Establishing Good Union Relationship

Running Head: ESTABLISING GOOD UNION RELATIONSHIP AT WORKPLACE 1

Suggestion on Establishing Good Union Management Relationship in the

Workplace

Salmiwati binti Mohamad Jamili

(2011248904)

Universiti Teknologi Mara

Human Resource Management

Assoc Prof Dr. Roshidi Hassan

December 24, 2011

SUGGESTION ON ESTABLISHING GOOD UNION RELATIONSHIP 2

Table of Content

Abstract…………………………………………………………………………. 3

Introduction……………………………………………………………………… 4

Changing Union- Management Relations…………………………………… 6

Open Warfare………………………………………………………… 6

Adversarial………………………………………………………………………. 6

Accommodating………………………………………………………………… 7

Partnership……………………………………………………………………… 7

Overcoming Past History to Negotiate New Relationship…………………. 9

High Integrity Relationship……………………………………………………. 9

Role of Managers………………………………………………………………. 10

Dynamic Line Managers………………………………………………………. 11

Workplace Harmonies and Cooperative…………………………………………….. 12

Worker Participation and Employee Involvement…………………………. 12

Communication………………………………………………………………… 13

Training…………………………………………………………………………. 14

Employee’s Satisfaction……………………………………………………….. 14

Conclusion………………………………………………………………………………. 17

Reference……………………………………………………………………………….. 19

Appendix………………………………………………………………………………... 22


Abstract

Relationship between union and management has changed together with environment

and economical condition from time to time. Union relations with management should

be seen as an essential part of management system and techniques, and not as a

discipline or activity apart from management. This paper explores a step in how to

establish the relationship between management and union and how management can

shape their organization for reaching their goals with support contributed by union. It

also attempts to identify some of the elements which may generally be regarded as

features of a good industrial relations system. It is not to say the step through this article

compulsory to being practice by all industrial life as no one kind of relationship is best

and can be fit to all varied circumstances of organization. However, all good relationship

has some common characteristic include trust, communication and a good leader to

coordinate the movement of organization. These articles will deal in general terms of

ways to achieving and maintaining any kind of good relationship in organization.


Introduction

Organizations today are facing an increasingly competitive and rapidly changing

environment (Johari,2006). Both management and employee want to protect their

interest. Management has to increase their value while employees have to maintain or

build up their outcomes in order to survive in the competitive environment. A voluntary

organization like the union is a choice for employee to protect their needs in order to

balance with needs of company.

Basically the union offers their promise to a number of benefits in order to solicit

the member’s commitment. Johari (2006) indicated that some of the benefits include

maximizing wages of their members, establishing a join system which both protect their

members from arbitrary management actions, allows them to participate in decision

making within the organization for which they work, allowing them to express the social

cohesion, aspirations and political ideology of their membership.

Labor union can be defined as an organization of employees that uses collective

action to advance its members interest in regards to wages and working conditions.

(Ivancevich, 2010). According to Ramasamy (2008), Malaysia’s trade union movement

is faced with a number of challenges, notably from neoliberal policies and changes

structures of employment. According to statistic provided by Department of Trade Union

Affairs, as at June 2011, the private sector employee unions at Malaysia are made up

for 441 trade unions while trade unions for public sector, statutory bodies, local

government and employers, there are 254. Total members who joined unions are

803,003 members. Thus only 6.3 percent of employees belong to a union out of the

total labor force of 12.6 million.

However, refer to study provided by Kumar and Gani (2008), trade union

movement in Malaysia considered strong by South Asean standard. However it still

recorded a decline in figure from 789,163 in 2003 from 807,260 in 2002. This declined

was a result of changes in the environment as follow:


• Political changes-privatization, deregulation, free trade, government union

busting

• Economic changes- trade liberalization, outsourcing, off shoring, work

reorganization, technological change

• Social changes- rise of “new right, decline in public goods and social

solidarity

Bernard (2004).

