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Labor Unions

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Aspiring to improve their working conditions, defend their rights, influence workplace rules, and increase compensation, employees form and join labour unions. Freedom to create or join labor union is one of the fundamental human rights established by national laws and constitutions. Workers’ unionization is an inevitable process due to the division of society into employers and employees. Today, trends of employees’ unionization have become a global phenomenon inducing controversial debates related to modern business ethics and economics. Relevant strategies of trustworthy relations with labor unions appear to be more productive than “an aggressive, adversarial approach” (Mathis & Jackson, 2010, p. 541). Thus, in order to increase business profitability and diminish costs related to unionization initiatives, contemporary employers should recognize these unions, develop efficient strategies and practices of labor relations, and consistently implement them.

Efficiently functioning business units are associated with skilful, experienced, competent, high qualified, goal-oriented and motivated professionals. The effectiveness of employees’ performance is inextricably connected with their job satisfaction. However, a great number of surveys and focus groups have indicated that issues of inadequate compensation, unsafe working conditions, abusive treatment and management, unfair policies, as well as other aspects negatively influence employees’ job satisfaction, inducing conflicts between personnel and employers (Pinnington Macklin, & Campbell, 2007; Baird & Wang, 2010; Mathis & Jackson, 2010; Yang & Kassekert, 2010; Noe et al., 2011).

Article 23 of the Universal Declaration of Human Rights (1948), international and national official regulations, laws, administrative rulings and court decisions comprise the legislative grounds of labor unions activities. Although membership, organisational presence, and influence of labor unions have fluctuated over years due to diverse political and economic regimes, their role and significance are predetermined by their involvement in the process of regulations of social and labor relations. In accordance with the definition provided by Mathis & Jackson (2010), a labor union, trade union, or staff association “is a formal association of workers that promotes the interests of its members through collective action” (p. 540).

Labour unions involve immense human resources; they are able to influence economic, public, labor and even political processes. Thus, labor unions (trade unions) can be identified as one of the key social institutions. Labor unions unite employees with different political views; today, they are striving to decrease the growing rates of unemployment and increase employment status. Labor unions serve employees and organize them to protect their rights. Transformations of labor unions’ functions do not lead to extreme changes in their primary objectives. The main goals of labor unions include protection of workers’ interests and collective bargaining; those can be externalized via implementation of such mechanisms as power pressure upon opponents (demonstrations, meetings, pickets, strikes) and formal agreements or  arrangements (multilateral and bilateral agreements, collective contracts, labor contracts). Consequently, collective actions of labor unions can be divided into costly forms of conflict and solutions without risk of loss. However, contemporary trends of cooperation between the state, businessmen and labor unions promote the development of equal social and labor partnerships due to the growing integration of society and the close interdependence of all social institutions. Well-organized activities of labor unions contribute to the creation and development of a positive image and organizational culture of a business unit.  Furthermore, socially responsible organizations do not oppose labor unions and their activities.

Decreased business productivity and increased costs are associated with collective actions performed by labor unions in the form of conflicts (Gall, 2008). The word "conflict" originates from the Latin language and means "collision" in its literal translation. The conflict is a functionally inconsistent phenomenon, and the parity of its positive and negative functions should be comprehensively considered and evaluated. Both HR professionals and operating managers should implement different approaches to the conflict resolution in order to get better results and suit a situation. Untrained managers tend to use the same approach in each conflict situation. Therefore, HR practitioners should possess relevant knowledge and skills to manage collective actions of labor unions. A compromising tactic is often utilized when the conflicting parties are not able to achieve full collaboration, but are still willing to make some progress toward their ultimate goals or take some actions to preserve the relationship.

Negotiations are a universal remedy of conflict resolution aimed at compromise. Negotiations represent a joint discussion of an issue conducted between the conflicting parties with possible participation of a neutral third party. The third party can operate the process of negotiations and evaluate the conflict while breaking it into separate problems and revealing the true interests of both parties. It can help the parties to reach procedural and substantial agreements, allocate the most significant issues, and provide the parties with constructive feedback. HR practitioners should promote a strategy of the consent, search, and augmentation of common interests in order to prevent the emergence of conflicts in the future. Labor unions resolve conflicts neutralizing contradictions between employers and workers. In addition, legislative grounds of labor unions provide them with rights to solve conflicts without initiating criminal proceedings.

Although interests of employers and employees are not identical, “they both benefit when the organization is strong and growing, providing employees with jobs and employers with profits” (Noe et al., 2011, p. 420). Issues of irrelevant compensation, inappropriate working conditions, labor discipline, training, professional expertise, and social protection are typical of both employers and workers. Employees’ unionization efforts are triggered by mismanagement expressed in abusive supervision, disrespect, underpayment, inadequate appreciation, insecurity, enormous restrictions, lack of response to complaints, and other aspects. Therefore, managerial practices associated with labor relations should be modified in accordance with changing economic, governmental, social, demographic, personal, and workplace conditions. In addition, the appropriate financial rewards can encourage and motivate employees, as well. According to expectancy theory designed by Vroom, correlations between effort–performance expectancy and performance–outcome expectancy have a considerable influence on the behavior and motivation of an individual. People are motivated to choose activities that have the greatest chance of producing desired outcomes and rewards. If organizational rewards are perceived by an employee as adequate and fair, he or she is motivated to endeavor.

