Unions, employee relations and high performance work practices
Nov, 2008
In recent times government and management has considered unions a hindrance to workplace performance. New research shows that unions positively impact the adoption of high performance work practices when employee relations are good. But they can have a negative impact when employee relations are poor.
In particular, unions can remove barriers to high performance work practices by advocating long-term investment in positive change. They can provide the communication infrastructure that facilitates the introduction of high performance work practices. And they can help create the necessary employee trust, cooperation and job security that high performance work practices need to be introduced effectively.
It has also been argued that high performance work practices are a union substitute because they introduce direct employee individual voice which negates the need for collective employee voice.
High performance work practices matter
High performance work practices diminish employee turnover and increase productivity and corporate financial performance by improving employee knowledge, skills, abilities motivation and engagement.
However, while these practices have a positive impact on employers, it has been argued that they have a negative impact on employees by intensifying work processes and stress. This explains initial union resistance.
And they are not the only ones to resist its implementation. Managers and others can lose power through the devolved decision making and flattened hierarchies of high performance work practices, and so may also resist its adoption.
Secondly, company ownership and corporate governance is geared towards short-term results. Because high performance work practices take time to implement and register results, change initiatives may be abandoned after limited implementation fails to deliver measurable results.
Thirdly, long histories of labour management conflict and mistrust inhibit its implementation. It is argued that the levels of trust and cooperation required by high performance work practices may be difficult to achieve and maintain. Employees must be willing to learn new skills, offer ideas and suggestions based on their knowledge and commit to quality and productivity. To get this commitment, employers must offer a quid pro quo of job security. If organisations are forced to restructure and layoff employees it will impact employee trust and the stability of team membership.
A co-operative, rather than adversarial, relationship with unions can address many of these barriers.
Union impact on the adoption of high performance work practices
Unions can have both a positive and negative impact on productivity. Unions can have a negative impact by using their monopoly position to drive up wages and to introduce restrictive work practices that inhibit management's ability to introduce high performance work practices.
Unions can also encourage management to introduce more productive work practices so they can stay competitive despite higher wages. Finally, unionism per se is neither a plus nor a minus to productivity: what matters is how unions and management interact at the organisation. In other words, productivity depends not on what unions and management do separately but on their relationship with one another. Cooperative industrial relations promote the positive aspects of unionism and adversarial industrial relations increase the negative aspects of unionism.
Call to action
To leverage the positive aspects of unionism, management must replace the pluralist perspective that has dominated traditional industrial relations with a partnership approach that places less emphasis on conflict of interests between employers and employees and more emphasis on mutual gain.
Extant research indicates that there are a number of ways in which unions may overcome many of the barriers to implementing high performance work practices and facilitate their adoption. Firstly, unions promote a long-term and organisation wide perspective. Systems of corporate governance that impose a short-term time frame are not conducive to the implementation of high performance work practices which require longer time horizons.
Unions take an organisation wide perspective when contributing to decisions while management can make poorer decisions based on their own interests and incentives. The independence of unions allows unions to challenge decisions that are not in the best interest of their membership and to challenge the logic of management proposals. Union representatives are able to take a longer-term perspective because their career paths are not tied to the organisation.
Secondly, unions enhance collective and individual voice.
There is substantial evidence that indicates that union organisations have more effective employee voice mechanisms. Management sponsored employee voice is not a substitute for union collective voice that allows employees to communicate openly to management without fear of reprisal. It can also make direct individual employee voice more effective because employees feel they are less vulnerable and are prepared to speak their minds. However, management must be responsive to collective voice if it is to be effective and this is most likely when the relationship between unions and management is cooperative rather than adversarial.
Thirdly, union networks provide an effective communication infrastructure. It has been proposed that unions can add value by providing an efficient way of communicating and negotiating with employees. In particular, union networks have an infrastructure that facilitates lateral communication and coordination; union representatives act as a ‘lubricant'; and negotiations are also less expensive if the organisation only has to deal with union specialists.
Fourthly, unions increase employee trust and commitment. Employees trust unions because they are independent and union leaders, unlike appointed managers, are elected to represent the interests of employees.
Finally, unions reduce employee withdrawal. Research has demonstrated that the collective voice of unionism leads to lower probabilities of quitting, longer job tenure and a lower lay-off rate which reduces the costs of training and recruitment and increases productivity Unions contribute to the effective implementation of HPWP because job tenure contributes to stable team membership, which is important to team effectiveness, and employees are more prepared to participate in employee involvement programs when they feel the union will protect their employment security.
Given high performance work practices have been linked to competitive advantage, workplaces would do well to perceive unions as having the potential to have a positive impact on employer outcomes. However, good employee relations, which moderate the impact of unions on HPWP adoption, are less likely in union workplaces and management needs to concern itself with developing this essential success factor.
Dr. Carol Gill
Program Director - Organizational Leadership, Melbourne Business School
Senior Fellow - University of Melbourne
and
Dr. Denny Meyer
Senior Lecturer - Statistics
Faculty of Life and Social Science, Swinburne University of Technology
