CHAPTER TWELVE Critical Issues in Human Resources Management CHAPTER OUTLINE Unionization in the Hospitality Industry Reasons for Union Affiliation A Brief History The Unionization Process The Collective Bargaining Process Contract Administration A Multigenerational Workforce Overview of the Generations Managing the Generations Downsizing and Outsourcing Downsizing Tactics Outsourcing Tactics Succession Planning Activities Career Development Programs Advantages Procedures for Career Development Human Resources Terms For Your Consideration Case Study Human Resources Management in Action Internet Activities Endnotes CHECKLIST OF CHAPTER LEARNING OBJECTIVES As a result of satisfactory completion of this chapter, readers will be able to: 1. Explain how the responsibilities of human resources managers are affected when employees are unionized. 2. Discuss guidelines that are helpful in facilitating the work of staff members belonging to the Traditionalist, Baby Boomer, Generation X, and Generation Y age groups. 3. Provide tactics that may be useful when organizational downsizing and outsourcing strategies are planned and implemented. 4. Review basic procedures that are useful in the succession planning process. 5. Identify the benefits of and basic steps that human resources managers can use to develop and assist staff members with career planning activities. c12.indd 399 12/14/07 8:02:18 PM 12/14/07 8:02:18 PM400 CHAPTER 12 ! Critical Issues in Human Resources Management Unionization in the Hospitality Industry 1. Explain how the responsibilities of human resources managers are affected when employees are unionized. Employee unions typically represent some hospitality organizations in metropolitan areas. Human resources practices in these operations must comply with the terms of the applicable labor contract , and managers work with other top – level officials to negotiate and administer these agreements. Those with line operating responsibilities may spend a significant amount of time ensuring compliance with the contract. Unions: Organizations comprising employees who act together to promote and protect their mutual interests through collective bargaining; see collective bargaining . Unions: Organizations comprising employees who act together to promote and protect their mutual interests through collective bargaining; see collective bargaining . Impact on Human Resources Management Most hospitality organizations in the United States are not unionized, but some, especially large operations in metropolitan areas, do negotiate and administer agreements with one or more unions. This chapter addresses why employees are attracted to unions, how bargaining agreements affect management responsibilities, and procedures for collective bargaining. Although many people believe that hospitality organizations are staffed by teenagers and young adults, there are, in fact, many persons of different ages working and enjoying careers in the industry. Should management and supervisory tactics be modified based on the age of staff members and, if so, how? Those with human resources responsibilities provide guidance and information to line supervisors and, in small properties, directly facilitate the work of employees. Therefore, a discussion of this topic is important for human resources managers. The strategy of doing more with less while attaining performance standards is a concern of managers in every type of hospitality operation. When is downsizing (rightsizing) appropriate? What is the role of human resources managers in the process? and What are its potential effects on the organization? These questions are addressed in the chapter. Another tactic—outsourcing—is also increasingly being implemented and is considered in the specific context of the hospitality industry. Even though hospitality managers are very busy with day-to-day concerns, they must also think about the short- and long-term future. To do so, they can use succession planning tactics to answer questions such as What and how many key management positions will be needed in the future and what competencies will be required for those in the positions? Once identified, career development programs and activities can be planned for incumbents in the positions and for those who aspire to the key roles. This chapter addresses each of these topics to provide more comprehensive coverage of the types of concerns that confront contemporary hospitality human resources managers. m c12.indd 400PMUnionization in the Hospitality Industry 401 Strategies to deal with employee unions from the time their representatives make initial contact with employees as a first step in the unionization process through negotiation procedures are developed by top – level managers, including those with human resources responsibilities. Because supervisors are likely to have more direct contact with union employees than are higher – level managers, they must learn the do ’ s and don ’ ts of interactions with union employees. Top – level managers must also provide this union relations training to their supervisors. REASONS FOR UNION AFFILIATION There are several common reasons why some employees want to unionize. One relates to the employees ’ perceptions that their employer is unfair and, for example, shows disrespect, disciplines them unjustly, and/or does not correct problems in a reasonable or consistent manner. In other cases, workers believe (rightly or wrongly) that the profits made by the business owners are high, relative to the wages they (the