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Union Organizing 1

Running head: UNION ORGANIZING

MGT 516

Legal Implications in Human Resources

Module 4: Session Long Project

Union Organizing

Dr. Stacey McCroskey

TUI University

By

David L. Gobber
Union Organizing 2

INTRODUCTION

The purpose of this assignment is to address – overall the role of labor unions in helping

to shape the industry and current conditions – and how unionization has impacted this industry or

business category overall; specifically, has this industry trend affected the organization’s

business? The second question to address is how much might proposed union-related legislation

by the federal government positively or negatively affect Microsoft?

BACKGROUND BEST PRACTICES

What is a “best practice?” As explained, a "best" practice complies with the law. The

following list of “best” in practice explains what is meant for companies and the law and notes

that they can be interrelated (Best Practices of Private Sector Employers, 2001).

 A "best" practice promotes equal employment opportunity and addresses one


or more barriers that adversely affect equal employment opportunity.
 A "best" practice manifests management commitment and accountability.
 A "best" practice ensures management and employee communication.
 A "best" practice produces noteworthy results.
 A "best" practice does not cause or result in unfairness.

As demonstrated by the above “Best Practices,” Intel Corporation, in the same industry

as Microsoft, has met several of the best practices methods (Best Practices of Private Sector

Employers, 2001). Intel Corporation (Intel) designs, manufactures, and markets microcomputer

components. It is the world's largest computer chip maker and also a leading manufacturer of

personal computer, networking, and communications products. Intel is headquartered in Santa

Clara, CA, and employs approximately 48,500 persons. Manufacturing, sales, and service

facilities are located in at least twenty-one countries. Voluntary mentoring program encourages

pairing of mentors and partners from different departments; requires negotiation and

implementation of an agreement between the partner, the partner's direct manager, and the

mentor; and includes a program and development plan. Employees discuss career development
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plans with their managers throughout the company. Most sites have employee resource centers

that deliver information, training, resources, and tools for continuous learning and optimum job

performance. Training is delivered through Intel University and specialized functional training

programs. There is tuition reimbursement for degree programs (Best Practices of Private Sector

Employers, 2001).

For example, Intel was identified in the categories of “Best Practices” Presented by

Companies in Promotion and Career Advancement and “Best Practices” Presented by Companies

in Terms and Conditions of Employment. Specifically, Intel announces all open positions except

some at the most senior level and they have partnered with selected schools and universities to

promote the company as career choice, and in the U.S., focuses special attention on the

recruitment of women and people of color. The company is committed to continuously

redeploying employees from areas of declining business value to areas of increasing business

leverage. An employee's manager has the responsibility to assist employee in preparing a

redeployment proposal with Human Resources; in defining job alternatives; in networking; and

in providing references internally. Furthermore, an employee's manager has responsibility to

write a transfer review, and to communicate actions, processes, and resources. A Business Unit

Redeployment Manager is provided to work with the employee in launching the job development

search, and to provide employee counseling. Intel’s Company's Open Door Program is staffed by

Senior Specialists, who are accessible to all employees, and are highly-trained, impartial fact

finders, who look at all sides of concerned issues. The specialist meets with employee to discuss

employee's concerns and issues; conducts a confidential investigation; analyzes all information

with an eye toward compliance with company guidelines, Corporate Business Principles, general

fairness, and the law; makes recommendations to employee and management chain about how to
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best resolve the issues; helps find workable solutions; and gives information about the issues

only to those individuals with a "need to know." The employee is not penalized for participation.

Moreover, goals, not quotas, are flexible, are set by job groups, and require good faith efforts of

managers. In meeting the goals, candidates are selected from among the best qualified, in a way

that ensures that the best people possible are being hired (Best Practices of Private Sector

Employers, 2001).

