Project 4 Main This Assignment requires a brochure see assignment below.. o Prepare an effective training seminar brochure using Microsoft Publisher (or similar software). o Describe the relationship of value creation and workplace relations with overall business performance Workplace Relations Value Creation and The Future Project Overview We will conclude this course by looking at the contributions HRM might make to creating value for private-sector organizations and how employee relations and/or union relations fits into that process. Begin by reviewing the following: Exploring ways to improve labor-management relations and collective bargaining. (Summer 2007). IR Concepts. Retrieved fromhttp://www.ircounselors.org/downloads/irconcepts07-summer.pdfIRConcepts Summer 2007 At IRC's Exploring Ways to Improve Labor-Management Relations and Collective Bargaining Summit at ORC Worldwide's headquarters in New York on March 6th and 7th, a group of experts and practitioners in the field discussed the relationship between management and organized labor in terms of its current state, the forces pressing upon it, and the outlook for its future. This session built on dialogue about the future of collective bargaining at recent FMCS National Labor-Management Conferences and may well be part of a continued national dialogue and action on these matters. Organized labor today is a small and shrinking part of the total workforce, and it is struggling at a number of levels to find a more vital role in the global economy. But the new forces in that economy are equally challenging to management, whether or not its own workforce is organized. These forces, which affect companies across the spectrums of industry and size along with their workers, were identified by the conference's speakers and participants: Globalization of both business and labor competition Changing nature of the workforce that requires more educated, specialized employees to compete in the growing information economy rather than in the shrinking manufacturing base Changing nature of labor from a monolith to a reflection of the dual labor market: Exploring Ways to Improve Labor-Management Relations and Collective Bargaining - Skilled workers needed by business who are nonmilitant and can take care of themselves, represented by the AFL - Unskilled, immigrant workers in service industrieslabor's traditional basefor whom a more aggressive stance is an attraction, represented by the SEIU and HERE Mergers & acquisitions at a continuingly frenzied pace, across industries and locations Outsourcing of both specific work and workers Cost explosion of traditional employee benefits, particularly health care and pensions Growing multiples between pay at the top and bottom, which encourages union militancy, and is contributing to the shrinkage of the middle class The prospect of imminent change in U.S. political leadership, possibly reverting to old-style political solutions for global business and labor problems Each speaker presented his own unique perspective on how these forces are influencing today's practice of labor relations and collective bargaining, citing different examples ranging from the shift in the basic structure of labor and management to a new model management and labor working together in strategic partnerships to achieve agreed-upon business goals. IRC Industrial Relations Counselors, Inc. IRConcepts is published by Industrial Relations Counselors, Inc., established in 1926 \"to advance the knowledge and practice of human relationships in industry, commerce, education, and government.\" Sydney R. Robertson President 212852-0403 sydney.robertson@orcww.com Robert J. Freedman Director of Research 212-852-0404 robert.freedman@orcww.com Industrial Relations Counselors, Inc. 500 Fifth Ave New York, NY 10110 IRC and IRConcepts are trademarks owned by Industrial Relations Counselors, Inc. A Publication of Industrial Relations Counselors, Inc. IRConcepts A publication of Industrial Relations Counselors, Inc. The Future of Collective Bargaining as an Institution: Perils and Prospects Joel Cutcher-Gershenfeld Professor and Dean, University of Illinois Institute of Industrial and Labor Relations Professor Cutcher-Gershenfeld pointed out that, as a result of fundamental shifts in mar - kets, work, technology and society, the basic structure of the relationship between manage - ment and organized labor is shifting as well. A growing move to \"bargain over how to bar gain\"reassessing the \"rules of the game\"is of central importance in this context. He has found that about 10 percent of labor-man - agement relationships are now on a transforma - tional path that is designed to align strategic-lev - el concerns and workplace-level concerns within the collective bargaining process. That path often integrates essential workplace innovations into enabling contract language through the ap - plication of interest-based bargaining (IBB) and related methods for understanding fundamental interests as a context for bargaining. While the net result of such transformational la - bormanagement relations can be a new, strategic partnership between the parties, he reports that a greater percentage of labor-management relation - ships are going in the opposite direction. They have become more adversarial, with more divergence in union and management views, less workplace in - novation, and a fall-off in a preference for IBB. Even in the contested context, many of the techniques involved in IBB are, he says, being incorporated into a range of new approaches to bargainingnot necessarily using specific labels. The parties are increasingly engaged in joint training; joint data collection prior to bargain - ing; pre-agreements on ground rules and a bar - gaining plan; use of facilitators and brainstorm - ing during bargaining; use of content experts and subcommittees during bargaining; new uses of electronic technology such as projecting text on a screen and taking joint minutes; and innovative ways to engage and calibrate con - stituents. In a limited, but important number of cases, the parties are