employees) receive, and union affiliation will help spread the profit rewards more equitably. Unions can increase the bargaining power of staff members because unified demands on the hospitality organization become possible. Unions also allow members to communicate and interact with higher – level managers in ways that would otherwise be different. For example, the grievance process spelled out in the union contract formalizes the communication procedures that dictate how managers interact with employees if problems arise. Equal treatment based on seniority replaces decisions, if any, made on the basis of personal relationships. Higher compensation levels, more control over work rules, greater job security, and peer influences are additional factors that some employees believe will be better addressed after union affiliation. Still other employees join unions because of union shop provisions of some union contracts: if all employees in a department are unionized, then new employees will be required to join the union and pay dues to it. Interestingly, some hospitality organizations are pleased about their union affiliations because they enhance their business. Some large meeting groups only use unionized properties or, at least, will not do business with properties that are known to have union problems. A BRIEF HISTORY The historical purpose of labor legislation has been to maintain a balance of power between labor and management. Until the 1930s, unions were discouraged by court rulings as conspiracies in restraint of trade, because there were concerns that employee groups interfered with the right of employers to run their businesses as they desired. Most employees were hired with the understanding that they would not join unions or engage in union activities. Labor contract: A written agreement covering a specific time that spells out management ’ s expectations for employees and limits to management ’ s authority; also called collective bargaining agreement . Labor contract: A written agreement covering a specific time that spells out management ’ s expectations for employees and limits to management ’ s authority; also called collective bargaining agreement . Grievance process: A process to resolve a complaint that is spelled out in union contracts. Union shop: The requirement that nonunion workers must join the union and pay applicable dues to it. Grievance process: A process to resolve a complaint that is spelled out in union contracts. Union shop: The requirement that nonunion workers must join the union and pay applicable dues to it. c12.indd 401 12/14/07 8:02:19 PM 12/14/07 8:02:19 PM402 CHAPTER 12 ! Critical Issues in Human Resources Management During the Great Depression (1929 throughout most of the 1930s), many politicians began to believe that poor treatment of workers, especially low pay, was a significant factor that contributed to the nation ’ s economic woes. In efforts to achieve a balance of power between labor and management, the National Labor Relations Act (1935), commonly referred to as the Wagner Act, was passed, and it prompted the growth of employee unions in the United States. Employees were allowed to affiliate with unions, union activities could be promoted, and union agreement violations could be reported without reprisal. Also, very importantly, employers had to undertake good – faith collective bargaining about three issues: wages, hours, and employment terms and conditions. The Taft – Hartley Act (1947) amended the Wagner Act and removed some of the power given to unions by that earlier Act. Several unfair labor practices were identified. For example, unions could no longer: Force workers to join the union Mandate that the employer select specific grievance or bargaining representatives Refuse to bargain with employers in good faith Authorize strikes or boycotts for purposes the Act considered illegal Charge inappropriate fees (dues) to employees under union – shop contracts Operate closed shops (These occurred when employees joined a union and were trained by union personnel. When needed, employers requested employees from the union.) ! ! ! ! ! ! Some Employees Dislike Unions Most hospitality industry employees are not union members. Unions do not generally attempt to organize small organizations with relatively few employees. Some employees are disinterested in unions because of: Cultural and social reasons. Some employees believe that professionals should not join unions. Individual reasons. Some staff members want to negotiate their own responsibilities and compensation because of their belief that they are in control of their own future as they do so. Basic human needs involving esteem and ego may contribute to this emphasis on individualism. Promotional considerations. Some staff members develop antiunion views in the belief that their affiliation with a union will hinder their career goals. While union membership typically results in increases in wages, benefits, and security for members, it is rare for rank-and-file union members to achieve the same levels of advancement (and income) within their companies as do talented individuals in nonunion operations. • • • l c12.indd 402 12/14/07 8:02:20 PM 12/14/07 8:02:20 PMUnionization in the Hospitality Industry 403 A local union is typically affiliated with a national – level union, and it can represent all unionized hospitality employees performing specific functions in a single community, or it may only represent members within a specific property. Local unions elect officers by a