The existence of high commitment management in unionized workplaces Essay
The existence of high commitment management in unionized workplaces
“The existence of high commitment management in unionized workplaces suggests that such management is compatible with trade unionism.” Discuss
The relationship between workers and management has historically been an adversarial one. In the process of fighting for employee right and benefits, unions have traditionally created a ‘them and us’ atmosphere between employees and managers. On the other hand, high commitment management tries to eliminate the ‘them and us’ atmosphere and instead attempts to replace it with one of partnership where both employees and management work together for the benefit of the firm. Thus, the respective natures of high commitment establishments and unions would imply incompatibility. It is due to this belief that some high commitment firms devote enormous resources to strategies aimed to keep unions away from their firms such as hiring lawyers who specialize in union avoidance and implementing high commitment work practices such as grievance systems and work teams.
However, there is a paradox to this belief as studies show that as compared with non-unionized firms, unionized firms in high commitment establishments provide more rights and benefits to workers, give more opportunities to employees to give and receive information, and give a greater voice to employees to voice either constructive suggestion or dissent (WERS 1992). Furthermore, union presence is increasingly popular in HRM organizations, as union density is 47% in organizations which employ at least half of the identified high commitment management practices. In this paper, I will use evidence from various studies to show why high commitment firms and unions are indeed compatible.
High commitment management is based on the theory that firms who give more
High commitment management is based on the theory that firms who give more to their workforce get back more from it in return. This requires a cooperative relationship based on trust and reciprocity between labor and management. Unions can help in solidifying a high commitment environment by policing management to ensure that certain high commitment goals are met. Unions in high commitment work environments fight to give employees a collective voice in decision making as well as enhancing distributive and procedural justice while in return improving workforce solidarity and aiding in legitimizing change. Thus, the compatibility between management and unions can increase the payoffs of both management and labor while allowing the firm to firm to be driven forward.
In the fast pace, ever changing corporate world, responsiveness to change and flexibility within firms are oftentimes required so that firm can readily adapt to ever-changing times. Recent times have seen an increasing amount of firms moving away from traditional authoritarian ways of management towards that of high commitment human resource management. Such drastic changes in work practicess however, are not always easily implemented because a lack of communication between the workforce and managers makes it hard to change the character of employment relationships. Unions however, can aid in making such changes by allowing firms to communicate to the entire workforce quickly and efficiently while giving the workforce the opportunity to respond with input or inquiries.
This increases the workforce’s knowledge and understanding of the new direction that their firm is taking and improves the probability that they will facilitate rather than resist future changes. Such was the case with Tesco, who realized that its inflexible employee involvement structure, as well as it’s “high turnover, relatively low pay and a hands on directive management style were inconsistent with achieving enhanced levels of service to advance in competitive strategy.
“1 Tesco wanted their employees to identify with and commit themselves to the company, and it saw the union Usdaw as the means for cultivating and realizing this goal. As a result a partnership between Tesco and Usdaw was formed where Usdaw gave up their strike threat in return for a greater union input to secure improved policy implementations. As a result, employee wages rose, terms and working conditions were improved and “staff turnover dropped significantly.”2 . Thus, this partnership took a step away from an ‘us and them’ environment and took one towards unions working with management as team for the benefit of the entire firm.
High commitment management is greatly dependent on a partnership between employees and management. This assumes that there aren’t agency problems because it is expected that employees have a deep understanding of the firm’s interests and that they go about their job as if those interests were their own. In order for the partnership between employees and management to flourish however, a workforce must have a collective voice in decision-making. Firms encounter many problems when trying to give individual workers decision-making authority. For instance, there is always the fear that a worker will abuse his decision-making authority by using it to further his own ends rather than to help the entire firm advance. Another problem is that it is extremely difficult to have a partnership between management and a fragmented workforce. Unions however facilitate a partnership by providing ‘a channel of communication between management and the entire workforce.
‘3 This enhanced communication is made possible by unions because just as management speaks with single voice, having a union allows the employees it represents to speak to management with a unified voice. Thus unions give their members decision making authority by taking into account the needs of the workforce and communicating it to managers. As a result, there is an improved match between what employees want and what they get from management and this is an important ingredient in high commitment environments.
Allowing workers to have a say in how their firm is managed increases their job satisfaction and is a major reason why “on average, turnover is lower in union settings.”4 In addition, unions tend to fight more for the benefits of employees with longer tenures in firms. This gives union members an increased incentive to commit themselves to their firm in the long term and also may be a factor contributing to lower turnover. This is compatible with high commitment management strategy in many occupations such as teaching and nursing where goals such as low turnover and worker longevity are important.
However, any high commitment based partnership can break down if there is a lack of trust and accountability. Unions though can be trusted by management to act cooperatively because managers know that union officials want to protect their union’s reputation with a particular firm and oftentimes this ” concern for its reputation can be the guarantee that management needs of good, constructive behavior”5. In addition, a long-term partnership between unions and management can permit a greater degree of trust and objectivity than can the partnership between management and individual workers. This is because there is a greater frequency of interactions between management and a union.
