Employee Motivation, Workforce Trends, and Labor Relations

Employee Motivation, Workforce Trends, and Labor Relations
This chapter introduces you to both classic and current thinking in the field of workforce motivation and shows how smart companies such as Atlas Containers bring these theories to life. If you have your sights set on management or entrepreneurship, understanding motivation is one of the most important discoveries you’ll make in this entire course. After exploring the theories, you’ll encounter the complex realities of today’s workforce—and some of the key reasons that motivation is a never-ending effort, from staffing challenges to shifting demographics to the pros and cons of setting people free from the confines of 9-to-5 office life through alternative work arrangements. The chapter wraps up with a look at the role unions play in business today and the sometimes-contentious relationship between organized labor and business owners. © Prentice Hall, 2007 Excellence in Business, 3e

Excellence in Business, 3e
Motivating Employees Engagement Success stems directly from employees having a strong sense of engagement, which is both a rational and an emotional commitment to their work. This commitment leads to higher-quality work and increased productivity while sharply reducing the likelihood that employees will leave the company in search of more satisfying opportunities. Employees who are thoroughly engaged in their work generally exhibit high morale, a positive attitude toward both their jobs and their employers. Making sure that employees are engaged and motivated is one of the most important challenges you’ll face as a manager. It’s also one of the most complex; human beings are complicated creatures to begin with, and today’s demanding business environment makes the challenge that much greater. You can start to appreciate the challenge by first exploring what motivation is, then by considering some of the many theories proposed over the years to explain motivation in the workplace. Morale © Prentice Hall, 2007 Excellence in Business, 3e

What Is Motivation? Needs Actions Both common sense and formal research suggest that motivated employees are a key to success in every business. In fact, making sure that employees are motivated is one of the most important challenges facing every manager. Motivation is the combination of forces that moves individuals to take certain actions and avoid others in pursuit of individual objectives. The notion of movement is vital here; motivational strategies have little value if they don't translate into action that helps the business enterprise. As you'll see in the following section, a diverse range of theories has attempted to explain motivation. However, every theory or motivational approach needs to consider three key steps: Need. The employee senses a need of some sort, from the basic need to enough earn money to buy food to a need for recognition or self-respect. Action. To fulfill the need, the employee engages in actions or behaviors that he or she believes will result in the need being satisfied. Outcome. The employee observes the outcome of the action (sometimes called the reward) and determines whether the effort was worthwhile. Actions that result in positive outcomes are likely to be repeated; those that result in negative outcomes are less likely to be repeated. These three steps are an extremely simplified look at the complex issue of motivation, but even from this simple model you can start to grasp the challenges involved. For instance, what if two or more needs conflict, leading to incompatible actions? It's hard to balance the need to relax and have fun with the need to generate enough money to pay the rent. Or what if an employee's need for recognition motivates him or her to work hard in the hopes of getting a promotion, but thanks to a tough economy, the company isn't growing and can't offer the promotion? Outcomes © Prentice Hall, 2007 Excellence in Business, 3e

Workforce Motivation Monetary Rewards Fair Treatment Satisfying Work Work-Life Balance Before moving into specific theories, it's important to consider the role of money as a motivator, since it's a central issue for most employees. Money obviously plays a critical role in most everyone's work life, but it is not the ultimate motivator for many people because money often can't compensate for the lack of other satisfying factors. In other words, it's important, but not enough to truly motivate people toward peak performance. Today, employees also expect to be treated fairly and want the opportunity to pursue satisfying work. They want to balance their careers and their family lives. “There’s an increasing interest in people finding meaning in their lives and in their work,” notes Don Kuhn, the executive director of the International University Consortium for Executive Education. “People are no longer content with income alone. They are looking for personal satisfaction. They want to be part of something they can believe in, something that confers meaning on their work and on their lives. They want to be motivated.” © Prentice Hall, 2007 Excellence in Business, 3e

Theories of Motivation
Frederick W. Taylor Maslow’s Hierarchy of Needs Herzberg’s Two-Factor Theory Theory X, Theory Y, and Theory Z Equity Theory Expectancy Theory Motivation has been a topic of interest to managers and researchers for more than a hundred years. A number of theories have evolved over the years, some that describe what motivates people and others that describe how they go about fulfilling their needs. No single theory offers a complete and proven picture of the motivation puzzle, but each can offer some perspective. The next seven slides will examine this list of theories, item by item. © Prentice Hall, 2007 Excellence in Business, 3e

