Slide 1
Human Resources
Chapter 14
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©2007 Prentice Hall
Chapter 14: Human Resources
Slide 2
Chapter 14 Objectives
After studying this chapter, you will be able to:
• Explain the challenges and advantages of a
diverse workforce
• Discuss four staffing challenges employers are
facing in today’s workplace
• Discuss four alternative work arrangements that
a company can use to address workplace
challenges
• Identify the six stages in the hiring process
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©2007 Prentice Hall
Chapter 14 Objectives
After studying this chapter, you will be able to:
Explain the challenges and advantages of a diverse workforce
Discuss four staffing challenges employers are facing in today’s workplace
Discuss four alternative work arrangements that a company can use to address
workplace challenges
Identify the six stages in the hiring process
Slide 3
Chapter 14 Objectives, cont.
• List six popular types of financial incentive
programs for employees
• Highlight five popular employee benefits
• Describe four ways an employee’s status may
change and discuss why many employers like to
fill job vacancies from within
• Define the collective bargaining process
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©2007 Prentice Hall
Chapter 14 Objectives, cont.
List six popular types of financial incentive programs for employees
Highlight five popular employee benefits
Describe four ways an employee’s status may change and discuss why many
employers like to fill job vacancies from within
Define the collective bargaining process
Slide 4
Human Resource
Management
Compensation
Training
Motivation
Evaluation
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©2007 Prentice Hall
Hiring the right people to help a company reach its goals and then overseeing
their training and development, motivation, evaluation, and compensation is
critical to a company’s success. These activities are known as human
resources management (HRM), which encompasses all the tasks involved in
acquiring, maintaining, and developing an organization’s human resources.
Because of the accelerating rate at which today’s workforce, economy, corporate
cultures, and legal environment are being transformed, the role of HRM is
increasingly viewed as a strategic one.
This slide includes an image of three boxes surrounded by a border containing
four boxes. The middle three boxes read from left to right: acquiring, maintaining,
developing. In the border, the top box is compensation. In the right box is
motivation. In the bottom box is evaluation. In the left box is training.
Slide 5
Staffing Challenges
Aligning the
Workforce
Fostering
Employee
Loyalty
Monitoring
Workloads /
Burnout
Managing Work
Life Balance
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©2007 Prentice Hall
Aligning the workforce. Matching the right employees to the right jobs at the
right time can be a constant challenge. Externally, changing market needs, the
competitive moves, advances in technology, and new regulations can all affect
the ideal size and composition of the workforce. Internally, shifts in strategy,
technological changes, and growing or declining product sales can force
managers to realign their workforces.
Fostering employee loyalty. Companies face a considerable dilemma
regarding employee loyalty: Most can’t guarantee long-term employment, but
they want employees to commit themselves to the company.
Monitoring workloads and avoiding employee burnout. As companies try to
beat competitors and keep workforce costs to a minimum, managers need to be
guard for employee burnout, a state of physical and emotional exhaustion that
can result from constant exposure to stress over a long period of time.
Managing work-life balance. The concern over workloads is one of the factors
behind the growing interest in work-life balance, the idea that employees,
managers, and entrepreneurs need to balance the competing demands of their
professional and personal lives. Many companies are trying to make it easier for
employees to juggle multiple responsibilities with on-site daycare facilities,
flexible work schedules, and other options designed to improve quality of work
life (QWL).
Slide 6
Demographic Challenges
Workforce
Diversity
Alternative
Work Programs
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©2007 Prentice Hall
The workforce is always in a state of demographic change, whether it's a shift in
global immigration patterns or the changing balance of age groups within a
country's population. The companies that are most successful at managing and
motivating their employees take great care to (1) understand the diversity of their
workforces and (2) establish programs and policies that both embrace that
diversity and help employers take full advantage of diversity's benefits.
This slide includes an image of a man and a woman standing in the middle of a
city staring at a globe that appears to be floating in the air.
