In the late 1980s and early 1990s, Saint John-based Irving Paper Limited practised an “old style of managing the plant,” explains Peter McIntyre, manager, human resources.
Management told the union what they wanted employees to do and the union told management what they would do.
It was not a good relationship — strikes and lockouts were common, it was very confrontational and that led to a lot of problems, he said.
At the same time, the company was beginning to suffer as a high-cost producer in an increasingly competitive environment. After a particularly acrimonious strike in 1991, the company decided they wanted to make a change.
The fact of the matter is, at most organizations confrontation is usually the rule and not the exception.
A new report from the Conference Board of Canada says it’s time to take everything anyone knows about that way of doing things and forget it. Union and management have to let their guards down for a while, stop acting like adversaries and take a leap of faith. Trust each other and break the vicious cycle that only hurts businesses and unions alike.
At a time of unrelenting and inevitable change, the old us-versus-them approach that characterized union management relations since the industrial age will only get in the way and impede corporate performance. But by working with unions as a partner instead of against them, businesses can improve performance, manage change, thrive and prosper.
Of course that’s if you have a union in the first place. Author Lloyd Fields would suggest it’s better not to have one at all.
It may be possible for businesses that have had a union for a while to try to improve the working relationship with their union, but it takes a long time after a union comes into a workplace to get over the animosity that is typically engendered in the certification process, he said.
This at a time when unions are becoming more aggressive than ever before in their certification drives. Unions are a for-profit business and the only way they can make a profit is by signing on new members, said Fields.
In the recently released fourth edition to his book, Unions are not inevitable, Field included for the first time a chapter on how to decertify a union. The only way to do that is to address the dissatisfiers that brought the union in the first place and ensure the senior management team understands they have to treat employees in such a manner that union dues seem like a waste of money, he said.
“Anything less than that and you’re just providing the union organizers with an opportunity.”
The Conference Board of Canada report, Change Is Inevitable, But Growth Is Optional, suggests an alternative strategy. The report highlights nine essential conditions for building a productive union-management partnership:
•effective union and management leadership;
•common values and goals;
•formalized partnership agreement;
•commitment to process improvement;
•a change in roles;
•commitment to employee development; and
The authors of the report, Susan Ward and Brenda Chartrand, conducted an in-depth study of four organizations — Irving Paper, Air Canada, Harley Davidson and General Motor’s Saturn — that have improved corporate performance as a result of better union-management relations and concluded that trust is the most critical factor in developing an improved relationship with unions.
“Often, the first step is for organizations to acknowledge the contribution the unions,” they write. “Doing so legitimizes the unions and facilitates the development of trust.”
Leaders recognize that the status quo in most union-management relationships is counter productive and are willing to let down their guard for a while and take a leap of faith toward improving relations.
All four organizations came to the realization, usually after some major crisis, that without fundamental change, both the union and the employer would only get weaker.
They were motivated to “take a leap of faith” that enabled them to break that downward spiral and begin a new cycle of growth for both the business and the union.
“The biggest problem was a lack of trust,” said McIntyre. So soon after the strike at Irving Paper ended in 1991, a concerted effort was begun to engender greater trust between the two parties.
A 12-member vision team made up of employees from across the company was sent out for two weeks to study six key businesses well known for exceptional union-management relationships.
After returning from their tour, the vision team made recommendations for change covering everything from safety concerns to landscaping the front of the plant.
Joint committees were established to explore the recommendations with the company moving as quickly as it could on some of the recommendations as a sign of good faith.
“Implementing some of the recommendations as soon as possible showed the company could be trusted,” said McIntyre.
One of their first acts was to bring in landscapers to improve the appearance of the plant. If seems like a simple thing but it was an important first step, he said.
“With recommendations like that one, employees actually see us act and the trust starts to grow.”
Today, every effort is made to involve the union strategy and decision-making. “Most things I do, I do jointly with the union,” he added. “I’ll take union reps with me and that allows employees to see exactly what we’re seeing.”
Union and management reps meet regularly. “We don’t talk grievances. It’s just to share information with them so they are aware of what’s going on all the time.”
All employees are also brought into the process once every three months at quarterly information sessions where management brings them up to date on the business and guest speakers give a talk on anything from sensitivity on harassment to stress management or pension issues.
There’s a lunch and then employees are presented with their incentive bonuses. “It’s a celebration but even if we didn’t do as good, we let them know why we didn’t do as good,” said McIntyre.
