LABOR RELATIONS OUTCOMES: INDIVIDUALS CHAPTER THREE LABOR RELATIONS OUTCOMES: INDIVIDUALS AND THE ENVIRONMENT Previous chapters emphasized the objectives of the employment relationship and different perspectives on how to achieve these objectives.   But how are actual outcomes determined? Labor relations outcomes are the result of labor and management strategies interacting in a multidimensional environment. Choices are also shaped by individual decision-making behaviors, including ethics.

LEARNING OBJECTIVES To understand ….. 1. That employment outcomes are the product of the employment environment and features of behavioral decision-making, including ethics. 2. The basic elements of the employment environment and behavioral decision-making. The importance of ethics in studying, practicing, and reforming labor relations. The central elements of major ethical theories and their relevance to labor relations.

LABOR RELATIONS OUTCOMES: INDIVIDUALS AND THE ENVIRONMENT A central questions for studying and understanding labor relations is what are the important influences that determine labor relations outcomes. Employment outcomes result from interactions between employees, unions, and employers in the socio-political, strategic, functional, and workplace tiers of the employment relationship. Both the environment and the nature of human decision-making, including ethics, shape employment outcomes. Employee reactions to perceived workplace injustices and employer reactions to competitive pressures are two major examples that illustrate how labor relations outcomes are determined by the environment and individual choices.

The Determinants of Labor Relations Outcomes Start with each party’s goals Efficiency Equity ? Voice ? EMPLOYER GOALS Efficiency ? Equity Voice EMPLOYEE O U T C M E S

The Determinants of Labor Relations Outcomes Parties create strategies to pursue their goals HRIR STRATEGY Efficiency Equity ? Voice ? EMPLOYER GOALS WORKER / UNION Efficiency ? Equity Voice EMPLOYEE O U T C M E S

The Determinants of Labor Relations Outcomes Parties interact at four levels Strategic Level HRIR STRATEGY Efficiency Equity ? Voice ? EMPLOYER GOALS Functional Workplace WORKER / UNION Efficiency ? Equity Voice EMPLOYEE O U T C M E S Socio-Political

Goals, strategies, interactions, and thus outcomes, are shaped by the environment and individual decision-making (the “human agent”) Strategic Level E N V I R O N M E N T HRIR STRATEGY Efficiency Equity ? Voice ? EMPLOYER GOALS Functional Workplace WORKER / UNION Efficiency ? Equity Voice EMPLOYEE O U T C M E S Socio-Political H U M A N A G E N T

The environment and the human agent have multiple dimensions Strategic Level E N V I R O N M E N T HRIR STRATEGY Efficiency Equity ? Voice ? EMPLOYER GOALS Functional Workplace WORKER / UNION Efficiency ? Equity Voice EMPLOYEE Legal Economic Institutional Social Technical Business Political O U T C M E S Personality Ethics Cognition Feelings Motivation Socio-Political H U M A N A G E N T

THE LABOR RELATIONS ENVIRONMENT LEGAL ENVIRONMENT:   The legal system in every country establishes the framework for labor management interactions. In the U.S. New Deal industrial relations system, the National Labor Relations Act (NLRA) establishes the process for forming new unions and for bargaining union contracts.

Other U.S. laws that govern the employment relationship include: Fair Labor Standards Act (minimum wages and overtime) Civil Rights Act (nondiscrimination) Occupational Health and Safety Act (workplace safety) Family and Medical Lace Act (unpaid leave) Tax laws Bankruptcy codes Deregulation

THE LABOR RELATIONS ENVIRONMENT ECONOMIC ENVIRONMENT   The economic environment includes the: Labor market Market for the employer’s products and services Markets for the other factors of production State of the overall economy Within the framework established by common and/or statutory laws, the economic environment determines workers’ employment options.

THE LABOR RELATIONS ENVIRONMENT TECHNICAL ENVIRONMENT   The technical environment includes the nature of production, work organization, and technology. The technical context includes: Whether the workplace is fixed (factory) or variable (transportation). The degree of workforce and workplace stability. The size and hours of the workforce. The workers’ job content and responsibilities.

THE LABOR RELATIONS ENVIRONMENT POLITICAL ENVIRONMENT The political context explicitly captures political influences beyond laws and legal environment.   Contextual influences can: Determine whether labor unions will or will-not engage in strikes. Create a climate in which it is acceptable for private-sector employers to actively fight unions. Cause business and labor to actively lobby political leaders for favorable treatment.

