2. 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.

3. LEARNING OBJECTIVES To understand …..
That employment outcomes are the product of the employment environment and features of behavioral decision-making, including ethics.
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.

4. 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.

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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.

11. 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

12. 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.

13. 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.

14. 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.

15. 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.

16. 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.

17. 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.

18. 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.

19. 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.

20. 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.

21. 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.

22. BOX 3.4: SIX ETHICAL FRAMEWORKS

23. 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.

24. 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.

25. Examples of Ethical Foundations in Labor Relations

26. 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

27. 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

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

29. 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.

30. 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.