You are on page 1of 29

Managing employee Relations:


Week 6
Industrial Democracy, negotiation
and collective bargaining.
Session outline

Industrial Democracy: meaning, arguments

for and against
Negotiation and Bargaining
Negotiation Stages/ Processes
Negotiation Team formation Roles
Negotiation team practices/ processes
What is industrial democracy?

Any theory or scheme that is based on concern for the

employee rights, particularly the right to share in the
control of decisions (Clegg, 1960: 3)

The use of power by workers or their representatives over

decisions within their places (Poole, 1986)

as a concept is concerned with both direct and indirect

representation (Rose, 2008: 337)
Industrial democracy: purposes
Transformation of the ownership and authority relations of the
enterprise as part of the wider strategy for transforming
economy and society (Mcllory, 1995: 357)

Structures and institutional mechanisms that give workers and

their representatives the opportunity to influence organisational
decision making in their places of employment (Hammer,
1997: 3 in Gollan, 1999: 413)

So is about voice broadly conceptualised in terms of

involvement and participation (Gennard & Judge, 2011;
Blyton and Turnbull, 1998, 2004; Dundon and Rollinson,
Industrial democracy: the
political/human rights arguments
Industrial democracy as freedom of association, expression,
movement and conscience, and equality before the law and an
equal stake in society.

Industrial democracy as core to liberal democratic society:

work too important to individual and society to remain outside
the fabric of the democratic society.

A complementary political system: practising popular

government on a limited scale, is necessary for its exercise on a
larger scale (J. S. Mills, 1963: 183; Also see Osterman et al.,
Industrial democracy: the economic
efficiency/performance arguments
Greater economic efficiency & performance: Key to
genuine employee commitment and, thus output

Business awareness: better informed employees are

have better understanding & therefore, less resistance to
management decisions & actions

Change management key to OD approach

Also see Gennard and Judge, 2011
Industrial democracy: the
employment relations arguments
Prevents Alienation from work: allows employees to have say
in production process and identify with what they produce
Therefore, decrease uncertainty by engendering greater levels
of trust between parties
Better psychological contract, improve voice and, therefore,
greater scope for genuine and effective contribution
From collective representative ER perspective, develop
consultation procedures and early union involvement in
decision making
Therefor, better Industrial relations: higher levels of ownership
of and commitment to organisational goals and objectives

See, e.g.: Edwards, 2003; Blyton & Turnbull, 2004; Gennard & Judge, 2011
Contextualising the
industrial democracy debate
Immediate post-war political consensus in support for Industrial democracy in
terms of participation of various types.

The 1970s and sharp debate over levels of participation - the Bullock Report

The argument that participation and involvement schemes release worker

creativity, such that commitment can be captured and utilised in the drive towards
economic success.

Much of these arguments based on Pluralist arguments, emphasising the positive

impact of trade unionism and collective bargaining, and the Human Relations
tradition, seeking to privilege employee voice in contradiction to the tyranny of

The crisis: resisting neo-liberal restructuring and relocation of production.

(Evoking memories of the sit-down strike argument for worker control, ownership
in the USA in the 1930s, (See Noam Chomsky, Occupy. Penguin 2012)
Negotiation: towards a
a process of dialogue definition
through which the parties seek to
reconcile their differences, with the aim of producing an
agreement, whether formal or informal, by using elements
of power, persuasion and argument
Dundon and Rollinson, 2011: 359
a process whereby two or more parties interact ... In order
to resolve their differences and who need to be jointly
involved in an outcome which is mutually acceptable, the
outcome being achieved by argument, persuasion and
9 Rose, 2008: 476
The nature & purpose of
Process involves the interaction that is based on common and shared
interests and desire to reach outcomes
However, negotiators start with differences that prevent initial
achievement of an outcome
Starts with recognition that the process is a legitimate mechanism for
resolving differences
Involves what Gennard & Judge (2002) refers to purposeful and
constructive compromise
So, even if neither party gets their ideal outcomes, parties remain
hopeful of an acceptable outcomes
Each party has some influence/power over the other real or assumed
otherwise there would be no point
Largely a verbal exchange and therefore influenced by socio-
psychological factors (attitude and emotion)
Rose, 2008
The contexts of negotiation

Dundon and Rollinson, 2011
Categories of Negotiation
Issues of individual
Between individual
members of
Common elements
of negotiation

Group problem-
Bargaining solving

Issues of collective
Gennard and Judge, 2005 in Rose, 2008
The process of negotiation
Stage 1: preparation
preliminary meetings and skirmishing
tacit communication
shaping & establishing attitudes, aspirations & positions & objectives
establish bargaining range
Stage 2: face-to-face negotiation
opening moves and developing your case
seeking agreement
concluding negotiations
failure and considering alternative resolution procedures
Stage 3 post-negotiation
clarify minor details
implementing the agreement
The Six Stages of Negotiation
Part 1
Stages of Negotiation Examples of processes during each
negotiation stage
1. Preparation Identify objectives and issues that cannot be
Gather all necessary facts and information
Anticipate possible problems
Assign roles for key negotiators.