He admits developing and tending to the union-management partnership is a lot of work and costs money, but it will improve the performance of the organization. And anytime that happens things are better for the union as well.
“There’s an expense, but there’s also a payback and the payback is we have a reasonably content workforce.”
Absenteeism is down, performance is improved, and the operation is safer and more efficient. Production numbers are up and the quality of their product is better.
Before setting out to improve the relationship between union and employer, absenteeism was routinely in the double digits, said McIntyre. Since 1992 absenteeism has been down below five per cent, and last year it dropped to 3.2 per cent.
Grievances are also way down. Typically running at about 50 to 60 a year with three or four going to arbitration, today they’re averaging six or seven grievances a year and only four have gone to arbitration in the last eight years.
The increased levels of trust also enabled management to sign long-term collective agreements with the two unions in the plant. In 1997, a six-year deal was signed with one group and this year an eight-year deal was reached with the other group, two years before the expiry of the old agreement, effectively guaranteeing labour peace for 10 years, said McIntyre.
That in turn frees up McIntyre and his HR department to focus on long-term objectives like training and development or improved hiring procedures that will ensure they are ready for the future. “You can’t do that when you’re negotiating every two years,” he said.
Since making taking their own “leaps of faith,” the other businesses in the Conference Board study have enjoyed similar successes that they attribute to the improved working relationship between union and management.
Air Canada’s heavy maintenance facility in Winnipeg landed a new $100-million contract with America West after the union promised not to hold any of their planes “hostage” should a labour dispute occur.
The Harley Davidson plant in Kansas City, Miss. met and exceeded diversity targets including bringing in employees from economically challenged areas, and has achieved improvements in productivity and quality.
And the General Motors Saturn plant in Spring Hill, Tenn., averages between 5.6 and 6.6 discrepancies a day, 10 per cent per day is considered world class and their absenteeism rate of 0.3 per cent is lower than the parent company’s.
The union-management partnership rule book
Effective union and management leadership
- Acknowledge that past forms of adversarial union-management relations are not beneficial for companies or unions
- Take a leap of faith toward a new form of union-management relationships, a collaborative, equal partnership
- Create and articulate a vision and mobilize people toward that vision
- Foster a positive organizational culture based on shared values
- Develop an environment for success by empowering people
- Recognize, acknowledge and legitimize the contribution of both union and management
- Share a vision of economic gain, mutual understanding and respect for each other
- Develop a “safe” environment, where individuals can disagree and raise issues or concerns without fear
- Realize that trust is fragile and needs to be cultivated on an ongoing basis
Common values and goals
- Undertake a conscious effort to have both union and management articulate and share their needs
- Explore and identify what both groups share in common
- Involve representatives from both union and management in the creation of joint values and the development of mutual goals
- Encompass the fundamental needs of the company and the union in these mutual goals
Formalized partnership agreement
- Craft a formal agreement between union and management to outline objectives of the partnership, roles, responsibilities, boundaries and a process for decision-making
- Position the agreement as a complement and supplement to the collective agreement, not as a replacement
- In the absence of a formal agreement (if both union and management are willing), elect to move ahead on the strength of goodwill
- Commit that both union and management leaders will participate in the strategic plan developed to satisfy the key stakeholders
- Link plans to objectives and daily work and connect to an incentive program jointly developed with the union
Commitment to process improvement
- Agree that process improvements can strengthen opportunities for employees and the enterprise rather than result in layoffs
- Consider all stakeholders (including unions) when realizing gains through quality control, or through incremental or breakthrough improvement
A change in roles
- Develop organizational structures that create an environment of empowerment and accountability
- Establish union and management “partners” at all levels of the organization, with separate but complementary responsibilities
- Ensure that structures at the individual, functional, cross-functional and organizational level facilitate communication, knowledge-sharing and decision-making, and recognize that structures are key to the partnership
Commitment to employee development
- Secure adequate resources to invest in employee development as a way to facilitate the large-scale organizational change that union-management partnerships represent
- Make employee development a collaborative effort between union and management and position it as a “win-win” for both groups
- Balance resources for development of technical skills, business enterprise knowledge and interpersonal skills
- Link the investment in employee development with measurable results and incentives
- Make the union-management partnership public
- Ensure effective communication between union and management around the purpose of the business; insist that knowledge and information flow in all directions and that communication include honest feedback
- Use a variety of means (including non-verbal symbols) to communicate important messages between union and management partners
Source: Conference Board of Canada, Change is Inevitable, But Growth is Optional
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