Theses notes are in raw form and are intended only to supplement
in-class lecture, discussion, and other forms of instruction. All topics
covered in class are not addressed in these notes. Notes are only in
approximate sequential order with the syllabus chronology. Doctoral
and masters students who are preparing for comprehensive field exams are
advised to review the complete sources cited. Such exams are intended to
ensure that you have consulted, organized, and thought about the material.
Thus, comps are in progressive stages: Preliminary take-home, regularly
scheduled test, allowance of follow-up electronic commentary on your
reasoning, and an oral inquiry and review.
Contents
Lecture #1: History of Personnel Management and Industrial Relations
Lecture #2: The Early Evolution of an IR Theoretical Construct
Lecture #3: History and Legal Foundations of Unions and Collective Bargaining
Lecture #4: Union and Management Structures, Goals, and Policies
Lecture #5: Collective Bargaining Theory
Lecture #6: Collective Bargaining Process
Lecture #7: Impasse and Conflict Resolution
Lecture #8: Grievance Procedures
Lecture #9: Compensation and Benefits
Lecture #10: The Public Sector
Lecture #11: Uncertainty and New Directions for Unions
Lecture #12: Demographics and IR
Lecture #13: Technology and IR
Lecture #14: Organizational Differences and IR
Lecture #15: International Competition and IR
Lecture #1: History of Personnel Management and Industrial Relations
The following was primarily taken from Bruce E. Kaufman, _The
Origins and Evolution of the Field of Industrial Relations in the United
States_ (Ithaca, NY: ILR Press, 1993).
The transformation of the U.S. economy form an agrarian to
industrial base began in earnest around 1870. This fundamental shift
brought more severe fluctuations in the business cycle, a remarkable
accumulation and concentration of wealth in the hands of industrialists,
and economic competition based on wage cutting. The last item in
particular gave rise to conflict and violence in the workplace and
presented the "labor problem" to policy makers.
The Taft Commission of 1912 contained the first use of the term,
industrial relations, and by the 1920's industrial relations (IR) had
evolved into a full fledged field of academic inquiry, although degrees
and programs in the field did not mature until the 1940's.. IR arose in the
context of three distinct theoretical views of the economic system. One
was the laissez faire view that government should minimize its role and
influence in the economy, and thus in the affairs of labor-management
relations. The second was Marxism, which essentially rallied the
energies of revolutionaries to the view that labor created all wealth and
thus should control and enjoy the fruits of all its efforts.
The IR view was something of a middle ground, and for a brief
period united both pragmatists and academics in the pursuit of
alternatives to the above extremes. The unifying professional
organization was the Industrial Relations Association of America, founded
in 1920. Part of the impetus for the need for such an organization was
the experience of different institutional structures and organizational
changes brought by the National War Labor Board during WWI.
However, the intellectual harmony of academics and practitioners
under the IRAA was to be short lived, and a split was evident in the
1920's. The IRAA was succeeded by the American Management Association,
under which the distinctly practitioner oriented field of Personnel
Management (PM) arose. PM focused on "better management" via combining
the principles of scientific management and human relations, this era in
the 1920's often being referred to as corporate welfare capitalism, or
paternalism.
To consolidate its organizational legitimacy PM had to wrest
power from the old foreman "drive system" of control in the employment
process. This marked a shift to a professional cadre withing the
organization to handle such matters. The orientation was on problem
solving and related applications were drawn from such fields of study as
engineering, management, and psychology. The scope of activity was
intraorganizational.
With the split in the IRAA, the IR field gravitated toward the
Institutional Labor Economics school of thought, which essentially viewed
unions and collective bargaining as central to the solution of U.S. labor
problems. This scope of inquiry was interorganizational in nature and
held the belief that democracy (via unions) had an essential role in the
employer-employee relationship.
The Great Depression ended the era of welfare capitalism, gave
rise to intense labor strife, and ultimately lead to the legitimization
of the role of unions and collective bargaining as American
institutions. The ensuing legislation also outlawed "company unions."
WWII and the re-establishment of the NWLB served to accelerate
the evolution of numerous institutions which continue to play large roles
in both PM and IR. These include employee benefits, job analysis, and
arbitration. The body of law defining labor relations continued to
evolve until the 1960's, when a defining turn was taken in the direction
of legislating individual, as opposed to collective, rights in the
workplace. Also, by the 1960's the dichotomy between PM and IR was
complete. PM went the theoretical route which is nurtured by human
capital theory, viewing people as assets, eventually evolving into what
we know as human resources management. IR consolidated its alliance with
the study of collective bargaining (CB), and as the fortunes of CB have
gone, so to has IR.
