Industrial Psychology

1. ROLE OF PERCEPTION, EMOTION &
COGNITION DURING NEGOTIATION BETWEEN
UNION & MANAGEMENT
Insights by:
Dr. SANDEEP SOLANKI (MBA, M.Com. & Ph.D.) Associate Prof. at RNB
Global University, Bikaner, Rajasthan, INDIA

2. UNDERSTADING BASIC CONCEPTS OF UNION & MANAGEMENT NEGOTIATION ISSUES
Q. What issues between Union and Management requires negotiation to get resolved?
Ans. On the Labor Union part; labor union is an organized group of workers that bargains with
employers on various issues like:
 Non-Adherence of Statutory Benefits like practicing legal framework (Act) related to compensation,
EPF, ESI, maternity, gratuity, pension, wages etc.
 Social Security Benefits such as education allowances, house building advance, sick leaves,
accident insurance etc.
 Fair Treatment (with all employees equally, say distribution of festive sweets to all sections)
 Working Conditions (ex; installing waste-water treatment, which is essential in a business like
metal-plating in which dangerous chemicals are used during manufacturing process)
 Job Security (say, retirement age in public sector or fixed duration of employment in private sector)
 Occupational Health & Welfare funds (say, T.B. or Lung Cancer or Eczema)
 Related to employment contract terms & conditions
 Longer Vacation/Holiday Periods

3. UNDERSTADING BASIC CONCEPTS OF UNION & MANAGEMENT NEGOTIATION ISSUES
On the Management part:
 Return on investment in terms of profit earning and wealth maximization
 Need to keep stockholders satisfied by maximizing market standing
 Need to keep satisfied other stakeholders like government in terms of fulfilling regulations and
consumers by building a brand image
 Continuous Production
 Utilizing maximum of human resource capacities
 Adherence of Statutory Benefits like practicing legal framework (Act) related to compensation, EPF,
ESI, maternity, gratuity, pension, wages etc.
Q. Describe Negotiation Process between Union and Management.
Ans. Negotiation process is made up of five steps:
1) Preparation & Planning
2) Definition of ground rules
3) Clarification & Justification
4) Bargaining & Problem Solving
5) Closure & Implementation

4.  In a unionized environment, the union officials (leaders or representatives) conveys the employer about the
burning issue or problem faced by the workers & what they (workers) want and ask what they (employers) are
willing to offer. When there is a discrepancy between that workers and what management/employer is willing to
give – union officials serve as negotiators on behalf of their workforce, with the objective of extracting the best
package of salary, benefits or any other conditions apply to resolve the issue. The process of settling differences
and establishing mutually agreeable conditions under which the employees will work is called collective
bargaining. Negotiation starts when each side states its position and presents its demands. Both parties usually
expect some give & take and realize that the final agreement will fall somewhere between the two positions. If
everything goes smoothly, a tentative agreement can be reached and then voted on by union members. If they
accept the agreement, the process is complete and a contract is put into place to govern labor-management
relations for a stated period. If workers reject the agreement, negotiators from both sides must go back to the
bargaining table.
 But if negotiation stall (stop or delay), the sides may call in outsiders, normally for mediation, under which an
impartial third party assesses the situation and makes recommendations for reaching an agreement. A
mediator’s advice can be accepted or rejected by either side. If mediation does not result in any agreement, they
may opt instead for arbitration, under which the third-party studies the situation and arrives at a binding
agreement. The word ‘binding’ is a condition of entering into the arbitration process as both parties have agreed
to accept the decision.
UNDERSTADING BASIC CONCEPTS OF UNION & MANAGEMENT NEGOTIATION ISSUES

5. Q. What are the tactics used by union and management, in case negotiation fails or can’t resolve
through collective bargaining or formal grievance procedure?
Ans.
By the Union:
 Strike (work stoppage caused by mass refusal of employees to work)
 Picketing (outside the factory gates)
 Boycotting (refrains from dealing with employers)
By the Management:
 Lockout (temporary work stoppage initiated by the management)
 Use of Strikebreakers (replacing striking workers by non-union workers)
UNDERSTADING BASIC CONCEPTS OF UNION & MANAGEMENT NEGOTIATION ISSUES

6. APPLICATION ASPECTS OF PERCEPTION, EMOTIONS & COGNITION DURING
NEGOTIATION BETWEEN UNION & MANAGEMENT
Q. How does perceptual process of labor union and that of management operates while negotiation?
Ans.
Of the Union Official:
 A general impression of the management in the mind of the union leader is that company has
earned lot of profit and despite they are unwilling to pay bonus on festive season to workers or are
paying very minimal bonus. Whereas the management might have planning to keep the profit part
to distribute extra dividends in future.
Of the Management Representative:
 Union remain in a strategic position to compete with management for the loyalty of employees. It
puts claim for higher wages and other benefits from an unwilling management. These managers
are likely to fear that the union will deprive them of the opportunity to serve as protectors of their
employees. But in times of high demand of the product in market, the productivity will be
increased only with the cooperation of union. Here the perception of the management may prove
to be wrong.

