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2.6 Employer and Employee Relations (HL only)

  • Employer and employee relations
    • Good relationships are necessary as poor working relationships lead to low morale, conflict, and perhaps even strike action/rioting
  • Negotiations and collective bargaining
    • Negotiations
      • Bargaining process wherein two parties try to get a mutually acceptable agreement
    • Collective Bargaining
      • Negotiations between managers and employee representatives (usually union representatives)
    • Not an industrial action, but failure here could cause more problems
    • Compromise is necessary on both sides
    • Employees are usually represented by labor unions
      • Organization of worker members
      • Increases bargaining power of employees
      • Makes it easy for employer to communicate to a collective
      • Provides legal and financial support
      • Goal is better employee conditions, legislation, pay, etc.
    • Three levels of negotiations:
      • Management negotiations (regarding internal business functions)
      • Commercial negotiations (w/ different organizations)
      • International negotiations
    • Six stages of negotiations:
      • Preparation, proposal, debate, bargaining, closing, review
    • Different views/approaches on negotiations:
      • Avoidance – avoid problems, might mean issues aren’t solved
      • Level playing ground – parties must be equal to have negotiations
      • Winner takes all – one wins, one loses
      • Win-win
    • Success of negotiation depends on:
      • Experience, power of union, state of economy, demand for labor, media opinion, government involvement and degree of substitution (ability to replace labor with capital intensive production)
  • Methods by employees to achieve objectives
    • Goal is to reduce a business’ productivity to increase union’s bargaining power
    • Negotiations/collective bargaining (as seen above)
    • Go-slow/slowdowns
      • Work at the minimum required amount by contract
      • Effective when in high seasonal demand
    • Work-to-rule
      • Work at the minimum required amount by rules
      • All rules and regulations are strictly followed
      • e.g. not taking calls during lunch breaks
    • Overtime ban
    • Strike action
      • Refusal to work
      • Illegal without prior notice
      • May coincide with a walk-out
  • Methods by employers to achieve objectives
    • Objectives include reducing costs, increasing productivity, and staff morale
    • Negotiations/collective bargaining (as seen above)
    • Public relations
      • Deals with media to make the business look good
      • Build goodwill
    • Lockout
      • Employer version of strike action
      • Divides unions by pitting workers who want to work vs. those who don’t
    • Threat of redundancy
      • Still considers employment rights
    • Change of contract
    • Closure
  • Conflict
    • Hinders productivity, reduces morale, causes internal politics, etc. etc.
    • May be good since it helps address problems
    • Conflict isn’t bad, depends on how it is managed
    • Sources:
      • Needs and wants – when they are not met
      • Perceptions – when communication is inadequate
      • Incompatible values, abuses of power, feelings
    • Approach depends on concern for personal outcomes and other’s outcomes
      • High concern for personal outcome causes win-lose
      • High concern for others causes surrender
      • Low concern for either causes avoidance
      • High concern for both    causes collaboration
      • Moderate concern for both causes compromise
  • Conflict resolution
    • Resolving conflicts successfully (if everyone is satisfied)
    • Approaches:
      • Conciliation
        • Use an independent arbitrator
        • “Caucusing” – separate meetings with arbitrator
        • Conciliators encourage compromise and make legally binding agreements
      • Arbitration
        • Like above, except arbitrator makes the decision, like a judge
      • Industrial democracy/employee participation
        • Involve employees in decision making
        • Uses motivation theories
        • Makes for cooperative employees less likely to strike (win-win)
      • No strike agreements
      • Single-union agreements
        • Employer agrees to only bargain with one union
        • More convenient
      • Consultation (w/ employees)
      • Litigation (lawsuits)
        • Likely to cause win-lose
      • Realistic expectations
      • Avoidance
        • Likely to cause lose-lose
  • Change management
    • Processes and techniques used to plan, implement, and evaluate change
    • Change includes: new products, restructuring, new policies, mergers, etc.
    • Forcing change might cause problems, while no change means no progress
    • Factors/sources of change
      • Customers – changing tastes, expectations, demand for better products
      • Competition – need to stay competitive and evolve
      • Management – stay on top of market trends, employee motivation, etc.
      • Exogenous Factors – change in fashion, state of economy, etc.
      • Technology
      • Government
  • Resistance to change
    • According to John Kotter, there are 4 main reasons:
      • Self-interest > Corporate Objectives
      • Misunderstandings (uncertainties and “if it isn’t broke…”)
      • Different assessments of situation
      • Low tolerance for change
    • Ambivalence may also be an issue
  • Reducing impact of change
    • Change Approaches Model by Kotter
      • Deals with resistance to change
      • Six approaches:
        • Education and communication
          • Establishes trust, eliminates misunderstanding, etc.
        • Participation and involvement
          • Link to Mayo and Herzberg theories of motivation
          • May be time consuming
        • Facilitation and support
          • Retraining, counseling, etc.
        • Negotiation and agreement
          • Compromise, incentives, amendments in contract, etc.
        • Manipulation and co-option
          • Convert thinking to be pro-change
          • May backfire
        • Explicit and implicit coercion
    • John Storey
      • 4 different approaches to managing change:
        • Total imposed package – changes are just implemented
        • Imposed piecemeal initiative – change done gradually
        • Negotiated total packages – negotiate with employees before implementing
        • Negotiation piecemeal packages – negotiate with employees then slowly implement
    • Iceberg Model
      • Two levels of change:
        • Top level: cost, quality, and time
        • Bottom level: People/stakeholders
      • 4 groups in the bottom level:
        • Opponents (- behavior, – attitude)
        • Promoters (+ behavior, + attitude)
        • Hidden opponents (+ behavior, – attitude)
        • Potential promoters (- behavior, + attitude)
      • Attitudes are shaped by management of perceptions; behavior is affected by management of power and politics
    • Change Phases Model by Kotter
      • 8 reasons why change management fails:
        • Too much complexity
        • No support from staff
        • No clear vision
        • No communication w/ stakeholders
        • Obstructions to vision
        • Does not focus on small continuous changes
        • Declare success too soon
        • Ignore corporate culture