Labor-Management Cooperation Essential for American Business

American workers have always sought better wages and job security. Years ago they were just "employees at-will," subject to the whims of their employers. They toiled in difficult working conditions and feared the day when their employers might fire them.

Workers eventually turned to unions for job security and improved conditions. Bolstered by the National Labor Relations Act, which prevented discrimination against employees because of union activity, unions became the bargaining agents for millions of workers. By the end of World War II, it looked as if we would become a nation of unionized employees.

But the promises of unionism were never fulfilled. In the name of job security, unions compelled employers to accept inflexible, unproductive work rules. Unions spoke angrily and carried a big "strike" stick.

They drove employers to pay ever-higher wages and contributed to an adversarial management-labor relationship, but they did not assist in improving productivity.

Unions gradually became anachronistic institutions, preaching the same 1930s message while the nature of work and the work force changed. Unions came to be perceived as self-serving institutions tainted by criminal indictments and prosecutions.

Unions also became less relevant as an increasing number of state and federal laws were enacted to protect workers. Various laws now regulate minimum wages, overtime, pension plans, work-place safety, Social Security and the like. Many of those regulations contain provisions making it unlawful for employers to terminate employees who report violations.

While those laws made work safer and more secure, state court decisions have built a new bulwark around individual employees over the last 15 years. Those courts have further limited the "at-will" concept of employment by allowing terminated employees to file suits against their former employers for "wrongful discharge."

Some employees have succeeded in these lawsuits by alleging that employers violated public policy because they fired them for serving on a jury, taking time off to vote, or -- blowing the whistle on a health violation.

Many courts also have recognized implied contractual theories of wrongful discharge. In such cases employers were found to have made and subsequently broken binding, written or oral "promises" of employment.

Still, wrongful discharge actions, because they are undertaken by individuals, can give only the most limited job security to the masses of working people.

Indeed, neither union bullying, statutes nor state court actions will provide American workers the job security for which we all struggle. Such security will be achieved only after both employers and employees deal successfully with two of the most vital economic issues of our times: international competition and productivity.

We all know that international competition has put American industry on the spot. Our nation is swamped with imports in almost every field of production.

Japan is one of our fiercest competitors, producing top quality products, while paying its employees lower wages than comparable American workers receive. Yet labor relations in Japan are excellent compared with those in America. Japanese workers have a high degree of company loyalty, and Japanese management regards its obligations to them as a top priority.

It is the very need to compete with Japan and other productive, energetic nations that ultimately will force American industry to protect its employees and provide better job security.

American industry will become a competitive leader in the international marketplace only when it builds cooperative partnerships of labor, supervisors and management. Employers who see the "writing on the wall" will realize that they have to treat their employees fairly and work with them to harness their energies to meet the competition.

American managers must re-examine their methods. Management must communicate effectively with employees, encourage suggestions and participation, adequately train supervisors in interpersonal relations and introduce problem-solving mechanisms in which employees have confidence. Under such circumstances, employers would find that their employees are eager to solve problems in the workplace.

The American-managed Nissan plant in Smyrna, Tenn., is an example of a company that has built a working partnership of labor and management. The company trains its workers to do a number of jobs, involves them in decisions and gives them responsibility for the quality of the product at every level. The Nissan employees have shown no interest in unionizing, and labor relations are harmonious.

This cooperative approach may have been born out of necessity, but it will be cooperation, rather than wrongful discharge actions, government regulations or union muscle, that will be the source of employee protections in the future.

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Labor Unions and Their Supporters Are Trying to Turn Back the Clock

From the end of World War II until the Reagan administration, powerful American labor unions regularly demanded wage and fringe-benefit increases that were regularly granted.

Increased labor costs were simply passed on to consumers. However, the spiral eventually spun out of control, and consumers turned to cheaper foreign products such as cars, electronics, and cameras.

Some companies closed their domestic factories and moved to countries that had no unions and low labor costs. Banks, as might be expected, suffered from a loss of business.

Unrealistic Demands

Ultimately, unions proved to be their own worst enemies, pricing themselves out of the marketplace. Their demands had grown increasingly unrealistic, their strikes and slowdowns the last gasps of self-destructiveness.

