This Instructor's Manual, to accompany

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I. Chapter reviews effects of collective bargaining on wages, fringe benefits, job security, and other job outcomes. Then it examines differences in the quality of union-management relationships.

II. Various stages in union effects -- example of wage effects.
A. Stage 1: Primary union effects.
B. Stage 2: Management adjustments -‑ increases in labor cost lead management to reduce output, increase rice, substitute capital for labor.
C. Stage 3: Secondary union effects -‑ if management reduces jobs then unions will ask for job security and stricter seniority rules.
D. Escape and Takeovers.

III. Union wage effects.

A. Absolute and relative union wage effects -‑ relative wage effect, on average, between 15 and 20%.
B. Key variations -‑ unions have greater positive effects on blacks than whites, unions reduce the effects of age and education on earnings, etc.
C. Research techniques -‑ regression analysis used to determine wage effect.
D. Variation in union effects over time -- example of pay concessions in the 1980s and 1990s.
IV. Other union effects on compensation.
A. Wage administration.
B. A number of innovations have been produced as a result of unions (e.g., COLAs, deferred wage increases, red circle wage rates, and wage reopener provisions).
C. Fringe benefits.
1. Sources of unions' demand for fringe benefits -‑ some of the sources include that unions have older members, exhibit low turnover, gain tax benefits as a result of fringe benefits, etc.

2. Trends in fringe benefit provisions -‑ unionized employees exhibit a strong preference for fringe benefits.

3. Recent evidence indicates that new jobs are less likely to provide health insurance and pension coverage than existing jobs.
V. Union effects on work rules.

A. Protection from arbitrary treatment -‑ unions pioneered the principle of just cause for dismissal or discipline.

B. Seniority.
1. Seniority rights are important, since they are used as a basis for allocating benefits and job opportunities.

2. Frequency and common forms of seniority language ‑- used in 83% of manufacturing and 59% of nonmanufacturing agreements in 1989.

C. Pros and cons of seniority provisions.
1. Advantages include the fact that seniority stabilizes the work force, reduces stress, and reduces uncertainty.

2. Disadvantages include when jobs require great technical, professional, or artistic skills (e.g., professional baseball)

D. Job and income security -‑ employers frequently oppose such demands because they increase labor costs and limit managerial freedom.
1. Job preservation -‑ one example is work-sharing provisions.

2. Income security during temporary layoffs.

3. Programs in response to permanent job loss -‑ workers can sometimes receive transfer rights when they are permanently laid off.

4. Outsourcing has led to major conflicts.

5. Why the emphasis on employment security? Because of the new work structures geared toward greater flexibility. A worker's motivation could be enhanced if he or she were given employment security. Firms need loyalty and increased motivation in order for teamwork to succeed.
VI. Management's responses to work rules.
A. Management rights clauses -‑ the difference between reserved rights doctrine and implied obligations doctrine.
B. Residual rights doctrine.
1. All rights not covered by a specific clause in the contract are retained by management.
2. Implied obligations doctrine -‑ union recognition clause requires that management negotiates changes in terms and conditions of employment even in the absence of an express contract provision that covers the issue involved.
C. Alternative Work Systems led to enhanced flexibility, teamwork and continuous improvement in quality. One example is the NUMMI Plant.
VII. Turnover.
1. Unions do significantly reduce turnover.

2. Why union effect? Maybe because union jobs are better or because of voice.

VIII. Safety and health.
IX. Productivity.
A. Union‑nonunion productivity comparisons. Some studies show that unionized industries are more productive than nonunionized industries. However, there are many data and causal problems with this analysis.
B. Diversity of industrial relations across unionized plants.