As was demonstrated in class, the academic curriculum
tends to reflect both this intellectual heritage, and the current state of
confusion and overlap in these and related fields of study. Present
issues, such as the TEAM Act before congress, should be viewed with a
historical perspective, but tend to return to the interorganizational and
CB heritage of IR.
Finally, with the PM/IR split undisputed by the 1960's, attempts
to define a theoretical framework for IR began. This is the focus of the
next lecture.
Lecture #2: The Early Evolution of an IR Theoretical Construct
Like it or not, the juxtaposition of whatever alternative theory
explored is with the market, and in most cases this requires a thorough
understanding of the neoclassical theory of markets, which treats wages
in the microeconomic context of marginal analysis of value added and
cost. In the macroeconomic context the focus is on market adjustments in
the supply and demand context of wages and labor. But as we shall see IR
theories do not accept this view as all-commanding.
A seminal work in IR theory, _Trade Union Wage Policy_, was published
by Arthur M. Ross in 1956 (Univ. of California Press). The target of
Ross's inquiry was the process of wage determination in an industrialized
society. He was particularly keen on pointing out the divergence of the
market view (wages determined by marginal productivity theory) and the
view that in a modern socio-economic system, humans can be the masters
rather than the servants of the market. Ross argued that mastery
required the ability to influence the big decisions, and this in turn
required collective bargaining and unions, which were characterized as
political institutions with practical objectives (business unionism)
including equity, justice, and rational organization, none of which
necessarily conformed to the laws of marginal productivity or supply and
demand.
Essentially, Ross's theory comes to rest on the dynamics of
comparative wage relationships--e.g., the percent vs. absolute amount of
wage increases, equitable comparisons, and patterns and interdependencies
of wage relationships. To crystallize this perspective, Ross coins the
phrase "orbits of coercive comparison," which suggests the framework of
IR analysis and critical questions to be addressed, such as when
comparisons are most compelling, when a difference becomes an inequity,
the paths of political pressures created by comparisons, corporate
ownership and union organizing patterns, and product market
relationships. He further remarks that the pressure for uniform
treatment is irresistable, and government has a large role to play in
this process. Equilibrium in the Ross context is a balancing of these
forces. However, he views such an equilibrium as unstable.
The next major contribution to IR theory was John Dunlop's
_Industrial Relations Systems_ (NY: Henry Holt and Company, 1958). Like
Ross, and the comments from Gerald Somers which follow after this summary,
Dunlop was writing during the golden era for unions. Hence, IR theory during
this period, though it took into account the broader context of institutions
and even the market, was essentially all about unions, or their influences.
Dunlop's systems approach contained more of an inherent tendency
of stability than did Ross's view. Dunlop took Ross's conceptual a bit
further by introducing a framework required for theoretical rigor and
consistency. His definition of a system required an inner rationality
and compatibility of views (ideology). This meant stable and predictable
relationships, such as patterns of wage relationships, which in the more
abstract context were referred to as wage contours (but kin to the
essence of comparative dynamics of Ross).
This systems view categorized the actors (workers, managers, and
the relevant government agencies), and the environments within which the
IR systems fit (technology, markets, and power relationships). Within
this context the analytic focus then became the web of rules emerging in
the collective bargaining relationships. Dunlop then proceeded to
declare his vision of the purpose of IR theory. "The central task of a
theory of industrial relations is to explain why particular rules are
established in particular industrial relations systems and how an why
they change in responses to changes affecting the system." (p. ix) This
view clearly had appeal for international IR comparisons. [Note: The
recently revised Dunlop text has not been reviewed for this summary.]
Despite Dunlop's appeal, by the end of the 1960's Gerald G.
Somers' book, _Essays in Industrial Relations Theory_ (Iowa State
University Press, 1969), clearly indicated a disarray in IR theory, in
part due to the continued fragmentation of the field, a point noted by
Somers' need for such inclusiveness in the following quote. "All the
forces of society, community, human motivation, and the labor market
propel the worker [to the workplace]. All the forces of the product
market and personnel recruitment pull him there. Technology, group
behavior, union and management organization, government regulation, and
personnel administration help determine the terms and conditions of his
employment." (p. 44)
Also in the Sommers text is an essay by Milton Derber, who
essentially defines the current rationalization for unions and the
collective bargaining process ("Industrial Democracy as an Organizing
Concept for a Theory of Industrial Relations"). He concludes that the
organization of labor is primarily justified because of its contribution to the
democratic way of life in the U.S., though unions do not necessarily lead
to a more democratic workplace. The achievement of this state requires
that a number of conditions be met, itemized below.