Frederick W. Taylor Monetary Rewards Personal Productivity Scientific Management Frederick W. Taylor was a machinist and engineer from Philadelphia who became interested in employee efficiency and motivation late in the nineteenth century. Taylor developed scientific management, an approach that sought to improve employee efficiency through the scientific study of work. In Taylor’s view, people were motivated almost exclusively by money, so he set up pay systems that rewarded employees when they were productive. Although money has always been a powerful motivator, scientific management fails to take into account other motivational elements, such as opportunities for personal satisfaction or individual initiative. © Prentice Hall, 2007 Excellence in Business, 3e

Self-Esteem Needs Social Needs Safety Needs Physiological Needs Self- Actualization Maslow’s Hierarchy Five Need Categories In 1943 psychologist Abraham Maslow proposed the theory that behavior is determined by a variety of needs. He organized these needs into five categories and then arranged the categories in a hierarchy. The most basic needs are at the bottom of this hierarchy, and the more advanced needs are toward the top. In Maslow’s hierarchy, all of the requirements for basic survival-food, clothing, shelter, and the like-fall into the category of physiological needs. These basic needs must be satisfied before the person can consider higher-level needs such as safety needs, social needs (the need to give and receive love and to feel a sense of belonging), and esteem needs (the need for a sense of self-worth and integrity). At the top of Maslow’s hierarchy is self-actualization—the need to become everything one can become. Although Maslow’s hierarchy is a convenient way to classify human needs, it would be a mistake to view it as a rigid sequence. © Prentice Hall, 2007 Excellence in Business, 3e

Herzberg’s Two-Factor Theory
Highly Satisfied Motivation Achievement Recognition Responsibility Work itself Personal growth Area of Satisfaction Motivators Influence Satisfaction Level Neither Satisfied Nor Dissatisfied Hygiene Factors Working conditions Pay and security Company policies Supervisors Interpersonal relationships Frederick Herzberg asked workers to describe situations in which they felt either good or bad about their jobs. His findings are called motivation-hygiene theory. What Herzberg called hygiene factors are associated with dissatisfying experiences. The potential sources of dissatisfaction include working conditions, company policies, and job security. Management can lessen worker dissatisfaction by improving hygiene factors that concern employees, but such improvements seldom influence satisfaction. On the other hand, managers can help employees feel more motivated and, ultimately, more satisfied by paying attention to motivators such as achievement, recognition, responsibility, and other personally rewarding factors. Herzberg’s theory is related to Maslow’s hierarchy of needs: The motivators closely resemble the higher-level needs, and the hygiene factors resemble the lower-level needs. Area of Dissatisfaction Hygiene Factors Influence Satisfaction Highly Dissatisfied © Prentice Hall, 2007 Excellence in Business, 3e

McGregor’s Assumptions
Theory X Employees Theory Y Employees Dislike work Motivated by threats Avoid responsibilities Value security Enjoy work Committed to goals Accept responsibilities Have mental potential In the 1960s, psychologist Douglas McGregor identified two radically different sets of assumptions that underlie most management thinking. He classified these sets of assumptions as Theory X and Theory Y. According to McGregor, Theory X-oriented managers believe that employees dislike work and can be motivated only by the fear of losing their jobs or by extrinsic rewards such as money, promotions, and tenure. This management style emphasizes physiological and safety needs and tends to ignore the higher-level needs.In contrast, Theory Y-oriented managers believe that employees like work and can be motivated by working for goals that promote creativity or for causes they believe in. Thus, Theory Y-oriented managers seek to motivate employees through intrinsic rewards. The assumptions behind Theory X emphasize authority; the assumptions behind Theory Y emphasize growth and self-direction. © Prentice Hall, 2007 Excellence in Business, 3e

Ouchi’s Theory Z Informal Control with Formal Measurements Slow Evaluation and Promotion Moderate Degree of Career Specialization Holistic Concern for the Individual Consensus-Based Decision Making Long-Term Employment Individual Responsibility In the 1980s, when U.S. businesses began to feel a strong competitive threat from Japanese companies, William Ouchi proposed another approach to motivation that was based on his comparative study of Japanese and U.S. management practices. His Theory Z merged the best of both systems, as expressed in seven principles: long-term employment, consensus-based decision making, individual responsibility, slow evaluation and promotion, informal control with formal measurements, a moderate degree of career specialization, and a holistic concern for the individual. © Prentice Hall, 2007 Excellence in Business, 3e

