Chapter
12
Participatory Processes
McGraw-Hill/Irwin
An Introduction to Collective Bargaining & Industrial Relations, 4e
Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
12 -31 - 3
The Evolution of Worker and Union
Participation
• Early efforts to create mechanisms for worker
involvement included “Quality of Working Life”
(QWL) programs
- QWL is oriented toward improving organizational
performance and the working life of the employees
• The QWL programs operate at the lowest level of
industrial relations activity, on the shop floor through
the involvement of groups of workers
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Early QWL - Limited Success
• Efforts to create interest in QWL expanded in the early 1970s
- QWL sought to address a perception that modern factories
alienated workers by providing few avenues for employee input
- QWL sought to reduce worker alienation known as the “bluecollar blues”
- Early efforts had opposition from labor and management
• Neither labor nor management saw the need for change
• Both labor and management felt that QWL questioned the
basic assumptions of the collective bargaining process, and
feared for their roles
• Few line managers or executives saw the bottom-line
relevance of QWL – but QWL was “reborn” in the 1980s as
economic pressures intensified
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Quality Circles
• In a typical Quality Circle (QC) program, workers in one area
of a plant meet for one or two hours per week with their
supervisor
- Quality Circles allow workers and management to identify
improvements in production and service delivery
- Many companies initially reported large payoffs from QC
activities, with scrap rates dropping and cost savings through
new processes
• The Limited Gains from Quality Circles
- QC gains dissipated over time
- Workers became frustrated when their suggestions were ignored
- Workers ran out of suggestions or found them to be in violation
of work rules
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The Broadening of QC and QWL
Programs
• The most successful QC and QWL programs involved broadening work
rules, bargaining issues, and production methods
- Without the broadening of work rules, QWL programs were not
able to address performance and employment security
• The Expansion of QWL at Xerox
- Xerox and their union committed to expand problem-solving
- Study teams of workers and management suggested changes in
work organization that required contractual changes, and thus
integrated QWL into the collective bargaining process
- Unions agreed to subcontracting and management accepted a nolayoff provision
- Xerox won the Baldrige award for organizational excellence, and
the participatory activities received much of the credit
• Strategic participation included top executive access by unions
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The Limits of Participation
• Events at Xerox at the start of the twenty-first century also
illustrate the limits of the participatory process
- The process cannot override fundamental changes in market
conditions or declines in core business caused by strategic
mistakes
- By 2000, Xerox lost market share, failed in elements of
restructuring, and was charged with accounting irregularities
- Employment in Rochester, NY, has been reduced by 50%
- While the extent of the participation has diminished, efforts to
work together have continued
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New Channels of Communication
• The expansion of the participation processes is often
associated with new communications between
management and labor
- Often led to expanded communication between union
officers and higher-management
• Work Organization Restructuring - Links to QWL
- Work reorganization became a central part of many
participation processes due to pressures for flexibility
- More easily done in new plants or those that are
completely retrofitted
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The Links between Teamwork,
Participation, and Work Restructuring
• Teamwork systems require a fundamental
reorganization of the workplace
- They replace multiple and narrow job
classifications with jobs that are broader in scope
- Workers make discretionary judgments and an
investment in training
- Some involve “pay-for-knowledge” plans
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New Roles for Supervisors
• Traditional supervisors are sometimes replaced with team
leaders
- Many team leaders are members of the bargaining unit rather
than first-line management
- In some cases, such as the Saturn Corporation, union and
nonunion team leaders are paired as partners who share
responsibility for managing the teams
• The Expansion of Teams
- Some plants have an “administrative” team which includes the
plant manager and union chairman
- A key to such a team’s success is union participation in initial
design of changes
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Managing the Overlap between Participation, Work
Restructuring, and Collective Bargaining
• As participatory processes expand, unions face a challenge to
manage and coordinate the overlap
- Unions try to avoid grievance or collective bargaining issues in
team meetings
- However, the line between collective bargaining and the
participatory process blurs as the process matures
- This occurred at Xerox, where workers made recommendations
that altered job descriptions and subcontracted work
- The situation at Xerox and Kaiser Permanente illustrated that
some way of integrating contract negotiations with on-going
participation must be found for the joint effort to survive
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Changes in Contractual Procedures that
Emerge from Participation
• As labor and management participate more directly in
decisions, they find the formal contractual procedures
less important
- Such was the case at Dayton Power, which replaced a
114-page agreement with a 13-page “compact”
- That compact introduced a no-layoff clause and new
incentive pay system
- This illustrated how increased worker and union
participation can change practices
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An Issue for Unions: How Far to Go in Lessening
Formal Rules and Procedures
• Unions want more cost competitiveness and job
security
- But don’t want to abandon formal negotiations and
grievance procedures
- Union leaders can allow participation to proceed but
coordinate the connection to collective bargaining
- Cases show that if a union maintains an arms-length
distance, as some point a confrontation develops or
participation withers
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New Union Rules
• Joint steering committees can help with oversight of the
participatory process
- Former union officers can make good facilitators
• They tend to be respected by the work force and adept at
compromise
- The result is the creation of a complex set of committees and
new jobs that coordinate participation and collective
bargaining
- In many settings, union officers now spend as much of their
time on joint activities as they do traditional arm’s-length
activities
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The Expansion of Joint Activities
• Other joint activities tend to evolve from the participatory
process
- They include employee assistance programs, such as alcohol and
drug abuse counseling, health and safety committees, absentee
programs, training and education, and community service
programs
- Union officers spend more time in such roles