This listed of changes in environment give an impact to employer for acting ‘cold’

to respond for union requisition from employee’s representative. According to

Ramasamy (2008), power and influence of multinational corporations (MNCs) coupled

with their strong antiunion stance, since the 1970s. These have restricted growth and

influence of trade unions, removed well-established minimum standards, blocked

minimum wage legislations, weakened collective bargaining and flooded the labor

market with foreign workers.

However, employers also aware that union have been playing role beyond

collective bargaining for state and employer. It also helps in increasing productivity or

efficiency of workers. Unions contributed in improving workplace peace and harmony by

improving workers discipline. According to Khan and Khan (2011), they referred to study

from Human Rights Watch (1998) quoted a study of International Labor Organization

(ILO), showing that productivity in Malaysia is actually higher in enterprises where the

workers are organized in industrial unions than in non-unionized companies. Lu, Tao,

Wang (2010) also identified although unions do not directly contribute to positive wage

gains for the workers, they do contribute to better employee benefits, increased signing

of formal employment contracts, and hence more harmonious employment relations in

China’s private enterprises.

Most management in any organization wants a harmonious, collaborative union-

management relationship. The challenge is in how to foster such relationship in the face

of a changing economic, political and social environment. The key to a relationship


building effort is a sincere acknowledgement by both parties that their relationship is

difficult or unproductive, and that this situation should not continue.

Changing Union- Management Relations

Relationship between management and union may be difficult sometimes.

Strained management and union relations can be disruptive. Some disagreement can

become troublesome to the development of positive work environment (Stanley, 2003).

In this article, some of basic history regarding relationship between management and

union will be describe, also the description of partnership relationship that currently

being seen as most suitable to adapt in organization of 21st Century.

Open Warfare

The history of labor management relationship began in the colonial days where

relationship between servant and master which the master had almost complete

authority. Labor- management relationship in United States on that time is based on

heritage of exploitation, resistance and industrial warfare. With the first establishment

of permanent labor unions shortly after the Revolution, the strikes become the favorite

weapon for attempting to increase the wages and improve job security. In those days,

most of management did not accept the right of union to exist and often acted not

followed the act of law. Management actions were driven by anti-unions and action to

get rids of union whenever possible (Blackard, 2000).

Adversarial

Adversarial relationship between union- management did not different much with

warfare era. However they avoided its overly destructive and public manifestation. This

relationship normally the management will look first to legal rights and coercive power

to resolve issues and continues to maximize its own legal position and power while

minimize as possible to other parties which is union (Blackard, 2000).


Accommodating

Relationship based on accommodation typically can be characterized by good

ones. However it doesn’t reach the goals to finding opportunities to the best

relationship but the managers only concentrate on minimizing the negative impact of

union. The example of typical management behavior in an accommodating a

relationship is advising the unions of planned changes in advance and bargaining a

good faith. Accommodating relationship minimizes the potential negative associated by

having a union but it fails to take advantage from the synergy relationship of employee

that can be found in union workplace (Valerie & Allen, 1996).

Partnership

In a modern environment today, where management committed to improve

performance and meet organization objectives by developing employee’s potential, the

unproductive conflicts would appear to be archaic and out of date.(Yarrington

Townsend & Brown, 2007).

The replacement of traditional IR model with new management strategy such as

High Commitment Management Models (HCMM) has been found to represent

significant changes in work organization and management of employees. However,

employee voice changes under HCM policies might provide problems for managers,

employees and union in establishing effective means of genuine employee voice

(Baird,2002).

Bacon & Story (2000) finds the motivations for management and unions entering

into partnership arrangement are strongly linked to maintaining employee trust in

management. Objective of partnership for management are improvement in employee

relations and facilitation of change programs.

Blackard (2000) mentioned the definition of partnership relationship can be

elaborate differently by the eyes of beholder, but it always fit somewhere on presented

as following:


• Comprehensive partnership- an association with partners who joins interest

and accountability who share in risk and rewards.

• Parallel partnership- an agreed system of joint decision making limited to

matters that not cover by collective bargaining.

• Environmental partnership- a work environment that encourages an open and

collaborative relationship.