The partnership’s experience in collectively dealing with past disputes makes it possible for future disputes to be settled in a promptly in a way that doesn’t disturb work practices. This partnership also presents a checks and balance system to ensure that both parties act cooperatively. Just as “a union is a party that can be held accountable for the actions of its members”6, management can also be held responsible for bad behavior of any single manager. For instance, if a manager is engaging in an activity that the workforce views unfavorably, a union representative can give notice to management to put an end it before it goes too far.
One of the biggest obstacles not permitting employees from fully committing themselves to a high commitment firm is if they perceive there to be unjustified unequal treatment. This can decrease employee performance incentives as well as hurt the morale of a high commitment firm. Unions however, have a ‘sword of justice’ effect and are successful in eliminating many of the adverse affects that occur because of unequal employment opportunities. A major reason for this is that unionized can better monitor firm practices to ensure fairness because they are much more likely to have managers and supervisors who are trained in people management skills and in addition, managers in unionized firms put a greater emphasis on ensuring that there is equal treatment among their employees.
Studies indicate that when taking into account workplaces where all the supervisors are required to have training in people management skills, “20% of those in unionized environments, [as] compared with only 12% of those in non-unionized places, have responsibility for equal opportunities.”7 Two of the most common and documented forms of unequal opportunities are employee promotions and employee selection. When compared to non-unionized firms, firms with a union presence are “four times as likely to monitor promotions by gender and three times as likely to review selection procedures to identify indirect discrimination.”8. There is also evidence that the increased monitoring in unionized firms has helped reduce sexual discrimination as it regards to promotions and this has thus helped women advance up firms’ hierarchy.
Studies indicate that “about one in seven managers in the union sector reported that the proportion of women in the managerial post had risen markedly in the last 5 years; [while] only one in ten managers in the non-union sector reported this. “9 Furthermore, unions have also traditionally been seen as defenders of an egalitarian pay structure. High commitment work environments value and oftentimes even require worker solidarity. However, when some workers are paid more than others for essentially the same job, the existence of this solidarity is difficult to maintain. A union presence in a high commitment work environments facilitates the presence of solidarity as they prefer to pay each occupational group a single rate.
This takes the wages out of competition among co-workers, and ensures that the high-commitment working environment won’t be harmed due to ruthless competition practices such as undercutting between co-workers. Thus unionized workers have less wage inequality than their non-unionized counterparts. Studies indicate that the standard deviation is “.457 in unionized setting [while it is] .592 in a non-union setting.”10 Furthermore, unions help decrease wage inequality by “2.6% between males and females, 1.4% between blacks and whites, .6% between the healthy and those with health problems, and 3.1% between non-manual and manual employees.”11. Thus by ensuring that firms pay equal wages for equal work, unions help maintain workforce solidarity which aids firms in maintaining high commitment work environments.
In recent years, it had become apparent that the relationship between firms and unions doesn’t necessarily have to be an adversarial one. In fact, the popularity of partnerships in high commitment firms indicates that the two institutions are indeed compatible. The evidence stated above indicates that when this partnership is properly utilized, unions can be a great asset to a high commitment management work design. This is because unions facilitate the existence of many of the necessary ingredients that go into high commitment work environments such as flexibility, increased employee voice in decision making, distributive justice, and worker solidarity. Major firms such as Tesco have recently taken advantage of this compatibility and are now realizing the formerly untapped benefits that a partnership between unions and high commitment management schemes can bring about.
1 Industrial Relations Services ‘Partnership delivers the goods at Tesco’, IRS Employment Review, August 1999, No. 662
2 Industrial Relations Services ‘Partnership delivers the goods at Tesco’, IRS Employment Review, August 1999, No. 662
3 Fernie, Sue. HRM Lecture on 29/01/02 : London: London School of Economics, 2001
4 Baron, James N. , Kreps David M. Strategic Human Resources: Frameworks for General Managers. (New York: John Wiley & Sons, Inc., 1999), 127
5 Baron, James N. , Kreps David M. Strategic Human Resources: Frameworks for General Managers. (New York: John Wiley & Sons, Inc., 1999), 134
6 Baron, James N. , Kreps David M. Strategic Human Resources: Frameworks for General Managers. (New York: John Wiley & Sons, Inc., 1999), 134
7 Fernie, Sue & Gray, Helen ‘Women – what unions can do for you’ CentrePiece Summer 2000
8 Fernie, Sue & Gray, Helen ‘Women – what unions can do for you’ CentrePiece Summer 2000
9 Fernie, Sue & Gray, Helen ‘Women – what unions can do for you’ CentrePiece Summer 2000
10 Metcalf, David ‘Fighting for equality’ CentrePiece Summer 2000
11 Metcalf, David ‘Fighting for equality’ CentrePiece Summer 2000
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