Chapter 10 -- Discussion Questions and Answers
1) Wage increases set off a chain reaction. Describe the chain reaction.
The first stage is the union's primary effects on the compensation their members receive. These are positive, as the union uses its bargaining power to raise member earnings.
The second stage involves management adjustments. This is where management tries to regain some of its costs through productivity increases or other measures; such as reducing the scale of output and employment, increasing the price of the product, or substituting capital for labor. The management adjustments may increase productivity, increase worker motivation, or demand that their human resources personnel work more efficiently.
The third stage is secondary union effects. Employee welfare is affected every time management makes the adjustments mentioned above. The union may then respond by negotiating language concerning management's adjustments.
2) Wages are of central importance to unions and their membership. Discuss some of the key variations in union relative wage effects.
Unions have a greater positive effect on the wages of black union workers.
Unions flatten out the normal age-earnings profile in the union sector, thus reducing the effects of age and education.
Wage effects vary across occupations and industries.
Unions reduce the differential between white- and blue-collar workers where the blue collar workers are organized. They also reduce intra-industry wage differentials.
Unions produce larger relative wage effects in less concentrated industries.
3) Seniority is a vital issue in collective bargaining. Unions have argued that seniority protects against arbitrary treatment by the employer, but, with the advent of affirmative action, this has come under attack. It has been argued by some that seniority helps maintain, if not increase, the amount of racial discrimination in the workplace. What are the pros and cons of seniority?
Pros: Seniority rules provide a formal and aboveboard way of treating people. Many employees and managers think such a criterion is fair. Adherence to seniority eliminates remove for favoritism and arbitrary judgments. Often skills rise with tenure, so in this way seniority is connected to employee performance.

Cons: The advancement of high achievers can be blocked by seniority. Strict application of seniority is inflexible and unresponsive to merit. If there is discrimination in hiring, then subsequent application of seniority can serve to perpetuate the effects of past discrimination.

  1. How did management’s response to work rules changed from the 1980s on?

What effects did this have on the future of industrial relations at the workplace?
Management used its enhanced bargaining power in the 1980s and 1990s to push for more favorable work rules. In some instances this involved increases in the pace of work or increases in the flexibility in the production process. Specific work rule changes in this approach included manning or job classification reductions or a lessening of the role played by seniority in job assignments or transfer rights. At some sites, work rule changes were linked with participatory work restructuring which altered provided benefits to the workforce and their unions. This approach typically involved improvements in working life, training opportunities, or enhanced participation in business decisions.
The former changes entailed distributive bargaining while the latter involved integrative bargaining. This had strong implications for the overall tenor and future of labor-management at the site. For example, hard bargaining over work rule changes led in some cases to the emergence of a downward spiral and a conflict pattern of industrial relations.
5) Discuss how health insurance coverage has been affected by union decline.
Evidence shows that the new jobs being created are less likely to provide health insurance. This is true especially for less educated and lower wage earners. There, is not any specific evidence to point to the lack of union coverage in these jobs as the reason for the decline in health insurance, but experts believe that it undoubtedly is part of the explanation. Additionally, within the already unionized sectors three has been a trend towards decreasing expenditures on health insurance by management. Such examples are companies who have negotiated plans that require the use of HMOs rather than individual doctors. This shifts the cost of health insurance towards the workers and less on the management.

6) Explain how outsourcing can threaten employment security and provide

examples of union-management agreements that have reduced this threat.
By allowing non-union firm, who are capable of doing many of the tasks performed by unionized workers, take over the tasks which were performed by unionized workers, management can take advantage of cheaper labor. The general trend in the 1990s is to downsize the companies in order to focus on only the core activities which give the firm a competitive advantage. This desire to downsize and cut costs to achieve the goal has made outsourcing seem more appealing. By using non-union labor to supply the parts, there is less need for union workers which results in decreased union leverage and ultimately in a loss of union jobs. Xerox and the ACTW/UNITE set an example of how union and management can successfully negotiate provisions to deal with the issue of outsourcing. Their solution was to form a join labor-management task force to study ways of re-organizing work threatened by outsourcing to see if it could be re-engineered to be done competitively within the company

7) How do team-based work systems and their associated contract provisions

differ from the more conventional work rules flowing from a job control model

of union-management relations?

The detailed work rules are interrelated parts of the job control union-management system of industrial relations built up in the U.S. since the rise of mass production. They produce the uniformity, equitable treatment, clarity over rights and obligations, and stability that management and labor need to overcome the arbitrary and often inconsistent treatment that workers experienced before unionization.

