Sole trader Very few employees Employee problems usually solved by talking to the business ownerLarger Businesses More difficult to discuss issues with a manager/owners of a businessScenarioYou are head of HR with 500 employees all have different skills, scientist to cleaner How do you agree on their wages? If a pay rise is imminent, how much and who would get the most? Will the pay rise be across the board and at the same rate?Easier for managers if workers get together and are represented by a TRADE UNION Saves time for HR No need for each individual to agree to pay, for example
ScenarioYou are head of HR with 500 employees all have different skills, scientist to cleaner How do you agree on their wages? If a pay rise is imminent, how much and who would get the most? Will the pay rise be across the board and at the same rate?Easier for managers if workers get together and are represented by a TRADE UNION Saves time for HR No need for each individual to agree to pay, for example
Easier for managers if workers get together and are represented by a TRADE UNION Saves time for HR No need for each individual to agree to pay, for example
Employees generally have the same interests improving pay, working conditions being treated fairly given proper trainingA union is there to help employees to achieve improvements in different aspects of their employmentIs a type of pressure groupUnions can be founf all over the world in countries such as the US, AUS, UK, Papua New Guinea, etc
Strength in NumbersImproved Conditions of EmploymentImproved Workplace Environment Health and Safety, Noise, HeatingImproved Benefits sick, retired, redundanciesImproved Job Satisfaction Engaged trainingAdvice & Financial Support If unfairly dismissed or made redundant, asked to do something that is not in their job descriptionFurther Benefits discounts, provisions for sporting facilities or clubsEmployment where there is a closed shop
Office staff, managers, and professional people
Becoming popular as employees are trained to do several jobs multi-skilledEmployees now more flexible used in different stages of productionSometimes it is difficult to determine which union to join
President / General SecretaryWork for and paid full time by the trade union Work from the headquartersIf union is large, there will be full-time officials working by district/regionSupport and help member branchesBranches Each work site Each has a union representative Representatives elected democratically
Representation of Members Work on behalf of their membersOffer AdviceEmployment Law, effects of trade agreements, health and safety regulations, taxation lawsPressure Group greater strength due to large numbers put arguments to govt when changes are requested one business maybe ignored, but many cannot beSharing good practiceShare ideas, help each other, usually when not in direct competition May share research facilities, as it can be expensiveBulk-buyingAble to gain from discounts, economies of scale
Government Control economy inflation law & order health education
As discussed before, it is not feasible or economic to deal with each worker/staff member separately. Therefore agreements are made between representatives of different interested groups, management & workforce collective bargainingCollective Bargaining Aim – arrive at a mutually acceptable agreementCan be at a local or national level
Can be at a local or national levelTrade unions argue for a wage increase for one/more reasons Rising Inflation Difficult to recruit qualified workers Maintaining pay differentials Changes in the workplace
Productivity Agreements Derived from an increase workers’ productivity more output being produced Workers argue for their fair share Acts as a motivator for workers to work harder Therefore managers sometimes link increases in pay with increases in productivity
Strike ActionA Token StrikeShort Stoppage half day, one day, even an hour want to indicate the strength of feeling about the claim E.g. workers at the car factory stop producing car from 9:00am to 14:00pm causing no output rate in the companyA Selective StrikeFew selected workers walk out chosen by trade union in order to cause the most damaging disruption to the workplace E.g. trade union told the managers of the car company not to work so the workers will be unattended causing a big mess in the company.An All Out StrikeAll union members stop work they leave the workplace until the dispute/claim is settled Workers maybe paid when on strike from trade union’s strike fund“Unofficial Strike” or “Wild-Cat Strike” strike pay will not be paidIf trade union wants to call for a strike, ballot papers will be sent round to vote if they should strike or not. Majority follows
E.g. There may be several checks that should be made to a delivery lorry before it goes out on delivery.All these checks may take a long time ad therefore some checks will normally not be carried out every time the lorry goes out.
E.g. A new administration procedure may involve the workers filling in more paperwork. They would refuse to fill in the forms
Independent ARBITRATOR acts as a judge, who hears both sides of the argument (what the pay rise should be) then an mutual agreement is made. Just like a trade union and employer negotiate.
Dismiss Workers Drastic action Leave the business in a mess Unable to produce product Not able to satisfy ordersLock Workers Out Known as “lock-out” Prevent workers from entering the work site that want to return Useful if workers are “working to rule” or are on “go slow” Employer will save on wagesPay Freeze Used in disagreements over work practices E.g. when new machinery is introduced
Until workers receive a fair wage, conflicts continue to existFair wage varies from country to country (minimum wage requirements), developed & developing countries vary greatlyUnion membership on the increaseBalance between rich and poor, a more equal society
Consultation Views need to be expressed openly and freely Do not have to always do what the employees wants, and to be in disagreement on a final decision is fine Consultation is different from collective bargaining / negotiation they do not normally seek the formal agreement of employees they simply ask for their views, these may/may not be taken into consideration to come to a final decision
TUC – Trade Union Congress Members include full time workers, admin, economists, solicitors Made up representatives from all unions More powerful than one union Aims are to; Act as a pressure group Represent trade union views in general Influence employer associations Influence govt policyCBI – Confederation of British Industry Represents many UK industriesAims are to’ act as a pressure group represents employers tries to influence govt decisionsACAS– Advisory, Counciliation, and Arbitration Service Independent organisation Financed by the govt role is to try and improve industrial relations provides services for free is impartial (does not take sides) both sides must agree on ACAS rulingsThe service providesadvice and info on all areas of employment (employer/employee)conciliation to find a middle ground where both parties agreeArbitration if discussions have reach a deadlock, and no settlement is near independent group listens to both sides propose a fair settlement both sides must agree & accept arbitrators findings
Chapter 15 employee and employer associations (1)
Unit 4 – People at Work
The role of trade unions The role of employer associations The process of collective bargaining The different types of industrial action How conflicts can be resolved
A Trade Union is a group of workers who have joined together to ensure their interests are protected
SHOP STEWARDFor an annual fee thatpays for the employmentof union officials, theywill represent the viewsof those in the union toachieve their aims.
