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Benefits of Labor-Management Cooperation

Instructor: Scott Tuning

Scott has been a faculty member in higher education for over 10 years. He holds an MBA in Management, an MA in counseling, and an M.Div. in Academic Biblical Studies.

In the United States, the adversarial relationship between management and labor is being replaced by a more collaborative approach. This lesson will explore some specific steps to reduce distrust and improve cooperation for the good of both the business and the union employee.

Management and Labor Unions as Adversaries

Relevance for the Business Leaders of Today

If you have supervised direct reports or been the direct report of someone else, you already know the truth about labor relations: it is costly and time consuming to put out fires related to poor performance, disciplinary matters, and other personnel issues. You may have also learned the hard way that your business's productivity is closely linked to the amount of time that must be spent on these personnel issues. In unionized workplaces, collaborative cooperation between labor and management can improve the bottom line by reducing the resource drain that is associated with poor labor relations.

Important Historical Labor Incidents

Until recently, the relationship between management and union employees has almost always been adversarial in nature. Examples of significant labor incidents include the Great Strike of 1877 in which thousands of railroad workers took control of a portion of the city of Pittsburgh, Pennsylvania and were dislodged only when fired upon by U.S. Army troops that had been dispatched to break up the strike.

Less than a decade after the strike in Pittsburgh, the city once again saw a violent clash between management and labor unions. In 1892, 3,000 employees of a manufacturing plant belonging to Henry Frick went on strike and refused to work. Management responded by hiring new unskilled workers to break the strike which resulted in a 14 hour gun battle that ended with the surrender of those individuals attempting to break the strike. These examples represent the 'worst-case' scenario in labor relations.

The Great Strike of 1877 came to violence when the U.S. Army opened fire on the striking workers
The Great Strike of 1877 came to violence when the U.S. Army opened fire on the striking workers

Zero to Hero in 30 Years

Zero

Interestingly, labor unions representing the air traffic controllers have been at center stage twice in the last 30 years. One occurrence is a shining example of the importance of collaboration while the other stands as a reminder of the consequences when negotiations break down. In August 1981, thousands of flights were canceled and air transportation ground to a halt when almost 13,000 air traffic controllers walked off the job in protest. President Ronald Reagan declared the strike illegal and ordered the controllers to return to work. Less than 2,000 controllers complied with Reagan's directive. The remaining 11,000 were summarily terminated, banned from working in the industry again, and the labor union was decertified by the federal government.

President Ronald Reagan announces the termination of 11,000 air traffic controllers who defied his order to return to work
President Ronald Reagan announces the termination of 11,000 air traffic controllers who defied his order to return to work

Hero

Thirty years later, in 2013, two major labor unions representing air traffic controllers engaged in productive good-faith discussions with the Federal Aviation Administration (FAA). These good-faith negotiations demonstrated the power of cooperation by achieving tangible results such as:

  1. An improvement in employee satisfaction from nearly 0% to over 40% in three years
  2. A 50% reduction in grievances filed
  3. Achieving the highest margin of union support for a collective bargaining agreement in the history of the labor union (85% of the voting members ratified the CBA)
  4. The reduction of 108,300 tons of carbon emissions was realized after the FAA worked collaboratively with controllers to find efficiencies in scheduling
  5. An additional reduction of 65,000 tons of carbon emissions and fuel savings of more than $17 million by including pilots, air traffic controllers, and FAA management in similar efficiency discovery projects
  6. A savings of more than $4 million per year by realigning job duties and eliminating overlap

These tangibles represent some of the best modern-day examples of collaboration resulting in win-win situations for labor and management.

The Roadmap

Strategic Goals

With the foreknowledge that significant issues existed, the two labor unions and the FAA hired an outside consulting firm to assist in negotiations. This organization laid out a four-part strategy to create a collaborative community between the unions and management. The four pillars were:

  1. Enforcing one-on-one contact between every employee and their manager. All employees with direct reports were required to spend time with each individual employee for the purposes of training, collaborating, and/or problem-solving.
  2. Identifying 700 non-management leaders who would participate in specialized labor relations training.
  3. The establishment of a plan of succession and mentoring. Senior-level management was required to identify an individual whom they would train, coach, or consult with for the purpose of knowledge transfer.
  4. Deploying technology tools that allowed convenient collaboration on documents, presentations, and multimedia.

Execution

Solid research shows that deficiencies of process within an organization are rarely related to a bad strategy. Instead, they are more often related to a poor execution. In the case of the FAA, the outside consultant gave a clear roadmap to a flawless execution that included milestones such as:

  1. Evaluating all business processes in the light of relevance. The consultant encouraged managers and trainers to spend significant amounts of time watching their employees work their jobs for the purpose of developing training tools and business workflows that were highly relevant and related to the most frequent or critical aspects of each employee's role.
  2. Management and labor leaders had access to an organizational psychologist who could be used as a sounding board or resource for helping to facilitate difficult discussions and reduce inappropriate or extemporaneous communications between labor and management.
  3. The FAA committed to a large-scale, high quality training program. The team of organizational psychologists and professional educators developed highly relevant simulation-based training. This training was definitively proven to improve safety, improve policy compliance, and reduce inadvertent mistakes in procedure.

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