The team based work system emphasized teamwork, employee participation, training, and employment security, but at the same time avoided detailed work rules found in contract provisions of conventional job control firms. The case studies in the 1980s showed that team based systems outperformed the traditional union-management relations on key indicators such has quality, productivity, and flexibility. The conclusion found was that changing one or two work practices is ineffective, but big effects are found in production when changes are made in flexible job assignments, teamwork, training, and human resource management.


I. A typical grievance procedure
A. Step 1 -‑ informal discussion of problem between supervisor and


B. Step 2 -‑ grievance is put into writing.
C. Step 3 -‑ involves officials from both sides to discuss the issue.
D. Step 4 -‑ union decision whether to go to arbitration.
E. The union's decision to go to arbitration -‑ various factors are involved such as the employee's loyalty to the union, the costs of arbitration, and a host of other factors.
F. Reasons why grievances are filed -‑ common source is disagreements about employee discipline. Also, the contract does not cover all the issues in the employment relationship.
II. The historical evolution of grievance arbitration
A. The spread of arbitration -‑ the WLB encouraged such practices to minimize industrial conflict.
B. Court encouragement of arbitration -‑ importance of the steelworkers' trilogy and the judicial deference to arbitration.
C. Clinical v. judicial approach to arbitration.
III. The functions of grievance procedures and arbitration
A. Employee interest in due process and fairness ‑- delivers industrial justice to workers. Example is major league baseball collusion award.
B. Employer interest in labor peace -‑ limits the union's right to strike and prevents unwanted stoppages in production.
C. Joint interests in continuity and consistency -‑ labor gets justice and management gets stability.
D. Society's interest in industrial peace.
IV. How arbitration works
A. The components of arbitration -‑ prehearing briefs, the arbitration hearing, and the arbitrator's decision.
B. The arbitrator's decision criteria
1. Discipline for just cause -‑ most contracts stipulate this.

2. Progressive discipline -‑ penalties should increase in stepwise fashion for repeated offenses.

3. The importance of past practice.

4. The impact of public policy considerations in arbitration.

C. Who are the arbitrators? The American Association of Arbitrators maintains an active list of arbitrators who can handle cases.
V. The duty of fair representation
A. The union’s decision to go to arbitration.
B. Courts set stringency standards for unions to follow in representing their members.
C. Employee often anxious to bring claims against employer that union may not want to press.
D. Reluctance of unions to drop grievance of questionable merit for fear of being sued.

VI. The connections between grievance procedures and other aspects of the labor-management relationship

A. Contract bargaining v. contract administration‑
1. The level of trust between the parties (i.e., attitudinal climate) carries over from contract administration to contract negotiations.
B. Mid-term or continuous bargaining.
C. The limits of arbitration: conflicts over technological change -‑ changes in the definition of work and job descriptions occur with introduction of technology, which can cause conflict between labor and management.
D. The impact of industrial relations and business strategy -‑ a classic example is given in the industrial relationships of two steel companies -‑ Bethlehem Steel and USX.
VII. Evaluating the performance of the grievance system
A. Time and costs of settling grievances -‑ average time to process a case through arbitration in 1987 was 310 days.
B. The effects of arbitration decisions -‑ delays are troublesome.
1. Employee finds other work.
2. Negative effects upon returning to work -- performance ratings are lower for those who return to work after arbitration.
VIII. Alternatives to the grievance procedure in the union sector
A. Expedited arbitration -‑ helps reduce costs and delays involved in many routine cases.

B. Grievance mediation – a third party functions as a mediator. Hope is that disputes will be settled in mediation instead of going to arbitration.

IX. Conflict resolution in the nonunion sector

A. Reasons for adopting nonunion grievance procedures.
1. Enhancing workforce performance by reducing turnover.

2. Union avoidance by substituting for union grievance procedures.

3. Reducing risk of litigation.
B. Types of nonunion grievance procedures.

  1. Integrated conflict management systems.

D. Why nonunion employees desire complaint procedures – default rule of employment at will.

E. Differences between union and nonunion grievance procedures.
F. Impact of nonunion grievance procedures.
1. Complaint rates are substantially lower in the nonunion sector than in the union sector. This may be because employees fear reprisals.

2. Evidence of some reprisals to complainers and their supervisors.

G. Peer review and union avoidance.
X. Nonunion arbitration and employment laws

  1. Use of nonunion arbitration to resolve claims based on employment statutes (e.g. Title VII, ADA, FLSA) instead of the employee being able to go to court.