increasingly even coming together over nontraditional, larger joint goals such as police and fire agreements to improve public safety, education agreements to improve student performance, or industrial agreements to improve environmental outcomes. He pointed out that there is especially the need to educate the workforce on business realities in today's economy. There is a parallel need for employers and the general public to see collec - tive bargaining as still able to contribute to the stability of a middle class in society. Basic ques tions arise to what extent it makes economic sense to invest in education in these domains. Will employers invest in educating a workforce on business issues given current high rates of turnover (both voluntary and involuntary)? Will education take place such that collective bargaining is not just seen as a private deal on wages, hours, and working conditions? He concluded by pointing out that one key to more effective bargaining is communication be - tween and within the parties during all phases of the relationshipnot just at the bargaining table. The Internet is a growing vehicle, for both labor and management, to establish such ongo - ing communication. Essential in this process will be the same kind of standardization and use of process disciplines as are found in quality improvement efforts and related initiatives. On the management side, top managementnot HRneeds to set a clear direction and policies for the organization's labor relations so that local-level management can operate on firm ground. For both labor and management, this will involve shifts in the basic institution to match today's global knowledge economy. Roads to Union- Management Collaboration Michael Maccoby Anthropologist, Psychoanalyst, and Consultant on Leadership, Strategy, and Organizational Behavior Dr. Maccoby explained how the current system of union-management relations is based on an IRConcepts A publication of Industrial Relations Counselors, Inc. outmoded realitythe industrial model of the 20th centuryas the work, scope, and structure of today's workplaces are subject to global economic, social, and especially technological forces. (He points out that more jobs are lost to the U.S. economy today due to automation than are due to outsourcing.) Improving union-management relationships today needs to be part of the process of improving work, according to economic and human values. This involves incorporating concerns about quality, productivity, and making work more satisfying. One way to achieve the necessary collaboration between unions and management, he has found in his extensive work on union-management projects, is by focusing on the customeri.e., that which creates value. The nature of the relationship between the union and the company sets the tone for how they relate to one another, and he suggests that unions be considered a supplierand treated accordingly. That then puts the union in the position of working to become the \"supplier of choice.\" Similarly, some unions (such as the International Union of Bricklayers and Allied Craftworkers) have focused on continuous development of worker competencies while the American Federation of Teachers has a policy of aiding professional development. While \"partnering\" does not reflect the true power relationship between the parties, he noted, \"collaboration\" doesas it means working together for a common purpose. He also noted that collaboration is in the interest of unions as well as management for example, in one case, as a result of the establishment of a collaborative relationship with management, union membership rose, from 65 percent to 85 percent. And, as the wage differential is receding for skilled workers (due to demographically based shortages), unions can \"sell\" prospective members on benefits of education and quality work. In doing such work, it becomes clear that there are no final answers. He discussed the initial excitement and ultimate disappointment of efforts such as reengineering and Total Quality Management (TQM), and quotes Tom Davenport, who said, \"All knowledge-work organization is experimental.\" Ultimately, companies and unions both have a profound interest in being competitive and having good jobs in an ever-changing economy. And experiments in cooperation have led to better business results. In later discussion, he pointed out that the collective bargaining system, starting with the Wagner Act, is built on something that no longer exists. We have gone from industrial to knowledge work; automation, continuous process change, global competition have demanded agility, not inscribed rules; and an every-three-year contract flies in the face of these new realities. Rather, employees involved in the work are required to participate responsively, not by the book. Yet, he concluded, many companies are not ready to go to the next level and cooperate with labor they need to have a compelling business reason to do so. The Workplace of the Future Hal Burlingame Director, Industrial Relations Counselors, Inc.; nonExecutive Chairman, ORC Worldwide; retired Executive Vice President, Human Resources, AT&T Inc. From the 1980s until 2000, AT&T prospered and then rode the wave of change in the telecommunications industry with an innovative program called Workplace of the Future, in which Mr. Burlingame played a central part. He described the \"virtuous circle\" on which it was based, integrating the popular Economic Value Added (EVA) approach to organizational improvement with two other elementsCustomer Value Added (CVA) and People/Employee Value Added (PVA). From EVA, investment flowed to employees; from employees work and service offerings flowed to customers; and from customers revenue flowed back to the company treasury. Focusing on the pivotal PVA segment of this circle, he described a \"new conversation\" between labor and management about the nature of the employment contract, in which everyone had to take a fresh look, and information had to IRConcepts A publication of Industrial Relations Counselors, Inc. be much more widely shared. Management had