democratic vote of its members. Full – time union officers are generally only found in large unions. Small employee unions have a president, whose responsibilities may include part – time union duties. Union members elect union stewards who represent the unionized employees within a department. Both the president and union stewards hold full – time jobs with the employer and are paid by the employer, and they typically use some job – related and their own time for union activities. Local union officials have numerous responsibilities, including negotiating labor contracts, filing grievances , ensuring that the bargaining agreement is complied with, and calling for work actions (such as strikes), if necessary. Some unions have regional organizations that coordinate their affiliated local unions. They establish basic policies, provide necessary services, collect information, and administer strike and retirement funds. These organizations may employ staff specialists, such as attorneys and others, who carry on key responsibilities. THE UNIONIZATION PROCESS Employees become unionized as the result of a several – step process: 1. Initial contacts are made by employees to union representatives in their communities or vice versa: union representatives may begin a membership drive within an organization. Unions Affect Property Managers When employees are represented by a union, property managers can no longer make unilateral decisions, and the decisions they do make will be applicable to all (rather than to specific) union employees. All staff members will need to be treated equally if they are in the same (or similar) positions regardless of their knowledge, experience, or skills. Frequently, seniority becomes the most important factor in many personnel decisions. There may be some company benefits to unionization. For example, managers will develop and/or improve policies or procedures that affect relationships with line personnel, and use of these personnel management tools will likely benefit the organization. Managers will deal with one representative of unionized employees rather than with individual staff members. Top levels of management may need to recover some decisionmaking responsibilities delegated to supervisors. This can sometimes be beneficial, so centralized decision making represents another potential advantage to union affiliation. l Seniority: The status of employees based on their length of employment with an organization. Union steward: A union member elected by other union members to represent the unionized employees within a specific department or work unit. Grievance: An allegation that a work requirement or action taken by management violates the applicable union contract. c12.indd 403 12/14/07 8:02:21 PM 12/14/07 8:02:21 PM404 CHAPTER 12 ! Critical Issues in Human Resources Management 2. A campaign is undertaken to secure signed authorization cards from at least 30 percent of applicable employees requesting that a specific union should represent them in employer negotiations. 3. After the union has received signed authorization cards, the union or employees can request voluntary recognition of the union. The employer may comply or, alternatively, may request that cards be verified by a neutral third party. If voluntary recognition is granted, contract bargaining can begin. 4. If the employer refuses voluntary recognition, a petition is made to the National Labor Relations Board (NLRB) requesting an election to determine if the majority of eligible voting employees want the union to become their certified bargaining unit. 5. A union drive is conducted in which union advocates and management must comply with strict requirements about what they can and cannot do as they make their cases about why employees should or should not affiliate with the union. 6. If the union receives a majority vote, the NLRB certifies and recognizes the union as the exclusive bargaining unit for the employer. As this occurs, there is mandatory recognition . What should (can) hospitality managers do during a union – organizing drive? Labor laws allow them to properly defend themselves against a unionizing campaign. Tactics include: Remaining neutral if employees ask about their position about unionization Allowing union – organizing activities during work hours if they do not interfere with ongoing operations Refusing to let nonemployee organizers distribute union information in the property Allowing employees to distribute union information during breaks Avoiding opportunities to question staff members either in public or in private about union – organizing activities. Not spying on employees ’ unionizing activities Not making threats or promises about unionization Refusing to discriminate against employees involved in unionization efforts Keeping alert to union efforts to coerce employees to join or to commit otherwise unfair labor practices 1 Sometimes union members become dissatisfied with their union and want to join another union or return to a nonunionized status. This is done as the union members petition the NLRB for a decertification election, and decertification will occur if a majority of the members vote to disaffiliate with the union. THE COLLECTIVE BARGAINING PROCESS Collective bargaining involves the process of negotiating and administering written agreements between union and management officials. A common stereotype ! ! ! ! ! ! ! ! ! Authorization cards (union): A card signed by prospective union members specifying their interest in having a designated union