  1. Debates over mandatory arbitration.

  1. Due process models for nonunion arbitration – development of Due Process Protocol.

Chapter 11 -- Discussion Questions and Answers

1) Describe the typical steps followed in a grievance case.


a. Discuss problem with supervisor and/or the union steward. Union steward and the employee may decide either that the problem has been resolved or, if not, whether there has been a violation of the contract.

b. Grievance is put in writing and given to the appropriate managerial authority. Union steward and management representative meet and discuss the problem, with the response of the management put into writing.

c. Grievance is appealed to the highest management authorities. Other local or international union officers may become involved. The decision is put in writing.

d. Union decides whether to appeal the decision to arbitration. Grievance appealed for binding arbitration.

Discharge Grievance

Start at either step two or step three.

Union or Group Grievance

Union representatives initiate grievance at steps one or two on behalf of the workers.

2) Grievance procedures meet the needs of several groups. Name these groups and discuss how the grievance arbitration procedures help meet their respective needs.

Individual workers -- the grievance/arbitration procedures provide fairness, protect their job rights, enforce their responsibilities, and protect those who use the procedures from any sort of retaliation for exercising their rights.

Labor unions and employers -- the procedure attempts to find the appropriate balance between uniformity and flexibility in the administration of the employment relationship.

Society in general -- the process attempts to maintain industrial peace during the life of the contract, by keeping the number of industrial disputes which reach the courts to a minimum, and by insuring employers and unions comply with public policies dealing with employment.

3) Grievance arbitration procedures are often very costly and time-consuming. What are some of the alternatives to this process in the union sector?

Minor adjustments include trying to keep the process as informal for as long as possible, tightening the time allowances for various steps in the procedure, and agreeing that oral settlements or intermediate settlements will not be precedent setting.

Expedited arbitration includes the avoidance of grievances or misunderstandings, the oral resolution of grievances, efficient investigation and speedy disposition of grievances, less adherence to the dates of official grievance processes so as to increase the flexibility and efficacy of the process, and a procedure for the disposition of unresolved grievances.

Grievance mediation uses the more informal mediation process rather than the more formal binding arbitration.

4) Although nonunion firms do not usually have a formalized grievance process with binding arbitration, these firms must also contend with conflict resolution at the workplace. What are some of the techniques nonunion firms use to resolve conflict?

Complaint or appeals systems -- the more formal parallel grievance/arbitration procedures without binding arbitration

Ombudsman officer -- gives a personal and confidential hearing to problems while defusing anger, provides and receives information on a one-to-one basis, confidential counseling, mediation, conciliation, arbitration, and adjudication

Attitude surveys

Employee counseling services

"Speak up" programs

Other communications programs

5) Nonunion firms are not required to have formal grievance procedures, but many do. What are some of the reasons that nonunion firms do choose to adopt grievance procedures?

Enhancing workforce performance, such as by reducing turnover.

Union avoidance – providing workers with a substitute for union grievance procedures. Particularly the adoption of peer review procedures.

Litigation avoidance – resolving potential legal complaints at the workplace level and the adoption of nonunion arbitration procedures that bar employees from going to court

6) What are some of the arguments for and against mandatory arbitration of statutory employment law claims?

Advocates argue arbitration provides a faster, simpler and cheaper method of resolving statutory employment law claims than does litigation. Arbitration provides enough due process protections to ensure fair resolution of claims.

Critics argue that mandatory arbitration procedures are dominated by employers, suffer from arbitral bias in favor of employers, and privatize justice. They argue mandatory arbitration is a modern version of the “yellow dog” contract, forced upon workers by employers and taking away their rights.


