1. Mgmt 583 Chapter 11: Contract Negotiations Fall 2008

2. Four Stages of Collective Bargaining  Preparation  Initial Proposals  Primary bargaining  Eleventh-hour bargaining.

3. Management Preparation  Three objectives of the preparation stage: Determines the bargaining objectives. Enables the bargaining team to substantiate and defend its proposals. Enables the bargaining team to anticipate and war-game the union’s proposals.

4. Stages in Preparation  Coordination stage Individuals are assigned to draft proposals for specific parts of the CBA. Timetables for negotiations are established.  Selecting the Bargaining Team Chief negotiator Cost specialist Secretary-/note taker Language draftsman Operations specialist (determines the impact of concessions on production and processes.

5. Stages in Preparation  Review the previous negotiations Id personalities Id union’s critical issues Id success and failures in last negotiations Id union success and failures in last negotiations Id union’s previous tactics  Review current CBA for necessary changes Id problem provisions. Look at grievance trends.

6. Stages in Preparation  Gather company and industry data  Gather economic data relevant to bargaining  Get inputs from supervisors and employees  Formulate proposals, priorities, and bottom-line proposals  Select the bargaining site  Prepare the bargaining book

7. Union Preparation  Activities at the National Researches firm’s ability to pay. Researches locals ability to strike.  Willingness for strike vote.  Nationals financial ability to support a strike. Consults with representatives from the local.  Locals present concerns and objectives.  Nation conveys “non-concession” objectives.

8. Union Preparation  Activities at the Local Negotiation team is elected Field representative from national explains the negotiation process to members. Information regarding employer’s profitability, sales, etc. is gathered. Members are informed of bargaining objectives. Local officers gage members commitment throughout the process.

9. Initial Proposals  Chief negotiators from each side develop the bargaining agenda. Meeting times Order of bargaining demands Ground rules Opening statements  By convention, the union usually presents its initial demands.

10. Primary Bargaining  Management offers counterproposals ti union’s initial demands.  Union will then counter with its own counterproposals.

11. Primary Bargaining  Behaviors to avoid Abusive language Ultimatums Personal attacks Extreme statements  “Management absolutely refuses to grant the union a checkoff.”

12. Three Rules of Counterproposals  Always carefully consider the future consequences of any proposal made by the union.  Never make concessions too quickly.  If you agree to the union’s proposal, always get something in exchange.

13. Beware of Roll-Up Costs  Roll-up costs are those concessions that also effect the cost of other issues.  For example a wage increase will also increase: Pension costs Paid vacations Paid holydays Paid sick leave Social security (FICA & FICA-M) Unemployment compensation.

14. Eleventh-Hour Bargaining  The crisis stage as negotiations as the expiration of the CBA approaches.  Bargaining tempo increases. Concessions are made at a faster rate. Less important issues are dropped (this is why you prioritize). Final offers are made. Parties reduce demands for quid pro quo.  Impasses are of great concern at this stage.

15. Walton & McKersie’s Behavioral Theory  Labor negotiations are a mixture of conflict and collaborative behaviors. Parties engage in the defense of each ones self- interest while attempting joint problem solving.

16. Walton & McKersie’s Behavioral Theory  Four bargaining sub-processes were defined Distributive Bargaining Integrative Bargaining Attitudinal Structuring Intraorganizational Bargaining

17. Distributive (Competitive) Bargaining  Zero-sum bargaining situations.  Bargaining issues in which the goals of the two parties to the bargaining are in direct conflict.  One party’s gain is the other party’s loss (the central issue in collective bargaining as negotiators probe for the other’s real goals).  Encourages threats, bluffs, and secrecy).

18. Integrative (Problem Solving) Bargaining  Bargaining issues in which the parties share a common problem requiring resolution.  Employee training programs, substance abuse issues, safety concerns.  Encourages trust, understanding, and cooperation.

19. Attitudinal Structuring  Activities aimed at changing the other party’s attitude during negotiations.  Assumes that a good relationship results in good concessions.  It may be positive or negative [US Steel story].  It can be used to accomplish distributive or integrative bargaining.

20. Intraorganizational Bargaining  Achieving consensus within the respective organizations.  Bargaining teams (especially union teams) are not always united. Political rivalries. Diverse constituencies.  Resolving internal disputes before the negotiations begin is critical.