Labor Relations Advice: The Importance of Being Level-Headed and Respectful

As an author of a comprehensive labor relations textbook (Labor Relations: Striking a Balance, McGraw-Hill), I was recently asked to provide some general advice for future human resources and labor relations managers. Issues within the labor relations arena can often be laden with highly-charged and volatile emotions. For complex reasons, the mere mention of labor unions can raise passions, if not outright hostility, among business leaders and others to a much greater extent than many other business and economic issues. Managers should avoid these traps, and instead approach issues in labor relations in a level-headed and respectful manner.

An important part of being level-headed is seeking to truly understand other perspectives. Business and labor leaders frequently disagree on key issues, and there is a tendency for each side to dismiss the other side as greedy, short-sighted, and other negative attributes. What's overlooked is that business and labor leaders typically have different underlying frames of reference--that is, different implicit assumptions about the workings of the employment relationship. By embracing contrasting frames of reference, business and labor leaders effectively see the world through different lenses, and therefore have contrasting views on best business practices. It is important for managers to understand these frames of references in order to approach labor relations issues wisely.

With respect to the employment relationship, business leaders typically have an interest-alignment frame of reference. From this perspective, it is assumed that the interests of employers and employees can be aligned by well-designed human resource management practices. A pay-for-performance system, for example, can serve employers' interests for high levels of employee performance while simultaneously fulfilling employees' interests in greater rewards. Labor leaders, in contrast, typically have a plurality of interests frame of reference. From this perspective, the employment relationship is seen as having complex stakeholders with multiple interests that cannot always be aligned--higher dividends for shareholders mean less compensation available for employees, longer work hours yield higher profits, but more employee stress, and so on.

Even though these two different ways of seeing the employment relationship are usually implicit rather than explicitly articulated, they yield sharply contrasting views on labor unions. From an interest-alignment perspective, labor unions are seen as unnecessary. Human resource management practice is based on the interest-alignment assumption that what's good for employees is good for business, and vice versa. If there is conflict in the workplace, it is believed that improved human resource management practices will resolve this.

Moreover, if markets are seen as ideally competitive, as in the basic textbook model of economics, then any employer that tries to exploit its employees will not be able to recruit and retain employees. Indeed, if markets are competitive in the ideal sense, then labor unions are seen as worse than unnecessary--they are seen as monopolizing organizations that distort the operation of competitive markets to the benefit of union members and at the expense of all others. It bears repeating that this perspective reflects a particular frame of reference that rests on a belief that markets are competitive in the ideal case of the basic economic model.

From a plurality of interests perspective, labor unions are seen in a very different light. Specifically, the belief that conflicts of interest invariably exist in the employment relationship means that employers will not always act in the best interests of its employees. Labor unions are therefore seen as an important voice mechanism that represents employees' interests when decisions are made. Moreover, economic markets are not believed to be competitive in the ideal textbook sense. Rather, employers are seen as having bargaining power advantages over individual employees. Labor unions are therefore seen as a necessary vehicle for striking a better balance between employers' interests and employees' interests when markets favor employers over individual employees. It is this frame of reference, not an interest-alignment frame of reference, that is widely embraced by labor leaders, that provides the intellectual foundation for labor laws that protect employees' right to form unions, and also that helps us understand why employees try to form unions.

Appreciating these contrasting perspectives is a key element of being a level-headed manager within the labor relations domain. At the same time, recognizing these different perspectives is not a magic solution. It does not make the differences between the business and labor perspectives disappear. But it does provide the basis for a rational understanding of the different perspectives. Rather than dismissing labor leaders as selfish or short-sighted, they should be respected for pursuing what they believe is a socially beneficial path. This more respectful view, in turn, provides the foundation for developing a productive rather than destructive dialogue with labor leaders and like-minded employees. Ultimately, whether a labor union is good or bad from a business perspective depends on the specific labor-management relationship within a particular organization. To create a productive relationship, managers should avoid the emotional rhetoric that too often accompanies labor relations issues, and instead should be level-headed and respectful.

When dealing with labor leaders during negotiations and when handling grievances, it is also important for managers to remain level-headed and respectful. In these contexts, managers and unions leaders both have constituencies that they are trying to satisfy. Managers want the approval of other managers and their bosses; union leaders need the approval of the rank and file union members. The difference is that these concerns are played out in a more public fashion on the union side. A disapproving executive can quietly reprimand a labor relations manager, but an unpopular labor leader will be publicly voted out of office.

So managers need to remember that part of what happens during bargaining and grievance handling is a performance to demonstrate strength to the rank and file union membership. Managers therefore should avoid getting emotionally involved in these incidents. Table pounding, yelling, even personal attacks are likely a "show" for the rank and file. Level-headed managers know their roles and the nature of the entire performance, and wait for their opportunities to deal productively with the labor leader out of the public spotlight. In multiple ways, then, remaining level-headed and respectful is a key route to success in the labor relations arena.

Note: For more on the importance of frames of reference in human resources and labor relations, see John W. Budd and Devasheesh Bhave (2010) "The Employment Relationship," in Adrian Wilkinson, Tom Redman, Scott Snell, and Nicolas Bacon, eds., Sage Handbook of Human Resource Management (London: Sage), pp. 51-70.