I. The evolution of worker and union participation

A. Early QWL -‑ limited success as the programs ran into opposition from both management and labor; conflicted with traditional collective bargaining.
B. The rebirth of QWL in the 1980s -‑ programs were reborn as a result of the severe economic pressures.
1. Quality circles -‑ narrow programs that often showed early success that was not sustained

2. The limited gains from quality -‑ management often failed to give the workers real authority.

C. In some places QWL expanded; example of Xerox.
1. Strategic participation at Xerox -‑ sharing of information with union leaders, etc.
D. Work organization restructuring -‑ links to QWL.
II. The links between teamwork, participation, and work restructuring
A. New roles for supervisors -‑ in some plants supervisors replaced by team leaders who are members of the bargaining unit.
B. The expansion of teams -‑ top "administrative" teams giving unions a broad array of financial and other strategic information.
C. Managing the overlap between participation, work restructuring, and collective bargaining -‑ over time, participatory processes must include collective bargaining issues.
D. Changes in contractual procedures that emerge from participation -‑ team meetings become forums for airing complaints that might otherwise be processed through grievance procedures.
E. An issue for unions: How far to go in lessening formal rules and procedures
1. New union roles -‑ facilitators and joint steering committees and that serve to bridge the participatory programs and collective bargaining issues.

2. One result of the expansion of joint activities is new union roles and responsibilities.

F. Worker and union participation in strategic decisions -‑ committees are given various tasks such as insourcing, which leads to questions regarding which, if any, contractual rules and language to modify.

1. Many involvement efforts fail because of a lack of will, the reemergence of conflict, or the inability to follow through with necessary changes in traditional practices.

2. A variety of types of strategic involvement -‑ at Saturn the union is involved in the choice of parts suppliers and a wide array of other decisions.

III. The debate surrounding participatory programs
A. Some argue that these new programs will lead to the demise of unions.
B. Others argue that employee interests are better served under the new programs.
C. Saturn workers are divided in the preferences for participatory programs versus traditional methods.
IV. Assessing the effects of participatory processes
A. Research shows that narrowly defined QWL programs have small positive effects on productivity.
B. Union representation on a company's board of

directors ‑- board membership alone does not yield substantial payoffs for workers or employers.

C. Employee ownership
1. Studies show that even under employee ownership, employees have similar views of union and management roles.

2. The impact of worker ownership on economic performance -‑ appears to work best in small firms.

D. Employee stock ownership plans
1. ESOP's in the trucking industry -‑ workers engage in a limited engagement strategy.

2. Lack of good data prevents conclusions.

Chapter 12 -- Discussion Questions and Answers
1) Give a brief overview of how participation programs evolved in the union sector from the 1970s on.
Most early programs were unsuccessful. They ran into opposition from both labor and management because:

a) these programs were mostly initiated from the outside, b) labor leaders and managers thought these programs questioned assumptions of the traditional form of unionism, c) labor leaders and managers feared informal problem solving would undermine their positions, and few top managers saw the relevance of these programs.

As the economic pressures increased in the 1980s interest in these programs was reborn. The most successful programs were those that eventually broadened and integrated QWL and collective bargaining changes. The Xerox case is a good example of this process.
2) Participatory programs provide challenges to unions and their leaders. Discuss how unions might be able to manage the overlapping roles of participation, work restructuring, and collective bargaining.
Unions allow participation programs to continue and they oversee these programs and try to connect them to the process of collective bargaining. The union needs to discuss these programs at union meetings and report the union's role in the union newsletter and other communications. The union can also attempt to set up joint committees with management for the oversight and coordination of participatory programs.
3) Participation programs have been the subject of much debate. Briefly describe this debate.
Critics argue that these programs do not lead to real increases in worker or union involvement in the decision making process, rather management uses these programs to increase the pace and difficulty of work. They also argue that these programs are used as a transition from union representation to a nonunion organization.
Proponents admit to the increased pressure and pay concessions but claim that increased worker and union involvement can lead to employment security as well as more interesting work. Unions can get a greater say on issues which are of crucial importance to workers if the union truly gets involved in the process.
4) How do labor leaders and unions generally view employee ownership?
The labor movement has generally been unenthusiastic about employee ownership. Union leaders fear that their members will no longer see the need for a union in an employee-owned plant. There are also some economic objections, namely that employee ownership creates pressures to cut wages and benefits in order to save jobs and that these programs are generally encouraged in the oldest least profitable firms. Labor leaders are also concerned with the effect these firms may have on wages in more profitable enterprises. In general, labor leaders view employee ownership as a last resort strategy, only to be used when nothing else has worked or can work.

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