In the UK, collaborative approach for unions is considered integral to partnership

and mutual gains strongly dependent on the level of trust in relationship between

management and unions (Novitz, 2002). Management strategy to improve

organizations performance such as creating ‘learning organizations’ found genuine

union involvement crucial to achieving outcomes (Yarrington et al., 2007).

Heaton, Mason and Morgan (2000) determined the major element that

importance in determining the partnership agreements are the importance of line

manager’s motivations and the individual factors in management union relations. Other

elements that important to mutual beneficial partnership are mutual legitimization of

different interest, involving recognition and acceptance of employee interest alongside

management’s strategic business needs.

A process in achieving the outcomes from partnership agreements involved

various step. Firstly the preferred outcomes of both parties are being established.

Secondly, the expectation of each party’s roles and behavior are being established and

creating the structure that supports the partnership process. Finally, sustainability of

this new way working by addressing both parties to continue for experience benefits

which only can be obtainable from participating in partnership (Yarrington et al, 2007).

Haynes and Allen (2002) stressing the process of identifying benefits and behavior to

be expected from each parties as the most crucial in developing the partnership

arrangement.

The activity to increase the involvement of employee is a central of partnership

agreements and requires strong commitment from all levels of management to

overcome the difficulties in achieving mutual beneficial outcomes. Good management


union relationship in partnership program must be associated with high level of trust,

commitment and good communication not automatically can deliver the partnership

agreement. These capacities also require considerable effort, dedication and attitude

changes in both parties (Yarrington et al., 2007).

Overcoming Past History to Negotiate New Relationship

To develop a new relationships between management (stakeholder) and

employees, the major framework should being implement is to breaking old habits and

applying the knowledge gained from developed dispute resolution techniques. The

knowledge gain from previous experience can be adapted in everyday practice of

industrial relations. The experience and radical change that occurred in a relationship

between union and management must be treated as transformative learning

experience in the art and practice of industrial relations (Ponak, Alan & Painter, 2005).

Moore (2000) described four important characteristics of positive working

relationship. First characteristic is each parties have to maximize their potential and try

to meet their individual needs as possible but he forbid the behavior of make expense

from others. Secondly, fair treatment must be implementing in the relationship between

employer and employee. An accommodating relationship should be avoided. Thirdly

both management and employee should respect the democracy between the parties.

Finally, the relationship must be moving towards a condition of trust. Management who

give empowerment of trust to the employee, will being rewarded by people will follow

through on agreement with a good faith. This will also execute them in the same

positive spirit. Also in a situation where people are willing to take a risk, each party will

look out for needs of each other.

High Integrity Relationship

Every company who agreed to engage a union involvement should discover the

common interest from a good relationship with a union. Each party both from

management and labor acknowledge their interdependence, the legitimacy and


purposes of the other (Ponak et al., 2005). As an example, a management who required

employees to return a value to the company by improving quality and productivity, bear

to re-invest in any profitable of future plan to ensure stability of employment to

employees. While employees also must understand the future of their union is

dependent on the delivery of their quality services to the management. (Ramasamy,

2008).

A collaborative bargaining session is valuable moment for management to

accommodate any possible requisition from union and it will build credibility and trust to

management from employees (Ponak, et al.,2005). A key element of this process was

the implementation of the committee consisting a senior management personnel and

union representative. This committee shall schedule their meeting regularly to

discussed the union relations issue and adjustment made where necessary ongoing

basis. These discussions were part of transforming the relationship of management-

unions to functional relationship that evolved to better meet each side’s needs.

Role of Managers

Sam Walton, the successful founder of Wal-Mart, reflected once upon dealing

with employees with this meaningful speech:

“If you’re good to people, and fair with them, and you demanding for them, they

will eventually decide you’re on their side. Look for things that are going right. We want

to let our folks know when they are doing something outstanding and let them know

they are important.”

The fundamental of union agreement specify the rights, protection and

responsibilities of management and the union. Organizational representatives or

managers spend considerable time and expense negotiating with union officials to bring

about a labor contract that will allow for efficient operations (Stanley, 2003).