Shared power & authority
Workers' freedom to choose their own representatives without interference
Majority rule form appropriate constituencies
Participation (voice) and consultation on workplace affairs
Equal rights for individuals
Due process--fair hearing, just decisions, ability to complain
Minority rights--dissent, free speech, orderly opposition
Responsibility--contractual duties, violations and penalties defined
Minimum employment standards--wages, hours, working conditions
Information--no secret or collusive agreements
We come full circle in this lecture by noting that Derber's ideas
of industrial democracy have essentially remained the core IR for the
past quarter century. This view is upheld by Kaufman's historical review
previously summarized. Kaufman states, "True democracy means that
decisions are reached only with the consent of the governed, implying
that workers must be able to elect representatives of their own
choosing, engage in collective bargaining over wages and other conditions
of employment, and go on strike if agreement can not be reached." (p 42)
Other Topics Covered in this Class Session
Unions and Internet
Stagnation of Real Wage Growth Since Early 1980s
Earnings Inequality
Lecture #3: Historical and Legal Foundations of Unions and Collective Bargaining
This section of the course covers the first 5 chapters of Leap,
which provide background on labor history and the evolution of collective
bargaining in the U.S. The labor theories discussed by Leap are somewhat
of a separate doctrinal area than what has been covered above, but you
should see the connection in some streams of thought. Strictly speaking,
Leap includes traditional labor economists explanations to describe the
labor movement and underlying causes, where the IR/HR overview was a
narrower focus.
In order to understand the role unions play in
our socio-economic system developing a good working knowledge of the
history and legislative evolution is absolutely essential. Within this
context an appreciation of the complexity of the collective bargaining
system in U.S. is a crucial conceptual framework for applying the nuts
and bolts of practice. For example, whether the economic environment is in
the public or private sector, defined by specific states, or even
specific industries (e.g., air or rail transportation) will largely
dictate the rules of labor-management relations. These rules include the
progression from the determination of the bargaining unit to
certification elections, contract negotiations, collective bargaining
agreements, contract administration (with such provisions as wages,
hours, working conditions, joint consultation, and grievance procedures),
mediation, arbitration, and whether there is a right to strike (and
related conditions). This is the practical stuff of Dunlop's web of
rules previously mentioned.
Once you understand the broader context of the particular issue
at hand, then the specific rules come into play. For example, Sections 7
and 8 of the Wagner Act, and Section 7 of the Taft-Hartley Act are
particularly crucial for private sector labor relations, but have no
bearing on public employees. A more recent development in the private
sector is the Teamwork for Employees and Mangement Act (TEAM) before
Congress which is intended to promote legitimate employee involvement and
genuine worker-management co-operation (without necessarily involving
unions. Critics of this bill argue that it is a direct attack on Section
8(a) of the NLRA. Why?
I pose a related question: If progressive or enlightened
management makes extensive efforts to involve employees by seeking their
ideas and input with respect to improving the production process, is it
not reasonable and logical to invite the same meaningful input on wages,
hours, and working conditions? Does this require a union? Explain.
Organizing your notes into a form that facilitates your grasp of
the historical process of labor relations is essential for addressing
questions and issues which rely on your ability to synthesize the
material. For example, How would you envision the condition of the
American worker today if unions had played no role in the American
workplace? You must be able to evaluate unions beyond their immediate
impacts by including the spillover effects, and some sense of how they
may need to change to remain viable in the future.
A good test of your conceptual and practical grasp of the
collective bargaining process is to examine the cases presented at the
end of Chapter 4 of Leap, particularly the Cooper Union scenario.
The inclusion of the material on the coal indusry is to provide a
more in-depth analysis of one industry, one which has a long history of
unions and encompasses most aspects of the American labor movement in
general. Of particular importance, and as will be discussed in class, is
the relationship of the industrial relations environment with the
regulatory and product market environments. The importance of different
variables extends to influences of demographic shifts, environmental
legislation, the shifting resource base, production technology changes,
geographic shifts in the location of production, occupational safety and
health, and interindustry relationships--e.g., with transportation and
electric utilities. How would contrast this broad based view with earlier
discinctions between HR and IR? Also, to return to an earlier theme, how
does this framework of analysis compare to the industrial relations systems
theory put forth by Dunlop?
