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1. Small Business >2. Business & Workplace Regulations >3. Labor Unions
The Effect of Labor Unionsby Ruth Mayhew, Demand Media
Organized labor affects HR and the overall work environment.
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Many job postings for human resources positions indicate whether the candidate needs experience in labor-management relations or an HR background in a union work environment. The reason is because a labor union significantly impacts HR functions as well as the company's overall operations. Small businesses that are unionized are likely to experience an even greater impact because of the advanced level of HR expertise and the HR functions required in a union environment that aren't a factor in a nonunion workplace.
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Labor-Management RelationsOne of the primary effects that a labor union has on an organization is the level of expertise your human resources department must have. Small businesses that don't have dedicated HR departments should have at least one staff member with management authority who's not just comfortable with both employee relations and labor-management relations, but who knows the distinction between the two and how to balance the two, because even in a union shop, there are also nonunion employment functions for which HR is responsible. In a unionized work environment, there are certain nuances peculiar to labor-management relations that aren't present in a nonunion work environment.
Employee IssuesMost labor union contracts -- also called collective bargaining agreements -- contain a step-by-step process for addressing and resolving employee grievances. The effect that a labor union has is that you generally can't resolve employee issues without following the grievance process. For example, if an employee objects to a disciplinary warning he received and has documentation to support his position, the union contract won't let you talk things over with the employee and arrive at a mutually agreed-upon resolution to retract the disciplinary action. Instead, you have to resolve the employee's issue according to the grievance steps outlined in the union contract.
Related Reading: Define Wage Dispersion in Labor Unions
NegotiationsCompanies that have a labor union contract in place need to be prepared for contract negotiations. The negotiation process involves labor and management presenting one proposal after another and agreeing to concessions until they reach common ground. HR must prepare for contract negotiations far in advance -- often months for complex contracts -- to calculate numerous wage and benefit scenarios to present to the labor union for collective bargaining negotiation sessions.
Management DiscretionA standard clause in most collective bargaining agreements is called a management rights clause. The management rights clause essentially says that the company's management has the right to operate the business as it sees fit and make decisions in the best interest of the company. Overall, the management rights clause allows company leadership to use their own discretion in running the company -- sort of. In a labor union environment, the collective bargaining agreement takes away management's discretion in making decisions concerning performance, recognition and
reward for union employees. For example, managers are prohibited from using their discretion in rewarding an employee's exemplary job performance with a wage increase. The effect that a labor union has is that the union contract generally dictates when employees receive raises. Union employees all receive raises at the same time, in the same amount, regardless of whether they are star employees or the lowest-performing workers.
DivisivenessLabor unions create divisiveness. "Some unions win higher wages for their members, though many do not. But with these higher wages, unions bring less investment, fewer jobs, higher prices, and smaller 401(k) plans for everyone else," writes James Sherk in his May 2009 article titled, "What Unions Do: How Labor Unions Affect Job and the Economy" for The Heritage Foundation. The article pits unionized work environments against nonunion work environments in describing the effects of two intertwined issues: jobs and economics. There are proponents for organized labor as well as those who support maintaining nonunion workplaces, and both groups generally are very passionate about their respective positions, which creates a line in the sand between organized labor and management.
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About the Author
Ruth Mayhew began writing in 1985. Her work appears in "The Multi-Generational Workforce in the Health Care Industry" and "Human Resources Managers Appraisal Schemes." Mayhew earned senior professional human resources certification from the Human Resources Certification Institute and holds a Master of Arts in sociology from the University of Missouri-Kansas City.
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Labor UnionAAA |
DEFINITION of 'Labor Union'An organization intended to represent the collective interests of workers in negotiations with employers over wages, hours and working conditions. Labor unions are often industry-specific
and tend to be more common in manufacturing, mining, construction, transportation and the public sector.
BREAKING DOWN 'Labor Union'Labor union representation in the United States has declined significantly in the private sector. It is commonly believed that union security clauses compel workers to join unions and pay full dues as a condition of employment, but it is actually illegal for a union to force an employee into full union membership.
Well-known American labor unions include the American Postal Worker's Union, the Screen Actor's Guild, the International Brotherhood of Teamsters, the National Education Association, the United Auto Workers and the United Steel Workers.
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