During the 1980s, union membership decreased, more and more companies opened factories either in other countries or nonunion ones in the United States, and consumers benefited from high-quality, low-priced products. The unionized worker had been made superfluous by selfish and overzealous unions.

Now there is an effort to turn the clock back and repeat the mistakes of the past, to tilt the playing field to the benefit of organized labor as Secretary of Labor Robert Reich has stated he would like to do.

To affect that tilt, President Clinton, Secretary Reich, and the AFL-CIO are all pushing Congress to pass a ban on permanent replacement workers.

Harmful to Recovery

As one who regularly negotiates the settlement of management-labor disputes and contracts on behalf of banks and others. I believe that the legislation would significantly undermine the nation's economic recovery and ability to compete in a global economy.

The new legislation, in fact, will give labor a powerful new weapon to be used against employers in collective bargaining.

Workers will rightly feel that they can strike at will and bring banks to their knees, because they can go on strike and feel that their jobs will not be replaced by permanent new workers.

In addition, banks will find it more difficult to operate during a strike, because temporary workers will be unwilling to cross picket lines for jobs that will end when the strike ends.

Finding it difficult to operate during strikes, banks will have to capitulate to union demands. Knowing that, striking workers will have an even greater incentive to strike again and again for more and more money.

Spur to Strikes

Richard Lesher, president of the U.S. Chamber of Commerce, warned that the adoption of the permanent striker replacement ban "would guarantee this country would experience many more strikes in the future." The bill will "tilt the current level playing field in favor of organized labor."

That we will see a return 
to the blood-in-the-streets
activities that perverted
the labor movement
during the 1920s and 
A BAN on replacing
strikers with permanent
replacement workers 
would undermine the 
nation's recovery and 
ability to compete in a global economy.

Not only will labor strife increase, but the intensity and destructiveness of that strife will wreak havoc on the financial well-being of management and labor alike: indeed, I believe that we will see a new era of labor-related violence, a return to the blood-in-the-streets activities that perverted the labor movement during the 1920s and 1930s.

In addition, the passage of the ban will be a body blow to America's ability to respond competitively to German, Japanese, and other country's companies. And that will have a negative effect on the entire banking industry.

Exodus to the Third World

Rather than benefiting from an economic resurgence of American business, we will be helpless spectators to the exodus of American corporations into Third World countries. Those countries will welcome investments that will drain out of American banks, while they provide an affordable labor pool.

The products those workers will manufacture will be affordable to American consumers, but of no help to their economic well-being.

The alternative, of course, would be for American companies to go along with union demands, pay ever-increasing wages and benefits, pass the costs on to consumers who will refuse to buy those high-priced goods, and then go out of business.

One need only look at the vast number of American companies that were thriving in the 1950s and then went out of business during the 1970s.

A Delicate Balance

Edwin L.Harper, president and chief executive officer of the Association of American Railroads, said that a ban on the use of permanent striker replacements "would upset the carefully crafted and long-standing balance" that exists in collective bargaining.

"Just as the law permits workers to withhold their labor in an effort to secure favorable results," added Mr. Harper, "employers are permitted to keep their business going during such work stoppages by offering permanent positions to workers hired to replace strikers."

Mr. Harper further pointed out that the scales are already tipped disproportionately in labor's favor, since the Supreme Court's 1987 decision(Burlington Northern Railroad Co. v. Brotherhood of Maintenance of Way Employees) to uphold the legality of secondary boycotts against railroads and airlines.

Incentive to Relocate

In effect, this bill is not only a company buster, but it provides a unique incentive to American companies to locate within the borders of countries that are known for being favorable to the interests of business. If American manufactures choose to operate on foreign soil, the banking industry will shrink as a natural consequence.

American companies need all of the help they can get to compete successfully. The ban on permanent worker replacements is an economic kick in the teeth.

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Hiring Pro-Management Employees and Laying Off Deadwood

The key to business success in the 1980's and beyond, is productivity. The recipe for employee productivity is comprised of numerous ingredients; but the key ingredient is management. Efficient and effective management is a combination of various managerial styles, each designed to productivity among employees.

No combination of management styles, no philosophy nor progressive labor relations program will be effective if employees do not complement and extend the goals of management. The major problem and objective then is to find those employees who are highly motivated, while appreciating and understanding their roles as team players. How do you find such employees?