Equity Theory Ratio Comparison* Employee’s Perception Outcomes A Inputs A Outcomes B Inputs B < = > Inequity (Under-Rewarded) Equity Inequity (Over-Rewarded) Equity theory contributes to the understanding of motivation by suggesting that employee satisfaction depends on the perceived ratio of inputs to outputs. If you work side by side with someone, doing the same job and giving the same amount of effort, only to learn that your colleague earns more money, would you satisfied in your work and motivated to continue working hard? You perceive a state of inequity, so you probably won't be happy with the situation. In response, you might ask for a raise, decide not to work as hard, try to change perceptions of your efforts or their outcomes, or simply quit and find a new job; any one of these steps could bring your perceived input/output ratio back into balance. *Where A is the employee, and B is a relevant other or referent. © Prentice Hall, 2007 Excellence in Business, 3e

Expectancy Theory Quality of effort put forth depends on. . . …expectations of …and expectations of …attractiveness of rewards relative to Expectancy theory, considered by many experts to offer the best available explanation of employee motivation, links an employee's efforts with the outcome he or she expects from that effort. Like equity theory, expectancy theory focuses less on the specific forces that motivate employees and more on the process they follow to seek satisfaction in their jobs. Expectancy theory expands on earlier theories in several important ways, including linking effort to performance and linking rewards to individual goals. The effort employees will put forth depends on the following: Their expectations about their own ability to perform Their expectations about the rewards that the organization will give in response to that performance The attractiveness of those rewards relative to their individual goals. Individual Effort Individual Performance Organizational Rewards Individual Goals © Prentice Hall, 2007 Excellence in Business, 3e

Workplace Motivation Strategies
Setting Goals Reinforcing Behavior The range of motivational decisions managers face is almost endless, from redesigning jobs to make them more interesting to offering recognition programs for high achievers. Whether it's a basic award program for salespeople or an entirely new way to structure the workforce, though, all motivational strategies need to consider two critical aspects: setting goals and reinforcing behavior. © Prentice Hall, 2007 Excellence in Business, 3e

Management by Objectives
Setting Goals 1 Planning Action 2 Implementing Plans Successful motivation requires action. To be successful, that action needs to be directed toward a meaningful goal. Accordingly, goal-setting theory suggests the idea that goals can motivate employees. The process of setting goals is often embodied in the technique known as management by objectives (MBO), a company wide process that empowers employees and involves them in goal setting and decision making. This process consists of four steps: setting goals, planning actions, implementing plans, and reviewing performance. Because employees at all levels are involved in all four steps, they learn more about company objectives and feel that they are an important part of the company-wide team. Furthermore, they understand how even their small job function contributes to the organization’s long-term success. One of the key elements of MBO is a collaborative goal-setting process. Together, a manager and employee define the employee’s goals, the responsibilities for achieving those goals, and the means of evaluating individual and group performance so that the employee’s activities are directly linked to achieving the organization’s long-term goals. Jointly setting clear and challenging—but achievable—goals can encourage employees to reach higher levels of performance. 3 Reviewing Performance 4 © Prentice Hall, 2007 Excellence in Business, 3e

Reinforcement Theory Behavior Modification Negative Reinforcement Positive Employees in the workplace, like human beings in all aspects of life, tend to repeat behaviors that create positive outcomes. Reinforcement theory suggests that managers can motivate employees by controlling or changing their actions through behavior modification. Managers systematically encourage those actions that are desirable by providing pleasant consequences and discourage those that are not by providing unpleasant consequences. Positive reinforcement offers pleasant consequences (such as a gift, praise, public recognition, bonus, dinner, or trip) for completing or repeating a desired action. Experts recommend the use of positive reinforcement because it emphasizes the desired behavior rather than the unwanted behavior. By contrast, negative reinforcement allows people to avoid unpleasant consequences by behaving in the desired way. For example, fear of losing a job (unpleasant consequences) may move an employee to finish a project on time (desired behavior). Such negative motivation, however, is much less effective than encouraging an individual’s own sense of direction, creativity, and pride in doing a good job. Avoid Unpleasant Consequences Obtain Pleasant Consequences © Prentice Hall, 2007 Excellence in Business, 3e