to open the books and unions had to abandon notions of seniority and outdated, strict work rules. All this change required dedicated cham - pions on both sides who faced detractors on all levels of both sides. Both Mr. Burlingame and Dr. Maccoby (who was the main consultant to the Workplace of the Future program) agreed that what was really in - volved was less a traditional labor-management effort than a leadership development issue on both sides. And Dr. Cutcher-Gershenfeld pointed out that such an effort cannot work bit by bitit has to be implemented throughout the organi - zation, on three levels simultaneously: from the top down, restructuring; from the bottom up, energy; and in the middle, a strategic planning process for standards, and protocols as guiding principles. This effort facilitated performance in turbulent times and helped strengthen AT&T as its industry structure was changing. Ultimate - ly, it was this effort thatwhen the breakup of AT&T did occurmade possible a smooth tran - sition process for the people at the company. Reinforcing Dr. Maccoby's point that even the most effective organizational change efforts today are temporary, Mr. Burlingame described how, when management change occurs, often there is a reversion to \"old style\" labor-management relations, and what had been built over decades took just a moment to be shattered. Yet today, as AT&T has now been reunited with SBC, it seems as though \"SBC is attitudinally in this space, ap - proaching labor issues in a pretty constructive way.\" The biggest challenge they will face with this is the new power of the financial markets that look only at EVA and are not attuned to the dayto-day reality of organizations' operations. The Case of Harley-Davidson Stephen Weidman Director, Corporate Labor Relations and Human Resources, The Harley-Davidson Motor Company While acknowledging the unique, \"egalitarian biker\" culture of Harley-Davidson, Mr. Weidman said that labor relations is really about human re - lations and that, despite being a classic \"old-style\" manufacturing company, Harley has created and maintained a partnership approach to labor rela - tions because they find it to be a value proposi - tion for the company. Today, after a tumultuous financial history, Harley is a highly profitable, $6 billion organization with $1 billion of profit. He described four key facets of the management value proposition. First, a partnership works best where there is an equality of power on each side. Harley, dealing with both the Machinists and the Steelworkers unions, recognizes that powerand the fact that each side, in opposition, could really damage the other side. And so they find they are both better off working together. Second, they find that a management-union part - nership is better than any available alternatives. There are an awful lot of working people in the U.S. who need protection, he saidand they can look to unions, government, or self-help (which he defined as \"get a lawyer\"). \"I have not found unions to be unreasonable,\" he said. \"And they're better than government or lawyers.\" He, too, views unions as \"suppliers,\" and pointed out that companies don't have adversary relationships with their other suppliers, so they shouldn't with their unions, which is the company's most longlasting supplier relationship. Third, with Harley's cooperative history, they are able to get the participation of their work force in solving problemsgetting people's brainpower as well as brawn. He said that, by and large, 20 percent of employees will love a company, 20 percent will hate itand it's that middle 60 percent that a strong relationship with a union can help engage. Finally, he said, when management offers a partnership approach, it benefits from a higher quality of union leadership. (As the adage goes, \"A company gets the union it deserves.\") An ad - versarial environment encourages an adversari - al union, but when union leadership is involved in both business issues and in operations, the company benefits from their knowledge, skills, and leadership. IRConcepts A publication of Industrial Relations Counselors, Inc. At Harley, all union presidents and all general managers are policy-setters, sharing all information and operating pragmatically, with mutual respect and trust, to engage in mutual problem solving. It is management by influence rather than authoritya consensus culture, in which some decisions are made by management, some with union input, and some are made jointly. Union members work with nonunion workers on training and other operational activities, while some plant managers and union presidents manage plants without supervisors. He said that the partnership culture is so ingrained into the company that even if new leadership came along and wanted to change it, that would be very difficult. And yet Harley did recently have its first strike in 15 years over the issues of health care and legacy costs, which Mr. Weidman pointed out are the two intractable issues facing every large employer in the nation, ones that cannot be solved on an individual company basis. A New Private Equity Path Steve Sleigh Principal, The Yucaipa Companies LLC; former Director of Strategic Resources, International Association of Machinists and Aerospace Workers While the pure bottom-line-results orientation of today's financial markets was mentioned by many at this conference as in opposition to labor-management harmony, Mr. Sleigh demonstrated that enhanced profitability and cooperative work modes can productively coexist. The private equity firm of which he is a principal began with the purchase of a California supermarket chain that was carried out with the approval of its unions and which, in private hands, continues to work cooperatively with its unions. As with any private equity fund, institutional investors put up capital and the fund looks for underperforming public companies to purchase, to improve their operations, and to sell back to the capital markets at a profit. The unique approach of this fund is that the improvements are often made through better