- This trend has led to changes in job titles of workers and more
facilitation
- In service industries, such as hotels or hospitals where multiemployer bargaining structures exist, joint efforts often cut
across employers
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Worker and Union Participation in
Strategic Decisions
- Some worker involvement comes from the
formal participatory process
• In other cases from an informal basis
- An example of this evolutionary expansion
occurred in some auto plants
• Workers and union representatives now sit on
planning committees that operate at the plant
level
• They assist in developing new practices to
avoid outsourcing and win new business
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The Effects of Downsizing and Outsourcing Pressures:
Heightened Concern for Employment Security
- Downsizing and threats of outsourcing in the
1990s led many unions to increase their
involvement in business issues
- Unions bargained for employment security
clauses that included participation as well as
concessions
- The process has led to extensive cooperation,
including avoidance of representation elections
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The Sources of Failure
• Joint processes seldom last forever
- Many fail in the early stages because leaders are
unable to make the organizational and role
adjustments needed to integrate joint efforts in
union/management relationships
- Recognition that participatory process are
vulnerable to business decisions traditionally under
the control of top management is why some labor
leaders pressed for a voice in strategic decision
making
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Worker and Union Voice in 21st Century
Corporations
• The U.S. experienced a crisis of corporate confidence in the
early twenty-first century
- The scandals arose from accounting and executive compensation
issues in companies such as Enron, Tyco, Polaroid, and Adelphia
Communications
- These scandals raised questions about the role of employees and
union representatives in corporate governance
- Given the growing importance of knowledge and skills as a
source of competitive advantage to corporations, this issue will
be important in future debates over the roles of employees
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The Debate Surrounding Participatory
Programs
• Critics argue that participatory programs do not lead to
meaningful worker involvement
- They claim that the team systems are used to put peer
pressure on workers and remove the independent voice of
the union
- They call such programs a “halfway house” to nonunion
operations
- Proponents argue it’s a better way to reach their
membership’s goals
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Assessing the Effects of Participatory
Processes
- Management seems convinced that participatory processes
and work reforms can improve productivity and quality
- A number of unionists are coming to a similar judgment
- Research shows that narrowly defined QC and QWL
programs have only a small positive effect on product quality
and negligible effects on productivity
- Auto plants with the highest productivity and quality are not
the most technologically advanced, but those that integrate
human resource strategy with production processes
- The best performing plants link “humanware” and
“hardware” through participation
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Union Representation on a Company’s
Board of Directors
- Formal representation on the board of directors is another
way unions have achieved involvement in strategic
decisions
- Started with the addition of a UAW representative on
Chrysler’s board as part of the federal loan guarantees in
1980
- Not all are success stories, as with Rath Packing and
Eastern Airlines
- Evidence suggests that board membership alone does not
lead to substantial payoff for workers
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Employee Ownership
- A more radical form or participation is employee ownership
- In some cases, employee buyouts occurred in the face of
impending plant shutdowns
- Some unions have promoted employee ownership as a way to
improve job security
- The employee buyout of United Airlines is the most noteworthy
example
- In 1994, United became the largest employee-owned company in
the U.S.
- It is not clear that the employee ownership had a positive effect
on morale or corporate performance at United
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The Views of Labor Toward Employee
Ownership
- Unions have been traditionally unenthusiastic
- Union leaders may fear that ownership will lead to a lack
of need for a union
- However, studies show this may not be the case
- While new forums arise in ESOPs, members still prefer
traditional bargaining for wage and benefit negotiations
- Unions fear that economic pressures will bring wage and
benefit cuts to save jobs
- Unions are also concerned about the effects of such wage
cuts on other unionized firms in the industry
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The Impact of Worker Ownership on
Economic Performance
• Evidence suggest that performance improves in employeeowned firms when workers have broader decision-making
opportunities
- ESOPs may work best in small, stable firms, where skilled
workers can improve productivity and economic
performance through motivation and group performance
- Critics say ESOPs put worker pensions at risk without any
real increase in decision-making
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Participation through Industrywide LaborManagement Committees
• In some competitive industries with numerous
employers and a single union or small number of
unions, industrywide labor-management committees
historically were used to discuss problems of mutual
interest outside the collective bargaining process
• Those committees represented early efforts by unions
to participate in broad strategic issues outside of
formal collective bargaining
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The Textile Industry Case
- The Amalgamated Clothing and Textile Workers Union
(ACTWU - now part of UNITE) became involved at the early
stage in research and development to mechanize production to
help stem the flow of imported goods
- In contrast to other unions, the ACTWU became deeply involved
before management’s strategic decision to implement the
technology
- Later, the union agreed to an experimental program that allowed
some importation of goods in exchange for a commitment to
reinvest in U.S. facilities
- Joint committees can be useful in creating links between
participation and the formal bargaining process
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Summary
- Experience suggest that new participatory processes cannot operate
in isolation from collective bargaining
- Reforms work best when they are associated with changes across
all three levels of industrial relations activity
- The ultimate success of reforms depends upon the ability to
reinforce and sustain high levels of trust
- To achieve tangible benefits, participatory programs have often
been accompanied by contract changes
- Shop floor participation has been spurred by strategic participation
- This helps convince workers that enhanced job security will follow
strategic participation
- Union critics fear that they will be co-opted by management in the
participatory process and their independence will be compromised
- Participation has rarely expanded without a crisis setting