Keeping Pace With Today’s Work Force
Staffing Challenges Demographic Challenges When trying to apply motivational techniques, managers must keep in mind that today’s workforce comprises people with a wide variety of needs. They must recognize that employees come from a diversity of backgrounds and have interests and obligations outside of work, such as family, volunteer activities, and hobbies. Addressing employees’ many needs becomes even more critical in a work environment plagued with a number of demographic and staffing challenges. Alternative Work Arrangements © Prentice Hall, 2007 Excellence in Business, 3e

Staffing Challenges Employee Loyalty Employee Workloads Work-Life Balance Workforce Alignment Managers in every organization that hires employees face an ongoing array of staffing challenges. The most significant of these include aligning the workforce with ever-evolving organizational needs, fostering employee loyalty in an uncertain job market, adjusting workloads and monitoring for employee burnout, and helping employees balance their work and personal lives. © Prentice Hall, 2007 Excellence in Business, 3e

Aligning the Workforce and the Organization
External Forces Internal Forces Employees Changing Markets Competition Advances in Technology Government Regulations Strategy Shifts Information Systems Production Systems Product Sales Personal Goals Better Jobs Temporary Retirement Permanent Retirement Matching the right employees to the right jobs at the right time is a constant challenge for most companies. Externally, changing market needs, the emergence and exit of various competitors, advances in technology, and new government regulations can all affect the ideal size and composition of the workforce. Internally, shifts in strategy, changes to information and production systems, and growing or declining product sales can force managers to realign their workforces. While external and internal forces shape workforce needs, individual employees also pursue their own personal and personal goals, whether it’s leaving for better jobs, temporarily stepping out of the workforce for personal reasons, or retiring permanently. Rightsizing is a term generally used to describe periodic realignments or shakeups, implying that the organization is making changes in the workforce to match its business needs more precisely. Although rightsizing usually involves downsizing—reducing the workforce—companies sometimes add workers even while they eliminate other jobs. © Prentice Hall, 2007 Excellence in Business, 3e

Fostering Employee Loyalty Excellence in Business, 3e
Manage Effectively and Ethically Give Employees a Stake Take Care of Employees With the notion of lifetime employment long gone, employees have been forced to devote more time and energy to looking out for their own careers, knowing that they could be forced to seek other work at any time. As you can imagine, this new scenario presents a considerable challenge for managers: They usually can’t guarantee long-term employment, but they want employees to commit themselves to the company even in the face of this uncertainty. Moreover, many employees no longer want to work for the same company for life, even if given the opportunity. Manage their companies effectively and ethically. While this might sound obvious, one of the simple truths of business is that managerial blunders can devastate workforces. Give employees a stake in the success of the firm. Make it clear that employees not only share the responsibility for the success of the company—thereby increasing the probably of continued career opportunities—but will also share in the rewards, through profit sharing, stock options, and other programs. Take better care of their employees. Employees who believe they are being treated well will tend to stay with their current employers—and to engage enthusiastically with their work while they’re there. Work with employees to align their career goals with the company’s goals. By having regular and honest discussions with employees regarding their career goals, managers can work with employees to create plans that benefit both parties—even it will be for only a few years. Work With Employees © Prentice Hall, 2007 Excellence in Business, 3e

Monitoring Employee Workloads
Employee Burnout Quality Of Work Quantity Of Work Long Work Hours “Ghost Work” Communication Technology Eighty-hour weeks are the exception, of course, but many employees seem to be feeling the strain of extra work these days. The problem is common after downsizing, when employees who still have jobs are sometimes expected to pick up the “ghost work” of the people who’ve been let go. Other employees cite the inability to ever truly get away from work, now that they’re connected via cell phones, laptop computers, and PDAs with wireless access. These multiple stresses create the risk of employee burnout, a state of physical and emotional exhaustion that can result from constant exposure to stress over a long period of time. The prospect of overwork and widespread burnout raises two vital questions. First, how bad is the problem? Second, when employees are expected to work long hours, does all that extra time really help companies over the long run—particularly in professional and managerial jobs, where analysis, creativity, and decision-making skills are so important? The quality of this work is often more important than the quantity. © Prentice Hall, 2007 Excellence in Business, 3e

