiations
don't result in an alternative within this bargaining zone, mediation may be
necessary.
3. MEDIATION is the
use of a third party, called a MEDIATOR, to encourage both sides to continue
negotiating.
4. The mediator
makes SUGGESTIONS for settling the dispute.
5. ARBITRATION is
the agreement to bring in an impartial third party to render a BINDING
DECISION.
IV. TACTICS USED IN
LABOR-MANAGEMENT CONFLICTS.
LEARNING GOAL 3.
Describe the tactics used by labor and management during conflicts and discuss
the role of unions in the future.
A. Both sides may
use specific tactics if labor and management reach an impasse in collective
bargaining.
B. UNION TACTICS.
1. STRIKE-Strikes
don't occur as often as they used to (there were an average of 400 strikes a
year in the 1950s whereas there were only 30 in 1996.)
a. A STRIKE means
that workers refuse to go to work.
b. Strikers may
also picket, or walk around outside the firm carrying signs and talking with
the public about the issues.
c. The public often
realizes how important a worker is when he or she goes on strike.
d. Often police,
teachers, or others engage in SICKOUTS or the BLUE FLU when union members don't
strike but refuse to come to work due to illness.
e. Employees of the
federal government can organize unions but are denied the right to strike.
f. Under the
provisions of the Taft-Hartley Act, the President can ask for a cooling-off
period to prevent a strike in a critical industry.
g. During a
COOLING-OFF PERIOD, workers return to their jobs while the union and management
continue negotiations.
2. PRIMARY AND
SECONDARY BOYCOTTS.
a. A PRIMARY
BOYCOTT is when organized labor encourages its membership not to buy the
product(s) of a firm involved in a labor dispute.
b. A SECONDARY
BOYCOTT is an attempt by labor to convince others to stop doing business with a
firm that is the target of the primary boycott.
c. Labor unions can
legally authorize primary boycotts, but the Taft-Hartley Act prohibits the use
of secondary boycotts.
C. MANAGEMENT
TACTICS.
1. YELLOW-DOG
CONTRACTS (outlawed by the Norris-LaGuardia Act) required employees to agree as
a condition of employment not to join a union.
2. LOCKOUTS (rarely
used today) put pressure on unions by temporarily closing the business and
denying employment to the workers.
3. Management most
often uses injunctions and strikebreakers.
4. An INJUNCTION is
a court order directing someone to do something or refrain from doing
something.
5. The USE OF
STRIKEBREAKERS, workers who are hired to do the jobs of striking employees, has
been a source of hostility in labor relations.
D. THE FUTURE OF
LABOR-MANAGEMENT RELATIONS.
1. Several new
labor-management issues have emerged.
2. Many unions have
even granted concessions or GIVEBACKS, where members give back previous gains,
to management.
3. The UNIONS'
SHARE OF NONFARM WORKERS HAS DECLINED from its peak in 1945 (35.5% to 14.5%
today.)
4. In order for
U.S. firms to remain competitive with foreign firms, unions are likely to
assume a role in maintaining competitiveness.
5. In exchange for
cooperating with management, unions may receive improved job security, profit
sharing, or higher wages.
V. CONTROVERSIAL
EMPLOYEE-MANAGEMENT ISSUES.
LEARNING GOAL 4.
Explain some of the controversial employee- management issues such as executive
compensation, comparable worth, child-care and elder care, AIDS, drug testing,
and violence in the workplace, and employee stock ownership plans (ESOPs).
A. THE ISSUE OF
EXECUTIVE COMPENSATION.
1. Throughout the
1990s government, boards of directors, and stockholders have argued that
executive compensation is getting out of line.
2. In the past,
executive compensation was determined by the FIRM'S PROFITABILITY or INCREASE
IN STOCK PRICE.
a. Today, many
executives receive STOCK OPTIONS, the ability to buy the company stock at a set
price at a later date.
b. The assumption
is that the CEO will raise the price of the firm's stock, but often executive
pay continues to soar, even when the company does poorly.
3. Peter Drucker
has suggested that CEOs should not earn much more than 20 times as much as the
company's lowest-paid employee.
a. Some companies
followed his advice, but many have not.
b. Today the
average chief executive makes 209 times the pay of a typical American factory
worker.
4. The imbalance
between starting pay and top pay is less for European and Japanese executives.
5. ARE THESE TOP
EXECUTIVES WORTH IT?
a. Some argue the
law of supply and demand says they are.
b. Others say that
executive compensation does not necessarily correlate with effectiveness, and
that workers are forced to take pay cuts while the top bosses make millions.
6. The issue of
fair compensation for executives is an interesting topic for class debate.
B. THE ISSUE OF
COMPARABLE WORTH.
1. Women make up a
larger percentage of the workforce-up from 15% in 1890 to 50% in 1997.
2. COMPARABLE WORTH
is the demand for equal pay for jobs requiring similar levels of education,
training, and skills.
a. Keep in mind
that this is a different concept than EQUAL PAY FOR EQUAL WORK, which means
that equal wages should be paid to men and women who do the same job.
b. The issue of
comparable worth centers on comparing the value of jobs.