Slide 7
Workforce Diversity
Age
Age
Religion
Religion
Gender
Gender
Race
Race
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©2007 Prentice Hall
In many companies, it’s not uncommon for two or even three generations of
people to be working side by side. While this age diversity offers some important
benefits—such as keeping a company tuned into different sectors of the
consumer market—it also presents two key managerial challenges. The first
involves the age composition of the workforce as it relates to supply and
demand. For example, higher than average birth rates during the two decades
following World War II produced the Baby Boom generation, which has
dominated the U.S. workforce for the past couple of decades. Many middle and
upper management positions are now filled by people from this age group, a fact
that can be a source of frustration for younger employees hoping to climb the
corporate ladder. However, as this generation begins to retire, their exodus from
the workplace could have the reverse effect, leaving millions of positions empty
starting around 2010.
The second challenge involves attitudes and expectations regarding work, which
can differ from one generation to the next. For instance, the so-called Generation
X, those born from the early 1960s through the early 1980s, is the most
entrepreneurial generation in U.S. history. A majority of Gen-Xers have
expressed an interest in being their own bosses, and many are comfortable
working freelance positions on a long-term basis. In contrast, the first wave of
Generation Y or the Millennial Generation, now entering the workforce has
shown a greater interest in job security and cooperative team efforts.
. “HR Must Evolve to Meet Needs of Age-Diverse Workforce,” Reliable Plant
[accessed 12 August 2007] www.reliableplant.com.
. Neil Howe and William Strauss, “The Next 20 Years: How Customer and
Workforce Attitudes Will Evolve,” Harvard Business Review, July/August 2007,
41–52.
By many measures, the United States has made considerable strides toward
gender equity in the past fifty years, but significant problems remain. For
example, the Equal Employment Opportunity Commission (EEOC) still fields
more than 20,000 complaints a year regarding gender discrimination.
The statistical picture of men and women in the workforce is complex, and
various parties have sliced and diced the data in order to promote a variety of
conclusions. However, nearly a half-century after the Civil Rights Act of 1964
made it illegal for employers to practice sexism, or discrimination on the basis of
gender, significant problems remain. “Sex-Based Charges: FY 1997 - FY 2006,”
EEOC website [accessed 13 August 2007] www.eeoc.gov.
In many respects, the element of race in the diversity picture presents the same
concerns as gender: equal pay for equal work, access to promotional
opportunities, and ways to break through the glass ceiling. And as with gender,
the EEOC still receives thousands of complaints every year about racial
discrimination.
The effort to accommodate employees’ life interests on a broader scale has led a
number of companies to address the issue of religion in the workplace. As one of
the most personal aspects of life, of course, religion does bring potential for
controversy in a work setting.
Slide 8
Diversity Initiatives
Policies
Procedures
Training
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©2007 Prentice Hall
Whether they address diversity under legal or social pressure or recognize the
advantages of embracing diversity, many companies have implemented diversity
initiatives, formal policies, procedures, and training programs to promote
successful management of diverse workforces. Such initiatives include long-term
commitments to hiring more women, company-sponsored networking and career
planning for women, diversity training and workshops, and mentoring programs
designed to help female employees move more quickly through the ranks.
Although encouraging sensitivity to employee differences is an important first
step, a company stands to benefit most when it incorporates its employees’
diverse perspectives into the organization’s work. This assimilation enables the
company to uncover new opportunities by rethinking primary tasks and redefining
markets, products, strategies, missions, business practices, and even cultures.
In short, diversity can be an asset, and one of the challenges of corporate human
relations is to make the most of this asset.
This slide includes an image of three interlocking circles. The left circle reads
policies. The middles circle reads procedures. The right circle reads training.
Slide 9
Alternative Work
Arrangements
Flextime
Flextime
Telecommuting
Telecommuting
Job
Job Sharing
Sharing
Extended
Extended
Leaves
Leaves
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©2007 Prentice Hall
An increasingly important alternative work arrangement, flextime is a scheduling
system that allows employees to choose their own hours, within certain limits.