Work-Life Balance Job Enrichment Job Redesign Reduces Specialization Restructures Work The concerns over workloads is one of the factors behind the growing interest in work-life balance, the idea that employees, managers, and entrepreneurs need to balance the competing demands of their professional and personal lives. Regardless of how realistic balance may or may not be, many companies are trying to make it easier for employees to juggle multiple responsibilities with on-site daycare facilities, flexible work schedules, and other options designed to improve quality of work life (QWL). Two common ways of improving QWL are through job enrichment, which reduces specialization and makes work more meaningful by expanding each job’s responsibilities, and job redesign, which restructures work to provide a better fit between employees’ skills and their jobs. Expands Responsibilities Coordinates Skills and Jobs © Prentice Hall, 2007 Excellence in Business, 3e

Demographic Challenges
Workforce Diversity Understanding Embracing Maximizing The workforce is always in a state of demographic change, whether it's a shift in global immigration patterns or the changing balance of age groups within a country's population. The companies that are most successful at managing and motivating their employees take great care to understand the diversity of their workforces and establish programs and policies that both embrace that diversity and help employers take full advantage of diversity's benefits. © Prentice Hall, 2007 Excellence in Business, 3e

Workforce Diversity Issues
Immigration Gender Age Race Diversity is simply a fact of life for all companies. Some of the most important diversity issues today include the immigration and globalization of the workforce, the aging of the U.S. workforce, gender and race issues, and religion in the workplace. For many companies, both large and small, managing the workforce is now an international challenge. This international, intercultural nature of the workforce yields a number of important benefits, including cost advantages, specialized talents, and local market knowledge, but it often gives managers a more complex employee base to supervise and motivate. Reversing a long-term trend toward earlier and earlier retirement, employment rates among older workers have recently increased. Many employers are happy to hire older workers, too, citing their greater flexibility in work hours and pay, lower rates of absenteeism, lower turnover rate, and ability to train younger workers. Economists cite a number of reasons: rising health-care costs (complicated by the number of employers who’ve canceled insurance coverage for their retired employees), reductions in company pension plans, individual retirement savings that took a beating during the post-dot-com stock market decline, and the desire to stay active longer. The statistical picture of men and women in the workforce is complex. However, three general themes are clear. First, both year to year and over the course of their careers, women earn less on average than men. Second, even in occupations that have traditionally been served primarily by women, such as teaching and nursing, women still earn less than men on average. Third, the higher up you go in most corporations, the fewer women you’ll find in positions of authority. In many respects, the element of race in the diversity picture presents the same concerns as gender: equal pay for equal work, access to promotional opportunities, and ways to break through the glass ceiling. However, while the ratio of men and women in the workforce remains fairly stable year to year, the ethnic composition of the United States has been on a long-term trend of greater and greater diversity. Unfortunately, as with average wages between women and men, disparity still exists between minority households and white households. The effort to accommodate employees’ life interests on a broader scale has led a number of companies to address the issue of religion in the workplace. On the one hand, some employees feel they should be able to express their beliefs in the workplace and not be forced to “check their faith at the door” when they come to work. On the other hand, companies want to avoid situations in which openly expressed religious differences might cause friction between employees or distract employees from their responsibilities. Religion Globalization © Prentice Hall, 2007 Excellence in Business, 3e

Diversity Initiatives
Policies Procedures Training Whether they address diversity under legal or social pressure or recognize the advantages of embracing diversity, many companies have implemented diversity initiatives, formal policies, procedures, and training programs to promote successful management of diverse workforces. Such initiatives range from include long-term commitments to hiring more women, company-sponsored networking and career planning for women, diversity training and workshops, and mentoring programs designed to help female employees move more quickly through the ranks. Although encouraging sensitivity to employee differences is an important first step, a company stands to benefit most when it incorporates its employees’ diverse perspectives into the organization’s work. This assimilation enables the company to uncover new opportunities by rethinking primary tasks and redefining markets, products, strategies, missions, business practices, and even cultures. In short, diversity can be an asset, and one of the challenges of corporate human relations is to make the most of this asset. © Prentice Hall, 2007 Excellence in Business, 3e

