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The future of labor-management relations.

Cooperation between management and labor/unions in instituting and/or continuing these programs is a must if the labor force is to be trustful and thus receptive to them.

We have all heard how out-dated and inefficient our production system is in the United States. The Japanese, as well as other countries, have moved far ahead of us in terms of both quality of product and productivity of the worker. We tend to blame a great deal of this on the fact that Japan has newer and thus technologically advanced tooling available to their production system. Perhaps an even greater reason for the obvious separation in production, however, is in the treatment of the worker and the mutual definition of what productivity is and should be.

The United States, being a capitalistic society, has always thought of productivity in terms of production rates and their corresponding effects on the profits of an organization. The worker is fitted to a task (often machine-oriented) and his job is made as simple and repetitive as possible in order to increase the efficiency in which the task is completed. What is suggested here, however, is that productivity involves more than just the needs of the organization. For a society as a whole to be productive, it must do more to satisfy the needs of the individual people in it. For this to occur, the relationship between management and labor (and labor unions) must head in new directions.

Irving Bluestone, in the book Work in America - the Decade Ahead, suggests collective bargaining between labor and unions and management to help fill certain needs and rights that our society should but does not provide adequately to its members. Included among these rights are health care, life insurance, retirement benefits and no loss in pay for holidays, vacations and absence due to illness. These are areas of present concern in labor-management negotiations and fall into the area of hard-line controversial issues as discussed by Bluestone. He cites two other general areas of concern, namely issues for joint cooperative programs between labor and management and worker participation in decision making.

Hard-line controversial issues

This constitutes the real emphasis of present day labor/union negotiations. Included in these issues are basic needs as far as pay, security and fringe benefits are concerned; and negotiations in this area are strongly adversarial in nature. If our ultimate goal is, as it should be, societal productivity rather than simply higher profits for an organization, then job security must involve not only keeping the present workforce employed but also employing those who are out of work. For a society to be productive and efficient as a whole, each member of that society must be a contributor. Our country has a history of high unemployment, and not much is being done by the legislative body to alter the situation. As was mentioned earlier, collective bargaining has been filling the void created by society's lack of action to provide for basic needs and rights, such as the right to earn a living. This is the problem that must be addressed in hard-line negotiations in the future.

Steps have already been made in the reduction of nationwide unemployment through mandatory retirement ages (with compensation) and reduced length of work weeks, which provides more jobs to obtain a specific level of production.

A push is currently in effect to reduce the standard work week from five to four days. Management's fear is that a four day work week will underutilize its capital investment in production equipment. By staggering days off, however, a plant may operate its normal forty hour week and also provide more jobs to the unemployed. If workers' income is not to decrease while working fewer hours, however, total wages will increase as a result of the increased number of employees while production should remain constant. It should be suspected, on the other hand, that individual hourly productivity will increase due to the shorter work week, absenteeism will decrease and more employed consumers in the market will create a higher demand. This, in turn, will trigger more production within an organization. These factors should, to a large extent, tend to offset the increase in total wages within an organization, especially as the shorter work week gains popularity throughout industry.

Issues for joint cooperative programs

Another area of major concern in the management-labor relationship involves issues that require the involvement and cooperation of both labor/unions and management. These programs are designed to improve the quality of working life within an organization. When organized and conducted effectively, such programs will benefit both the worker and his management. Included here are programs in new employee orientation, health and safety and, more recently, drug and alcohol rehabilitation.

Again, the recurring theme of societal welfare is the driving force here. Of specific interest is the drug and alcohol rehabilitation issue. For years management has dealt with substance abusers with escalating levels of disciplinary action, usually resulting in termination. This scenario benefits neither the laborer nor the company's management. The worker loses his source of income and suffers possible loss of family and friends as well. Management loses an employee on which training time and money has already been spent and must suffer the expense of hiring and training a new employee.

Rehabilitation programs are in use in many industries and organizations and are increasing in acceptance throughout the country. Other programs have been designed to offer psychiatric counseling as well.

Cooperation between management and labor/unions in instituting and/or continuing these programs is a must if the labor force is to be trustful and thus receptive to them. The presence of the union as an active member is also an invaluable aid in communicating the intent and composition of such programs.

Worker participation in decision making

The Japanese are rapidly altering the way in which this country views the management-labor relationship. Management in the United States as a rule has a very authoritarian approach to how workers should be treated. They should be given orders, shown how to carry them out and then do so. Tasks are simplified in an attempt to reduce human error as much as possible. It is felt that this will result in peak productivity and performance. What really comes out of this type of relationship is a feeling that management does not trust its labor force. It certainly does not regard it as the human resource it is.

As was mentioned earlier, improved technology is not the only, or even the main, reason the Japanese are leaving this country's production system behind. More importantly, it is the way in which they treat their workforce that separates our societies. Many would argue that this separation is due to cultural differences and in some instances this is valid. It is not, however, a viable excuse to ignore necessary changes, which need to be made in the treatment of the workforce of this country.