Welding employees with diverse experiences, extraordinary capabilities, knowledge and mentality, an organization should create opportunities for their development, self-improvement, career advancement and professional growth. Appropriate practices of labor relations are designed to foster effective union-management interactions, including labor relations strategy, negotiating contracts, and administering contracts (Noe et al., 2011).

A person’s behaviour is regulated by complex interactions of external and internal factors. Employees’ basic needs, motivation and satisfaction should be balanced. More lucrative compensation, benefits, collaboration, employee empowerment, relevant reward policies, motivation practices and support network are generally determined as the most imperative tactics in terms of avoiding costly forms of unionization efforts.

Wages and salaries are the basic sources of income;they areclosely connected with the population’s standard of living. Salaries for employees engaged in the same industry vary widely depending on a number of factors; these may include an organization to work at, its location, individual experience, qualifications, and benefits of the position.Financial inability to motivate experienced and skillful employees may lead to failure in recruitment and retaining. Inadequate salaries are the most influential contributing factor to the escalation of conflicts. Therefore, unionization initiatives designed to lobby for increased wages and salaries appear to be feasible. Improvements in salaries significantly reduce the emergence of conflicts between employers and workers. However, all unions should apply, prove and validate their strategies. Each strategy must be different, effective and appropriate to each employee’s situation or organization.

The diversity of behavioral, psychological and managerial theories has created a complex web of patterns and theories regarding issues that surround employees’ motivation and satisfaction with their activities. “Job satisfaction can enhance individual and organizational performance by increasing work motivation and organizational citizenship behavior and by reducing costs associated with negative organizational behaviors such as turnover, burnout, apathy, and absenteeism” (Yang & Kassekert, 2010). A cadre which comprises of more competent and better-prepared employees is crucial to all organisations and business units. The relationships between employees and their supervisors in all types of occupations were found to be critical elements that affect employees.

In order to prevent conflicts and increase profitability of business performance, an organization should provide its employees with equal opportunities regardless of their race, origin, gender, age, religious beliefs, disability, marital or any other status or condition. A company’s reward programme should include a comprehensive compensation package, an inclusive, respectful and equitable workplace, along with an integrated system of broad corporate training, cash bonuses and competitive pay. Providing its employees with available online resources of additional learning, continuing education, professional certification and employee development, an organization supports and encourages its employees’ innovative approaches, initiative and productive work.

Furthermore, in order to increase retention, motivate and satisfy employees, a well-designed reward programme should involve tangible rewards such as competitive pay, incentives, and benefits, opportunities for professional and personal growth, and fair organisational policies and practices (Mathis & Jackson, 2010). A reward system should be perceived by employees as relevant to their efforts and inputs.

The process of a professional self-determination is dynamical and covers an essential part of lifespan, bringing the specific contribution to the development of a person.. It is not limited to the formation of professional competence; it is a component of personal self-determination as a whole. At each stage of professional self-determination, a person realizes and determines specific purposes and problems which correspond to socially developed requirements, regulations and needs, and which are realized according to them and his/her inner "resources", perceptions, values, interests, requirements, objectives and personal orientations. During specific periods, there can be divergences between external professional requirements and internal possibilities of an individual, which can lead to conflicts and contradictions between them.

Collective efforts of labor unions require managers to monitor the efficacy of labor relations of their organization, pursue phenomenological studies, develop new managerial practices, and consistently implement them in order to promote an organization’s success and profitability. Job analysis is a “systematic way of gathering and analyzing information about the content, context, and human requirements of jobs” (Mathis & Jackson, 2010, p. 125). Functional job analysis has been utilised in HR management since the early 1940s. HR professionals conduct task-oriented and worker-oriented job analyses so that they can determine their planning, recruiting, reward, compensation, training, and selection strategies. Basic techniques of job analysis are interviews, questionnaires, gathering background information, observation, psychometric practices, logs/diaries, and other. Job analysis consists of five obligatory phases, namely, planning, developing and introducing job analysis, conducting job analysis, developing job descriptions and specifications, and maintaining and updating job descriptions and specifications.

Both workers and their employers can benefit from pertinent practices of employee empowerment.

Employee empowerment is one of the most influential factors contributing to enterprise efficiency. Being empowered at work, employees perform their duties and fulfil responsibilities more effectively and, thus, promote their organisation’s profitability and reduce potential risks of costly collective actions (Baird & Wang, 2010; Noe, R. A. et al., 2011). However, today, employee empowerment initiatives do not correspond to the levels of empowerment intended due to specific economic conditions, as well as organisational environments, contextual factors and strategies. Therefore, it is important for HR managers of business units and organisational scholars to identify deliberate strategies to promote and facilitate employee empowerment. 