Alternative Work Arrangements
Flextime Telecommuting Job Sharing Flexible Career Paths To meet today’s staffing and demographic challenges, many companies are adopting alternative work arrangements to better accommodate the needs of employees—and to reduce costs in many cases. Four of the most popular arrangements are flextime, telecommuting, job sharing, and flexible career paths. An increasingly important alternative work arrangement, flextime is a scheduling system that allows employees to choose their own hours within certain limits. Related to flexible schedules is telecommuting—working from home or another location using computers and telecommunications equipment to stay in touch with the employer’s offices. Job sharing, which lets two employees share a single full-time job and split the salary and benefits, has been slowly gaining acceptance as a way to work part-time in a full-time position. Perhaps the most challenging of all alternative work arrangements are situations in which employees want to leave the workforce for an extended period of time to return to school, work for a charity, raise children, or pursue other interests—with the intention of returning to work at some point in the future. In the past, stepping out of the workforce for several years or more usually meant a significant blow to one’s career. However, the pressure to accommodate such moves is now coming from multiple angles: Companies that have invested in developing star employees want them back, many women who leave to raise children want to regain their career momentum when they return to work, and today’s generation of new fathers frequently want to spend more time with their young children, even if that means putting their careers on hold for a while. © Prentice Hall, 2007 Excellence in Business, 3e

Working With Labor Unions
Wages and Benefits Working Conditions Job Security Although they work toward common goals in most cases, managers and employees do face an inherent conflict over resources: managers, as representatives of company ownership, want to minimize the costs of operating the business, whereas employees want to maximize salaries and ensure good benefits and safe, pleasant working conditions. If employees believe they are not being treated fairly or don't have a voice in how the company is run, one option they can consider is joining labor unions, organizations that seek to protect employee interests by negotiating with employers for better wages and benefits, improved working conditions, and increased job security. Unions have played an important and lasting role in U.S. employee-management relations and are largely responsible for the establishment of worker’s compensation, child-labor laws, overtime rules, minimum-wage laws, severance pay, and more. Employees are most likely to turn to unions if they are deeply dissatisfied with their current job conditions, if they believe that unionization can be helpful in improving those conditions, and if they are willing to overlook negative stereotypes that have surrounded unions in recent years. © Prentice Hall, 2007 Excellence in Business, 3e

How Unions Are Structured
Labor Federation National Unions International Unions United Steelworkers of America United Auto Workers Union of Needletrades, Industrial, Textile Employees Many unions are organized at local, national, and international levels. Locals, or local unions, represent employees in a specific geographic area or facility. Each local union is a hierarchy with a broad base of rank-and-file members, the employees the union represents. These members pay an initiation fee, pay regular dues, and vote to elect union officials. Each department or facility also has or elects a shop steward, who works in the facility as a regular employee and serves as a go-between with supervisors when a problem arises. In large locals and in locals that represent employees at several locations, an elected full-time business agent visits the various work sites to negotiate with management and enforce the union's agreements with those companies. By comparison, a national union is a nationwide organization composed of many local unions that represent employees in specific locations; examples are the United Auto Workers (UAW) of America and the United Steelworkers of America. International unions have members in more than one country, such as the Union of Needle trades, Industrial, and Textile Employees (UNITE). A national union is responsible for such activities as organizing new areas or industries, negotiating industry-wide contracts, assisting locals with negotiations, administering benefits, lobbying Congress, and lending assistance in the event of a strike. Local unions send representatives to the national delegate convention, submit negotiated contracts to the national union for approval, and provide financial support in the form of dues. They have the power to negotiate with individual companies or plants and to undertake their own membership activities. Local Unions Local Unions Rank and File Shop Steward Business Agent Rank and File Rank and File Shop Steward Business Agent Rank and File © Prentice Hall, 2007 Excellence in Business, 3e

How Unions Organize Conduct pre-election campaign Petition NLRB for election Request union as bargaining agent Distribute authorization cards Determine interest in unionization Select target group Step 1 Campaign for authorization cards Step 2 Certification election Election Union certified as bargaining agent Union organizers, whether professional or rank-and-file, generally start by visiting with employees, although dissatisfied employees may also approach the union. The organizers survey employees by asking questions such as "Have you ever been treated unfairly by your supervisor?" Employees who express interest are sent information about the union along with authorization cards—sign-up cards used to designate the union as their bargaining agent. If 30 percent or more of the employees in the group sign the union's authorization cards, the union may ask management to recognize it. Usually, however, unions do not seek to become the group's bargaining agent unless a majority of the employees sign. Often the company's management is unwilling to recognize the union at this stage. The union can then ask the National Labor Relations Board (NLRB), an independent Federal agency created in 1935 to administer and enforce the National Labor Relations Act, to supervise a certification election, the process by which a union becomes the official bargaining agent for a company's employees. If a majority of the affected employees choose to make the union their bargaining agent, the union becomes certified. If not, that union and all other unions have to wait a year before trying again. © Prentice Hall, 2007 Excellence in Business, 3e