At IBM, another high technology industry, employees are encouraged to come forward

and talk to their manager at any time they have experienced harassment. Communication

channels, such as Open Door, Panel Review, and Speak Up Programs exist to help employees

address their situations. Has thirty-one diversity councils around the world; and also holds

diversity town meetings. IBM has community service assignments and career programs, and

many volunteer IBM-ers in the community representing the organization. Moreover, goals, not

quotas, are flexible, are set by job groups, and require good faith efforts of managers. In meeting

the goals, candidates are selected from among the best qualified, in a way that ensures that the

best people possible are being hired. They provide purchasing and marketing opportunities to

minority-, women-, and disabled-owned companies; and have long-standing relationships with

United Negro College Fund. The company has determined that it is in its best business interest to

have a workforce that looks like, understands, and appreciates its diverse customers, and can

produce products that are needed by diverse clients. Its workforce diversity program is built on

Equal Opportunity, Affirmative Action, and Work-Life Programs, which work to eliminate

disadvantages, not to give anyone an advantage; and to help create an atmosphere conducive to

the highest quality work in a workplace where all people feel comfortable and productive (Best

Practices of Private Sector Employers, 2001).


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Motorola – also in the technology industry - uses internal recruiters and external search

firms, and both are required to present diverse candidate pools. The CEO and the President led

efforts to break the Glass Ceiling for women and minorities. As a result, the number of women

and minorities has increased. Planning has been an instrument of major significance in

identifying talented employees for leadership positions in the future. At least forty hours per year

training for each employee has been mandated. Motorola recruits at minority universities;

provides Hampton University's engineering department with money, equipment, faculty training

and the summer assignment of faculty to work at the company. They also support the television

broadcasts of two Engineer of the Year programs (Black, Hispanic). And, the company’s

internship program includes the Minority Scholarship Internship Investment Program (MSIIP),

offering summer internships to sophomores and juniors in engineering and finance. Each

business sector or group creates its own diversity program, so each is designed differently.

Minority students are aided through the company's various partnerships with the Chicago public

school system; and African American women employees volunteer in the Sojourner Program,

which provides mentors for hundreds of "at risk" African American women in the Chicago area

(Best Practices of Private Sector Employers, 2001).

Xerox, the last example in this industry, prides itself on promoting from within its own

ranks; but if a specific set of skills are not found in the internal candidate pool, recruiting firms

are engaged to provide candidates with such skills, and a diverse candidate pool is requested in

each case. Upward mobility for women and minorities is integrated into the Management

Resources Planning, a management candidate identification and succession planning process.

Each of the twenty-five organizations reviews its organization, lists women and minorities at

middle management level and above in that organization, and makes recommendations for their
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next potential career move. These assessments are next reviewed by the Presidents of the major

Xerox organizations; and those inputs are subsequently reviewed by the corporate office to

determine bench strength for key executive positions. When the company must reduce its ranks,

it tries to avoid unnecessary impact on minorities and women. They have a Diversity Program

and a Minority/Female Vendor Program, where Xerox purchases products, supplies and services

from qualified minority-owned and women-owned businesses. The company indicates that it is

an equal opportunity employer committed in policy and practice to recruit, hire, train, and

promote, in all job classifications, without regard to race, color, religion, sex, age, national

origin, citizenship status, marital status, sexual orientation or status as a veteran of the Vietnam

era. Xerox also prohibits discrimination against persons because of their disability, including

disabled veterans; and does not practice nor tolerate harassment of or retaliation against any

employee or applicant on the basis of these characteristics, or because the individual exercised

his or her EEO rights. Lastly, Xerox views diversity as something more than a moral imperative

or a business necessity; the company sees it as a business opportunity to bring many diverse

backgrounds, fresh ideas, opinions, perspective, and creativity to the solving of real business

problems, and gives the company a competitive advantage (Best Practices of Private Sector

Employers, 2001).

These examples - Intel, IBM, Motorola, and Xerox – demonstrate that Microsoft is not

alone in its attempts to provide the right type of non-discrimination environment for its

employees, customers, suppliers, distributors, and other stakeholders.

