Chapter 1

Union-Management
Relationships in
Perspective
Phases in the Labor Relations
Process
1. Recognition of rights and responsibilities
– Legal protections and constraints on union and
management representatives
2. Negotiation of the labor agreement
– Strategies, tactics, and dispute resolution
techniques
3. Administration of the negotiated labor
agreement
– Management administers the agreement.
– Union monitors management’s compliance
with the terms of the agreement.
MGMT 523 - Chapter 1
Elements in the Labor Relations
Process

Exhibit 1.2
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Labor Relations’ Focal Point:
Work Rules
 Work Rule Categories
– Rules governing compensation
• Wages, overtime payments, vacations, shift
premiums
– Rules specifying employees’ and
employers’ job rights and obligations
• No strike/no lockout, performance standards,
promotion qualifications, job specifications,
layoff provisions

MGMT 523 - Chapter 1

Labor Relations’ Focal Point:
Work Rules
 Characteristics of Work Rules
– Common or unique
– Vague or specific
– Change over time

MGMT 523 - Chapter 1

Labor Relations’ Focal Point:
Work Rules
 Examples
– Professional Baseball - The Player and the Club
recognize and agree that the Player’s participation
in certain other sports may impair or destroy his
ability and skill as a baseball player.
– Television - The latest version of the script will be
made accessible to the Player in the casting office
24 hours in advance of a scheduled reading or
immediately after the scheduling of the interview,
whichever last occurs.

MGMT 523 - Chapter 1

Participants in the Labor Relations
Process
 Management Officials
– Corporate, divisional, plant-level managers
– Management consultants, “union
avoidance” experts
 Union Officials
– Elected officers and representatives
 Employees
– Vote to organize and vote to ratify
negotiated agreements
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Participants…(cont’d)
 The Government
– Executive, legislative, and judicial branches
• Actions (laws and regulations) can change labor-
management relationships.
– Federal, state, and local levels of government
 Third-Party Neutrals
– Mediators - Facilitate bargaining activities
– Arbitrators - Consider disputed issues and
make decisions binding on both labor and
management

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Constraints or Influences on
Work Rules
 State of the Economy
– Inflation, interest rates, unemployment, and
productivity affect job security.
 Labor Market
– Skills and wage levels in the relevant labor
market
– Demand for labor and shifts in labor market
sectors

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Constraints or Influences…(cont’d)
 Product Market
– Vulnerability of disruption to product supply to
customers from the potential for labor strikes
– Use of outsourced materials and products
 Financial Market
– Availability and cost of funds for investment
– Exchanges rates that affect plant location choice
– Funds borrowed to support ESOPs
– Capital investments in nonunion and offshore
facilities
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Constraints or Influences…(cont’d)
 Technology
– Equipment changing or eliminating skills
required
– Pace and scheduling of the work
– Work environment and tasks
– Information exchange

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Constraints or Influences…(cont’d)
 International Forces
– North American Free Trade Agreement
(NAFTA)
– U.S. firms’ overseas investments
– Globalization and the global economy (24/7)
– Multinational firms’ plant location strategies
– Low-wages in newly industrializing countries
– Rising volume of imports

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Constraints or Influences…(cont’d)
 Public Opinion
– Influential individuals and organizations
– Attitudes and traditions of the community
 Affecting Public Opinion
– Monitoring and reacting to negative comments
made in the media
– Getting organized labor’s positive message
out to the community
– Forming alliances with various groups in the
community

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Union Membership Trends
1960 – 2002
Union Total Employed
Year Membership Number Percentage

1960 17,049,000 72,142,000 23.6%

1970 19,381,000 85,903,000 22.6
1978 20,238,000 102,537,000 19.7
1985 16,996,000 94,521,000 18.0
1990 16,740,000 103,905,000 16.1
1992 16,390,000 103,688,000 15.8
1994 16,748,000 107,989,000 15.5
1996 16,289,000 111,960,000 14.5
1998 16,211,000 116,730,000 13.9
1999 16,477,000 118,963,000 13.9
2001 16,387,000 122,482,000 13.4
2002 16,107,000 122,007,000 13.2

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Union Membership Is Declining
 Structural Changes in the Labor Force
– Shift from manufacturing to knowledge-based
jobs
– Growth in professional, technical, and service
workers
– Shifts in workforce demographics
– Employment growth (80%) in smaller firms
– Increases in the use of contingent workers
– Economic recessions

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Union Membership (cont’d)
 Organizational Practices
– Union-avoidance practices by firms
– Improved human resources practices
 Companies’ Use of Current Law
Governing the Workplace
– Legal loopholes favoring management
– Insufficient resources

MGMT 523 - Chapter 1