BUS301 Study Guide

Unit 8: Labor Relations and Internal Employee Relations

8a. Define key concepts in labor relations

What is the relationship between labor unions and labor relations?
What is the term for the negotiations between the company and the union representatives?
In addition to their focus on legislative changes, what are the activities of a national union?
What is one of several challenges the U.S. labor movement is experiencing?

Labor relations are how workers and managers of a company talk to, behave, and deal with each other. A labor union is when workers agree to band together to work toward common goals, such as convincing their employer to offer them better pay, benefits, or promotion rules.

Collective bargaining describes the negotiation process between a company and union representatives. Every local union has a union steward who represents union members' interests and is elected by their peers.

Three challenges facing today's labor unions include a decline in membership, globalization, and problems faced because employers are focused on maintaining a non-union status.

In addition to their focus on legislative changes, a national union:

lobbies in government for workers' rights laws;
resolves disputes between unions;
helps organize national protests; and
works with allied organizations and sponsors various programs for the support of unions.

To review, see:

Working with Labor Unions

8b. Define key concepts in employee relations

What is one reason employers pay careful attention to employee relations?
What factors indicate how much support and direction a manager should provide an employee when applying the situational leadership model?
What four elements should be quantified to foster ethical behavior in an organization?

The term employee relations is broad and encompasses virtually every aspect of employer-to-employee partnerships, from hiring to exiting. Many companies try to avoid the increased costs and operational inefficiencies they may experience when their employees unionize. Instead, companies usually benefit from paying careful attention to employee relations and creating programs that address pay, benefits, and other compensation issues.

Creating a productive working relationship requires opening avenues of communication so employees and employers feel their concerns are being heard. Both sides should demonstrate they care about the other person, value what they have to say, and properly consider the other person's viewpoints.

Leaders should try to develop their active listening skills to understand what the other person means and convey beyond what they say with their spoken or written words. They should also use emotional intelligence, which requires empathizing with others.

Upward communication occurs when members of the lower levels of an organization (such as administration and support staff) communicate with the organization's upper echelons (such as management or leadership). These messages typically include recommendations for improvement, complaints about inefficiencies, and other grievances that need to be resolved.

Downward communication occurs from an organization's upper echelons to the lower levels, such as when a manager explains to an employee how to do a task, recommendations for improvement, or new rules and regulations that need to be followed.

There are four primary workplace communication styles or personalities:

Individuals with an expresser communication style tend to express their interest and excitement, prefer challenges, and rely heavily on hunches and feelings.
Individuals with a driver communication style tend to be decisive and prefer to drive the conversation, so others adopt their ideas and recommendations.
Individuals with a relater communication style appreciate positive attention and want to be regarded warmly.
Individuals with an analytical communication style tend to ask many questions and behave methodically. They do not like to be pressured to make decisions quickly and prefer to work in a structured environment.

Also, people tend to communicate based on three styles:

A passive communicator tends to put the interests of others before their own.
An aggressive communicator stands up for their interests but may violate others' rights in the process.
An assertive communicator respects and communicates the interests of others. This person tends to be direct, but others do not perceive them as insulting or offensive. Many prefer to have an assertive communicator in the workplace because, while they exhibit self-esteem, they respect others and do not try to mislead them.

Body language describes non-verbal language, such as facial expressions, eye contact, standing or sitting posture, and hand position. Body language can differ across cultures. For example, in some cultures, direct eye contact can be perceived to be aggressive. The OK sign (thumb and pointer finger put together to form a circle) conveys agreement in the United States but is considered offensive in Brazil, Germany, and Russia.

Employers can promote positive avenues of communication in several ways, such as by creating and maintaining an open-door policy, offering opportunities for respectful listening during meetings, and providing an anonymous tip or complaint hotline.

In addition to effective communication, establishing trust is the most important element of a successful manager-employee relationship. From a business perspective, trust is necessary for creating and maintaining an environment that promotes continuous, on-time delivery and produces quality work that meets a client's business requirements. Employees are more apt to trust managers who encourage fairness and consistency.

Employees can promote and maintain trust in the workplace by choosing tasks with the maximum chance of success and keeping their managers informed about their progress. Managers can promote and maintain trust by being honest about their goals and expectations, sharing information that will affect employees, and encouraging one-on-one conversations.

There are several management styles:

A manager with a task-oriented style is concerned about the technical aspects of the job. They want to ensure employees know what is expected and have the necessary tools to complete the job.
A manager with a people-oriented style focuses on interpersonal relations and is most concerned about the employee's welfare. These managers tend to be friendly and trusting.
A manager with a participatory style may focus on how their employees fit into the organization's bigger picture. They try to provide support and input where needed and focus on the individual's role in the project.
A manager with a directing style is focused on getting the task done and may be an appropriate leader when deadlines are tight or in emergencies.
A manager with an autocratic style is focused on completing a task. This individual uses their authority to decide who will do what, how the project will proceed, and when deadlines need to be completed. Relationships are of secondary importance.
A manager with a free-rein style gives employees total freedom to decide how to complete assignments. This type of manager is removed from day-to-day activities but is typically available to help employees respond to any situation.