Managers play assorted roles at the most. They deal everyday with the

employees at all levels, including members and officers of the union. In an occasion,

they have to deal with unions during negotiation session. Sometimes the negotiations

are tiresome and contentious. Managers also have to prepare the contract and have

responsibilities to make the contract work. In order to administer the contract fairly,

managers and supervisors must familiarize themselves with all aspects of the labor

agreement. Managers will need to be quite resourceful in dealing with the contract,

while at the same time meeting organizational goals and objectives.

Essentially, the manager is the co-negotiator, part-judge, part arbitrator, the key

planner, “the secretariat” and the chief executor of all terms and conditions of the

agreement, usually called as “collective bargaining agreement (CBA)” between

management and union during negotiations (Baladad,2010).

They are several managerial decisions that will disputes in administering the

contract but disciplining employees is probably the most heated issue. Oral and written

reprimand, suspension, demotion and discharge are common of disciplinary action.

When discharging an employee, managers must well aware unions have a propensity to

insist on arbitration in termination cases (Stanley, 2003).

Dynamic Line Manager

Yarrington et.al (2007) indicated the most likelihood conflict happen at the

workplace as a result of individual arising between direct managers and employees.

The issues will become large dependent on individual line manager’s attitudes,

personalities and management styles. A few respondent in Yarrington et.al (2008)’s

research suggested that conflict at the line manager level was due to Internal Relation

ignorance by line managers or actions by union members without consultation of the

line managers. Therefore, line managers should being provided by management with

significant training in employee relations issues and conflict resolutions.


Workplace Harmonies and Cooperative

Sen Charles (2003) concluded a good analogy for fighting with employee as

“Blowing the whistle on your employees is like being a skunk at picnic. Win or lose,

you’ve probably ruined your reputation and perhaps even your health”.

Khan and Khan (2011) highlighted that unions always being blamed for non

cooperation and always demanding for benefits and their harsh and quarrelsome

attitude. Some cases unions have defended the traditional ways by fighting against the

changes but in some other cases, union’s cooperated for saving jobs and promoting

human side benefits of more flexible work organization. Unions have also played a

proactive reformist role, by pushing management toward new forms of organization

such as group work. However, if organization can adapt the union relations issues by

approached in a positive manner, supervisors and managers can minimize employee’s

frustrations and improve operating efficiencies by addressing employee concerns

(Stanley,2003).

Black and Lynch (2004) reported support from unions improved when increased

managerial focus on employee involvement, quality management, continuous

innovation and incentive based compensation. They identified four broad component of

this innovation of managerial practice that is associated with productivity and wages,

employee voice, work design, workforce training and incentive based compensation.

Worker Participation and Employee Involvement

Silva (2009) mentioned effective corporate strategies can no longer be

developed by top management without information inputs from, and relying on the

knowledge of frontline employees. Emphasis is being placed on greater involvement of

employees in matters affecting their works and jobs, through consultation, information

sharing and two ways communication procedure.

A few strategies to being adapt in increasing worker involvement such as

employees at all levels are acquiring higher educational qualifications and skills. As


such, they will be less amenable to management through control and commands, and

will instead respond better to be more participative (Silva, 2009). Exposure to employee

in decisions at the point of production will help to increase quality and productivity.

Other than that, due to changes in work today it requires more interpersonal skills,

greater coordination among workers and sharing information through information flow

and data analysis.

Communication

Ozley (2005) conclude that realities of organization in 21st Century is have to

facing with challenges to increase qualities, market share, customer satisfaction,

maintain reduce cost and operate successfully in a global marketplace. To be

successful in the face of these, organization must examine their traditional practices in

every facet of their operations and aware for success demand the most effective use of

all available.

The starting element to install mechanism to promote effective union

management relations is communication, because it covers whole range of issues and

other matters such as productivity, small group activities, joint consultation, performance

appraisals and motivation, as well to organizational performance (Silva, 2009). Changes

in organization can be brought to an effective way when there is sufficient

understanding between management and employees. To enhance the understanding, a

two way communication may influence behavior in desired direction. A step to enhance

two way communications is there should a knowledge regarding communication skills, a

structure of communication channels, and the channel can be access by all employees.