Telecommuting, working from home or another location using computers and
telecommunications equipment to stay in touch with colleagues, suppliers, and
customers, helps employees balance their professional and personal
commitments by spending less time in transit between home and work.
Job sharing lets two employees share a single full-time job and split the salary
and benefits. It can be an attractive alternative for people who want part-time
hours in situations normally reserved for full-time employees.
Perhaps the most challenging of all alternative work arrangements are situations
in which employees want to temporarily leave the workforce for an extended
period to raise children, volunteer, or pursue other personal interests. For
example, nearly half of all women in one survey had left work to raise children,
and 93 percent of these women wanted to return to work at some point.
Slide 10
Planning for Staffing Needs
Forecasting
Estimate
Demand for
Employees
From
Business
Plan
Estimate
Supply of
Employees
Evaluating Job Requirements
Perform
Job Analysis
Write Job
Descriptions
Write Job
Specifications
To
Hiring
Process
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©2007 Prentice Hall
One of the six functions of the human resources staff members is to plan for a
company’s staffing needs. Proper planning is critical because a miscalculation
could leave a company without enough employees to keep up with demand,
resulting in customer dissatisfaction and lost business. Yet if a company expands
its staff too rapidly, profits may be eaten up by payroll, or the firm may have to lay
off people who were just recruited and trained at a considerable expense. The
planning function consists of two steps: (1) forecasting supply and demand and
(2) evaluating job requirements.
Slide 11
Forecasting Supply
Employee Retention
Contingent
Employees
Outsourcing
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To ensure a steady supply of experienced employees for new opportunities and
to maintain existing operations, successful companies focus heavily on
employee retention.
Contingent employees, or temporaries, can help businesses save money and
increase flexibility by augmenting their core workforces as needed, without
adding to fixed costs.
In addition to augmenting core staff with contingent workers, companies can also
outsource entire business functions, such as sales, product design, or even
human resources. In general, outsourcing is used to take advantage of outside
expertise, to increase flexibility, or to benefit from the cost-efficiencies offered by
firms that specialize in a single business function.
This slide includes an image of a woman dressed in a business suit sitting at a
computer staring at the screen with her hand on her chin.
Slide 12
Forecasting Demand
1.
2.
3.
4.
5.
6.
Forecasted Sales Revenues
Expected Turnover Rate
Current Workforce Skill Level
Impending Strategic Decision
Changes in Technology
Company’s Current and Projected
Financial Status
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To forecast demand for the numbers and types of employees who will be needed
at various times, HR managers weigh (1) forecasted sales revenues; (2) the
expected turnover rate, the percentage of the workforce that leaves every year;
(3) the current workforce’s skill level, relative to the company’s future needs; (4)
impending strategic decisions; (5) changes in technology or other business
factors that could affect the number and type of workers needed; and (6) the
company’s current and projected financial status.
. Dessler, A Framework for Human Resource Management, 74–75.
Slide 13
Evaluating Job Requirements
Job
Analysis
Job
Job
Description Specification
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©2007 Prentice Hall
Through the process of job analysis, employers try to identify both the nature
and demands of each position within the firm and the optimal employee profile to
fill each position. Once job analysis has been completed, the human resources
staff develops a job description, a formal statement summarizing the tasks
involved in the job and the conditions under which the employee will work. In
most cases, the staff will also develop a job specification, which identifies the
type of personnel a job requires, including the skills, education, experience, and
personal attributes that candidates need to possess . Dessler, A Framework for
Human Resource Management, 66.
This slide includes an image of three interlocking circles. The left circle reads job
analysis. The middle circle reads job description. The right circle reads job
specification.
Slide 14
Recruiting Employees
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Having forecast a company’s supply and demand for employees and evaluated
job requirements, the human resource manager’s next step is to match the job
specification with an actual person or selection of people. This task is
accomplished through recruiting, the process of attracting suitable candidates
for an organization’s jobs.