A technique that has proven successful for creating positive employee attitudes and productivity is the development of a profile that depicts the positive attributes of the optimum employee. A composite or profile of essential characteristics and attributes (which are not personality traits) can provide the simplest and most thorough technique for finding and keeping those employees who can establish the necessary leadership and initiative for high-level of productivity.

The management-labor department of Pechner, Dorfinan, Wolffe, Rounick and Cabot, has developed a test for determining an employee profile, and it has been successfully utilized by a number of Fortune 500 companies. Attributes contained in the employee profile are not personality characteristics. The attributes represent a distillation of the prospective employees past work experience. The profile seeks to determine what the prospective employee has "learned" about work in general and employers in particular. Such learning experiences create propensities and attributes which will become evident through the selection process.

The development of the employee profile begins with a thorough analysis of the employer's work force. In an ongoing facility, analyzing the existing work force must be approached from two perspectives. First, the necessary skills required by the employer must be determined; second, the profile must show how the existing work force can be categorized in regard to specific skills. In a company, such as a small automobile parts wholesaler, located in the Northeast, it was relatively easy to determine skill and ability levels of employees, since the company had been operating for more than 15 years.

To determine skill levels, a series of interviews with employees, management, and line supervisors was undertaken. Next, a detailed (computerized) survey of employee attitudes towards their employer and work was undertaken. The results of that process were factored into the creation of the profile, which was then specifically tailored to the needs of the company. This small, but flourishing, business handily survived the recent recession.

A different process had to be developed for use in a large plant. For instance, another program was called for in a large industrial plant, which was going to be located in the Southwestern portion of the United States. The analysis of workforce involved a projected employee complement based on the prior experiences of the company, utilizing similar facilities producing similar products. The company provided data, concerning the number and category of employees. A sophisticated workforce analysis was performed, mapping out when and how each type of employee would be needed.

Once the necessary skill and ability levels have been determined and there has been an analysis of employee attitudes, the relevant labor market must be examined. (In both situations, the relevant labor market was considered to be the geographic area surrounding the facility). Demographic, general economic, socioeconomic, wage and other labor data for the relevant labor market were garnered.

The data was analyzed with the assistance of a computer. The analysis enabled us to identify the likelihood of individuals possessing the desired skills and abilities. Having determined the existence and concentrations of individuals with the desired skills and abilities, we interviewed other companies within the relevant labor market to determine the attitude of their employees.

To buttress the information we derived from the computer, we selected local "leaders" and interviewed them. They included guidance-counselors in local high schools, in vocational-technical training schools, and opinion leaders from the community. These individuals were able to give deeper insight into the types, attitudes, local mores, and tradition of employees within the labor market.

In the plant in the Southwest, the analysis of the data indicated that within the relevant labor market, there existed a substantial pool of employees with the necessary skills and abilities. However, that analysis also indicated that these individuals were primarily employed within other large industrial concerns which were unionized. There did not appear to be a substantial surplus of individuals who possessed the higher-level skills necessary to operate the new facility.

As we moved down the hierarchy of skills, the availability of individual increased. Nevertheless, the analysis of the demographic and labor data indicated that even at the lower end of the skills hierarchy, many of the prospective employers would have either direct or indirect experiences with unionized employers. Since one of the goals of the start-up facility was to maintain its pro-employee, management style, the existence of many individual: with prior union experience was of concern. Nevertheless, based on the information that was available, we would be able to screen out those individuals who would not work well within the company environment, regardless of prior union experience.

The most effective means for ascertaining the profile attributes remained die interview process. Interviewers were instructed in how to review employment applications and supporting documents. Interview questions had been designed and tested in the early stages of hiring. Questions were refined as a result of feedback from the interviewers. As a result of the testing and feedback process, core of questions was developed. They determined attitudes, which were used in conjunction with typical job-skills questions to screen applicants.

In the start-up situation, a group of core questions involved previous supervision. Interviewers asked die following group of questions: "Tell me about your last supervisor? What were his or her best points? What were his or her worst points? What role do you believe a supervisor should play in the work place? Have you ever been a supervisor? Are you interested in becoming a supervisor here?" Such questions were designed to elicit two of the major profile attributes.

First, was the applicant willing to view his workplace situation from both sides? An applicant whose response indicated understanding and/or empathy for the position of supervisors was a positive trait.