7. APPLICATION ASPECTS OF PERCEPTION, EMOTIONS & COGNITION DURING
NEGOTIATION BETWEEN UNION & MANAGEMENT
Q. How does emotions or moods of representatives of labor union and that of management affects overall negotiation
process?
Ans.
Of the Union Official:
 Anger should be used selectively in negotiation: angry negotiators shows who have less information or less
power than their opponents have significantly worse outcomes. Moreover, it also depends on the degree of
truthfulness of the situation or demand in hand such as poor sanitation facilities or unfair wage cut practices
by the management. Feeling of stress and anxiety arose due to fear of unsuccessful deal with management or
not adhering to the expectations of his workers may have positive or negative affect during the whole
negotiation process. For instance, convincing management to apply the regulation related to the employment of
women at work, before and after a childbirth as the provision of maternity leave.
Of the Management Representative:
 May be the management representatives consider the union leader’s personality abrasive and it may be known
that they’ve said negative things about them; regardless of this fact, they are forced to interact with the union
leader or feign friendliness, just to reach an agreement. This disparity is emotional dissonance.

8. APPLICATION ASPECTS OF PERCEPTION, EMOTIONS & COGNITION DURING
NEGOTIATION BETWEEN UNION & MANAGEMENT
For instance, while discussing a demand of union leader to raise the entitlement of minimum limit of
reimbursement of medical expenses for a material impairment of health of a worker who was engaged in
hazardous process of material handling in the factory. This demand of raise of reimbursement limit would
eventually increase the overall expenditure incurred on workers by the organization, which may not have been
forecasted by the management. Bottled-up feelings of frustration, anger and resentment can eventually lead to
emotional exhaustion and burnout. Further, mistakes may be committed due to over-confidence or self-assurance
of the management representative, while formulating an agreement terms & conditions. For instance, mutual
agreement arrived for a hike in wages of workers in a non-unionized firm to be increased up to two times as the
one practiced in a unionized firm, but documented as only 50% hike.
Regulating emotions is very crucial to either party to arrive at some common grounds in the overall interest of the
organization. Strategies to change your emotions include thinking about more pleasant things, suppressing negative
thought and reappraising the situation. Negotiation is an emotional process; however, a skilled negotiator has a
‘poker face’.

9. APPLICATION ASPECTS OF PERCEPTION, EMOTIONS & COGNITION DURING
NEGOTIATION BETWEEN UNION & MANAGEMENT
Q. How does cognition levels of labor union and management representatives contribute in negotiation
process?
Of the Union Official:
 A union leader must have qualities to define the conflicting issues precisely or convey as well as
responds on what the disagreement is actually about. For this, he must possess a sound cognition
level. For instance, if a labor union leader confronts with management to negotiate over an issue
of legal provisions related to dearness allowance. Therefore, he must be aware about that the rate
of the DA, which is calculated on the basic pay structure. And the basic pay structure also has
different grades depending on the degree of skill required and experience involved. Similarly, the
union leader must also be aware about the current stock prices of his company in the market and
the degree of competition prevailing in the market.

10. APPLICATION ASPECTS OF PERCEPTION, EMOTIONS & COGNITION DURING
NEGOTIATION BETWEEN UNION & MANAGEMENT
Of the Management Representative:
 Similarly, the representative of the company management must be aware about the current
market price of the labor in the market and can bargain on minimum wages to be paid to labor
and not to overpay or underpay. He must also be aware about all tactics of keep the labor
behavior under control such as working hours or to make them follow the rules & regulations of
the company for smooth production in longer term. He must also have knowledge about the labor
& union leader that whether the union leaders have genuine demands or they are simply
influenced by some political factor.

11. THANK YOU FOR PATIENT COMPREHENSION!
E-mail: sandeep.victory1947@gmail.com