Lecture #4: Union and Management Structures, Goals, and Policies
Most of our lives we are caught up in work day problems and don't
have the opportunity to reflect on the larger scheme of things. Chapters
6 and 7 of Leap provide a broad survey of the structure and goals of
unions and management at the micro and macro levels. These, more often
than not, opposing institutions with all their political and economic
history are essentially what define the collective bargaining
relationships in the U.S. It is particularly important to keep in mind
that the institution of collective bargaining is a blend of market and
political forces, and hence understanding how the fortunes and evolution
of CB have varied with business cycles, philosophical shifts, and political
changes help us make sense of the current environment and consider the
prospects for the future. You should become intimately familiar with the
general structure of organized labor from the AFL-CIO to the shop floor
steward, and likewise for management's top tier organizations such as the
AMA, NMA, SHRM, etc...to the suprervisor level.
The two readings for this section of this course on reengineering
and horizontal corporations are intended to illustrate how sweeping
organizational changes are, or will, impact both management, unions, and
the collective bargaining process. Can you write an essay on the
possible implications?
Lecture #5: Collective Bargaining Theory
Negotiating and bargaining theory eventually evolved into a
subfield of economics (and other disciplines) and in the end became quite
mathematical and meshed with game theory. For our purposes the graphical
representations of a minimal number of models suffice to convey the
theoretical concepts, process, and illusory outcomes.
First, I recommend you have a firm grasp of the neoclassical
labor market model which analyzes the demand and supply of labor in in
the competitive market context. Within this context you should be
capable of explaining such phenomenon as shortages, surpluses, spillover
effects--and relating the wage rate, demand for labor, vale of marginal
product of labor, marginal revenue product of labor, supply of labor,
with the resultant equilibrium solution.
Second, a modification of the perfectly competitive neoclassical
model, the bi-lateral monopoly model should be understood from the
perspectives of the underlying economic assumption, the indeterminate
(bargaining) range of solutions, and especially the idea of the
convergence of one possible outcome of the bilateral solution coinciding
with the perfectly competitive solution.
Third, the Pigou model is of interest because it essentially
centers on the immediate negotiating process and the initial ranges of
consideration by the employer and union. What do you think determines
these ranges? This model also leaves us with an indeterminate
theoretical outcome.
Fourth, the Hicks model bends more toward the psychology of the
bargaining process through time, for example, how well can the company
resist raising wages from their existing level vs. how well can the union
resist lowering its initial bargaining point of wages. Somewhat related
to this notion is a model more embedded in economics, which expresses the
ratio of the cost of disagreeing with the cost of agreeing. When this
ratio is greater than one a settlement is predicted.
While I think these models are interesting teaching devices, as a
practical matter, they will not have precise predictive power. This is
one reason bargaining theory is not central to the study of IR, which is
so heavily dependent on understanding the institutional arrangements.
However, from a policy perspective, the bilateral monopoly has appeal
because of its implication that power on one side of the market
(big company) should be balanced with power on the other side of the market
(big union). This argument is grounded in the idea that these
countervailing powers reduce the possibility of exploitation of workers
and at least hold out the prospect of a negotiated solution approximating
the socially and economically desirable competitive solution (generally
stated in economic welfare theory as lower prices and more output).
Lecture #6: Collective Bargaining Process
Much of the practical material can be found in Leap (Ch. 9) and I
will not dwell on it here. The preparations, legal requirements,
strategies and tactics are fundamental to getting to more complex
issues. One of these is the ability to compute costs (or benefits) to
firms and workers. As a technical matter an understanding of time
values, roll up costs, and other simple financial impacts of negotiations
are crucial. These computations should be generated as close to real
time as possible in order to accommodate the other dynamics of the
negotiating process.
Second, we should perhaps not be too foucsed on the formal
negotiating period, if there is one. When a contract expires, any number
of things can happen--a general economic strike, selective strike,
continuation of work and negotiations, etc... Also, in a sense
"negotiations" may have been ongoing long before the contract expiration
via such informal mechanisms as joint committees, collaborative efforts,
and the duties to advise and confer.
Lecture #7: Impasse and Conflict Resolution
When labor and management are at an impasse, the most drastic
actions remaining are strikes or lockouts. Historically, there have been
fewer lockouts since unions took the measure of a strike. Beginning in
the early 1980's (usually marked by the failure of the PATCO strike)
however, this strategy has backfired since the balance of political and
economic power shifted in favor of management during the the Reagan
Administration. Companies effectively employed permanent striker
replacements and significantly weakened the unions. In the past few
years unions seem to be shifting strategies to bring more pressure on
companies by PR efforts, boycotts, and directly approaching existing or
potential shareholders and directors (a good paper topic).
