14-1 McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved. fundamentals of Human Resource Management 3 rd edition by R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright CHAPTER 14 Collective Bargaining and Labor Relations

14-2 Role of Unions In the U.S., most workers act as individuals to select jobs that are acceptable to them and to negotiate pay, benefits, flexible hours, and other work conditions. At times, workers have believed their needs and interests do not receive enough consideration from management. One response by workers is to act collectively by forming and joining labor unions.

14-3 Labor relations involves three levels of decisions: 1. Labor relations strategy2. Negotiating contracts3. Administering contracts

14-4 Figure 14.1: 10 Largest Unions in the United States

14-5 Figure 14.2: Union Membership Density among U.S. Wage and Salary Workers,

14-6 The decline in union membership has been attributed to: Change in the structure of the economy Management efforts to control costs Human resource practicesGovernment regulation

14-7 Figure 14.3: Union Membership Rates and Coverage in Selected Countries

14-8 Some Statistics on Union Members

14-9 Goals of Management Management goals are to increase the organization’s profits. Managers tend to prefer options that lower costs and raise output. When an employer has recognized a union, management’s goals continue to emphasize restraining costs and improving output. Managers prefer to keep their organization’s operations flexible.

14-10 Goals of Management (continued) In their labor relations, managers prefer to: – Limit increases in wages and benefits, and – Retain as much control as they can over work rules and schedules.

14-11 Goals of Labor Unions Labor unions have the goals of obtaining pay and working conditions that satisfy their members and of giving members a voice in decisions that affect them. They obtain these goals by gaining power in numbers. Unions want to influence the way pay and promotions are determined.

14-12 Goals of Labor Unions (continued) The survival and security of a union depend on its ability to ensure a regular flow of new members and member dues to support the services it provides. Unions place high priority on negotiating two types of contract provisions that are critical to a union’s security and viability: – Checkoff provisions – Union membership or contribution provisions

14-13 The Process of Organizing Signing authorization cardsPetition for electionElection campaignElection and certification

14-14 Table 14.1: What Supervisors Should and Should Not Do to Discourage Unions

14-15 Collective Bargaining In collective bargaining a union negotiates on behalf of its members with management representatives to arrive at a contract defining: – Recognition – Management Rights – Union Security – Compensation and Benefits – Grievance Procedure – Employee Security

14-16 McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved. fundamentals of Human Resource Management 3 rd edition by R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright CHAPTER 15 Managing Human Resources Globally

14-17 HRM in a Global Environment The environment in which organizations operate is rapidly becoming a global one. Foreign countries can provide a business with new markets. Companies set up operations overseas because of lower labor costs. Technology makes it easier for companies to spread work around the globe.

14-18 Employees in an International Workforce Parent-country national – employee who was born and works in the country in which an organization’s headquarters is located. Host-country national – employee who is a citizen of the country (other than parent country) in which an organization operates a facility. Third-country national – employee who is a citizen of a country that is neither the parent country nor the host country of the employer.

14-19 Employees in an International Workforce (continued) When organizations operate overseas, they hire a combination of parent-country nationals, host-country nationals, or third- country nationals. Expatriates – employees assigned to work in another country.

14-20 Employers in the Global Marketplace International organization – an organization that sets up one or a few facilities in one or a few foreign countries. Multinational company – an organization that builds facilities in a number of different countries in an effort to minimize production and distribution costs. Global organization – an organization that chooses to locate a facility based on the ability to effectively, efficiently, and flexibly produce a product or service using cultural differences as an advantage.

14-21 Transnational HRM System Transnational HRM system: – makes decisions from a global perspective – includes managers from many countries – based on ideas contributed by people representing a variety of cultures Decisions that are the outcome of a transnational HRM system balance uniformity with flexibility.

14-22 Factors Affecting HRM in International Markets Global HRM CultureEducation Economic Systems Political- Legal Systems

14-23 Culture Culture – a community’s set of shared assumptions about how the world works and what ideals are worth striving for. Culture can greatly affect a country’s laws. Culture influences what people value, so it affects people’s economic systems and efforts to invest in education. Culture often determines the effectiveness of various HRM practices.

14-24 Culture (continued) Cultural characteristics influence the ways members of an organization behave toward one another as well as their attitudes toward various HRM practices. Cultures strongly influence the appropriateness of HRM practices. Cultural differences can affect how people communicate and how they coordinate their activities.

14-25 Hofstede’s Five Dimensions of Culture 1. Individualism/CollectivismDescribes the strength of the relation between an individual and other individuals in the society. 2. Power DistanceConcerns the way the culture deals with unequal distribution of power and defines the amount of inequality that is normal. 3. Uncertainty AvoidanceDescribes how cultures handle the fact that the future is unpredictable. 4. Masculinity/FemininityThe emphasis a culture places on practices or qualities that have traditionally been considered masculine or feminine. 5. Long-term/Short-term Orientation Suggests whether the focus of cultural values is on the future (long term) or the past and present (short term).

14-26 Culture (continued) Organizations must prepare managers to recognize and handle cultural differences. – Recruit managers with knowledge of other cultures – Provide training For expatriate assignments, organizations may need to conduct an extensive selection process to identify individuals who can adapt to new environments.

14-27 Education and Skill Levels Companies with foreign operations locate in countries where they can find suitable employees. The educations and skill levels of a country’s labor force affect how and the extent to which companies want to operate there. In countries with a poorly educated population, companies will limit their activities to low-skill, low-wage jobs.

14-28 Economic System The economic system provides many of the incentives or disincentives for developing the value of the labor force. In developed countries with great wealth, labor costs are relatively high. This impacts compensation and staffing practices. Income tax differences between countries make pay structures more complicated when they cross national boundaries.

14-29 Political-Legal System The country’s laws often dictate the requirements for HRM practices: training, compensation, hiring, firing, and layoffs. An organization that expands internationally must gain expertise in the host country’s legal requirements and ways of dealing with its legal system. Organizations will hire one or more host- country nationals to help in the process.

14-30 Criteria for Selection of Employees for Foreign Assignments 1.Competency in the employee’s area of expertise 2.Ability to communicate verbally and nonverbally in the foreign country 3.Flexibility, tolerance of ambiguity, and sensitivity to cultural differences 4.Motivation to succeed and enjoyment of challenges 5.Willingness to learn about the foreign country’s culture, language, and customs 6.Support from family members

14-31 Table 15.1: Effects of Culture on Training Design

14-32 Cross-Cultural Preparation This is training to prepare employees and their family members for an assignment in a foreign country. The training covers all three phases of an international assignment: 1.Preparation for departure 2.The assignment itself 3.Preparation for the return home

14-33 What’s coming up Week 8 deliverables – Case Study, Quiz, Discussions Week 9 – Quiz, discussion Week 10 – Writing assignment, optional farewell