Recruiters are specialists on the human resources staff who are responsible for
locating job candidates. They use a variety of methods and resources, including
internal searches, newspaper and Internet advertising, public and private
employment agencies, union hiring halls, college campuses and career offices,
trade shows, corporate “headhunters” (people who try to attract people at other
companies), and referrals from employees or colleagues in the industry. One of
the fastest-growing recruitment resources for both large and small businesses is
the Internet.
Slide 15
The Hiring Process
1
Select
Qualified Candidates
2
Screen
Candidates
3
Conduct
Interviews
4
Evaluate
Candidates
5
Check
References
6
Select the
Best Candidate
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©2007 Prentice Hall
Most companies go through the same basic stages in the hiring process as they sift
through applications to come up with the person (or persons) they want.
The first stage is to select a small number of qualified candidates from all of the
applications received.
The second stage in the hiring process is to interview each candidate to clarify
qualifications and to fill in any missing information.
After the initial prescreening interviews comes the third stage, when the best candidates
may be asked to meet with someone in the human resources department who will
conduct a more probing interview. For higher-level positions, candidates may go through
a series of interviews with managers, potential co-workers, and the employees who will
make up the successful candidate’s staff.
After all the interviews have been completed, the process moves to the final stages.
In the fourth stage, the department supervisor evaluates the candidates, sometimes in
consultation with a higher-level manager, the human resources department, and staff.
During the fifth stage, the employer checks the references of the top few candidates.
The employer may also research the candidates’ education, previous employment, and
motor vehicle records. A growing number of employers are also checking candidates’
credit histories.
In the sixth stage, the supervisor selects the most suitable person for the job. Now the
search is over-provided the candidate accepts the offer.
Slide 16
Background Checks
Employers take the following steps before hiring applicants:
Employment Verification
86%
Criminal Records Check
81%
Drug Screening
78%
Reference Checks
70%
Education Verification
70%
Motor Vehicle Records
56%
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In response to concerns about workplace violence, unethical business behavior,
and other problems, many companies are taking a closer look at job candidates.
Violence in the workplace is an increasing threat that can harm employees and
customers, hurt productivity, and lead to expensive lawsuits and higher health
care costs. This means that companies need to be especially careful about
negligent hiring.
Employers conduct a variety of background checks on job applicants, including
verifying all educational credentials and previous jobs, accounting for any large
time gaps between jobs, and checking references. Background checks are
particularly important for jobs in which employees are in a position to possibly
harm others.
Slide 17
The Legal Aspect of Hiring
Equal Employment
Opportunity
Negligent Hiring
Immigration Reform
and Control Act
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©2007 Prentice Hall
Federal and state laws and regulations govern many aspects of the hiring
process. In particular, employers must be careful to avoid discrimination in the
wording of their application forms, in interviewing, and in testing. Employers must
also respect the privacy of applicants.
Asking questions about unrelated factors such as citizenship, marital status, age,
and religion violates the Equal Employment Opportunity Commission’s
regulations because such questions may lead to discrimination. In addition,
employers are not allowed to ask questions about whether a person has children,
whether a person owns or rents a home, what caused a physical disability,
whether a person belongs to a union, whether a person has ever been arrested,
or when a person attended school. The exception is when such information is
related to a bona fide occupational qualification for the job.
On the other hand, employers must also obtain sufficient information about
employees to avoid becoming the target of a negligent-hiring lawsuit. Moreover,
the Immigration Reform and Control Act (passed in 1986) forbids almost all U.S.
companies from hiring illegal aliens. The act also prohibits discrimination in hiring
on the basis of national origin or citizenship status. This creates a difficult
situation for employers who must try to determine their applicants’ citizenship, so
they can verify that the newly hired are legally eligible to work, without asking
questions that violate the law. As you can imagine, striking the balance can be
quite a challenge.