Keep in mind that most discussion on strikes applies to the
private sector since most public employees are prohibited from striking
by law. Why? If workers give up the right to strike, what should they
receive in return? Your understanding of arbitration as third party
intervention should also be clear with respect to differentiating between
interest and grievance arbitration. Knowledge of the formal
institutional mechanisms is also important--e.g., FMCS and AAA.
Alternative Dispute Resolution (ADR), third (neutral) party
intervention, and the objectives and powers of such are rather diverse.
The following is a fairly comprehensive list of the possibilities.
Factfinding without recommendations
Factfinding with recommendations
Facilitation
Mediation
Mediation-Arbitration
Arbitration--Advisory
Arbitration--Final & Binding
Arbitration--Final Best Offer
Labor arbitrator decisions have a rather scantified place in our
system of Industrial Relations. You should be well versed in the
constraints and special conditions which could limit or set aside the
arbitrator's decision.
Finally, the most dramatic and largest scale of intervention is
from the federal government, especially if a national emergency is
declared. What are the institutional mechanisms set up to cope with such
a situation?
Lecture #8: Grievance Procedures
Most discussion about grievance procedures pertains to CB
agreements and administration. However, the growth of nonunion
grievance mechanisms should be noted. In the 1992 issue of the IRRA's
_Research Frontiers in IR and HR_ Richard Peterson's piece, "The Union
and Nonunion Grievance System," reports that recent surveys indicate as
high as 50% on nonunion firms have grievance systems. One survey
estimated that grievances filed by nonunion employees ranged from .7% to
43% of the workers, but in most cases the figure is less than 5%.
Peterson also concludes that it is the larger companies which tend to
have grievance systems. Some systems have a peer review system, but very
few have third party intervention.
I think an essential question for students to think about is
whether a union contract tends to clarify working rules and hence reduce
the prospect of disagreement and consequent grievances, or is a roadmap
generating the propensity for more grievances. In the nonunion
environment, many attorneys take the position that the less that is
written down, the better. How does this issue play in the larger context
of the role of information in the workplace?
Finally, with respect to union or nonunion grievances (public or
private sector), the one rule that is the root of any such process is "do
your homework." The weaknesses of being unprepared in a grievance
hearing will be glaringly and embarrassingly exposed by an opponent of
even average competency and experience. You should also be well versed
in such grievance dimensions as the duty of fair representation and due
process.
Lecture #9: Compensation and Benefits
Leap's (chapters 14 and 15) treatment of this subject matter is
rather narrowly confined to the collective bargaining environment. A
crucial point made with respect to the impact of unions is the
approximate 15% differential in compensation attributable to unions.
This observation must be juxtaposed with to factors. The first is
whether unions in reality are raising wages above the market equilibrium
which in turn generates unemployment.
The second is just as fundamental to our economic system.
Coupled with the observation that unions raise wages, relative to
nonunion environments, is the added observation that this increase
consequently lowers profits (dubious argument?), and subsequently returns
to invested capital (shares). Hence, one of the premises of Marxian theory,
the inevitable divergent interests between workers and capitalists (or
stockholders). How do you square this with the partnership model?
Another interesting theoretical point to be drawn is the idea of
teams in compensation theory and practice. If in neoclassical theory we
see that the equivalency of the ratio of the marginal products to prices of
inputs yields an optimal solution, in practice it is still extremely
difficult and often costly to obtain such information. Now lets narrow
the theory further and consider the ratio of MP/W for heterogeneous labor
units. Since people have different productive qualities, and
compensation systems are generally a hodgepodge combination of items,
isn't it possible this problem is just complex to solve
administratively? Consider two additional questions. Since unions tend
to homogenize pay, does this lead to homogenized productivity? Second,
does the creation of teams, with workers cross-trained and substitutable
for one another, tend to homogenize productivity, and hence pay? Both of
these approaches would appear, in theory, to greatly simplify the
pay-productivity problem. Where does the whole scheme of job
descriptions, job analysis, and job evaluation fit into this team framework?
There is also a great deal more which can be said about pay
equity, especially outside the realm of collective bargaining. You
should make sure to read my article from BENEFITS QUARTERLY on this
topic. The article from the CUPA Journal points out the messy
administrative (practical) difficulties when one wades into the equity
problem.
With respect to both direct compensation and benefits, you should
become quite familiar with the legal framework, especially with respect
to the argument that governement policies undermine the need for unions,
and with respect to applicability in the public vs. private sectors.