labor relationsby partnering with the company's unions to find and implement better ways to work, to everyone's eventual benefit. Despite the potential benefits of labor-friendly private equity only 3 percent of multi-employer pension plan assets are invested in private equity compared with 6 percent of corporate pension plan assets and 15 percent of endowment fund assets. Mr. Sleigh cited the example of Spirit Aerosystems as a successful private equity investment that created value for investors, managers, and employees. He pointed out that these relationships, like any others, are not necessarily forever-after. But each party sees it to be in its interest to cooperateas long as everyone else does. And one of the knottiest issues is CEO compensation, particularly as workers may be agreeing to take wage cuts. But unions are recognizing how such buyouts can be in their interest and so the private equity fund is now getting leads from unions as to underperforming companies that could be turned around in a buyout. A buyout by a laborfriendly private equity group can spur a radical transformation of labor relations that otherwise is unlikely to occur. Barriers to Management and Union Change William P. Hobgood Arbitrator, Mediator, and former Vice President, United Airlines Taking a balanced look at both sides of the bargaining table, Mr. Hobgood notes that the signs of a bad relationship are obvious: a high grievance level, protracted bargaining, low productivity, public conflict, and strikes. But, drilling down, he points out that the root causes of such results come from deficiencies in both management and labor leadership. Some of the realities that hinder good relations include the fact that most change efforts ignore the political character of collective bargaining, and management either doesn't understand or ignores the union political structure. Both em- IRConcepts A publication of Industrial Relations Counselors, Inc. ployer and union leadership are often reluctant to go past their traditional roles, and show little willingness to assume new and broader respon - sibilities. Management leadership tends to have a quarterly mind-set, while union leaders are largely elected as adversaries to management. Management often underestimates the invest - ment in time and money necessary to put the relationship on a more cooperative footing with processes such as team building and inter - est-based bargaining that need to be leadership driven, typically by management, to improve the bargaining relationship. Often such efforts are focused on activities rather than outcomes and the role of supervisors, who need to be key players, is ill defined. Yet there are positive pointers to better relations. While they are neither necessary nor sufficient to improve labor-management relationship, exter - nal threats such as global competitive pressures can serve to encourage constructive change. So can recognition of the fact that each of the par - ties needs the other to succeed. And once the de - sire to improve the relationship exists, effective conflict resolution systems can be applied, along with a focus on real performance that includes provision for profitability, institutional security, and job security. A Union Leader's Outlook Thomas R. Donahue Former President and Secretary/Treasurer, AFL-CIO After a lifetime of union involvement, Mr. Donahue has concluded that employers and unions have much more in common than their differences, and that partnershipswhich he terms mature bargaining relationshipsreflect those commonalities. They work, he said, when each party remains true to its base, representing the interests of their side, while respecting the other side. While he has seen many successful efforts at learning to live and work together, he says there are still appropriate moments for a strike. These can sometimes be healthy, he says, in \"clearing the air\" and reminding the parties of their mu - tual needs, tempering employers' narrow focus on stockholder value and unions' narrow focus on extracting the \"last drop of benefits.\" Sometimes, he said, the real results of a strike do not favor the winner. He cited situations in which the company put up a strong fight, and won on all issuesonly, after the strike, to find that morale had plummeted and turnover had soared. And the company learned to look to inter - est-based bargaining as a better alternative than the traditional take-no-prisoners stance, thereby coming to a good outcome for all concerned. On the other hand, he cited unhappy cases, such as when United entered into its disastrous ESOP planand when AT&T sold off a manu facturing plant to management as the wire and cable industry was shrinking. He was put on the board as the union representative, but the com - pany was again sold, and finally sold again, to be liquidated. Echoing other speakers, he remembered ex - amples of labor-management cooperation that worked beautifullyfor a time, including Chrys - ler and AT&T. He was active on the AFLCIO Committee on the Evolution of Work in the 1980s and 1990s, a group designed to orient the labor movement to serving its members. Its Third Report was published in 1994 as a call to partnership, a step beyond cooperation. While 35 national union presidents signed up to the report, they could not shift the membership and now, 13 years later, they are still talking about the way ahead. Summing up, he said that five basics have to be in place for cooperative arrangements to succeed: finding a willing partner; acquiring the tools to make it work; developing communications skills to sell it up and down both the corporate and the union sides; recognizing limitsthat, as in any re - lationship, there will always be stresses; and hav - ing dedicated people to make it work. And he said that the biggest barrier to the use of interest-based bargaining is the issue of cost, on both sides. IRConcepts A publication of Industrial Relations Counselors, Inc. He left the group with a basic philosophical ques - tion he said he has spent a long time thinking about and to which there is no obvious answer: Considering both the traditional legal \"master/ servant\" relationship of management and labor and the practical unity of the work of the job and the person doing it, who \"owns\" the jobthe worker or the management? Case of Kaiser Permanente Peter diCicco Former Executive Director of the Coalition of Kaiser Permanente Unions In 1996, Kaiser Permanente (KP), America's lead - ing not-for-profit, fully integrated, and highly unionized health maintenance organization, was facing some difficult challenges. Both its management and staff were suffering from the prevalence of the growing unpopularity of man - aged care and from the explosive growth of nonunion, for-profit health care companies. And so, having suffered a bitter strike in the late 1980s and early 1990s that nobody won, the company began to work toward a genuine partnership with its unionized employeesnot simply coop - eration or a new labor strategy, but a joint rec ognition of the need for fundamental change in order to meet their mutual goals of making life better for their customers and communities. The union leaders, representing most staff except doctors, and senior KP executives de - veloped a partnership agreement through an intensive negotiation and problem-solving pro - cess that took most of 1996 and into 1997. The toughest issue after job and union security was that of leadership: the scope of shared decision making. The unions gained the right to input (not veto) at the highest level: its representative sits in on meetings of the board and all its com - mittees except compensation, with both sides respectful of their determination to achieve to - tal transparency and confidentiality. Working down from there, management and labor worked together to achieve agreed-upon business goals (such as service quality improve - ments and expanded membership), with union members learning to be proactive, demonstrat - ing their vested interest in the success of their company. In 2000, the spirit of cooperation extended to the bargaining table, where the two sides deter - mined to institute a facilitated, single, national \"interest-based negotiation\" process, in which various task groups engaged in joint study, problem-solving, and negotiations on subjects ranging from quality and service to work-life innovations to wages and benefitsand then submitted recommendations to a centralized common issues committee. Ultimately, the na - tional agreement and derivative local contracts were ratified by substantial margins92 per - cent overall. Working to improve ongoing operations, the partnership follows two strategies: applying the partnership principles and process to address specific, \"naturally occurring\" events or crises; and an incremental, steady, planned diffusion of those principles and process across the or - ganization, guided by extensive investment in education and training of managers, union rep - resentatives, and employees. He noted that the interestbased bargaining process can seem frustrating because it takes a long time to take hold. It's slow at first, he said, but when it takes off the results start multiply - ing. So both sides really have to be committed to slogging on to make it work. All of this has worked. In 1998-1999, KP enjoyed a turnaround in its financial performanceand designed and opened a brand-new hospital in a new California location incorporating improve - ments in physical design and in the flow of pa - tient care that came out of the joint effort. At that and other facilities, a wide range of mea - sures, from financial results to patient care to health and safety, rose and continued to rise year after year. And a 2005 union survey of members showed dramatic improvements from 1998 in their attitudes toward their job, attitudes that are critical to the quality of patient care, and the competitive success of the organization. IRConcepts A publication of Industrial Relations Counselors, Inc. Examples of Strategic Labor-Manage - ment Partnerships Thomas J. Schneider President, CEO and Founder, Restructuring Associates Inc. Also involved in the case of Kaiser Permanente detailed by Peter diCicco, Mr. Schneider related several examples of burgeoning partnerships. Catholic Healthcare West has 44 hospitals in California, Nevada, and Arizona, with 40,000 employees whose staff and nurses had been organized since 2002 by the SEIU. Facing stiff competition, particularly from Kaiser Perman - ente, in 2006 they agreed to form a labor-man - agement strategic alliance to simultaneously redesign three hospitals and the delivery of careall systems, processes, and jobsin Las Vegas, starting with a clean slate rather than in - stituting incremental change. The initial meet - ing with representatives of labor and manage - ment took place in July 2006 and in just seven months committees were formed, had identi - fied initial functions, processes, and problems for redesign to improve performance, and had gained the approval of the steering committee. Now they are beginning to carry out their coop - erative endeavors. One of the goals is to become a \"Magnet\" hospital, one deemed so by nurses as a best place to work; this status both attracts the best nurses and, therefore, attracts doctors and patients as well. The management and SEIU at Allina Health care, the largest health care delivery system in Minnesota, have now worked jointly for a year on specific important performance-related challenges by means of a process that not only focused strongly on communicating their mes - sage throughout the organization, but also trained all middle and lower-level managers and stewards in alternative dispute resolutions pro - cesses and effective conflict resolutions skills, and jointly trained management and stewards regarding contract interpretation. In these and other workplaces, he said, the core business strategy is strategic and operational en - gagement, essential to improving performance results. High performance requires discretion - ary effort and judgment, which will not appear unless the people who know and have to execute the work feel engaged, a sense of