3. Women earn
approximately 71% of what men earn.
a. One reason for
the disparity is that many women try to work as well as care for their families
and fall off the career track.
b. Other women opt
for more flexible jobs that pay less.
c. One of the main
arguments is that women make less because the labor market is not perfectly
competitive and some degree of gender bias still exists.
4. The idea of PAY
EQUITY is to correct past discrimination by raising the pay in so-called
women's jobs.
C. THE ISSUE OF
SEXUAL HARASSMENT.
1. SEXUAL
HARASSMENT refers to unwelcome sexual advances, requests for sexual favors, and
other conduct of a sexual nature (verbal or physical).
2. Both men and
women are covered under the Civil Rights Act of 1991 that today governs sexual
harassment.
3. SEXUAL
HARASSMENT becomes ILLEGAL when:
a. An employee's
submission to such con duct is made either explicitly or implicitly a term or
CONDITION OF EMPLOYMENT.
b. An employee's
submission to or rejection of such conduct is used as the BASIS FOR EMPLOYMENT
DECISIONS AFFECTING THE WORKER'S STATUS.
c. The conduct
UNREASONABLY INTERFERES with a worker's job performance or CREATES AN
INTIMIDATING, HOSTILE, OR OFFENSIVE WORKING ENVIRONMENT.
4. Managers and
workers are now much more sensitive to comments and behavior of a sexual
nature.
5. In 1996 the U.S.
Supreme Court broadened the scope of what can be considered a hostile work
environment.
6. One of the major
problems is that workers and managers often know a policy concerning sexual
harassment exists, but they have no idea what it says.
D. THE ISSUE OF
CHILD CARE.
1. Child-care
remains an important issue.
2. Workplace
changes have already occurred such as the FAMILY AND MEDICAL LEAVE ACT that
permits up to 12 weeks of unpaid leave per year to qualified workers upon the
birth of a child.
3. The need for
childcare is obvious.
a. A sizable
percentage of the over 50 mil lion working women are likely to become pregnant
during their working years.
b. So who is going
to provide childcare? Who will pay for it?
4. Many companies
are now providing childcare for their employees.
5. Working parents
have made it clear that safe, affordable child-care is an issue on which they
will not compromise.
E. THE ISSUE OF
ELDER CARE.
1. By 2005, 40% of
U.S. workers WILL BE AGED 40 TO 54.
a. These workers
will not be concerned with childcare.
b. Instead, they
will be faced with the responsibility, of CARING FOR OLDER PARENTS AND OTHER
RELATIVES.
2. Some predict
that this will have a greater impact on the workplace than childcare.
3. Elder caregivers
cost employers billions in lost output and replacement costs.
4. Elder care
providers are generally older and more experienced employees who are often more
critical to the company than the younger workers effected by child-care
problems.
F. THE ISSUE OF
AIDS, DRUG TESTING, AND VIOLENCE IN THE WORKPLACE.
1. AIDS.
a. HIV and AIDS are
a leading cause of death for Americans between the ages of 25 and 44.
b. MANDATORY
TESTING FOR THE AIDS ANTIBODY is one of the more controversial
employee-management issues.
c. Pre-employment
medical testing CANNOT BE USED TO INTENTIONALLY SCREEN OUT POTENTIAL EMPLOYEES.
(i) If used at all
they must be given to EVERYONE.
(ii) Many firms
have gone beyond pre- employment testing and suggested that ALL employees
should be tested.
2. DRUG TESTING.
a. Some companies
feel that alcohol and drug abuse is an even more serious workplace issue.
b. Over 80% of
major companies now test workers and job applicants for substance abuse.
3. VIOLENCE IN THE
WORKPLACE.
a. Employers are
also struggling with a growing trend of violence in the workplace.
b. Many executives
don't take workplace violence seriously and believe it is primarily media hype.
c. Other
organizations recognize the threat and hire managers with strong interpersonal
skills to deal with growing employee violence.
G. THE ISSUE OF
EMPLOYEE STOCK OWNERSHIP PLANS (ESOPS).
1. ESOPs are plans
which allow employees to buy part or total ownership of the company in which
they work.
a. Louis O. Kelso
started the idea for ESOPS about 50 years ago when he helped the employees of a
newspaper buy their companies.
b. Since then, the
idea of employees taking over ownership of their companies has gained much
favor.
c. ESOPs have had
mixed results.
2. BENEFITS OF
ESOPS.
a. There are about
10,000 businesses with ESOPs, covering over 10 million workers.
b. Giving employees
a share in the profits of the firm motivates them to enhance their involvement
in the firm and increases morale.
c. Productivity
also seems to rise.
3. PROBLEMS WITH
EMPLOYEE STOCK OWN ERSHIP PLANS (ESOPS).
a. ESOPs can be
used to refinance a company with workers' money without giving them more
participation or job security.
b. In about 85% of
the companies with ESOPs, employees do not have voting rights.
4. The goals of
ESOPs are good, but the implementation of such programs is often less than
satisfactory.
5. Companies with
HEALTHY EMPLOYEE-MANAGEMENT RELATIONS have a better chance to compete.
6. Managers must
constantly be aware of emerging issues that affect employee-management
relations.