Many current labor-related problems with which management must contend are not the result of a technically inefficient production system. Problems such as increased absenteeism, high labor turnover and decreased quality of output are more people-related and need to be dealt with in a less scientific manner. Management has long stated that the worker is the most important step in the production process. Despite this prevalent opinion, management has done little to make use of the creativity that abounds among the labor force. Improving the quality of worklife through increased worker involvement in the decision making process will allow some of this latent creativity to surface. As a democratic society, we trust and even encourage individuals to make their own decisions in everyday life. Increasing an employee's direct bearing on the production process will lead to a greater sense of pride within that employee in regard to his or her job. This will most naturally lead to a decrease in labor turnover and absenteeism and a marked increase in product quality.

If the Japanese really appear to dominate an aspect of production right now, it is the quality aspect. In Japan many large production organizations operate with complete quality control. Each worker is responsible for the quality of the product as it leaves the individual's work station. If upon inspection by the worker the part is found to be defective, that worker triggers a shut down of the line until the problem is found and eliminated. In this manner every part coming off the end of the line is of acceptable quality. The worker is trusted, given the responsibility of quality. The results are dramatic.

The aforementioned lack of trust pervades American industry and is easily seen in the quality control process. Typically a network of inspectors and other quality control measures are set up at the end of an assembly process. A worker will operate an assigned machine and repetitively mass produce a product or process relating to the product. As quality control finds defects, the problem must be pinpointed within the entire assembly process. This takes time, time during which more defective products are being turned out, increasing scrap. This is an example of how increased worker participation in decision making benefits the production system. It also enhances the total societal welfare by increasing the quality of worklife within the organization.

It would be useful at this point to discuss how this increased worker participation may be attained. First and foremost, a sense of trust must be developed between management and labor/labor unions. The two forces must develop a history of cooperation on the hard-line issues before anything may be accomplished in the more humanistic areas.

Through past trials and experimentation, basic criteria has been established that is essential to the success of any such program. First, the program should be voluntary. If workers are forced into such changes, the feeling that they are being treated in an authoritarian way will remain. Second, the workers must be convinced that any progress resulting from such a program will not also result in a loss of job security as more trivial jobs are eliminated. Third, and perhaps most important, management must design the jobs to fit the workers rather than making the worker fit the job. Individual creativity is only of value when it is unconstrained in its environment. A final necessity to successful implementation of an increased worker involvement in a decision making program is that the worker must be able to foresee how this program will benefit him. A framework of promotion and increased income corresponding to an increase in responsibilities must be developed and communicated to the labor force effectively. This is far from an exhaustive list of essential program features, but they all seem extremely important from past experience in various industries.

Being that an increased worker involvement program is far from a scientific endeavor, the program must be flexible to compensate for various human needs and emotions. Being a fairly new concept to all parties involved, a rigid framework would only serve to create hostility and excuses when problems occur.

Labor unions may be an invaluable tool if the future of such programs is to be successful. The unions could be of great importance in the development of the initial trust that must coexist between labor and management. A communication tool between the two groups, the union will serve as a buffer, helping each side to understand the other's point of view. Perhaps most importantly, unions give the labor force the unified power to alter today's authoritative system.

In summary, if we as a country are to reverse our current trend of falling productivity relative to many other countries, we must take the societal productivity approach. An overall improvement in the quality of worklife among the labor force should be the prime objective, thereby creating more of a team-oriented atmosphere in which the creative talents of the workers in our society could flourish. We as individuals are America's greatest resource and should be used to maximum capabilities.

For further reading

Buffa, Elwood S. Meeting the Competitive Challenge. Homewood, Illinois: Dow Jones-Irwin, 1984.

Chase, Richard B. and Nicholas J. Aquilano. Production and Operations Management. Homewood, Illinois: Irwin, 1985.

Hughes, Charles L. Making Unions Unnecessary. New York: Executive Enterprises Publications Co., Inc., 1976.

Kerr, Clark and Jerome M. Rosow. Work in America: The Decade Ahead. New York: Van Nostrand Reinhold Company.

Ouchi, William G. Theorv Z. Reading, Massachusetts: Addison-Wesley Publishing Co., Inc., 1981.

Sandras, Bill. "JIT/TQC Changes in Thinking, Materials: Multiple Source vs. Single Source." P&IM Review, Jan. 1987, pp. 26,57.

Brian H. Kleiner, Ph.D., is a professor of management at California State University - Fullerton.
COPYRIGHT 1993 Institute of Industrial Engineers, Inc. (IIE)
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Author:Seegert, Scott; Kleiner, Brian H.
Publication:Industrial Management
Date:May 1, 1993
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