ownership, in it. The most critical concept is that cooperative labor-management relations must be a core busi ness strategy, line-driven rather than driven by HR or labor relations staff. Best Practices in Interest-based Bargaining Michael Gaffney Mediator, Facilitator, Educator; Consultant, Restructuring Associations; formerly Cornell University School of Industrial and Labor Relations Dr. Gaffney pointed out that prior to the intro - duction of interest-based bargaining (IBB) to in - dustrial relations in the mid-1980s; there was no way to connect then emergent structures of la - bormanagement cooperation with mainstream industrial relations activity (contract bargaining and contract administration). Collaboration be - tween management and union prior to the 1980s was relegated to parallel structures specifically enjoined not to address issues having to do with terms and conditions of employment, i.e., the important stuff. IBB provided a means by which the parties could move the ethos of collaboration from the wings into the mainstream. FMCS data earlier cited by Dr. Cutcher-Gershen - feld demonstrates how significant that penetra - tion has been, awareness and use of IBB tending upward. That same data, however, also indicates recurrent problems with IBB application and some recent slippage in terms of bargainer preference for this approach. While it is likely that this loss of ground may have been due in part to difficult economic conditions during the survey period, it is Gaffney's opinion that the problem lies as well within the IBB method itselfor at least within a version of IBB which borrows heavily from the organizational development values and practices of the mid-1980sfrom which environment the early champions/trainers/consultants emerged. IRConcepts A publication of Industrial Relations Counselors, Inc. This version of IBB asks for behaviors, which in Gaffney's opinion, are unrealistic in many bargaining settings (particularly those en - tailing low to only moderate levels of trust, a modicum of training, and no external facilita - tion), resulting in frequent disappointment. Gaffney mentioned a number of unrealistic components of this version of IBB which he dubbed \"fragile\" (prohibition of positions, prohibition or discouragement of caucuses, no or low tolerance of display of emotion, im - plicit assumption that a win/win solution can be achieved in every instance and consequent lack of instruction on how to deal with distrib - utive/monetary issues). Gaffney recommended an alternative \"robust\" version of IBB that was much more sober in these regards. The subsequent discussion among the summit participants focused primarily on one issuewhether or not the absence of positions was the sine qua non of IBB. Going Forward and Some Concluding Thoughts Conference speakers and attendees alike agreed on a number of issues: Management and organized labor need each other to keep their organizations com - petitive in today's harsh business climate. Mutual respect and a willingness to work hard in understanding each party's objec - tives are essential. Transparency and information-sharing are the necessary foundations of mutual trust. A huge hurdle is the fear of change in tradi - tional roles. Continuing, intensive communication is essential in three domains: - Within management, starting with the full education of the CEO - Within union membership - Between management and union membership There was no attempt to generate a consensus view from summit participants, but ORC staff came away with the following thoughts about union and management efforts to improve their relationships. 1.The process should commence with an in-depth joint review of what each party hopes to get out of the changed relation - ship and whether the hoped-for benefit is worth the cost. In this respect, manage - ment and unions may need help in devel - oping a joint vision of the future. Are the visions of a desired future consistent? If the price of union participation is management neutrality in organization drives and recog - nition on the basis of an authorization card check, rather than an election, is manage - ment willing to agree to that? 2.The arrangement needs to function at corporate, strategic business unit, and workplace levels, to address strategic, collective bargaining, and workplace is - sues. Piecemeal approaches are not likely to be successful; relations at one level are syn - ergistically influenced, for good or for bad, by relations at other levels. 3.Issues need to be sorted out in terms of the manner in which they are to be addressed: management decides and informs the union, management seeks input from the union and decides, decisions are shared in some manner, etc. Potential bumps in the road need to be anticipated and provided for: management believes a decision must be made too rapidly to allow for consultation or bargaining, major outsourcing, facility closure, shifts from interest-based to tradi - tional bargaining, etc. 4.Planning for education, training, and communication activity is needed. Train - ing in interest-based bargaining may be re - quired. Union members and representatives often need better understanding of P&L statements, etc. Managers in functions oth - er than HR often need to be sensitized as to behavior that will lead to a union's aban donment of a cooperative arrangement. IRConcepts A publication of Industrial Relations Counselors, Inc. 10 Minimum standards of dialog frequency for each level should be set. 5.Each party needs to examine its own internal arrangements as they relate to the relationship. The union will have to find ways to prevent an opposing faction from using successful labor-management collaboration as coziness warranting regime change. Management should consider whether and how to take relationship performance into account in the management reward system. 