represent them in employer negotiations. Union recognition (voluntary): Union recognition that occurs when an employer agrees that signed authorization cards have been received from a majority of employees. National Labor Relations Board (NLRB): An organization with responsibility to conduct union representation elections. Union recognition (mandatory): Union recognition that occurs after the National Labor Relations Board conducts a secret ballot election and confirms that a majority of employees desire to be represented by the union. Collective bargaining: The process of negotiating and administering written agreements between union and management officials. Union security arrangements: Provisions of labor contracts that provide alternative tactics to attract and retain union members who pay dues. Right – to – work law: A state law that prohibits a requirement that employees must join a union. c12.indd 404 12/14/07 8:02:21 PM 12/14/07 8:02:21 PMUnionization in the Hospitality Industry 405 of the contract negotiation process is one of labor and management attempting to win concessions from each other in an “ I win, you lose ” distributive collective bargaining strategy. This approach is used, for example, when a union attempts to bargain for increased compensation packages at a time when the organization cannot afford it. Management concessions negotiated during good economic times are infrequently given up during periods when profits are lower. Unfortunately, much of the hospitality industry goes through almost predictable profitability cycles tied to the nation ’ s economy, and higher levels of compensation become very troublesome (sometimes disastrous) during down periods in the economy. Integrative collective bargaining is a more cooperative effort that focuses on each party ’ s interests, including those that are mutual, rather than positions that must be defended. The premise that a hospitality organization must be able to survive to benefit both parties becomes a foundation on which labor and management can work to “ make the pie bigger, ” rather than to divide it up. Significant time and effort is required by both union and management personnel to negotiate agreements. It is, therefore, common for contracts to span a several – year period. Both parties will be very interested about current compensation Do Employees Have to Join the Union? Many labor agreements contain union security arrangements designed to attract and retain union members who pay dues. Under the most stringent arrangement, union shop, all employees hired for unionized positions must join the union or quit their jobs after a specified probationary period. However, approximately 20 states have right-to-work laws that, with few exceptions, do not permit union agreements in which employees are required to join or pay dues to a union. Under these laws, employees may resign from union membership at any time. An agency shop arrangement requires nonunion employees to pay the union the equivalent of applicable fees and dues as a condition of continuing employment. With this plan, the union represents all employees regardless of whether they are union members. The least desirable union security arrangement (from the unions’ perspective) is the open shop. With this arrangement, union membership is voluntary, and those who do not join are not required to pay dues or fees. Another desired union security arrangement relates to dues check-off. When used, the employer withholds union dues and fees from members’ paychecks in much the same way that other payments such as taxes and insurance payments are withheld. l Agency shop: A security arrangement in a labor agreement that requires employees to pay union dues and fees even if they do not join the union. Open shop: A union security arrangement in which employees are not required to join the union and do not need to pay union dues and fees if they are not union members. Dues check-off: A process by which employers withhold union dues from the paychecks of union members. c12.indd 405 12/14/07 8:02:22 PM 12/14/07 8:02:22 PM406 CHAPTER 12 ! Critical Issues in Human Resources Management rates and the organization ’ s current and projected financial position. Details about the current contract must be assessed, if applicable, and issues of concern to both parties must be considered in advance of negotiations. Union and organization representatives must, simultaneously, consider their going – in and fallback positions about their priority concerns. Recall that the Wagner Act required employers to bargain in good faith about three mandatory issues: wages, hours, and employment terms/conditions. Additionally, grievance procedures are addressed in almost all labor contracts. Labor contracts typically address concerns that unions make on behalf of their membership. Those that are most typically important relate to compensation, benefits, and job security. Bargaining issues generally concern one of two types. Mandatory items include those about which labor and management must negotiate if either party desires to do so, including wages, working hours, and benefits. Permissible items are those that can be negotiated if labor and management agree to do so (e.g., union veto power over a restaurant ’ s hours of operation). Employee unions are concerned about current and future compensation for their employees. They typically negotiate cost – of – living adjustments (COLAs) that tie wage increases to changes in consumer purchasing power. Other typical union concerns relate