This slide includes an image of a judge’s mallet and gavel.
Slide 18
Training and Development
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To make sure that all new employees understand the company’s goals, policies,
and procedures, most large organizations and many small ones have welldefined orientation programs.
Training and other forms of employee development continue throughout the
employee's career in most cases. Many HR departments maintain a skills
inventory, which identifies both the current skill levels of all the employees and
the skills the company needs in order to succeed. Depending on the industry,
some of the most common subjects for ongoing training include problem solving,
new products, sales, customer service, safety, sexual harassment, supervision,
quality, strategic planning, communication, time management, and team building.
This slide includes an image of two businessmen walking. They are both wearing
suits. One man is much larger than the other man. The larger man has his arm
around the smaller man and appears to be giving him directions. The larger man
is pointing out into the distance.
Slide 19
Compensation and Benefits
Salaries
Wages
Benefits
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©2007 Prentice Hall
Pay and benefits are of vital interest to all employees, of course, and these
subjects also consume considerable time and attention in HR departments. In
many companies, payroll is the single biggest expense in the entire company,
and the cost of benefits, particularly health care, continues to climb.
Consequently, compensation, the combination of direct payments such as
wages or salary and indirect payments through employee benefits, is one of the
HR manager’s most significant responsibilities.
This slide includes an image of three interlocked circles. The left circle reads
salaries. The middle circle reads wages. The right circle reads benefits.
Slide 20
Compensation
Wages
Salaries
Hourly
Workers
Benefits
Corporate
Executives
Pay Scale
Bonuses
Benefits
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©2007 Prentice Hall
Administering compensation, a combination of payments in the form of wages or
salaries, incentive payments, employee benefits, and employer services, is another
major responsibility of a company’s human resources department.
Many blue-collar (production) and some white-collar (management and clerical)
employees receive compensation in the form of wages, which are based on calculating
the number of hours worked, the number of units produced, or a combination of both
time and productivity.
Employees whose output is not always directly related to the number of hours worked or
the number of pieces produced are paid salaries. As with wages, salaries base
compensation on time, but the unit of time is a week, two weeks, a month, or a year.
Salaried employees such as managers normally receive no pay for the extra hours they
sometimes put in; overtime is simply part of their obligation.
Compensation has become a hot topic in recent years, at both ends of the pay scale. At
the low end, for instance, many businesses, employees, and unions are wrestling with
the downward pressure on wages and benefits exerted by Wal-Mart's enormous
presence in the economy. Wal-Mart's compensation policies affect thousands of
employees who've never worked there.
At the upper end of the pay scale, executive compensation, and the pay of CEOs in
particular, has generated its own brand of controversy. CEOs typically receive complex
compensation packages that include a base salary plus a wide range of benefits and
bonuses, including golden handshakes when they join a company and golden
parachutes when they leave. It is important to note that comparing compensation
packages is difficult because they are so complex, and some include potential income
that executives haven't actually received yet, but critics still find the numbers staggering.
Slide 21
Incentive Programs
Bonuses
Bonuses
Commissions
Commissions
Profit
Profit Sharing
Sharing
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©2007 Prentice Hall
To encourage employees to be more productive, innovative, and committed to
their work, many companies provide managers and employees with incentives,
cash payments that are linked to specific individual, group, and companywide
goals; overall productivity; and company success. In other words, achievements,
not just activities, are made the basis for payment. The success of these
programs often depends on how closely incentives are linked to actions within
the employee’s control:
For both salaried and wage-earning employees, one type of incentive
compensation is the bonus, a payment in addition to the regular wage or salary.
In contrast to bonuses, commissions are a form of compensation that pays
employees a percent of sales made.
Employees may be rewarded for staying with a company and encouraged to
work harder through profit sharing, a system in which employees receive a
portion of the company’s profits.
These incentive programs are so popular in today’s workplace that many
employees consider their financial value as part of their overall salary package.