They also establish a strong foundation on which to develop, identify, and communicate

the “best practices” in an industry. Their reputations, success, and survivability depend on these
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communities. These best practices, strong reputations for fairness to all employees are some of

the ways to avoid labor unions’ successful organizing and impinging on a major corporation’s

LABOR UNIONS, MICROSOFT, AND THE INDUSTRY

In 2006, Microsoft employees were growing more and more disillusioned with

“stagnating salaries and an increasingly contentious review system that they say was unfair,” that

led to more defections by senior engineers and growing dissatisfaction among rank-and-file

workers. The publication affiliated with the Washington Alliance of Technology Workers, a labor

union affiliated with the AFL-CIO has tried to organize Microsoft workers in the past. At issue is

the company's performance review system. Some workers complained that the review process

had become tainted, rewarding workers based on office politics rather than performance.

(Microsoft's labor troubles, 2006) Obviously, this is one type of frustrated workplace

environment that attracts unions.

In another attempt to gather support of Microsoft workers in March, 2006, a Seattle-

based technology labor union said Microsoft's employee compensation wasn't keeping up with

the rise in the cost of living, citing what it described as previously confidential company

documents. The Washington Alliance of Technology Workers, which hoped to unionize the

Microsoft work force, said it planned to release data from two documents delivered anonymously

to its offices late in 2005 (Bishop, 2006).

In 2005, the same labor union complained that Microsoft was outsourcing jobs to India at

the expense of U.S. workers in Washington (Microsoft outsourcing high-end jobs, union says,

2004). When companies don’t listen to their workers, they will resort to other means, even techie

workers who consider themselves highly skilled.


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At Intel, for example, Oregon¹s largest tech employer, would "prefer to continue to

operate in a non-union environment," said Bill MacKenzie, spokesman for Intel Oregon. Intel

needs the "flexibility to move quickly, and respond to changing market conditions." Intel makes

widespread use of both the foreign worker H-1B visa program and its own offshore development

and manufacturing facilities in its efforts to maintain a strong bottom line. The company¹s

focused emphasis on cost controls through all facets of its operations pays off. However, workers

form unions, said MacKenzie, when ³they don¹t think they¹re being treated fairly, don¹t think

they¹re being communicated with, don¹t think a company is being consistent in its policies, and

don¹t think a company is responsive to their concerns. Although I don¹t think any of these apply

to Intel, some workers at Intel disagree. Intel demands long hours and supervisors do not shrink

from telling workers that if they fail to come up to scratch, their jobs could be filled by workers

in other parts of the world. Intel has brought in employees from places like Malaysia to be

trained by local workers. Once enough training has taken place, functions are moved offshore to

be performed at lower cost, and local workers are laid off. The traditionally strong emphasis on

productivity at Intel is increasing, "It¹s a highly competitive marketplace. We need to hold and

grow our market position (Earnshaw, 2003)." Local software company Merant has a slightly

different take on the infant tech union movement. "It¹s a wake-up call for corporations," said

Diane Williams, vice president of human resources. Labor unions were formed in the early 20th

century, she said, "because of the conditions of the workers. If employers are not open to

listening to workers, protecting their interests and working with them, they¹ll resort to outside

means" to protect their interests (Earnshaw, 2003). These attitudes and potential actions have

plagued both the Microsoft and Intel companies, as well as other “best practices” companies,

throughout the past ten years. Presently, however, they remain union-free.
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It is understandable that high-tech companies such as Microsoft have no desire to support

unionization of their employees. In fact, they are doing everything they can to promote lower

wages and less job security at their companies, the very two major benefits that unions seek for

workers. With considerable market power and a labor force resistant to unions, everything is in

Microsoft’s favor for continuing its endeavor for cheap, dispensable labor.

