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The Implications of the New HRM for Unions

Yonatan Reshef
School of Business
University of Alberta
Edmonton, Alberta

By and large, North American manufacturing unions are not used to performing within production systems not based on adversarial employee-management relations. Executing since their inception their "pure and simple" job-control philosophy, these unions have confined themselves to a limited bargaining agenda reflecting the immediate interests of their members in the workplace. While for years this orientation has meshed neatly with managements' industrial relations orientation embedded in Scientific Management, in many cases it is no longer the case. Changing union environments and management industrial relations practices challenge union capabilities to deliver traditional services, regulate the worker-management relationship, maintain intra- and inter-organizational solidarity, avoid decertifications and attract new members.

We have mentioned that three of the key assumptions of the union economic paradigm are that: An inherent exclusivity of interest exists between the union and management (#3); a union should not involve itself in management decision making (#4); and collective bargaining, therefore, forms the basic regulatory mechanism of the labor-management relationship (#5). New HRM arrangements violate all of these assumptions, and the altering union environments render an alternative action model difficult to devise.

  1. First, the New HRM implies that communality of interest between labor and management does exist. By participating in decisions which influence plant layout and production design, workers and their union are being drawn into decision-making processes that have traditionally been managements' sole responsibility.
  2. Second, this process seriously erodes collective bargaining's role as the preeminent regulatory mechanism of the labor-management relationship and with it unions' regulatory role in the worksite. To be effective, new HRM arrangements empower front-line employees to consider such issues as manning, job description, rewarding and disciplining, hiring and firing, and pay which were once the sole responsibility of, and arguably still are an integral part of, the collective bargaining process. The boundaries of the collective bargaining's jurisdiction are growing blurred.

    More specifically, HRM innovation may be used to enhance managerial flexibility in managing the workforce, "by replacing rigidities in contractual relations between unions and management with more flexible and cooperative arrangements entailing greater commitment by employees to management goals" (Wells, 1993: 56). In the course of the change, workers are expected to enter into a new relationship with superiors, assume new responsibilities, and learn to play a new role at work. For weak unions, HRM innovation likely means the abandonment of at least some aspects of job control and, often, the absence of any guarantee of alternative sources of leverage. Consequently, HRM reforms can undercut workplace unions by improving communication and expanding collaboration between managers and workers in ways that are not mediated by unions.

  3. Third, management may use work team meetings to directly communicate with the workers on how to improve production processes and quality of work life, thereby offering the workers alternative, direct modes of interest representation. During team sessions, management and team members may discuss issues that have been part of collective bargaining. In the process of implementing team recommendations, management can grant workers benefits which they have refused the union leadership through collective bargaining. Consequently, unions are rendered less useful to members.
  4. Fourth, new work arrangements, such as self-organized, self-monitored work teams, may lead workers to assume responsibilities, such as hiring, disciplining and rewarding, that have previously been reserved for managers. This, in turn, can undermine the union's ability to protect members against unfair labor practices; there is no legislated procedure parallel to the grievance process that unions can use to protect one union member against unfair decisions made by another union member. Consequently, union solidarity can be eroded as some union members may use their newly assumed powers against other members.
  5. Fifth, HRM innovation can further undermine union solidarity if it leads to a cleavage among the unionís ranks. Some union members can be deeply involved in restructuring efforts against their union officers' and members' opposition (Reshef, Lam & Kizilos, 1996). Consequently, the innovation results in a split among the union's ranks which may undercut its power to negotiate innovation implementation in the next collective agreement.
  6. Finally, it has been suggested that innovations may be designed to enhance employee involvement in decision making, an important component of many HRM reforms. If controlled by management, they simply replace traditional bureaucratic control with peer control, thus fragmenting the work force (Grenier, 1988; Metzgar, 1990). Such innovations may serve mainly as an echo of management in decision making. For example, in the name of working together toward the common goal of being the best in an industry, workers can be pressured by management and/or fellow team members to work overtime without extra pay. The power of the union to regulate work through the collective agreement is thus diminished.

Since union capabilities to deliver selective services are weakening and since the three most important things workers expect from their jobs (a good salary, job security, and appreciation for a job well done) are increasingly being provided by nonunion firms (Business Week, July 8, 1985, p. 76), unions cannot stem declining popularity and organizational atrophy. Thus, given that industrial relations abhors a vacuum, when unions lose ground as worker service agents certain union functions have to be performed by management and/or government agencies. Indeed, nowadays, more and more, the courts and state legislatures are becoming the most effective advocates of employee rights (Business Week, July 8, 1985, p. 72), thereby further eroding the needs for unions.

To recapitulate, changes in union environments and management industrial relations practices have been challenging U.S. manufacturing unions on several counts.

  1. Unions have difficulties to deliver traditional services such as pay increases and job security.
  2. Unions have lost part of their regulatory capabilities. On many occasions, the worker-management relationship is regulated outside the structure of collective bargaining.
  3. Union intra- and inter-organizational solidarity has diminished. The above changes have increased competition among individual workers, work groups, and locals of the same and of different unions.
  4. It becomes more and more difficult to attract new members.

A New Paradigm for Unions?