A clear distinction between what is social vs. private insurance
is essential. Also, one conceptual difficulty with benefits is the
likely divergence of the value of benefits to the employee, the cost to
the employer, and the the value on the market. An looming administrative
issue is how to communicate and educate employees about benefits, and how
benefits plans are governed. What are the implications for partnerships
in this area?
Finally, although Leap's coverage of the basic components of
benefits plans is well-rounded, note that this is nowhere near a
comprehensive treatment. For example, interesting items missing are
executive benefits packages, flexible benefits plans, sick leave banks,
etc... Such material will be covered at length in my employee benefits
course (Econ 439/539). You can also find considerable sources on
compensation and benefits on my related web pages:
http://www.mtsu.edu/~rlhannah/IR_HR.HTML
http://www.mtsu.edu/~rlhannah/employee_benefits.html
Lecture #10: The Public Sector
The public sector arena of CB has three distinctive features not
typically found in the private sector. They are multilateral bargaining,
prohibition against the strike, and numerous administrative procedures,
protections, and prohibitions of worker and union behavior in addition to
the negotiated settlement. Leap covers these quite well in chapters 17.
I suspect one of the looming issues with respect to the public
sector is a potential wave of privatization sweeping through state and
local governments. Of the many changes in labor-management relations
this could impact, particularly those listed above, one is that
privatized services open the door to union activity, including strikes,
as in any other part of the private sector. This seriously questions the
assumption that any public service is an essential service.
Lecture #11: Uncertainty and New Directions for Unions
Chapter 18 of Leap gets us closer to future's edge. What can we
expect of the evolution of CB? We have both international comparisons,
and the view (particularly Mitchell's "island unionism") that the the
U.S. situation is likely to further decline. Current thinking seems to
gravitate toward the reading of the potential of reshaping CB in
particular and IR in general via the interrelated themes of the TEAM Act
Dunlop Commission Report. I think this has to be balanced with the
realities of attitudes expressed in the Freeman/Rogers report and even
the AFL-CIO's "Being Heard" study. On one hand U.S. workers seem to long
for a democratic voice and process in the workplace, while on the other
largely rejecting the traditional union model. Thus the overriding
question we are left with is, What strategies and policies can fill this gap?
Lecture #12: Demographics and IR
This class meeting primarily covered the evolving role of females
in labor markets, and particular the increasing participation rates of
females who are married and have children. The child care and
potentially even the elder care problems imposing the double and triple
burdens on females continues to build increasing pressures for labor
market, employer, or government solutions--because the alternative of men
allocating more time to household work and caregiving has not proven
viable. In other words, men are very slow to alter their behavior with
respect to these activities.
The other demographic variable examined is age, and in particular
the adaptability to new work environments, skills, and the investment of
training. The human capital model is introduced, and distinctions are
drawn for private vs. social investing in human capital.
Lecture #13: Technology and IR
Training is a key component within this topic. Compared to other
large industrialized economies, there is a rather unique character to the
U.S. in that we have no real national training policy. When we examine
the evolution of training programs beginning with the Job Corps in the
1960s to the School-to-Work legislation of 1994, a rather fragmented
series of efforts emerges. This should not be taken as an evaluative
statement, because in the ebb and flow of economic evolution, this
relative "hands-off" policy by the federal government may yield more
effective and efficient market solutions. However, today's policy debate
is whether the U.S. can enhance its competitive position in the global
economy by pursuing a national training policy.
This issue even spills over into the appropriate role of our
educational systems (e.g., Tennessee's split of secondary education tracs
into vocational and college preparation). The extension of fundamental
questions about work force preparedness touches higher education as
well. Since this is my environment of familiarity, I offer a few comments.
First, I draw a distinction between training and education. Even
within training there are conflicts as to whom the benefits should
accrue--the indivdual or the corporation. This leads directly to the
question of who pays--e.g., how is tuition reimbursement handled for this
class? If labor is relatively moble, workers can take the new skills and
walk. The analytic approach to these kinds of problems--the general and
specific training models--are covered in class.
My view of how education differs from training is simply a list
of commonly held beliefs amongst academics. (1) The benefits of
education can accrue to society as well as the individual (e.g., better
citizens, better leaders, more knowledgeable voters). (2) Within the
more narrow realm of economic activities, the benefits of education can
accrue through the consumption, investment, and saving sides of individual
behavior, as well as the employment (wage enhancement) prospects. (3)
But in my view even closer to the mark of what quality higher education
should be is the preparation for how the world will be, rather than how
it is, which is the focus of training.