6.The effort to improve relationships cannot be based on wishful thinking (instantaneous transformation; the ups and downs of relationships can be ironed out; fostering relationships can eliminate winlose issues). Nevertheless, the search for common ground and improved relationships can be fruitful. About IRC and ORC Worldwide: In the wake of the Ludlow Massacre in the Colorado minefields of 1917, John D. Rockefeller, Jr., created an organization to foster improved employer/employee relationsIndustrial Relations Counselors, Inc. (IRC). Incorporated in 1926, it was the first research organization in its field. IRC advocated the establishment of employee representation plans, which involved employee-elected representatives and regular meetings with management to discuss matters of mutual interest. The idea was greeted with less than enthusiasm by many of Rockefeller's fellow industrialists, but it led to his conviction that there could be a \"unity of interest\" between labor and managementit was not always necessary for one party to lose in order for the other to win; win-win arrangements and agreements were possible. IRC continues to be dedicated to its original objective: \"To advance the knowledge and practice of human relationships in industry, commerce, education, and government.\" IRC's work has been guided over these 80-plus years by a board of trustees comprising distinguished leaders of American industry. IRC became an exemplar of the progressive management view that labor and management, while adversaries, had common interests and that it was the task of the industrial relations function to seek ways to establish this unity of interests. From its inception, IRC has conducted innovative research and produced publications that have broken new ground in the employee relations field. In the 1930s, legislators drew on IRC expertise concerning pension systems and European experience with unemployment insurance in the establishment of the federal social security system and the design of unemployment insurance in the United States. IRC was also deeply involved in advancing the interests of progressive employers in the formation of national labor policy. Between 1927 and 1932 IRC was the official representative of American business to the International Labour Office in Geneva, and conducted research there on employment issues in several European countries. IRC research has also dealt with all aspects of collective bargaining policy, remedies in emergency disputes, executive retirement, and job evaluation. For many years IRC's own management development and education courses broadened the expertise of human resources professionals and increased line managers' understanding of employee relations issues. Periodic IRC symposia bring together business leaders and academic researchers to review HR topics of mutual importance. After several decades, IRC spun off its for-profit company that is today known as ORC Worldwide. Since 1953, ORC has served to assist clients, primarily Fortune 500 firms, with specialized knowledge and advice about human resources management. For further information about IRC and ORC's activities in the labor and employee relations field, please contact Thomas Connors, Senior Vice President, ORC Worldwide at 212-719-3400. IRConcepts A publication of Industrial Relations Counselors, Inc. 11 Agenda Welcome Hal Burlingame, Director, Industrial Relations Counselors, Inc. Fiona Webster, Director, International and Social Labor Affairs, ORC Worldwide The Challenge for the Institution of Collective Bargaining Joel Cutcher-Gershenfeld, Dean and Professor, University of Illinois Industrial and Labor Relations Center Successful Intervention in the Workplace Michael Maccoby, Anthropologist, Psychoanalyst and Consultant on Leadership, Strategy and Organizational Behavior The Workplace of the Future Hal Burlingame, non-Executive Chairman, ORC Worldwide and retired Executive Vice President, Human Resources, AT&T Inc. The Harley-Davidson Motor Company Experience and Relationship Transformation Situations Stephen Weidman, Director, Corporate Labor Relations and Human Resources, The Harley-Davidson Motor Company A New Private Equity Path Steve Sleigh, Principal, The Yucaipa Companies LLC, former Director of Strategies Resources, International Association of Machinists and Aerospace Workers Intra-Organizational Bargaining: Insider and Outsider Perspectives William P. Hobgood, Arbitrator, Mediator and former Vice President, United Airlines A Union Perspective Thomas R. Donahue, former President and Secretary/Treasurer, AFL-CIO The Kaiser Permanente Experience Thomas J. Schneider, President, CEO and Founder, Restructuring Associates Inc. and Peter diCicco, former Executive Director of the Coalition of Kaiser Permanente Unions Group Discussion of Thoughts and Experiences Addressed So Far Rory Mullett, ORC Worldwide Getting to Real: Second-Generation Interest-Based Bargaining Michael E. Gaffney, Mediator, Facilitator, Educator and Consultant, Restructuring Associates, formerly Cornell University School of Industrial and Labor Relations IRConcepts A publication of Industrial Relations Counselors, Inc. 12 Appelbaum, Eileen (Rutgers) & Hunter, Larry W. (Wisconsin-Madison), Union Participation in Strategic Decisions of Corporations, NBER Working Paper 9000 (March 2003), http://www.nber.org/papers/w9590 This paper looks at the subject primarily from a union point of view. Its table, \"Choices Facing Union Leaders in the Design of Institutions for Strategic Partnership\" (on the following page) is particularly valuable. Strategic partnerships are unlikely to evolve from other partnerships or employee involvement pro - grams, and they raise dilemmas for unions. At the local level, unionists have to reinterpret and rede - fine their roles and convince the membership of the values associated with cooperation. Involve - ment at more strategic levels is more problematic. Responsibility without corresponding authority is unattractive. Will management share enough to make the arrangement influential? Will manage - ment take action inconsistent with the arrange - ment under pressure? The primary incentive for union involvement is the viability of the firm, but the arrangement is unlikely to be able to address the turbulence outside the firm that seems to be endemic to the current