Two way communication avenues depend on a willingness to deploy resources

by both parties, but the return on investment is priceless such us outcomes can be more

accurately and more efficient future resource investments (Schultz, 2010). The

performance of organization is affected by the manner in which that organization

communicates with the employees. Managers must consider the fact that effective

leadership and decision making are heavily dependent on communication and


information flows (Diesing, 1961). To be effective, managers need to communicate in

ways which have a positive effect and they must aware of the various systems of

communication and use them as the best advantage.

Training

A good management will always see the supervisors or leaders as critical to

labor relations because it is they who interact most with employees. They also are the

first to identify problems, and their attitude towards employee will justify the views about

the management. Therefore supervisory development is an important aspect of

developing well labor relations with management. Many employers viewed the

supervisor training as an expendable expenses and waste of money. However, Craver

(2005) indicated that training for new and experienced supervisors is essential because

well-trained supervisor will lower an employer’s chance of being caught in lawsuit.

Supervisors and managers should be trained on legal issues including

harassment, discrimination, military service, leave, safety, wage, working hours and

employee privacy. At Malaysia, supervisor training should include a general overview of

basic Labor Act such as Industrial Relations Act 1967, Employment (Termination and

Lay-off Benefits Regulations) 1980 and Employment Provident Fund Act 1991.

With the proper training, supervisors will become familiar with those laws and

general principal to mantaining a workplace free of discrimination, harrasment and

retaliation. It also will protect employers if any cases involving managers or supervisor

who doing such abusive things as above by saying to court that organization already

provide a training to those managers.

Employee’s Satisfaction

The other element that important to management look into during establishing

relationship with union is employee satisfaction. It is important to organization know the

satisfaction level of the employees and they can take measure to improve the

productivity. Organization should giving higher priority in providing necessaries facilities


that will improve satisfaction and reduce dissatisfactions. Less of dissatisfactions will

reduce the possibilities of union raised their concern to management, so less dispute to

production movement. As Clark (1998) argues, “If unions address issues of workers

dissatisfactions, the more dissatisfied will be the most attracted to union membership”.

Foster (2009) mentioned that employer and employee inter related due to

dependency on each other. An employer has the right to expect an employee carry out

duties in a competent and appropriate manner. An employee needs recognition and

proof of his value with satisfactory element such as monetary compensation and

convenient workplace. When an employee’s needs are not being met, the result is low

self-esteem, a condition that can result in chaos with an organization. Usual symptoms

of dissatisfactions between employees to organization such as absenteeism, high

turnover, low productivity and involved in several issue that commit to effect

management reputation.

Saari and Judge (2004) mentioned that research studies across many years,

organizations and types of jobs show that when employees are asked to evaluate

different facets of their job such as supervision, pay, promotion opportunities, coworkers

and the nature of work itself generally emerges as the most important job

dissatisfactions.

Some managers think employees are most desirous of pay to the exclusion of

other job attributes such as interesting work. However in study done by Kovach (1995),

employees ranked interesting work as the most important job attribute and good wages

ranked fifth, whereas when it came to what managers thought employees wanted, good

wages ranked first while interesting work ranked fifth. The most important regarding a

money for employees is their wages not below than poverty line. Ramasamy (2008)

stated that Malaysian Trade Union Congress (MTUC) stress that the Employment Act

1955 should be amended to stipulate a minimum wage RM900. It asserts that the

minimum wage is a way of protecting workers who are often subjected to exploitation.

Further, it is a means of redistribution income. In addition to the minimum wage, MTUC

have also demanded a cost of living allowance (COLA) of RM300 (MTUC, 2007:22).


Other than wages, bonuses also can seriously improve employee satisfaction

and should give when possible. Yet money cannot safe all morale issues but the

backbone of employee satisfaction is respect for workers and job they perform. Even if

management cannot meet all the demands of employees, showing workers that they

are being heard and putting honest dedication into compromising will often help to

improve morale.

