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Organizations exist due to market opportunities and most of the organizations run with the profit motive. Resources are required for driving the activities in an organization and manpower is one of the important and expensive resources. Every organization has the management that takes important decisions with regard to the matters internal and external of the company and that are driven by the objectives of the company. While efforts are taken to create a working and stable relationship between organization and its employees, there are instances that point towards frictions between the end objectives of both the parties. Hence, unions act as representatives of the employees of the organization and put forth their demands in front of the management. But, as has been noted very often, unions and management do not get along well with each other (Business and Management Courses, 2012).
Role of Management in an organization
The role of management in an organization is complex in nature. The management should consider themselves as a medium for effective engagement between the employees and the employers. While undertaking negotiations and bargaining with the union leaders, the managers need to consider and analyze the grievances and concerns by employees of the organization. If the concerns are genuine, then the managers need to pay attention to the demands that the unions put forth on behalf of the employees. If the concerns are hyped or not genuine, then the managers should take a standpoint and try to convince the unions about the status quo.
However, it has been seen that these extreme cases rarely happen. More often than not, employees face certain concerns which get multiplied when the unions represent them. This is mainly because of the intermediate commission of unions that costs the employees and the employers a lot. Hence, if the management can bring in suitable policies and measures that can address the grievance of every employee directly and in a fair manner, unions would not fuss, but would not be able to get cooperation from all employees. Also the management is often thrust with the responsibility for representing the employer to maintain the status quo. Many instances that have been encountered prove that this approach is destructive in nature, where companies can move towards irreparable loss and damage. Therefore, management should play a role in developing directly compatible and interrelated goals that can serve the objectives of employees and employers.
Role of Union in an organization
Unions play an active role to voice opinions and concerns of all its employees. Unions are not a mandatory part of the organization. They come into existence if there are gaps in employee and employer policies and goals. Employees form a union and elect its representatives if they encounter unfair treatment from the employer with respect to salary, benefits, workplace environment, personal grievances, apathy, etc. To deal with employee interests, unions come into discussion with the management. In extreme cases, the discussions extend to lobbying, politics, litigation, etc. (Verma, 2005). Unions have important impacts on employee satisfaction, employee performance, and productivity of the company.
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Reasons for Disagreement
The reasons for disagreement between the unions and management can arise due to the following reasons:
a) Profit motive:
While the management pursues the profit motive for the company, they would want to reduce all possible costs that drag down the bottom line. Since employee costs are one of the major expenditures of the company, the management tries to control the employee costs. On the other hand, unions exist for the welfare of the employees, who would expect the organization to compensate them fairly. The profit motive of the management is inculcated to show a strong financial performance of the company in front of shareholders and prospective investors (Business and Management Courses, 2012).
b) Self-interests of unions:
Unions get their due commission for having led the employees. Hence, more often than not, unions fight for their own cause and self-interests. The more the demands, the more is the commission of the unions. Therefore, employees should select their unions in such a way that they consider the employee interests as a primary driving force to pursue discussions with the management.
c) Incompetent unions:
The concept of unions in organizations is mostly seen in the manufacturing sector where the labor is responsible for conducting activities. A lot of manual intervention of labor is needed for day-to-day operations. Unions are selected depending upon the power and influence they can exert on the management. But there is a need to bring competent, knowledgeable, professional representatives in the union that can take constructive steps with the management without hampering the operations of the company.
Effects of Disagreement
Disagreements between unions and management can lead to negative impacts on both the organization and employees. As management and unions fail to come to a consensus, strikes and absenteeism by the employees will follow, hence leading to a lesser pay for employees and plummeting profits for the organization. Sometimes, the fights between the unions and management can even get ugly and violent. Hence, the management has tremendous responsibility on their shoulders to protect the company from moving towards such a deteriorating situation.
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One example of such conflict between unions and management is Air India, where the airline is severely hampered by the continuous strikes by its union led employees. The unions have been demanding better pay, which the management was not able to cater because the company was making losses. The relationship between the unions and the management is worst in the airline sector across the countries, with another example being faced by British Airways which has cost the company millions of pounds (Pardey, 2010).
Strategies for improvement
There is a need to move towards a win-win situation for both organizations and employees as both parties are dependent on each other for their welfare for making a living and developing a synchronous relationship with the society.
There are reasons why the management and unions should work towards a common goal:
a) Stable work environment
b) Fair compensation
c) Conducive working relationship
The very basis on which employees should work for the growth of the organization and organization should take care of the welfare of its people is that one cannot exist without another. Realizing this dependency is very essential for developing a synchronous relationship. There are many legal laws that guide and govern how both parties should work with each other. These labor laws are intended to better the constraining relationship between employees and employers. Some of the legislative laws are namely Fair Labor Standards Practices Act, Minimum wage standards, Civil Rights Act, etc. (Business and Management Courses, 2012). If there were a set of mutually beneficial objectives for both unions and management, then the relationships among them can be improved.