Collective Bargaining Process
Preparing to Meet Meeting Reaching an Agreement 1 2 3 Voting and Ratification 4 5 In a process known as collective bargaining, union and management negotiators work together to forge the human resources policies that will apply to the unionized employees--and other employees covered by the contract--for a certain period, usually three years. Preparing to meet. The union negotiating team determines the needs of union members. Management tries to anticipate the union’s demands and decide on what it is willing to offer. Meeting. Both sides present their demands, and bargaining follows. The union may call for a strike vote to demonstrate to management the solidarity of union members. Reaching an agreement. If bargaining is successful and a tentative agreement is reached, the agreement goes out to union members for ratification by vote. Voting and ratification. If union members approve of the agreement, it is ratified and can be signed by union and company representatives. If not, negotiators return to the bargaining table. © Prentice Hall, 2007 Excellence in Business, 3e

Resolving an Impasse Mediation Arbitration If negotiations reach an impasse, outside help may be needed. The most common alternative is mediation—bringing in an impartial third party to study the situation and make recommendations for resolution of the differences. Mediators are generally well-respected community leaders whom both sides will listen to. However, mediators can only offer suggestions, and their solutions are not binding. When a legally binding settlement is needed, the negotiators may submit to arbitration—a process in which an impartial referee listens to both sides and then makes a judgment by accepting one side’s view. In compulsory arbitration, the parties are required by a government agency to submit to arbitration; in voluntary arbitration, the parties agree on their own to use arbitration to settle their differences. © Prentice Hall, 2007 Excellence in Business, 3e

When Negotiations Break Down
Labor Management Strike Strikebreakers Sometimes negotiations reach an impasse, and neither side is willing to compromise. Labor has several options: The strike is a temporary work stoppage aimed at forcing management to accept union demands. An essential part of any strike is picketing, in which union members positioned at entrances to company premises march back and forth with signs and leaflets, trying to persuade non-striking employees to join them and to persuade customers and others to stop doing business with the company. A less direct union weapon is the boycott, in which union members and sympathizers refuse to buy or handle the product of a target company. Increasingly, labor is pressing its case by launching publicity campaigns, often called corporate campaigns, against the target company and companies affiliated with it. Management can use a number of legal methods to pressure unions when negotiations stall. When union members walk off their jobs, management can legally replace them with strikebreakers, nonunion workers hired to do the jobs of striking workers. The U.S. Supreme Court has upheld the use of lockouts, in which management prevents union employees from entering the workplace, in order to pressure the union to accept a contract proposal. An injunction is a court order prohibiting union workers from taking certain actions. Boycott Lockouts Publicity Injunctions © Prentice Hall, 2007 Excellence in Business, 3e

Union Membership Today
In certain industries, including transportation, retailing, and manufacturing, unions remain a significant force in employee-management relations in the United States. Unions remain a significant force in employee-management relations in the United States, but their membership continues to decline. Unions now represent only 15 percent (16.3 million) of workers in the United States (down from 20 percent in 1983 and 35 percent in the 1950s). True to the often combative nature of the relationship, each side blames organized labor’s decline on the other. Some business leaders say unions don’t have anything relevant to offer workers in today’s environment of more enlightened and supportive management, while union leaders say managers use every tactic they can think of, both legal and illegal, to thwart unionization efforts. Meanwhile, some labor leaders have leveled criticisms internally as well, asserting that union leaders have been too slow to adapt to the changing world of business. © Prentice Hall, 2007 Excellence in Business, 3e

The Labor Movement Today
Health-Care Costs International Competition What does the future hold for unions? It is difficult to make predictions, but two key issues highlight the continuing complexity of union-management relations: Healthcare costs. By just about any measure, healthcare costs in the United States are spiralling out of control, climbing much faster than the general inflation rate. These costs have become a major point of contention in labor negotiations, with employers saying that employees need to pay a larger share of healthcare costs and employees saying they can't afford to. International competition. In industries that face vigorous international competition, such as autos, steel, and aircraft, some union and business leaders are trying to work more cooperatively than they have in years past. Both healthcare costs and international competition are staggeringly complex challenges with no clear solutions, but attempts to solve them may well influence the progress of unions in the coming years. © Prentice Hall, 2007 Excellence in Business, 3e

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