Furthermore, employers' criticisms that higher education is not
delivering graduates to the marketplace with needed skills MUST be
evaluated with the above criteria in mind. Turning this question around
is a useful exercise. What do employers want? Do they know themselves?
And if they think they do, are they taking a long-term view?
There is not a great deal of survey work on this last topic, but
one interesting was reported in 1988 in the _Training and Development
Journal_ (42:10, pp. 23-30), titled, "The Skills Employers Want." The
following is a list in order of highest to lowest.
1) Employees who show up on time and don't steel.
2) Ability to learn to learn.
3) Reading, writing, and computational skills.
4) Creative thinking and problem solving.
5) Self-esteem, ability to set goals, motivation.
6) Interpersonal, negotiation, and team work skills.
7) Leadership for organizational effectiveness.
Lecture #14: Organizational Differences and IR
I recommend reviewing the first two lectures in this series in
order to consolidate your thoughts with the following material.
The introduction to _Research Frontiers in Industrial Relations
and Human Resources_ by Lewin, et al contains a theme distilled from the
same pot as part of the rationale in the previous lecture--the driving
force of international competition. If we conclude that capital flows
freely around the world, that technology is readily transferred, and that
information is becoming in many respects rather ubiquitous--then where
can (American) firms pin there competitive edge? When we look at the
tremendous differences in wages around the world, economic logic dictates
that the offsetting factor for us MUST be a much higher level of
productivity. With capital, technology, and information easily
transferred, what is left? The Lewin theme is the quality of our labor
force as a whole, and our market and institutional approaches to human
resource management. This goes directly to the heart of examining how
people are brought together and interact to work in organizations.
A great deal of the material covered in this course has centered
on differences between the union and nonunion environments. This
dichotomous view of the world of industrial relations may not be
sufficient as we advance into the next century. The evolution from the
Electromation case to the Dunlop Commission to the TEAM Act shows us
that a true dilemma exists. Richard Freeman and Joel Rogers, in Chapter
1: "Who Speaks for Us? Employee Respresentation in a Nonunion Labor
Market" of Kaufmann and Kleiner's _Employee Representation_ point out
that union density in the private sector was a mere 11.5% in 1993 (a
pre-Wagner Act level) and at current rates of new organizing, the level
will be 5% by 2000. If this happens, IR models which focus on unions
might continue to make interesting analytics, but will not tell us much
about what is really happening in the world of work. What new models are
emerging?
Freeman and Rogers go on to offer some insights in the following quote.
"Assuming that an alternative workplace institution ought to
address seriously the concerns of union disapprovers, the Gallup
figures suggest that such an organization would have to advance
employee interests in nonadversarial ways that contribute to economic
performance and that accommodate individual ambition. It is not, we
believe, a demand that organizations be weak.... Rather, the
responses point to concerns about how goals are advanced: Americans
want workplace institutions that will advance their interests in a
manner compatible with the goals of the firm." (p. 34)
Two other chapters from the _Employee Representation_ text offer
additional insights which may at least help define the boundaries in this
emerging zone of change. The first is chapter 4: "Evolving Modes of Work
Force Governance: An Evaluation," by Thomas Mahoney and Mary Watson.
These authors contend that in the absence of collective bargaining, there
is no explicit model of workforce governance.
True governance they assert must include the treatment of equity
and justice in the workplace. Their assessment of the economic model of
organizations, which focuses on effectiveness (accomplishing objectives)
and efficiency (resource use), is that it is concerned with survival, not
social approval to be gained with immersion in equity and justice. They
also point out that unlike other types of economic exchanges, the
employment relationship has the unique characteristic of the worker
acceptance of authority.
The second model examined by Mahoney and Watson is the
social-psychology model, which focuses on power relationships and the
concepts of distributive and procedural justice. Within this power
dynamic they dissect the possibilities of more broadly based
participative HRM. The context of this essay also includes sketches of
three models.
The first is the authoritarian model, which is predicated
on the superior-subordinate relationship and limited information flow,
and perhaps low levels of trust or respect. The second is the
traditional collective bargaining model, which is described as an
institution to balance the power relationship by constraining managerial
discretion, but it is nontheless consistent with the authoritarian model,
having a parallel evolution. An interesting question raised is whether
the CB model can evolve apart from its traditional adversial role and into a
more participative framework. I am compelled to point out here that the
CB model includes BOTH management and labor, and that while they do point
out exceptional cases like Saturn, I'm not convinced that Mahoney and Watson
accurately portray the traditional CB model as non-participative. After all,
how much more participative can a negotiated contract be?