Advantages ◦ Strength in Numbers ◦ Improved Conditions of Employment ◦ Improved Workplace Environment ◦ Improved Benefits ◦ Improved Job Satisfaction ◦ Advice & Financial Support ◦ Further Benefits ◦ Employment where there is a closed shop
Trade Unions seek to ◦ Put forward views to the media ◦ Influence government decisions ◦ Improve communication between workers & management
A craft union is a trade union which represents a particular type of skilled worker.
A general union is a trade union which represents workers from a variety of trades in the industry. They are often un-skilled but also semi-skilled workers.
An industrial union is a trade union which represents all types of workers in a particular industry
A white-collar union is a trade union which represents non-manual workers.
Closed shop is where all the employees have to be a member of a particular union.
A Single-Union Agreement is where a firm deals with only one particular union.
Advantages for employees ◦ Discussions clearer ◦ Greater power ◦ No disagreements between unions ◦ Better working relationship ◦ Disputes solved quickly
Advantages for employers ◦ Only one union to negotiate with ◦ Better working relationship ◦ Disputes resolved more quickly ◦ Easier to agree to changes ◦ Better relationships
President National Executive Head OfficeRegional offices Regional offices Regional offices Regional officesBranch Branch Branch Branch Branch Branch Branch Branch Individual Members
Employer Associations Employer Federations Trade Associations Business join together to form a association or federation Subscription Fee Benefits
Advantages ◦ Representation of Members ◦ Offer Advice ◦ Pressure Group ◦ Sharing good practice ◦ Bulk-Buying
Act as pressure groups Represent business interests Linked to economic environment Government Control & Provide Taxation Rules & Regulations Economic Policies Infrastructure
Collective bargaining is negotiations between one or more trade unions and one or more employees (or employee associations) on pay or working conditions
Rising Inflation Difficult to recruit qualified workers Maintaining pay differentials Changes in the workplace
This is taken by trade unions to decrease or halt production
Strike Action ◦ A Token Strike Short Stoppage ◦ A Selective Strike Few selected workers walk out ◦ An All Out Strike All union members stop work
Picketing ◦ Support strike ◦ Stand outside workplace ◦ Try to persuade other workers not to go to work ◦ May halt production all together ◦ Gain publicity ◦ Company gets bad publicity ◦ Applies pressure
Work to Rule ◦ Strictly, Rigidly follow rules/regulations ◦ Work often slows ◦ Workers paid normally ◦ Nothing wrong
Go Slow ◦ Similar to “work to rule” ◦ Workers do jobs more slowly ◦ Deliberately take longer to complete tasks
Non-Cooperation ◦ Workers refuse to have anything to do with new working practices that they do not approve of
Over-time Ban ◦ Normal working hours carried out only ◦ No additional work time is done ◦ Damaging to the company
Loss of Loss of Output Income/Profit For Employers Cash Flow Poor Customers maybe ProblemsReputation lost to other firms as orders not delivered
Loss of Threat of jobWages losses For Employees
FindAlternative May cost more Supplier for product For the Firm’s Customers Deliveries not May not beShortage of made able to Product produce goods
Workers have Lower Income less money means less to spend tax collection For the Economy Bad reputation Striking firmExports lost from not may have to lay Less delivering on time off workers – products Incomes fall, being unemploymentproduced - imports rises
Strikes are damaging for both employers and employees These agreements usually involve an “independent ARBITRATOR”
Poor Wage Rates Poor conditions of employment Poor working conditions
Rigid/Authoritarian Management Restricted flow of information Frustration
Rapid/Poorly Planned Change Employees downgraded or moved without consultation
Rapid/Poorly Planned Change Employees downgraded or moved without consultation
Lack of involvement in decision-making Employees feel less important Employees feel bored, alienated and uncared for
Decrease in market share Job security issues
This occurs when employees contribute and are involved in the decision making in the business
Worker Directors ◦ appointed representative ◦ usually do not attend board meetings Works Council ◦ Representatives of workforce meet ◦ Discuss management proposals ◦ Feedback on ideas and comments ◦ Issues may include; Health and Safety Introduction of New Machinery
Quality Circles ◦ Used by many companies (especially Japan) ◦ Encourage continuous development ◦ Team Working ◦ Discussions on improvement on how things are carried out or how the product is assembled ◦ Improved feeling of importance and motivation of employees results
Democratic Styles of Leadership ◦ delegation