Microsoft Chairman Bill Gates is one of the leading supporters in the fight for infinite H-

1B guest worker visas (Broache, 2007). At a Congressional hearing in March, 2008, Gates said

there is only one way to solve a crisis-level shortage of qualified scientific talent in the United

States, "Open our doors to highly talented scientists and engineers who want to live, work and

pay taxes here (cited in Broache, 2007)." The true motivation in Microsoft’s endorsement of the

H-1B guest workers lies in its desire to bring in foreign workers at lower pay rates than it can

obtain from American workers.

At the same time, Microsoft is courting the importation of labor to reduce costs, it is a

strong advocate of outsourcing to achieve the same objective. Various outsourcing presentations

by Microsoft senior executives make it clear that the company just wants “cheap” labor as

evidenced by statements such as “quality work at 50-60% of the cost,” “2 heads for the price of

one,” and “leverage the Indian economy’s lower cost structure (Microsoft’s Indian outsourcing

documents).” Increasingly, it is obvious that Microsoft’s outsourcing is not just for noncritical

work as it has publicly claimed. Leaked documents reveal that the company is outsourcing to

India high-level jobs in software architecture and development (Bishop, 2004).

Meanwhile, Microsoft’s compensation to employees is not keeping up with the cost of

living in this country across many of its positions (Bishop, 2006). Minimum, midpoint and

maximum compensation guidelines at Microsoft remained unchanged between 2004 and 2007
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for eight of its twenty-one salary categories, at the lowest end of the pay scale. In other

categories, many of the increases have been below three percent. In the Seattle area, where

Microsoft has a large presence, salaries fell by about two percent during this time (Bishop,

Union says Microsoft salaries lag, 2006).

Microsoft has tremendous advantages in preventing unionization with little help on site

for its employees. In its fight for H-1B visas, all it has to do is threaten to ship the work overseas

if it doesn’t get its way. The only real constraint on outsourcing is the availability of skilled

labor overseas. However, the advantage Microsoft has is the reluctance of high-tech workers

themselves to unionize as Millard explained (Millard, 2004). Undoubtedly, the threat of

outsourcing and layoffs has intimidated many workers. Still, high-tech workers have long

associated unions with blue-collar workers. And, high-tech workers tend to change jobs more

frequently, meaning that job security may not be as important as it is in other industries. On the

other hand, in today’s downturned economy, workers at all levels are not changing job position.

In the long-term, job scarcity may lead to large enough dissatisfaction to finally persuade high-

tech workers that unionization is in their best interests (Bishop, Microsoft outsourcing high-end

jobs, union says, 2004).

It is apparent that Microsoft has no reason to allow its employees to unionize.

Microsoft’s objective is inexpensive labor that it can use on an as-needed basis. Presently, it has

the market power to achieve its aims and a domestic labor force resistant to unions. These forces

at work are not likely to change for some time. Perhaps high-tech workers will eventually

realize that they need the protection of unions to continue to make a good living and to protect

their jobs, but there are few signs of encouragement at this time.
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The Microsoft Web site states, “Our mission is to enable people and businesses

throughout the world to realize their full potential. Achieving this requires great people who are

bright, creative, and energetic, and who possess the following values:

 Integrity and honesty


 Passion for customers, partners, and technology
 Open and respectful with others and dedicated to making them better
 Willingness to take on big challenges and see them through
 Self critical, questioning and committed to personal excellence and self
improvement
 Accountable for commitments, results, and quality to customers, shareholders,
partners and employees (Careers, 2010)”

As a global industry leader and corporate citizen, Microsoft continues the effort to

understand, value, and incorporate differences by stating, “We work hard to enable talent, satisfy

customers, and lead technology innovation globally” (Microsoft Diversity and Inclusion, 2010).

Microsoft offers quality of life experiences to their employees, customers, associates, and

stakeholders.

