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Chapter 6
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Chapter 6

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  1. Chapter 6 Negotiating the Labor Agreement

  2. Collective Bargaining: Definition • Collective Bargaining • Continuing interdependent relationship that involves the exchange of commitments to resolve conflicts of interests • Conflicts concern terms and conditions of employment • Success in Collective Bargaining • Objectively • Subjectively MGMT 523 – Chapter 6

  3. Negotiation Preparation Activities • Selection of the Bargaining Team • Size • Member Qualifications • Proposal Determination and Assessment • Recent labor negotiations settled by industry competitors or other facilities • Records of previous negotiations • Analysis of grievances MGMT 523 – Chapter 6

  4. Costing Contract Proposals • Preparation of employee background data • Calculation of cents-per-hour wage increase and its roll-up effect on associated time-based benefits • The cost of some items (e.g., funeral leave) can be difficult to precisely estimate MGMT 523 – Chapter 6

  5. Effective Negotiators • Has the ability to say no effectively • Has integrity and the ability to inspire confidence • Is able to plan effectively and conduct research • Can discern bottom line interests of other party • Is even-tempered; able to tolerate ambiguity and conflict • Is an excellent communicator and listener MGMT 523 – Chapter 6

  6. Effective Negotiators (cont.) • Self-confident and pragmatic • Has good physical and mental stamina • Understands short- and long-term implications of proposals • Is willing to take calculated risks to achieve bargaining goals • Asks relevant questions and interprets other party’s responses • Has a sense of humor and uses it to relieve stress MGMT 523 – Chapter 6

  7. Resistance Point Target Initial Offer Management Proposal More BargainingAgreementRange Less No Settlement(Management) No Settlement(Union) More Initial Offer Target Resistance Point The Bargaining Range MGMT 523 – Chapter 6

  8. Bargaining Approaches • Distributive bargaining • The negotiation process is a win-lose exercise • Each party relies on its bargaining power • Mutual gain (win-win or interest-based) bargaining • Both bargaining parties seek to satisfy each party’s substantive interest • Strengthens their relationship MGMT 523 – Chapter 6

  9. Strategies and Tactics • Using persuasive arguments and objective evidence • Painting a picture of the loss or gain • Presenting a bargaining proposal in writing • Listening carefully for nonverbal cues • Use of positive reinforcement • Linking issues (packaging multiple proposals) • Matching proposals • Splitting the difference MGMT 523 – Chapter 6

  10. The Bargaining Power Model • BP = OCD/CA • Assumptions • Both parties are rational and use the same approach to the costing of proposals • Either party will accept the other party’s proposal if it costs that party more to disagree than to agree • Factors Affecting Bargaining Power • Prevailing economic conditions • Bargaining parties • Governmental interventions MGMT 523 – Chapter 6

  11. Factors Affecting Agreement and Disagreement Costs • Union • Financial Supplements • Public Aid • Management • External Competition Factors • Company-Specific Factors • Intraorganizational Bargaining MGMT 523 – Chapter 6

  12. Ethical and Legal Considerations • Immoral or Unethical Behaviors • Bribing opponents • Stealing opponents’ confidential information • Demeaning or humiliating opponents • Surreptitiously observing opponents • Self-Dealing • Conformance to Professional Standards by Negotiators MGMT 523 – Chapter 6

  13. Good Faith Bargaining • Each party must demonstrate a sincere and honest intent to reach a labor agreement and be reasonable in their bargaining positions, tactics, and activities • Totality of Conduct • Violations of Good Faith Bargaining • Types of Bargaining Issues (subjects) MGMT 523 – Chapter 6

  14. Examples of Mandatory Subjects • All wage issues (hourly, piece rate, differentials, bonuses, etc.) • Health care issues (premiums, carriers, etc.) • Retirement plans Clothing or tool allowance • Hours of work • Job issues (duties, qualifications, etc.) • Performance issues (promotion criteria, evaluation methods, etc.) • Employee testing procedures (e.g., drug test) MGMT 523 – Chapter 6

  15. Management Per Se ULPs • Refusing to meet with the union to negotiate proposals • Implementing a wage change without consulting the union (unilateral change in a mandatory item) • Reaching a bargaining impasse on a nonmandatory issue • Refusing to furnish information necessary for the union’s carry out its duty to bargain MGMT 523 – Chapter 6

  16. Union Per Se ULPs • Insisting on a closed shop or discriminatory hiring clause • Refusing to meet with a legal representative of the employer about negotiations • Refusing to negotiate a management proposal involving a mandatory subject MGMT 523 – Chapter 6

  17. Other Bad Faith Bargaining • “Pleading Poverty” • Totality of Conduct Doctrine’ • Boulwarism • Surface bargaining • Dilatory tactics • Imposing unreasonable conditions • Unilateral changes • Commission of ULPs MGMT 523 – Chapter 6

  18. Managerial Rights • Management Rights • The discretionary freedom of management to decide about and direct the operations of the firm • Reserved Rights Doctrine • Management retains all rights to manage the firm except those rights restricted by the terms of its labor agreement with labor MGMT 523 – Chapter 6

  19. Successor Employer Bargaining Obligations • Successor Employer • Legal duty to bargain with an existing union if there is substantial continuity of operations • Successorship Clause • A clause requiring the present owners to obligate subsequent owners to continue the labor contract MGMT 523 – Chapter 6

  20. Bankruptcy • A bankrupt firm can abandon the terms of a labor contract if the firm: • Seeks to make a fact-based proposal to the union to modify the contract • Provides relevant information to the union • Bargains in good faith • Needs to modify the contract to reorganize the firm and treats all parties fairly • Has a balance of equities favoring modification of the contract MGMT 523 – Chapter 6

  21. Violations of the Duty to Bargain in Good Faith • Legal Remedies • A cease-and-desist order that halts further ULPs • A requirement to post written notices of employee basic rights and pledge to cease ULPs • Require employer to take affirmative actions that restore employees’ rights and remove the effects of past practices MGMT 523 – Chapter 6