2. Proposal Put forward the case, in order of priority

Listen to the proposal of the opposition
Ask clarifying questions
3. Debate Each party discusses the main points of their
Find inconsistencies in opposing argument
Further questioning and reiteration of main
points or proposals
The Six Stages of Negotiation
Part 2
Stages of Examples of processes during
Negotiation each negotiation stage
4. Bargaining Discussions to find a mutually
beneficial outcome
Compromise a win-lose situation
Convincing the other party to
Aim to make, rather than to win, a deal
5. Closing Choosing a way forward, like a strategy
A final offer from each party is
Formalize and summarize agreements
in writing
6. Review Review each stage of the negotiation
process to see what was successful
Reflect on the whole process in order
to learn how to achieve a better
Negotiating Styles - Competitive
Hard Avoid conflict
Change position easily
Dig into your position
Concede Stubbornly Concede generously
Demand concessions to have Make concessions for the
a relationship relationship
Make threats Back down to ultimatums
Commit early; draft late Commit early; draft late
Negotiating Styles Cooperative
Problem Solving
Solve the problem
Focus on interests, not positions
Dont concede anything; invent options
Separate the people from the problem
Know each sides best walkaway alternative
Draft as you go; commit only at the end
What is collective bargaining?

The process whereby representatives of employers and

employees jointly determine and regulate decisions pertaining to
both substantive and procedural matters within the employment
relationship. The outcome of this process is the collective
agreement (Rose, 2008)

Voluntary negotiations between employers or employers

organizations and workers organizations, with a view to the
regulation of terms and conditions of employment by collective
agreement (ILO Convention No. 98, 1949)
Theories of Collective Bargaining
According to the Webbs collective bargaining is one of three
main trade union methods used to achieve their basic aim of
improving the conditions of their members working lives. The
other methods being mutual insurance and legal enactment.

So it represents the collective equivalent, but more effective than

individual bargaining because it enabled individual employees
to secure better terms of employment by controlling competition
amongst themselves.

However, for Flanders, collective bargaining is itself essentially

a rule-making process (job regulation) that has no equivalent or
counterpart in individual bargaining.
2 basic models of C/B
Conjunctive or distributive bargaining:
agreements driven by sheer functional necessity.
therefore, no incentives to do more than implement the minimum terms
of the agreement,
Outcomes are temporary resolution of conflicting interests.
Co-operative or integrative bargaining
based on acknowledgement and acceptance of mutual dependency
Therefore, that each party can achieve its objectives more effectively if
it wins the support of the other.

Source: Walton and McKersie; Chamberlain and Kuhn in Rose, 2008 .

Bargaining Strategies
Distributive Bargaining
Negotiation that seeks to divide up a fixed amount of
resources; a win-lose situation.

Integrative Bargaining
Negotiation that seeks one or more settlements that can
create a win-win solution.
Distributive V. Integrative
Bargaining Distributive Integrative
Available resources Fixed amount of Variable amount of
resources to be divided resources for mutual
Primary motivations Win loose (I win you
loose I win, you win (win
Primary interests Opposite mutually
nce of interests
Focus of relationship Short-tem

Essentially, Collective bargaining
It is essentially a representative process
It is not a substitute for the individual employment contract
However, it is only one method of decision-making amongst
several which include the following:
Unilateral employer regulation
Individual bargaining
Joint consultation
Unilateral employee regulation.
70% of all employees in all establishments, unionised and non-
unionised, were covered by collective bargaining arrangements
in 1984, but this fell to 54% in 1990, 38% in 1998 and 35% in
Structural features of
collective bargaining

Bargaining Extent (coverage)

Bargaining Level
Bargaining Unit
Bargaining Scope (content).
Bargaining Issues
Document that results from collective bargaining
process is labor agreement or contract
Management Rights
Union Security
Compensation and Benefits
Grievance Procedure
Employee Security
Negotiating Team Formation
- Roles & Responsibilities Definition
Leads the negotiation
LEADER Keeps the meeting moving forward
Drives the desired outcome

Keeps the negotiable issue on track

FACILITATOR Guides the team to refocus and ensure goals are reached
Gives advice and direction when necessary

Keeps record of agreements

NOTE-TAKER Keeps record of follow-up action items
Prepares Memorandum Of Understanding

Source of detailed knowledge about commodity, industry, use of the

EXPERT commodity, specifications, ensures technical feasibility, understands
product/commodity critical attributes
Bargaining outcomes:
Procedural agreements
Relatively permanent rules
Though may contain substantive (economic) elements but
generally entail procedural (political) issues such as:
Framework of negotiating procedures
Procedures for the resolution of issues
Substantive/economic agreements
Generally entail substantive/economic issues such as:
Rates of pay,, overtime, Bonus
Working hours, Holiday entitlements, sick leave,
Contemporary Trends in Bargaining
Significant decline in the proportion of workplaces, where pay is
determined through collective bargaining since 1980.
Decline in percentage of workplaces that use any collective
bargaining from 30% in 1998 to 22% (WERS, 2004)
The decline is largely in the private sector, with decline from
17% to 11% between 1998 and 2004.
Almost three quarters (72%) of private sector employees had
their pay unilaterally set by the management, a figure that rose
to nine in ten (88%) where unions were not recognised for pay
But even unionised workplaces have seen a rise in non-
representative forms of determining pay and terms and condition
What are the alternatives to
Use of power
Joint Problem Solving
Agreeing to Disagree or walk away