Green and Haywood (2011) analyzed that workplace where conditions are more

dangerous or less pleasant generate lower job satisfaction and it is these conditions that

led the jobs becoming ionized in first place. Study done by Kumar and Murray (2001,

2002), almost 46.7 percent reported an increase in healthy and safety risk at workplace

contribute to their dissatisfaction. The highest dissatisfactions reported is increase in

workload of work which is 86.6 percent. Other factor is level of job security (52.9

percent), less of promotion opportunities (63.4 percent) and lack of training (48.7

percent).


Conclusion

There is many substantial researches that examine the benefits of union can provide to

organizations or influence of unions to organization productivity, it seems less of

knowledge and research of what actually can constitute to good union management

relationship. This preliminary research involved information and data combining through

a various research regarding unions which done previously. A step to establish

relationship between union and management in workplace mostly involved organization

strategy on how to win the union members support. It was found that there are four

elements that influence the smoothness of relationships. Firstly, organization has to

change the way of relationship into more partnership as each parties contribute and

depending to for each other. Secondly, both unions and management have to overcome

the past history in order to meet the organizational goals. Respect and trust is essential

to move together and learning from a mistake done previously should being adapt as a

guidelines to move further. Thirdly, quality of managerial and coordinating skills among

managers in organization during handling unions and at the same time to meet

organizational goal should being improved. Finally, employer must deploy a good

practice in order to provide workplace harmonies and cooperative. This element has

being fully elaborate with four sub point which is worker participation and employee

involvement, communication, training and a way to meet employee’s satisfaction.

.


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APPENDIX

NUMBER OF MEMBERSHIP AND TRADE UNION IN MALAYSIA,

YEAR 2005-NOV 2011

YEAR TRADE

UNION MEMBERSHIP

2005 621 761,160

2006 631 801,585

2007 642 803,212

2008 659 805,565

2009 680 806,860

2010 690 803,289

OKT 2011 698 803,003

Table 1 (source: http://jheks.mohr.gov.my)

NUMBER OF TRADE UNION BY SECTOR IN MALAYSIA,

YEAR 2005-NOV 2011

SECTOR 2005 2006 2007 2008 2009 2010 NOV 2011

PRIVATE 390 396 407 421 436 439 441

GOVERNMENT 127 130 130 132 137 139 145

STATUTORY

BODY AND

LOCAL

AUTHORITY

91 92 92 92 93 98 98

EMPLOYER 13 13 13 14 14 14 14

TOTAL 621 631 642 659 680 690 698

Table 2 (http://jheks.mohr.gov.my)


NUMBER OF TRADE UNION BY INDUSTRY IN MALAYSIA,

2005-NOV 2011

INDUSTRY 2005 2006 2007 2008 2009 2010 NOV 2011

AGRICULTURE,

FORESTY AND

FISHERY

54 55 55 58 58 56 54

MINING AND QUARRY 1 1 1 1 1 1 1

PRODUCTION 146 150 154 159 162 169 176

ELECTRIC, GAS AND

WATER

39 39 40 40 40 40 40

CONSTRUCTION 11 11 11 11 11 11 11

COMMERCE 18 19 21 24 32 32 30

TRANSPORTATION

AND

TELECOMMINICATION

61 61 62 63 65 64 59

SERVICES 291 295 298 303 311 317 327

TOTAL 621 631 642 659 680 690 698


NUMBER OF TRADE UNION MEMBERSHIP BY GENDER

IN MALAYSIA, YEAR 2005-NOV 2011

YEAR

NUMBERS

OF

TRADE

UNION

TOTAL

MEMBERSHIP MALE FEMALE

2005 621 761,160 464,308 296,852

2006 631 801,585 484,016 317,569

2007 631 803,212 485,306 317,906

2008 659 805,565 486,978 318,587

2009 680 806,860 487,679 319,181

2010 690 803,289 485,747 317,542

NOV 2011 698 803,003 485,437 317,566


Establishing Good Union Relationship

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Transcript of Establishing Good Union Relationship