economy. To gain worker support, the arrangement must provide not only employment security but union institutional security. Man - agement neutrality with respect to organizing and outsourcing prohibition may be required. History does not appear to support the notion that innovative union-management arrange ments have provided greater security. Organizing the arrangement in terms of link - ages with union structure and including all rel - evant parties can be difficult. An international's responsibilities with respect to a particular firm and the industry may be conflictual. A study of CBAs expiring between 9/1/97 and 9/30/07 found that about 47 percent contained Descriptive Bibliography some form of \"partnership,\" but fewer than 3 percent of them were strategic. Arrangements negotiated by the IBEW, CWA & IBW, USWA, and IAMAM are discussed. The CWA/IBEW/AT&T Workforce of the Future is discussed in greater detail in Agents of Change by Heckscher et al., digested below. The USWA and IAMAM arrangements follow here. In 1992 the USWA adopted a \"New Directions\" bargaining program, seeking \"an ongoing voice\" in decisions affecting the shop-floor, plant, and corporate performance. Its main provisions in - cluded no layoffs, involvement in workplace and corporate decisions, restructuring to increase flexibility, improving productivity and reducing costs, neutrality, and card check. These provi - sions were negotiated with the major integrated companies in the 1993-94 round and renegotiat - ed in 1999. Contracts with other steel companies \"contained many of the substantive features.\" The authors report variations in implementation from company to company but an overall posi - tive effect despite union and management skep - ticism as to whether the arrangement can live up to expectations with respect to union participa - tion in top-level strategic decisions. The IAMAM has High Performance Work Or ganization (HPWO) Partnerships at about 50 facilities (out of several thousand), including Harley Davidson. The IAMAM is looking for: [1] a business plan incorporating long-term re - turns, market expansion, and workforce growth, [2] accurate accounting of all activities support - ing the firms products/services, and [3] changes in process to improve quality and productivity. Extensive education, training, and planning are involved; several years of relationship explora - tion may precede an agreement. Beyond growth and joint decision-making, the IAMAM seeks employment security and an education and com - munication plan for all employees. The paper also includes a fairly extensive section on union membership on boards of directors. IRConcepts A publication of Industrial Relations Counselors, Inc. 13 Type of Choice International Union International or Local Union Local Union Establishment of partnership Does the international union advocate partnerships as a matter of policy? Does the union support board seats? Does the union support negotiated strategic partnerships? What policy should the union demand of the company with respect to subsequent organizing campaigns? Does the union bargain for partnership structures? If management is reluctant to agree, how much is partnership worth? How should future organizing campaigns and acquisition of nonunion operations be handled? Should workers buy stock in their own company? Should partnerships accompany concession bargaining? What role should employment security guarantees play in the partnership agreement? Identity of union representatives in strategic level decisions Should active international union leaders be permitted to involve themselves in governance decisions of individual companies? What criteria will be used to select representatives? Who will the representatives be? Continuing support for representatives Will the international union provide training and technical support for the representatives? Will the union attempt to coordinate with or instruct the representatives? Will structures be established for communication between representatives, local union leaders, and local members? Beaumont, Phillip B. & Hunter, Laurence C, both with the University of Glasgow, \"Collective Bargaining and Human Resource Management in Britain: Can Partnership Square the Circle?\" in Kochan & Lipsky, Negotiations and Change: From the Workplace to Society (Cornell 2003), p. 161 Much of this article seems to have little relevance to the U.S. labor-management situation, but a couple of aspects are worth noting. The Trades Union Congress has created a TUC Partnership Institute, which has defined partnership in terms of six principles: [1] shared commitment to the success of the enterprise, [2] recognition of legitimate interests, [3] commitment to employment security, [4] focus on the quality of working life, and [5] adding value. The authors say that the profile of the sort of organization to successfully adopt the partnership approach is one that: 1. Is under competitive/performance pressure 2. Sees HRM practices as a major way to respond to pressure 3. Is relatively highly unionized 4. Has unions not historically hostile to the HRM Choices Facing Union Leaders in the Design of Institutions for Strategic Partnership IRConcepts A publication of Industrial Relations Counselors, Inc. 1 4 5. Has an existing relationship that needs fixing but isn't hopeless 6. Has a management that sees the distinc - tion between negotiating and employeemanagement relationships and is willing to invest in both 7. Has a management that understands that unions can't sell change if they haven't been involved in the design of the change 8. Has an international, as well as a local, that is welcome in the design process 9. Addresses issues of concern to the repre - sented early 10. Needs early success See Appendix A for a 6/22/04 speech by Ron Bloom, Special Assistant to President, USWA, to a manage - ment group setting forth what the Steelworkers look for in a relationship with management. Brommer, Buckingham, Loeffler (FMCS Com - missioners and Deputy Director), Coopera - tive Bargaining Styles at FMCS: A movement toward choices\