This slide includes an image of a man who is strapped to a very large dollar bill
that appears to be wings.
Slide 22
Incentive Programs
Gain
Gain Sharing
Sharing
Pay
Pay for
for
Performance
Performance
Knowledge-Based
Knowledge-Based
Pay
Pay
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©2007 Prentice Hall
Similar to profit sharing, gain sharing ties rewards to profits (or cost savings)
achieved by meeting specific goals such as quality and productivity improvement.
A variation of gain sharing, pay for performance requires employees to accept a
lower base pay but rewards them with bonuses, commissions, or stock options if
they reach agreed-upon goals.
Another approach to compensation being explored by some companies is
knowledge-based pay, also known as competency-based pay or skill-based
pay, which is tied to employees’ knowledge and abilities rather than to their job
per se.
This slide includes an image of a man who is strapped to a very large dollar bill
that appears to be wings.
Slide 23
Benefits and Services
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Benefits and services include insurance, paid holidays, pension plan, and other
benefits the company sets up—or provide as flexible plans, sometimes known as
cafeteria plans (so called because of the similarity to choosing items from a
menu). The benefits most commonly provided by employers are insurance,
retirement benefits, employee stock-ownership plans, stock options, and family
benefits.
Slide 24
Insurance
Life and Health
Dental and Vision
Disability
Long-Term Care
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©2007 Prentice Hall
Employers can offer a range of insurance to their employees, including life,
health, dental, vision plans, disability, and long-term-care insurance. However,
perhaps no other issue illustrates the challenging economics of business today
more than health insurance. With insurance premiums and other costs rising
faster than employers can raise their own prices, many companies are searching
for ways to reduce the financial impact.
This slide includes an image of a man standing outside in the rain. He is holding
a briefcase and he is protecting himself from the rain with an umbrella.
Slide 25
Retirement Benefits
Employee
Employee Pension
Pension Plans
Plans
Defined
DefinedBenefit
BenefitPlans
Plans
Defined
DefinedContribution
ContributionPlans
Plans
Retirement
Retirementage
age
Employer
Employercontributions
contributions
Average
Averagesalary
salary
Employee
Employeecontributions
contributions
Years
Yearsof
ofservice
service
Accumulated
Accumulatedearnings
earnings
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In addition to Social Security from the federal government, many employers offer
retirement plans, which are designed to provide continuing income after the employee
retires.
Company-sponsored retired plans can be categorized as either defined benefit plans, in
which the company specifies how much it will pay employees upon retirement, or
defined contribution plans, in which companies specify how much they will put into the
retirement fund (by matching employee contributions, for instance), without guaranteeing
any specific payouts during retirement. Although both types are technically pension
plans, when most people speak of pension plans, they are referring to traditional defined
benefit plans, in which employers promise to pay their employees a benefit upon
retirement based on the employee’s retirement age, final average salary, and years of
service. In the past, most U.S. employers that offered retirement plans offered these
defined-benefit plans, but today fewer than 50 percent still do. Moreover, many of these
plans are now in serious financial trouble.
Defined contribution plans are similar to savings plans that provide a future benefit
based on annual employer contributions, voluntary employee matching contributions,
and accumulated investment earnings. Employers can choose from several different
types of defined contribution plans, the most common of which is known as a 401(k)
plan. Unfortunately, stock market declines, reductions in company contributions, and
accounting scandals have reduced the attractiveness of 401(k) plans in the eyes of
many employees, particularly in the all-too-common situation where employees invested
most of their 401(k) fund in their own employer's stock.
Some eight million U.S. employees are now enrolled in another type of defined-benefit
plan known as an employee stock-ownership plan (ESOP), in which a company places a
certain amount of its stock in trust for some or all of its employees, with each employee
entitled to a certain share. These plans allow employees to later purchase the shares at
a fixed price.