Second, the interviewers were instructed to find out if a prospective employee made any efforts to make his supervisor's job easier. Responses which indicated the applicant compromised toward a common good and made other efforts to work well with the supervisor were regarded as highly positive.

The response to questions concerning the desire to be a supervisor was examined not from the prospective of whether the employee would make a good supervisor, but from how the employee viewed the supervisor's job. For instance, an applicant who indicated that he would never want to be a supervisor would most likely be indicating distrust for management.

A similar analysis was performed for each of the core questions which formed the profile interview. The interviewers were provided with sample responses and an analysis of those responses was subsequently undertaken. The process clearly becomes more valuable as the interviewers gain experience using it.

The experience in the start-up facility proved highly successful; it demonstrated that the initial cadre of employees exceeded all expectations for productivity and ability. In addition, they worked exceedingly well with their supervisors.

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Management's Role in Non-Union Companies

The number of unionized workers in the private sector continues to diminish, with estimates of no more than a fraction of the non-governmental workforce currently unionized. To maintain a productive workforce, pulp and paper company management needs to supplant the role that unions have played. Unfortunately, there are few companies with managers trained to supplant unions. That lack of training can be a significant detriment to a company's overall well being.

In the past, the foremost role for unions was dealing with employee grievances/ complaints. Unions listened to employee grievances and then negotiated resolutions with management. In a non-unionized company, management must listen to concerns and grievances and resolve them in ways that do not cause discord.

Alternative dispute resolution

It is essential that human resource executives be expert in administering alternative dispute resolution (ADR) programs. ADR programs are generally welcomed by both management and employees because they are cost effective and swiftly arrive at fair resolutions. One obstacle is management's fear of giving up its traditional power. But by involving employees, management will not be perceived as arbitrary or capricious.

The three most common ADR programs are:

Arbitration. An adjudication process during which a third party hears both sides of a dispute and renders a decision after weighing the evidence. Both sides may agree prior to arbitration that the decision will be binding or that an appeal to another body is allowed to reach a mutually acceptable decision.

Mediation. A process where a third party facilitates open and ongoing communication designed to lead to a settlement.

Peer review. A representative adjudication process that relies on a selected panel of managers and employees. A majority of the panel is required to render a binding decision.

If costs are incurred for the mediator and/or arbitrator, management and employee can agree to share the costs, or management can absorb the full costs.

Focus groups, teams, and coaching

Management at non-union plants also undertakes one of the traditional roles of unions: listening to employees. One of the best means is through focus groups, which afford management significant opportunities to obtain representative information about its workforce and their attitudes. Focus groups also permit management to communicate real issues through ongoing employee involvement.

Focus groups explore issues in a flexible manner that is part of an overall strategic plan. Such groups are an effective means for collecting valuable data. That data, when analyzed, will be essential for management making decisions that will meet the needs of employees, thus maintaining morale and productivity. The results should be published as part of management's commitment to open communication.

Focus groups lead to team building-the instruments that implement strategic plans. Historically, unions have created a sense of a team. Management can also create that spirit of solidarity. Teams can serve such purposes as the enhancement of communication and the resolution of conflicts, but they are most effective in increasing productivity and enhancing employee morale.

To create effective teams, management must clearly determine what problems it hopes to address by the formation of a team. It is also important that all levels of management support the team. Finally, it is important that teams have a selection of the right kind of people to get a job done.

An essential spur for a team's success is having an effective coach. The coach encourages employees to do better and to accomplish more, works to rehabilitate negative employee attitudes, and is not a punitive task master

Employee Advocate Representative (EAR)

Just as unions used to have shop stewards, non-unionized companies can have an employee advocate representative (EAR). The FAR position is usually a trial assignment aimed at improving morale by involving employees in a broad spectrum of management activities and decisions.

When employees want to make their concerns available to management, the EAR listens and imparts those concerns. The EAR position may or may not be salaried and exists for a limited period of time. Once a term expires, another employee is either chosen or volunteers for the EAR position.

The responsibilities of the EAR include providing input about employee issues and suggesting solutions at department meetings. The EAR may assist in promoting company communication and may play a pivotal role in assisting management with training and quality control programs, while also serving on committees dealing with employee awards and activities.

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