PROPOSED LEGISLATION

What, if any proposed union-related legislation by the federal government positively or

negatively affects Microsoft or other companies in the high technology industry? The timely

discussion about the Bush-tax reductions being continued may or may not affect the high

technology industry. It will depend on how high or low the taxes will be proposed and for how

long a time period, if not permanent. This legislation, among others on the table related to the

economy will impact all industries. The legislation affects the potential for hiring skilled workers

in technology and how they might be paid. Although not directly union-related, the legislation

that is being debated will affect worker’s satisfaction levels with pay, pay increases, and taxes. If

taxes are increased, then workers may be more disillusioned and dissatisfied and seek union-

related information.
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While major companies are being offered inducements through the hiring incentives and

tax reductions for companies, workers do not see any specific benefits coming their way and that

could also negatively impact their satisfaction with the jobs that they are not able to leave.

CONCLUSION

In conclusion, Microsoft is dedicated by a strong commitment to fostering an inclusive

work environment - in all areas of their organization whether in the U.S.A. or in another country

in one of Microsoft’s Operational Centers or in one of their subsidiaries. While there is always

work to be done in every organization, Microsoft currently is a strong positive example for other

global entities. While their attempts to resist unionization have been successful - and may

conflict with their stated mission at times by subtle threats - they do offer an excellent work

environment and compensation, especially in these days of economic uncertainty.


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REFERENCES

Best Practices of Private Sector Employers. (2001, May 25). Retrieved December 5, 2010, from
The U.S. Equal Employment Opportunity Commission :
http://www.eeoc.gov/task/practice.html

Microsoft outsourcing high-end jobs, union says. (2004, June 16). Retrieved December 5, 2010,
from Seattle PI Business: http://www.seattlepi.com/business/178021_msftindia09.html

Careers. (2010, December 1). Retrieved December 5, 2010, from Microsoft:


http://careers.microsoft.com/careers/en/us/meetmicrosoft.aspx

Microsoft Diversity and Inclusion. (2010). Retrieved November 4, 2010, from Microsoft:
http://www.microsoft.com/about/diversity/en/us/default.aspx

Strategic Management, SLP 4. (2010). Retrieved December 4, 2010, from TUIU:


http://cdad.tuiu.edu/CourseHomeModule.aspx?
course=95&term=90&module=1&page=bkg

Bishop, T. (2004, June 6). Microsoft outsourcing high-end jobs, union says. Retrieved December
5, 2010, from Seattle Post-Intelligencer:
http://seattlepi.nwsource.com/business/178021_msftindia09.html

Bishop, T. (2006, March 9). Union says Microsoft salaries lag. . Retrieved December 5, 2010,
from Seattle Post-Intelligencer:
http://seattlepi.nwsource.com/business/262262_msftsalaries09.html

Broache, A. (2007, March 7). Gates call for ‘infinite’ H-1Bs, better schools. Retrieved December
5, 2010, from CNET News : http://news.com.com/Gates+calls+for+infinite+H-1Bs
%2C+better+schools/2100-1014_3-6165166.html?tag=st.num

Cantrell, A. (2006, March 14). Microsoft's labor troubles. Retrieved December 5, 2010, from
CNNMoney.com:
http://money.cnn.com/2006/03/13/technology/microsoft_employees/index.htm

Earnshaw, A. (2003, October 27). When Techies Consider Unions . Retrieved December 5, 2010,
from Labor Tech.net: http://www.labortech.net/archives2.htm

Gates, B. (2010, November). Executive Commitment to Diversity. Retrieved November 5, 2010,


from Microsoft: http://www.microsoft.com/about/diversity/en/us/exec.aspx

Guynn, J. (2000). Microsoft Case Sets New Rules for Treating Temporary Workers. Tribune
Business News.

Microsoft’s Indian outsourcing documents. (n.d.). Retrieved December 5, 2010, from


WashingtonTech: http://washtech.org/news/documents/valentine/
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Millard, E. (2004, February 11). Time for a high-tech union? Retrieved December 5, 2010, from
E-Commerce Times. : http://www.technewsworld.com/story/32823.html

Romano, B. (2006). Under pressure, Microsoft fights to keep its workers. Seattle Times.

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