Slide 26
Stock Option Plans
Employer Benefits
Employee Benefits
Cost Effective
Profit Potential
Long-Term Incentives
Long
Long-Term
Vested Interest
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©2007 Prentice Hall
A related method for tying employee compensation to company performance is
the stock option plan. Stock options grant employees the right to purchase a set
number of shares of the employer’s stock at a specific price, called the grant or
exercise price, during a certain time period.
Stock options can be a win-win situation for employers and employees. From the
employer’s perspective, stock options cost little, provide long-term incentives for
good people to stay with the company, and encourage employees to work harder
because they have a vested interest in the company doing well. From the
employee’s perspective, stock options can generate a handsome profit if the
stock’s market price exceeds the grant price. But stock options lose their appeal
when the stock does not perform as expected.
Options are particularly common in executive compensation packages, where
they offer an incentive for effective corporate management.
Slide 27
Family Benefits
Unpaid
Leave
Elder-Care
Daycare
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©2007 Prentice Hall
The Family Medical and Leave Act (FMLA), signed into law in 1993, requires
employers with 50 or more workers to provide up to 12 weeks of unpaid leave
per year for childbirth, adoption, or the care of oneself, a child, a spouse, or a
parent with serious illness.
Day care is another important family benefit, especially for two-career couples.
Today, only 10 percent of companies provide day-care facilities on the premises,
but 86 percent of companies surveyed by Hewitt & Associates offer some form of
child-care assistance.
A related family issue is care for aging parents. An estimated 50 percent of
employers offer some form of elder-care assistance, ranging from referral
services that help find care providers to dependent-care allowances.
Slide 28
Overseeing Changes in
Employment Status
Promotion
Reassignment
Termination
Retirement
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©2007 Prentice Hall
Of course, providing competitive compensation and good employee benefits is
no guarantee that employees will stay with the company. Employees leave
companies for a variety of reasons. Some may decide to retire. Others may
resign voluntarily to pursue a better opportunity. Still others may make a change
because they are promoted, reassigned, or terminated. Whatever the reason,
when a vacancy occurs, companies must go to the trouble and expense of
finding a replacement, whether from inside or outside the company. Overseeing
changes in the employment status is another responsibility of the human
resources department.
Slide 29
Working with Labor Unions
Wages and Benefits
Working Conditions
Job Security
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©2007 Prentice Hall
Although they work toward common goals in most cases, managers and
employees do face an inherent conflict over resources: managers, as
representatives of company ownership, want to minimize the costs of operating
the business, whereas employees want to maximize salaries and ensure good
benefits and safe, pleasant working conditions. If employees believe they are not
being treated fairly or don't have a voice in how the company is run, one option
they can consider is joining labor unions, organizations that seek to protect
employee interests by negotiating with employers for better wages and benefits,
improved working conditions, and increased job security.
This slide includes an image of a man holding what appears to be a sign while he
is protesting or on strike.
Slide 30
Overview of Labor Unions
Advantages
Advantages
Disadvantages
Disadvantages
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©2007 Prentice Hall
Unions have played an important and lasting role in U.S. employee-management
relations and are largely responsible for the establishment of worker’s
compensation, child-labor laws, overtime rules, minimum-wage laws, severance
pay, and more. Employees are most likely to turn to unions if they are deeply
dissatisfied with their current job conditions, if they believe that unionization can
be helpful in improving those conditions, and if they are willing to overlook
negative stereotypes that have surrounded unions in recent years.
One advantage of joining labor unions is that it gives employees stronger
bargaining power. By combining forces, union employees can put more pressure
on management than they could as individuals. Still, not all employees support
labor unions. Some believe that unions stifle individual initiative and are not
necessary to ensure fair treatment from employers. Moreover, companies that
have most successfully resisted unionization seem to have adopted participative
management styles and an enhanced sense of responsibility toward employees.
In addition, some of the most egregious management abuses that unions initially
rallied against, such as forcing children to work long hours, are now prohibited by
law.