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Strategies that can be taken by organizations to maintain a conducive, working relationship with unions
Organizations should take proactive steps to put an effective management in place. The main objective that has to be bestowed upon the managers is that they should develop a mutually respectful relationship and help each other grow. The profit motive should not be thrust upon management representatives; otherwise all the policies of the management would be taken without consideration of employee welfare. All resultant union-management discussion would be futile. The reason why organizations should consider the voice of employees is that, as the organization grows, employees increase in number and unions can play an important role to hamper the total operations of the company resulting in enormous losses.
The following are some of the recommended strategies that could work in the present employee-employer setting:
a) Consider employees as assets of the organization
Organizations should not only consider employees as resources with the greatest cost but also give them due credit for being the most important revenue generator for the company. The employees are also the key stakeholders of the company and the organization is responsible for taking care of the interests of all its stakeholders. The working environment of the company should be encouraging and rejuvenating. There should be direct communication between the management and employees and their contribution should be recognized and rewarded in a timely manner.
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b) Direct grievance handling mechanisms
Organizations should adopt methodologies that present employees with forums to voice their opinions and concerns. Discussions and negotiations can resolve differences in a more professional way. Each employee should be able to register the concern immediately and there should be a way to prove that their concerns are genuine. A grievance handling cell should be in place and it should be active in responding to such concerns immediately. Addressing individual employee concerns directly would make the concept of a union non-existent.
c) Aligning employee and employer goals
The management should take steps to engage employees while devising strategies and policies. This brings a sense of fulfillment that employees are a part of the growth story of the organization. Employees feel that their cooperation is valued and given importance. Hence, both employee and employer can contribute to the well-being of each other.
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d) Training union leaders
The management can take the help of HR to organize trainings and seminars for the unions and employees in general. These trainings should be focused on understanding the dynamics of the industry and forces that can lead the organization to take a different approach. By investing sufficient time and effort, unions and employees can be brought closer to the challenges that the management faces to meet the expectations of all the stakeholders. This approach is called interest based bargaining, vis-à-vis the traditional approach of position based bargaining (MacDonald, 2012)
Strategies a union can implement to create a conducive, working relationship with management
Unions are the powerful force that can galvanize the employees and impact the day-to-day operations of the company. Unions should consider the management standpoint before putting across employee demands in front of the management. Unions should play a constructive role in the organization. Since they represent the best interests of the employees, they should prepare themselves to take on the management in a professional way.
The following are some of the recommended strategies that unions should adopt so as to develop a mutually cohesive and stable relationship with the management:
a) Aim for productive discussions
Unions should come prepared in front of the management after doing their analysis on cause and effects. Instead of showing their power, they should exhibit their knowledge by showing proof, data, and graphs. These data points can bring in a more productive discussion during negotiations between the management and the union leaders. The management will be ready to defend by quoting examples of the areas where the company has made losses and how the company is not meeting its stated objectives. But if unions can gather realistic and accurate data, they can be better prepared to defend the employee interests.
b) Not only ask questions but also provide solutions
If the unions are selected based upon their level of knowledge and experience, they can bring about a direction to the negotiations. Instead of questioning the management on the problems faced by the employees, they can recommend possible solutions that can be mutually beneficial and profitable (Pardey, 2010). Hence, unions should work for both the rights and responsibilities of the employees.
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c) Play the role of a constructor, not a destructor
Unions have the responsibility to respond to employee interests. But if they can represent the employees’ voice on how the company can respond better to recessionary situations, improved value systems, or better competitiveness in the market, the management will view the unions as constructive players. In this way, unions will not just be lessening the profits of the company for employee compensation, but also improving profits by suggesting better strategies. This helps in devising better go-to strategies of the products of the company resulting from compatible relations between the union and management.
The objectives of both employees and employers can be better served if each of the unions and the management consider their role more responsibly. Unions should start playing an active role in providing their opinions to help the company recover losses or make more profits. To reduce the friction between the unions and the management, they should come to a common platform whenever there are any problems faced by the company. The source need not be just employee concerns on welfare, pay, or security. On the other hand, the management should consider the unions as strategic partners in the development of the firm (Tschida, 2012). By giving due respect to the unions, management can start getting positive feedback from the unions. This lays the foundation for a long-lasting and fruitful relationship between the unions and the management.
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