The third model is the employee involvement (EI) model with the
usual descriptors such as teams, TQM, QWL, partnerships, etc... Here,
the authors are on the mark with two observations. One is the potential
conflict of this model, with emphasis on small group and even individual
decision making and participation, with the CB model, which emphatically,
and with legal backing, is concerned with the collective aspect of
participation. The second point is need to clarify the potential costs
and benefits of these organizational alternatives.
Chapter 5: "Representatives of Their Own Choosing: Finding
Workers' Voice in the Legitimacy and Power of Their Unions," by Patricia
Greenfield and Robert Pleasure, add an important dimension to the search
for alternative models. Power is defined as the ability to bring about
desired outcomes, and legitimacy is defined as the right to exercise
power. Their point is that whatever alternative emerges, these
ingredients must be present. The debate over the TEAM Act is an
excellent example of the the conflicts abounding these concepts.
I offer another model, which I confess is more of an intellectual
exercise than a potential practicality at this point. When we think of
the evolution from the foreman drive system to centralized personnel
functions, originally the employment and record keeping office, and then
to the conflict management and regulatory compliance functions, the view
of HR is clearly as a functionally defined reactive institution. Though
there is much literature of late espousing the strategic or proactive aspects
of HRM, I think the question is still open as to whether this cadre of
professionals is a true agent of institutional change. An empirical test
of this matter is to examine if HR executives have equal footing with
other executives in organizations, and if the governing boards of
organizations have expert and influential representation from this
perspective.
When all is said and done, we are still left with a troubling
questions. Is there something morally right about democracy in the
workplace (or conversely, something wrong with its absence)? Do
legitimacy and power require elected representatives? If the answer is
no, then doesn't this cast a chill on other institutions we presume to be
democratic? Is the decline of unions an indication that workers don't
really care about democracy in the workplace?
Lecture #15: International Competition and IR
As Americans we often conceive of international competition as in
competing businesses. However, this is a one-dimensional view which
obscures our deeper understanding of government motivations and policy
making. From another perspective, the competition is for jobs. With the
high population growth rates in developing countries, there will be an
estimated 500 million young adults added to the labor force in the
1985-2000 period. Large segments of unemployed populace in this group is
a formula for revolution and massive disruption is global social order.
In the U.S. and other prosperous industrialized countries our
concept of jobs is directly tied to expectation of rising living
standards, rather than mere survival. We often overlook the power of job
allocation and creation, especially when we consider that in either
totalitarian or democratic societies, legal or illegal activities,
prosperous or impoverished economies, a job largely reflects one's
economic worth, social status and self-esteem.
With increasing global mobility of capital, technology, and
information, the discussion in the previous class focused on the
importance of HR as the remaining key variable which firms can exercise
some potentially decisive economic control. This variable is also of
societal importance and thus is a matter of public policy concern as
well, particularly when viewed in light of what our major international
competitors may be doing to enable a competitive edge.
Given the heavy emphasis in this course on unions and collective
bargaining, some importance accrues to an examination of this topic at
the global level. Pages 687-690 of Leap provides a very good summary of
comparative industrial relations systems in industrialized countries. A
noticeable weakness in Leap's list is information in major emerging
economies like China. Other Asian economies, Latin America, and even
Australia and Russia are not described. I mention these because they add
to the mix of models which are emerging and must find mutually
cooperative principles (among unions). This is unfortunately a topic for
another course given our time limit is near expiration. The crucial
point here is that with respect to unionization, the U.S. is only ranked
16th in union density (chart discussed in class). This reality casts great
doubt on any simplistic arguement that U.S. unions inhibit international
competitiveness.
We have slightly touched on the potential for greater
international cooperation among unions via the Internet. Two other
factors are herein mentioned. The first is the International Labor
Organization (ILO), which has existed for 75 years, and has made efforts
to develop employment standards for a global community. This institution
is apparently re-assessing its function in light of the end of the cold
war, and the unfolding world trade talks. With respect to the latter
point, we will probably hear more of the prospects of a social charter in
the context of GATT--a mechanism in part insuring certain worker rights.
To some degree this fabric has been weaved into the Maastricht and NAFTA
Treaties.
Perhaps more than any other factor, we in the U.S. play a
somewhat tenuous role on the world stage in work force preparedness (read
training or education). As previously discussed in this course, we have
seen that the U.S. is not distinguished in terms of policy or content
(other than--perhaps--our higher education model). The global contest and
consequences of our path is not about the present, but the future. Can we
remain a super economy without massive upgrades in the quality of our human
resources? Or, is the key to our success that we have left more solutions to
the market than to government policy?