Slide 31
Collective Bargaining
Process
1
2
Preparing
Preparing
to
toMeet
Meet
3
Reaching
Reachingan
an
Agreement
Agreement
Meeting
Meeting
4
5
Voting
Votingand
and
Ratification
Ratification
14-31
©2007 Prentice Hall
In a process known as collective bargaining, union and management
negotiators work together to forge the human resources policies that will apply to
the unionized employees--and other employees covered by the contract--for a
certain period, usually three years.
Preparing to meet. The union negotiating team determines the needs of union
members. Management tries to anticipate the union’s demands and decide on
what it is willing to offer.
Meeting. Both sides present their demands, and bargaining follows. The union
may call for a strike vote to demonstrate to management the solidarity of union
members.
Reaching an agreement. If bargaining is successful and a tentative agreement
is reached, the agreement goes out to union members for ratification by vote.
Voting and ratification. If union members approve of the agreement, it is ratified
and can be signed by union and company representatives. If not, negotiators
return to the bargaining table.
Slide 32
Resolving a Labor Issue
Mediation
Arbitration
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If negotiations reach an impasse, outside help may be needed. The most
common alternative is mediation—bringing in an impartial third party to study the
situation and make recommendations for resolution of the differences. Mediators
are generally well-respected community leaders whom both sides will listen to.
However, mediators can only offer suggestions, and their solutions are not
binding. When a legally binding settlement is needed, the negotiators may submit
to arbitration—a process in which an impartial referee listens to both sides and
then makes a judgment by accepting one side’s view. In compulsory arbitration,
the parties are required by a government agency to submit to arbitration; in
voluntary arbitration, the parties agree on their own to use arbitration to settle
their differences.
This slide includes an image of a man holding a bullhorn – he is wearing a suit
and tie.
Slide 33
Attempts to Force a Resolution
Labor
Management
Strike
Strikebreakers
Boycott
Lockouts
Publicity
Injunctions
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Sometimes negotiations reach an impasse, and neither side is willing to
compromise. Labor has several options:
The strike is a temporary work stoppage aimed at forcing management to accept
union demands. An essential part of any strike is picketing, in which union
members positioned at entrances to company premises march back and forth
with signs and leaflets, trying to persuade non-striking employees to join them
and to persuade customers and others to stop doing business with the company.
A less direct union weapon is the boycott, in which union members and
sympathizers refuse to buy or handle the product of a target company.
Increasingly, labor is pressing its case by launching publicity campaigns, often
called corporate campaigns, against the target company and companies affiliated
with it.
Management can use a number of legal methods to pressure unions when
negotiations stall. When union members walk off their jobs, management can
legally replace them with strikebreakers, nonunion workers hired to do the jobs
of striking workers. The U.S. Supreme Court has upheld the use of lockouts, in
which management prevents union employees from entering the workplace, in
order to pressure the union to accept a contract proposal. An injunction is a
court order prohibiting union workers from taking certain actions.
Slide 34
The Labor Movement Today
Membership
Healthcare
Costs
Immigration
Reform
Strategic
Cooperation
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Membership. Labor’s top priority is reversing the downward trend in union
membership. Central to the union message to workers is that membership will
assure them of better wages, better healthcare, and better retirement income.
Health-care costs. Health-care costs and insurance coverage have become a
major point of contention in labor negotiations, with employers saying that
employees need to pay a larger share of health-care costs and employees
saying they can’t afford to. You can expect to see unions play a visible role in the
continuing debate over how to fix the country’s health-care system.
. Change to Win website [accessed 18 August 2007] www.changetowin.org.
Immigration reform. The Service Employees International Union is among the
unions pushing for immigration reform, including creating a path to citizenship for
workers who entered the country illegally and protecting immigrant workers from
exploitation.
Strategic cooperation. In industries that face vigorous international competition,
such as autos, steel, and aircraft, some union and business leaders are trying to
work more cooperatively than they have in years past.