According to the path-goal theory of leadership, a leader's role is to define goals and create pathways so employees can accomplish their tasks. Employees who are satisfied with this leadership style will be motivated to complete these goals.

Ken Blanchard's situational leadership model explains how we can apply management styles to certain situations. A leader should determine the best management style and level of support each employee needs based on their readiness and commitment.

Blanchard's Situational Leadership Model

Blanchard's Situational Leadership Model

Ethics is the branch of philosophy that involves systematizing, defending, and recommending what is considered right and wrong. We typically equate ethics with moral philosophy. Many believe establishing an ethical corporate culture is critical to creating an effective organization.

To instill ethical behavior in an organization, HRM should quantify four elements of workplace ethics:

a written code of ethics and standards;
ethics training to executives, managers, and employees;
provide advice and guidance on ethical situations; and
systems for confidential reporting.

Three ethical issues in sales and marketing include pricing practices, promotional activities, and advertising practices. Ethical issues in finance include fair trading practices, trading conditions, financial contracting, sales practices, consultancy services, tax payments, internal audits, external audits, and executive compensation. Specific corporate ethical and legal abuses include creative accounting, earnings management, misleading financial analysis, insider trading, securities fraud, bribery, kickbacks, and facilitation payments.

To review, see:

8c. Identify key labor laws and legislation that impact workforce relations

What legislation was enacted to prohibit employers from interfering with employees' freedom of association and organization to form unions?
What is the responsibility of the National Relations Board (NLRB)?
What kind of strikes were prohibited by the Taft-Hartley Act introduced and passed in 1947?
How did the Landrum Griffin Act, also known as the Labor Management Reporting and Disclosure Act (LMRDA), address corruption charges by union leaders?

Historically, employers and employees have struggled to find a balance of power that recognizes the value both parties contribute to an organization or industry. Each side has asserted their leverage, and in the process, both sides came up short of their objectives. Initially, employers set the rules that employees were powerless to object to. As employees recognized that there was strength in numbers, they began to seek ways to form coalitions and unions to have their concerns heard by management. Below is a brief description of several impactful laws relating to workers' rights and the protections of employers to conduct business.

The Railway Labor Act (RLA) was the first federal law guaranteeing workers' right to organize, join unions, and elect representatives without employer coercion or interference. Its goal was to ensure there was no disruption in interstate commerce by encouraging employees and employers to use collective bargaining to apply alternate dispute resolution, arbitration, and mediation to resolve labor disputes. For major disputes over wages, benefits, and working conditions, the RLA created a three-member National Mediation Board, appointed by the president and confirmed by the Senate, with the power to mediate any dispute between carriers (railroads, airlines, and transportation companies) and their employees at the request of either party or upon the board's motion.

The Norris-LaGuardia Act barred federal courts from issuing injunctions against nonviolent labor disputes and barred employers from interfering with workers joining a union. This act made yellow-dog contracts unenforceable in courts and established that employees could join unions without employer interference.

In 1935, the U.S. Congress passed the Wagner Act (also called the National Labor Relations Act), which changed how employers responded to several aspects of unions. The National Labor Relations Board administers and handles complaints per the Wagner Act. According to the Wagner Act:

Employers must allow freedom of association and organization and cannot interfere with, restrain, or coerce employees who form a union.
Employers may not discriminate against employees who form or become part of a union or file charges against them.
An employer must bargain collectively with union representation.

In 1947, the U.S. Congress passed the Taft-Hartley Act to respond to an upsurge of worker strikes. While the Wagner Act oversaw unfair labor practices by companies, the Taft-Hartley Act focused on unfair labor actions by unions. The Taft-Hartley Act outlawed strikes that unions did not authorize, called wildcat strikes.

In 1959, the U.S. Congress passed the Landrum Griffin Act in response to charges of racketeering (crimes of coercion and extortion) and corruption by union leaders. The act required unions to hold secret elections, submit annual financial reports to the U.S. Department of Labor, and create standards governing a member's expulsion from a union.

Major Acts Regarding Unions at a Glance

Major Acts Regarding Unions at a Glance

To review, see:

Unit 8 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

active listening
autocratic style
body language
collective bargaining
communication style
directing style
downward communication
emotional intelligence
employee relations
free-rein style
labor relations
labor union
Landrum Griffin Act
National Labor Relations Board
Norris-LaGuardia Act
participatory style
path-goal theory of leadership
people-oriented style
Railway Labor Act (RLA)
situational leadership model
Taft-Hartley Act
task-oriented style
union steward
upward communication
Wagner Act
wildcat strike