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Mgmt 583. Chapter 11: Contract Negotiations Fall 2008. Four Stages of Collective Bargaining. Preparation Initial Proposals Primary bargaining Eleventh-hour bargaining. Management Preparation. Three objectives of the preparation stage: Determines the bargaining objectives.

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Mgmt 583

Chapter 11: Contract Negotiations

Fall 2008

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Four Stages of Collective Bargaining

  • Preparation

  • Initial Proposals

  • Primary bargaining

  • Eleventh-hour bargaining.

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Management Preparation

  • Three objectives of the preparation stage:

    • Determines the bargaining objectives.

    • Enables the bargaining team to substantiate and defend its proposals.

    • Enables the bargaining team to anticipate and war-game the union’s proposals.

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Stages in Preparation

  • Coordination stage

    • Individuals are assigned to draft proposals for specific parts of the CBA.

    • Timetables for negotiations are established.

  • Selecting the Bargaining Team

    • Chief negotiator

    • Cost specialist

    • Secretary-/note taker

    • Language draftsman

    • Operations specialist (determines the impact of concessions on production and processes.

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Stages in Preparation

  • Review the previous negotiations

    • Id personalities

    • Id union’s critical issues

    • Id success and failures in last negotiations

    • Id union success and failures in last negotiations

    • Id union’s previous tactics

  • Review current CBA for necessary changes

    • Id problem provisions.

    • Look at grievance trends.

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Stages in Preparation

  • Gather company and industry data

  • Gather economic data relevant to bargaining

  • Get inputs from supervisors and employees

  • Formulate proposals, priorities, and bottom-line proposals

  • Select the bargaining site

  • Prepare the bargaining book

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Union Preparation

  • Activities at the National

    • Researches firm’s ability to pay.

    • Researches locals ability to strike.

      • Willingness for strike vote.

      • Nationals financial ability to support a strike.

    • Consults with representatives from the local.

      • Locals present concerns and objectives.

      • Nation conveys “non-concession” objectives.

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Union Preparation

  • Activities at the Local

    • Negotiation team is elected

    • Field representative from national explains the negotiation process to members.

    • Information regarding employer’s profitability, sales, etc. is gathered.

    • Members are informed of bargaining objectives.

    • Local officers gage members commitment throughout the process.

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Initial Proposals

  • Chief negotiators from each side develop the bargaining agenda.

    • Meeting times

    • Order of bargaining demands

    • Ground rules

    • Opening statements

  • By convention, the union usually presents its initial demands.

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Primary Bargaining

  • Management offers counterproposals ti union’s initial demands.

  • Union will then counter with its own counterproposals.

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Primary Bargaining

  • Behaviors to avoid

    • Abusive language

    • Ultimatums

    • Personal attacks

    • Extreme statements

      • “Management absolutely refuses to grant the union a checkoff.”

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Three Rules of Counterproposals

  • Always carefully consider the future consequences of any proposal made by the union.

  • Never make concessions too quickly.

  • If you agree to the union’s proposal, always get something in exchange.

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Beware of Roll-Up Costs

  • Roll-up costs are those concessions that also effect the cost of other issues.

  • For example a wage increase will also increase:

    • Pension costs

    • Paid vacations

    • Paid holydays Paid sick leave

    • Social security (FICA & FICA-M)

    • Unemployment compensation.

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Eleventh-Hour Bargaining

  • The crisis stage as negotiations as the expiration of the CBA approaches.

  • Bargaining tempo increases.

    • Concessions are made at a faster rate.

    • Less important issues are dropped (this is why you prioritize).

    • Final offers are made.

    • Parties reduce demands for quid pro quo.

  • Impasses are of great concern at this stage.

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Walton & McKersie’s Behavioral Theory

  • Labor negotiations are a mixture of conflict and collaborative behaviors. Parties engage in the defense of each ones self-interest while attempting joint problem solving.

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Walton & McKersie’s Behavioral Theory

  • Four bargaining sub-processes were defined

    • Distributive Bargaining

    • Integrative Bargaining

    • Attitudinal Structuring

    • Intraorganizational Bargaining

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Distributive (Competitive) Bargaining

  • Zero-sum bargaining situations.

  • Bargaining issues in which the goals of the two parties to the bargaining are in direct conflict.

  • One party’s gain is the other party’s loss (the central issue in collective bargaining as negotiators probe for the other’s real goals).

  • Encourages threats, bluffs, and secrecy).

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Integrative (Problem Solving) Bargaining

  • Bargaining issues in which the parties share a common problem requiring resolution.

  • Employee training programs, substance abuse issues, safety concerns.

  • Encourages trust, understanding, and cooperation.

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Attitudinal Structuring

  • Activities aimed at changing the other party’s attitude during negotiations.

  • Assumes that a good relationship results in good concessions.

  • It may be positive or negative [US Steel story].

  • It can be used to accomplish distributive or integrative bargaining.

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Intraorganizational Bargaining

  • Achieving consensus within the respective organizations.

  • Bargaining teams (especially union teams) are not always united.

    • Political rivalries.

    • Diverse constituencies.

  • Resolving internal disputes before the negotiations begin is critical.