Mgmt 583
Chapter 11: Contract Negotiations
Fall 2008
Four Stages of Collective Bargaining
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Preparation
Initial Proposals
Primary bargaining
Eleventh-hour bargaining.
Management Preparation
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Three objectives of the preparation stage:
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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.
Stages in Preparation
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Coordination stage
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Individuals are assigned to draft proposals for specific
parts of the CBA.
Timetables for negotiations are established.
Selecting the Bargaining Team
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Chief negotiator
Cost specialist
Secretary-/note taker
Language draftsman
Operations specialist (determines the impact of
concessions on production and processes.
Stages in Preparation
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Review the previous negotiations
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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
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Id problem provisions.
Look at grievance trends.
Stages in Preparation
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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
Union Preparation
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Activities at the National
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Researches firm’s ability to pay.
Researches locals ability to strike.
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Willingness for strike vote.
Nationals financial ability to support a strike.
Consults with representatives from the local.
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Locals present concerns and objectives.
Nation conveys “non-concession” objectives.
Union Preparation
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Activities at the Local
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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.
Initial Proposals
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Chief negotiators from each side develop the
bargaining agenda.
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Meeting times
Order of bargaining demands
Ground rules
Opening statements
By convention, the union usually presents its
initial demands.
Primary Bargaining
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Management offers counterproposals ti
union’s initial demands.
Union will then counter with its own
counterproposals.
Primary Bargaining
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Behaviors to avoid
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Abusive language
Ultimatums
Personal attacks
Extreme statements
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“Management absolutely refuses to grant the union a
checkoff.”
Three Rules of Counterproposals
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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.
Beware of Roll-Up Costs
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Roll-up costs are those concessions that also
effect the cost of other issues.
For example a wage increase will also
increase:
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Pension costs
Paid vacations
Paid holydays Paid sick leave
Social security (FICA & FICA-M)
Unemployment compensation.
Eleventh-Hour Bargaining
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The crisis stage as negotiations as the
expiration of the CBA approaches.
Bargaining tempo increases.
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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.
Walton & McKersie’s Behavioral
Theory
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Labor negotiations are a mixture of conflict
and collaborative behaviors. Parties
engage in the defense of each ones selfinterest while attempting joint problem
solving.
Walton & McKersie’s Behavioral
Theory
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Four bargaining sub-processes were
defined
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Distributive Bargaining
Integrative Bargaining
Attitudinal Structuring
Intraorganizational Bargaining
Distributive (Competitive)
Bargaining
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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).
Integrative (Problem Solving)
Bargaining
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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.
Attitudinal Structuring
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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.
Intraorganizational Bargaining
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Achieving consensus within the respective
organizations.
Bargaining teams (especially union teams) are
not always united.
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Political rivalries.
Diverse constituencies.
Resolving internal disputes before the
negotiations begin is critical.