Firms' approaches to labor relations are undergoing the most dramatic change since the early part of this century. And, since unions' very existence is predicated on how firms organize work, unions are now obliged to completely reassess their own raison d'Ítre, their basic beliefs and assumptions.

In the past, firms' human resource management practices rested on a tripod composed of: elaborate bureaucracy; military organization; and the principles of scientific management. This potent mix initially increased production efficiency. But, because of the vertical and horizontal task differentiation which it promoted, and the deskilling and alienation of many workers which it also caused, this labor relations paradigm lead to an atmosphere of mutual mistrust between management and workers. This, in turn, lead to the adversarial IR system we see today.

This traditional human resource management paradigm will no longer work for firms struggling to survive amidst the heightened competition "globalization" has introduced. A firm's surviving a global shakeout with a hostile, alienated workforce is about as likely as a nation capturing Olympic medals with athletes who are compelled to compete.

Firms who find themselves in the dramatically heightened competitive environment global competition has spawned demand engaged committed workers who understand and identify with the interests of the firm. The problem that managers who are trying to survive in this global marketplace face is how to create this new culture, how to convert managers and workers alike to a new set of very different basic assumptions, to a new paradigm.

I believe that the economic paradigm "fits" with firms' traditional labor relations paradigm. The question for unions is: What new roles and supporting assumptions will fit with the "cooperative" paradigm now emerging?

Two approaches to this dilemma can be detected. Some unions have decided that the changes firms are making are permanent and profound, and are grasping, with varying degrees of success, for a new role. Other unions believe that cooperation is merely a ploy by firms to weaken unions, another union avoidance tactic. Unions holding this belief are retaining an adversarial stance.

Whichever approach they takes, unions must reassess their assumptions about labor relations. If a union sees the current changes as the "dawning" of a "new age" of cooperation it must find a place for itself in this new world. It must also explain its new stance to other unions who may accuse it of wholesale acceptance of management's plans and a wholesale abandonment of any national labour standards.

If the union feels that cooperation is merely a new union avoidance tactic, it still must develop a rationale demonstrating that it does not simply lack imagination and foresight. Either way, unions cannot carry on as before.

I do not believe that cooperation is simply a new union avoidance tactic. This is not to say that I believe attempts at cooperation will be successful. All the arguments concerning the difficulties, for unions, of changing paradigms apply equally to firms. Firm are just as likely to encounter difficulties changing paradigms as unions are. In fact, the interdependence of unions and firms make each antagonists' adjustment even more difficult. Many firms and unions share decades of mutual mistrust, yet each is institutionally interlocked with the other through collective bargaining agreements. These inter-organizational structures will further sabotage each parties' efforts to change paradigms.

Unions must, however, remember that they are secondary institutions whose existence is predicated on firms' choice of labor relations paradigm. Thus, their continued survival is not assured when firms change their labor relations paradigm. A strong argument can be made that if a firm adopts the cooperative paradigm, a union is unnecessary. Combine this argument with the institutional inertia arguments presented above and change from one paradigm to another may be best explained by a selection model -- not an adaptation model.

Hannan and Freeman (1984) argue that structural inertia in large organizations achieves such an elevated level that change in "form" in a population of organizations occurs principally through processes of selection rather than adaptation. A selection model would predict that firms that are unable to escape the embrace of unions will simply wither away, their market share taken by non-union organizations whose managers and workers both subscribe to a new "cooperative" paradigm.

While the weight of evidence seems to support the selection explanation for change, I do not feel that selection is necessarily in the best interests of workers, firms, or society generally. A smoother, more painless transition to a new paradigm would be achieved, I believe, with union participation.

But, if adaptation is to be achieved, we must first understand the inertial forces arrayed against it. This is why I have attempted to describe the paradigm concept. While paradigms are essential guides to action, they exert an inertial force far more powerful and more insidious than the inertia forces described by Hannan and Freeman.

Unions, then, must "unfreeze" the basic assumptions which, unseen, guide all their actions. Only when they have done this can they struggle toward a new role. Here, at least, some guidance is available. Jan Carlzon (1987: 101-2), former President of Scandinavian Airlines, for example, has articulated the following new role for unions:

  1. First, and most important is the cooperative role. Together with top management the unions participate in analyzing, discussing, and establishing the company's overall role and strategy. The unions should participate with middle management in planning the acquisition and distribution of resources, determining the earning targets, devising investment guidelines, and so on. With the front line the unions play a natural part in backing up the people they represent, meaning those who now make all the decisions.
  2. The second role of the unions is similar to that of an internal auditor. They should critically examine how well the company is complying with labor laws, collective agreements and, in our context, the principles of the high-performance system or quality-driven system.
  3. The third role is more traditional: Unions still must sit down at the other side of the table during negotiations. But now that the unions have helped shape the company's operations and investments, they can no longer pursue and adversarial role that undermines the company's overall strategy. To do so would serve no purpose since they have been participating in the construction of the company's strategic foundation all along.

    Unions that accept these roles become vital contributors, not threats, to the management process. Because of their relationship with rank and file, unions have access to a large fund of knowledge, ideas, and opinions that might otherwise be unavailable to top management. Unions have a network of contacts out in the company that management lacks.

Unions will only survive to enjoy this or some other new role, however, if they first recognize and overcome the inertial force paradigms (both those constraining firms and unions) exert.

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