to employee benefits, including retirement, paid holidays, and working conditions. Unions typically negotiate for employer payment of all or most employee insurance costs. Job security is another typical collective bargaining priority, and seniority is integral to this discussion. A wide range of other union – initiated issues are often considered. These include working hours and overtime pay policies, agreements about rest periods, differential pay for employees working on different shifts, and the use of part – time and temporary employees. What happens if the union and management negotiators cannot agree on one or more contract clauses? One typically thinks about strikes and, unfortunately, these do occur, and they can cause significant disruption to hospitality operations and their guests. Other legal labor actions that unions can use to deal with labor disputes include picketing , boycotts , and work slowdowns . Typical union agreements contain clauses addressing the following issues: Recognition of union Wages and benefits Vacation and holidays Working conditions Layoffs Management rights Working hours Employee seniority Arbitration Union renewal clause ! ! ! ! ! ! ! ! ! ! Concessions (collective bargaining): The act of conceding (yielding) something as a labor contract is negotiated. Collective bargaining (distributive): An “I win, you lose” approach to negotiation in which one party attempts to gain something at the expense of the other party. Collective bargaining (integrative): An “I win, you win” approach to negotiation in which both parties benefit from the agreement. Collective bargaining (mandatory items): Concerns over which labor and management must negotiate if either party wants to do so. Collective bargaining (permissible items): Concerns that may be negotiated if both parties agree to do so. Cost – of – living adjustment: An arrangement in which future wage increases are tied to the consumer price index that reflects changes in consumer purchasing power; often abbreviated COLA. c12.indd 406 12/14/07 8:02:22 PM 12/14/07 8:02:22 PMUnionization in the Hospitality Industry 407 Three conflict resolution tactics may be used when negotiations reach an impasse: Voluntary arbitration . An action in which both parties (organization and union personnel) submit a dispute to an external, disinterested third party for binding or nonbinding resolution after the presentation of evidence and related discussion. Compulsory arbitration . An action in which an arbitrator is appointed by the government to make a binding decision on the parties negotiating the contract. Note : This contract resolution tactic is not typically used in the United States to settle labor disputes in commercial hospitality operations. Mediation . A nonbinding structured process in which a third party assists management and union negotiators to reach an agreement. Advice, not a final, mandated decision, is the result. CONTRACT ADMINISTRATION After union and hospitality organization representatives agree to contract provisions, and the contract is ratified (approved) by the union members, communication and coordination efforts are required to ensure that the contract is understood by all parties. Even if changes are minor, significant communication, training and education, and meetings may be necessary so both parties understand all contractual terms. Changes involving work rules and hours, for example, can involve significant details that required focused explanation. The union steward represents union employees, and managers represent the organization ’ s interests. They must both consider each other ’ s rights to work together cooperatively. If approved by the union steward, an employee may attempt to resolve a complaint through a formal grievance process that often includes the following steps, if resolution is not forthcoming at an earlier step: 1. The union steward and affected employee meet with the supervisor. 2. The employee, union steward, and chief steward meet with the supervisor and the organization ’ s labor relations (human resources) specialist. 3. The employee, steward, and union grievance committee meet with labor relations (human resources) and the property ’ s top management personnel. 4. Representatives of the national union or other top union officials meet with top – level organization management. If the Step 4 grievance resolution procedure is unsuccessful, a final step will likely be arbitration. Note : In small organizations, the grievance process is often abbreviated. After Step 1, the property ’ s senior manager or owner may become involved and, if still unresolved, the grievance may then move to arbitration. The labor agreement should effectively spell out management ’ s and employees ’ rights. The identification of management ’ s rights is important, because they directly impact the ability of managers to operate the business. Those negotiating ! ! ! Picketing: A legal labor action in which union employees promote grievances at the entrance to the employer’s property. Boycott: A legal labor action in which employees refuse to purchase the products or services of a specific employer. Work slowdown: A legal labor action in which employees work at a slowerthan-normal pace. Arbitration (voluntary): An action in which both parties (organization and union personnel) submit a dispute to an external, disinterested third party for binding or nonbinding resolution after the presentation of evidence and related discussion.
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