Employee empowerment involves practices “giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service” (Noe et al., 2011, p. 36). Employee empowerment is one of HR practices associated with employee engagement (Pinnington et al., 2007; Noe et al., 2011). The development and improvement of employee empowerment practices should be based on the essentially new grounding of work with personnel in order to increase the productivity of a business unit, reduce turnover rates, expand services, and improve consumers’ satisfaction. New approaches to work with employees should possess a complex character, consider influential organisational and cultural factors, widely utilize human resource planning, and implement individual-oriented methods of management (“Employee Earnings, Benefits and Trade Union Membership”, 2011).. An integral component of successful activities of a business unit is the increase in funds allocated for work with its personnel. In addition, “HRM practices such as performance management, training, work design, and compensation are important for ensuring the success of employee empowerment” (Noe et al., 2011, p. 36).

Despite the rise of research on employees’ motivation, satisfaction, participation, and involvement in decision-making and business operations in general, levels of employee empowerment in Australian organizations and impacts of organizational and cultural factors on this phenomenon appear to be under-researched and less from an empirical perspective. In order to evaluate the extent of employee empowerment within Australian manufacturing organizations and explore the influence of a variety of organizational and cultural factors “on the extent of adoption of employee empowerment” (2010, p. 574), Baird & Wang pursued an empirical study. Findings of the research conducted by Baird & Wang (2010) on employee empowerment are clarified in the article “Employee empowerment: extent of adoption and influential factors,” which was published in Personnel Review in 2010.

The researchers have precisely identified the objectives of their study, significance of the issue and existing relevant concepts. The background to the research, problem statement, objectives, and significance of the study identify crucial aspects of this issue. The nature of the study described the methodology and design. The research process entailed the examination of 80 peer review journals, online publications, official statistics, and scholarly research from reputable international and national organizations, which were used to gather pertinent information. Previously published studies on employee empowerment, benefits associated with this option, factors affecting this business phenomenon, and research methodology were analyzed by the scientists. Examining diverse theoretical perspectives connected with employee empowerment, the researchers assess existing correlations “between each of the organizational and cultural factors with the level of empowerment using the adapted Pardo del Val and Lloyd (2003) measure” (Baird & Wang, 2010, p. 576). The research includes a vast array of numerical and statistical data on investigated issues. Therefore, this empirically designed study of the Australian employees’ empowerment can be identified as an evidence-based and reliable source of information.

According to the researchers’ findings, the majority of business units in Australia have “a moderate level of employee empowerment (63 per cent), with only 12 per cent of organizations being classified as having a high level of employee empowerment, and 25 per cent of organizations experiencing low levels of employee empowerment” (Baird & Wang, 2010, p. 590). Collaboration with employees is determined as the main employee empowerment practice; employees’ involvement in the identification of problems and decision-making is limited. The research has revealed that training as an organizational factor and team work as a cultural one enhance the extent of the adoption of employee empowerment (p. 591). Thus, employee empowerment practices should be expanded and more extensively implemented within the Australian manufacturing business units (“Employee Earnings, Benefits and Trade Union Membership”, 2011).  

Today, labor unions perform their activities in both national and international arenas influencing management in general and international management in particular. Such organizations as the International Trade Union Confederation, the Union International Network (UIN), and the International Labour Organization coordinate the efforts of labor unions worldwide and “deal with multinational firms having operations in multiple countries” (Mathis & Jackson, 2010, p. 543) influencing public policy in a positive way (“The United Nations...”, 2012). Therefore, senior managers of multinational companies face constant challenges of using a flexible and rational approach to a business unit’s personnel, providing optimal solutions to any issue, and manipulating financial, natural and technological resources of a company in order to avoid costly actions performed by international labor unions. Contemporary management of multinational corporations should be aimed at the right balance between business interests of different levels and employees’ needs taking into consideration restrictions of international, regional, local and national character. Modern management is steadily becoming more complicated than the traditional models applied in all branches and spheres of life within many decades due to new economic conditions of globalization and increasing competitiveness.

In conclusion, today, potential competitive strengths and opportunities of companies are determined by multifaceted factors of economic, political, social, and cultural nature. Labor unions have become one of the basic social institutions. Therefore, requirements posed by labor unions and their activities can be identified as the most influential initiatives. Business environment becomes extremely complicated due to global, national and regional trends in employees’ unionization. However, in terms of collaborating with labor unions and considering needs of employees, contemporary business units can increase their efficacy and profitability.  In order to meet the changing demands of the 21st century and promote the steady development of business via collaboration with labor unions, organizations face the urgent necessity to be able to implement beneficial transformations of their structure, performance, strategies, culture, and practices of labor relations.

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