THE LABOR RELATIONS ENVIRONMENT SOCIAL ENVIRONMENT The workplace or workgroup-level social context of employment is emphasized in sociology, social psychology, and organizational behavior. Workgroups can have at least four major social functions: Socialization of employees to workplace norms. Solidarity in defense of managerial abuse. Support of personal space. Affirmation of workplace identities. The social context also includes corporate and organizational culture. The social part of labor relations environment can favor labor or management.

THE LABOR RELATIONS ENVIRONMENT BUSINESS ENVIRONMENT   One element of the business dimension of the labor relations environment is the nature of corporate governance-how rules and decisions regarding resource allocation within corporations are made. A second element of the business dimension of the labor relations environment is business strategy. Business strategies affect HRM and labor relations strategies.

THE LABOR RELATIONS ENVIRONMENT INSTITUTIONAL ENVIRONMENT   This context includes the varied influences on the employment relationship that stem from the presence of non-market institutions and organizations. Primary elements of this dimension include the philosophy, structure and scope of the labor movement. In the U.S., unions have traditionally had a business unionism philosophy with a pragmatic focus on workplace issues such as wages, benefits, and work rules.

INDIVIDUAL DECISION MAKING The second key element for studying labor relations behavior and outcomes is the nature of individual decision-making:   Employees, managers, shareholders, and union leaders make choices. The seven dimensions of the labor relations environment provide broad parameters and constraints on the available choices, as well as the set of feasible choices. These parameters and constraints determine the actions of employees, managers, shareholders, and union leaders.

INDIVIDUAL DECISION MAKING The factors that shape these choices can be divided up into five major elements of human decision-making: Cognition-the processing of information and knowledge. Motivation-a drive to do something (purposeful behavior). Personality-an enduring dispositional quality or stable mental state. Feelings-includes attitudes, moods and emotions. Ethics-the study of the general nature of morals and of the specific moral choices to be made by the individual within the context of their relationship to others.

INTRODUCTION TO BUSINESS ETHICS Comparing ethical theories is a valuable way of considering different perspectives on labor relations that illustrates explanations for:   Why individuals, employers and union, or elected officials make certain choices. Provides a basis for judging whether reforms in behavior or laws are needed. Ethics is the final dimension of individual decision-making that determines labor relations outcomes.

BUSINESS ETHICS IN LABOR RELATIONS The use of business ethics in labor relations is important in providing a basis for evaluating both behavior and outcomes.   Many participants and observers, both pro-business and pro-labor, feel that the labor relations system needs fixing.   The six ethical theories provide basic standards against which the labor relations system and the participants’ should be evaluated.   The six ethical theories are useful to consider the ethics of … Utility, Duty, Liberty, Fairness, Virtue, and Care.   Business ethics is not only the evaluation of right and wrong, it is also the study of the underlying basis for decision-making.

BOX 3.4: SIX ETHICAL FRAMEWORKS

AN ETHICAL ANALYSIS TEMPLATE Identify the benefits. Identify the harms. Identify rights. Identify rights violations. Identify the impact to the person making the decision. State the moral problem. Consider the ethics utility.

AN ETHICAL ANALYSIS TEMPLATE Consider the ethics of duty. Consider the ethics of liberty. Consider the ethics of fairness. Consider the ethics of virtue. Consider the ethics of care. Identify several alternatives. Support your decision.

Examples of Ethical Foundations in Labor Relations

LEVELS OF DECISION MAKING Individuals and organizations make choices within the parameters of the environment.  Choices are influenced by ethics and other elements of the human agent.  In labor relations, these choices are made within four levels: Sociopolitical Strategic Functional Workplace

FOUR LEVELS OF DECISION MAKING Interactions between unions and management occur on four levels The sociopolitical level – the broad social and political arena Example: A union campaign to generate public pressure on a company The strategic level – the highest-level of corporate and union decision-making  Example: Establishing collective bargaining goals The functional level – between the workplace and the boardroom Example: Negotiating contracts The workplace level – local settings where work actually gets done Example: Resolving grievances

EMPLOYEE REACTIONS TO WORKLACE INJUSTICE Many of the central questions of labor relations can be phrased in terms of workplace injustice.  

EMPLOYEE REACTIONS TO WORKLACE INJUSTICE The possible responses to workplace injustice include: Exit Individual voice Collective voice Resistance Silence   The response chosen in specific situations are determined by the environment and individual choices. A critical question for this course is under what circumstances will employees choose collective voice.

EMPLOYER REACTIONS TO COMPETITIVE PRESSURES What are the factors that shape employers’ reactions to unions and competitive pressures? Environmental and individual choices: The economic environment. Increased competition from domestic nonunion companies and international companies caused strong anti-union employer responses. Business pressures for flexibility and competitiveness in the global economy. Favorable pro-business political and social climate that allowed and encouraged employers to use replacement workers. Managerial values.