Default Labour Relations
Question: if cooperative labour relations is so good why is it so rare? Is it simply too hard to implement, too hard to maintain, or perhaps doesn't it work as well as its proponents suggest? Are business and labour leaders who support a less confrontational style and more worker participation off the mark?
What brought these questions to mind recently was the strike vote taken at Saturn in Tennessee. Saturn workers voted on July ?? to go out on strike if negotiations broke down. Saturn is a wholly owned division of General Motors established in the 1980's. From the beginning it set out to do things differently. GM struck a deal with its long time union, the UAW, and agreed to establish a different labour relations format. It wanted to do away with the animosity and acrimony that has marked, and indeed continues to distinguish GM labour relations and rather establish a more cooperative and participative working relation with its employees. WRF Comment has featured aspects of the Saturn story over the years as a model of what could be possible, even for a large corporation, in the way of innovative and cooperative labour relations.
The original GM-UAW agreement included the following commitment concerning the role of the union: "As a stakeholder in the full operation of Saturn, the UAW will participate in business decisions as a full partner including site selection and construction, process and production design, choice of technologies, supplier selection, retail dealer selection, pricing, business planning, training, business systems development, budgeting, quality systems, productivity improvements, job design, new product development, recruiting and hiring, maintenance, and engineering."
Both sides saw the wisdom of abandoning the old adversarial rut and it might have been assumed, that despite certain setbacks, the new road, once chosen, would not be left. Well, what happened? Is this the end of a grand experiment? Or just a big bump in the road?
Perhaps the difficulty is simply that the ideal is much greater than reality can ever deliver. This is not uncommon in other areas of corporate life. Consider a few examples the authors of Credibility cite. They refer to a Steelcase survey that found that while 87% of Canadian office workers think the statement "Management is honest, upright and ethical" is important, only 36% of respondents think the statement to be very true.
They also point out an apparent gap in the "quality" drive. Many firms now deem quality as job one; in fact "fifty-five percent of employees stated that their companies considered 'making quality everyone's priority' extremely important. But only thirty-five percent said their company was doing very well in that area."
The ideal-reality gap only describes what is happening. And it shouldn't be surprising that ideals are goals that are worked towards but rarely fully attained. They lead individuals and organizations in certain directions. Failing to fully attain a particular ideal should not be seen as proof that the ideal itself needs to be thrown out. (This is not to suggest that ideals that lead to of wrong actions or results do not require revision). No, gaps will always exist, particularly if the ideal is truly worthy. Rather, if the ideal is sound, we need to consider what obstacles stand in the way and how can we work to overcome them.
I believe the greatest obstacle to overcome is the reality that the default position in labour relations is adversarial. In other words, without specific, directed attention by both sides the relationship will "naturally" slide into a confrontational one. Hence a cooperative, progressive employee-employer relationship requires considerable effort to achieve, and once attained, requires an almost similar amount of effort to maintain.
Our very human nature, while preferring peace over confrontation, responsibility over getting-away-with-what we can, and trust over suspicion, nevertheless finds itself doing the very thing it desires not to do. Theologians try to explain the deeper reasons for this. The rest of us are left to try and deal with the practical implications of this reality in our everyday lives, including industrial relations.
Back to Saturn. It appears from the various media accounts that both sides are sliding back into older established patterns of relating to each other. The UAW charges that management is making decisions without full consultations, contrary to the original intent. It seems certain managers are reverting to the old practice of making all the decisions, assuming either that employees aren't interested or able to make or impact management decision.
Employees have illustrated the cost of this type of thinking with example of their suggestion, years ago, to produce a mini SUV. Management nixed the idea only to see Honda and Toyota launch the very popular CRV's and RAV-4's. The union also feels frustrated that the incentive-bonus portion of their pay system is not providing the results it once did.
Management, meanwhile sees the local union being pressured from the UAW head office to move towards a more traditional style of representation. Local Saturn union leaders concur that there was not strong support for a different approach from the larger UAW body and that there has been agitation for years to move towards a more militant stately. Over time it appears that they have been able to beaver away at the support for the cooperative approach. This scepticism from above makes it easier for those who run into difficulty to blame the other side and take a more militant stance.
Part of the equation includes the fact that Saturn is not doing as well in terms of sales and profitability as it did in the early nineties. When the pressure mounts its often easy to blame the other side. Its even easier if you always suspected the other side was not worthy of your trust. And so the downward spiral begins. The default position sets in and everyone gets comfortable with the rightness of their position and the surety of the other sides blame.
Real world relations
If this happens so often is it possibly because the original premise is incorrect? Are employees really better off in firms that treat them with respect and pay them well? Is it cost effective for companies to be nice. After all its a tough world out there and notions of progressive labour relations are fine for a academic to propose and a consultant to promote at some far away seminar. What about the real world?
Evidence from the real world supports building a more humane and cooperative workplace. It is not only good for employees (Some trade unionist dispute this claim alleging that employees are being bought with their own money, being conned through non-remunerative "benefits"—unfortunately employers exist that support this stereo-type. However, the exception here is not the rule.)
Lee Hardy, in The Fabric of This World, discusses this in a section subtitled, "The Bottom Line: Must We Choose Between People and Profits?". He addresses the concern of sacrificing profits for employee welfare by asserting that, "This worry, however, assumes that the concern for people and the need for profits are always at loggerheads; that humanizing work makes a company less competitive; that maximizing productivity means tight, top-down control; that maximizing efficiency means task specialization. Many empirical studies, however suggest the contrary. He goes on to cite several studies including the work of Patrick Leveigh, a stock analyst who compared the stock performance of top companies to work for (as compiled by Robert Levering) and the financial performance of Standard & Poor's 500. In terms of both earnings per share and stock prices, the best companies to work for also performed markedly better than the broad average.
When you consider this evidence and the plethora of books lining your local bookstores on how to motivate, build teams, provide effective leadership, etc. you wonder why bad workplaces, archaic management practices and reactionary union rhetoric continues to the extent that it does? Again the only viable explanation seems to be that despite our best intentions, evidence to support cooperation and collaboration, the default mode triggers animosity and separation.
Our response should not be one of giving in to tendencies that clearly are not to the advantage of either party, particularly over the long run. Rather, we should deepen our resolve to overcome the barriers and continually strive for doing things better. This suggests two strategies in terms of labour relations. First of all, efforts to implement a higher ideal in labour relations should not be abandoned simply because they are difficult to attain. On the way to the ideal compromises need to be made. Compromise is the hallmark of any successful labour relations situation. However, true compromise, by definition is the accommodation of the goals of several parties into a workable reality. We must not let the compromise itself though, become an accepted goal.
Secondly, when the goal is reached we need to recognize that maintaining that position will require ongoing effort. Complacency at the top has toppled a host successful ventures. Achieving a good labour relations situation can face the same fate if taken for granted. Those who are more comfortable with an entrenched approach will fill the vacuum if either or both parties take their foot of the cooperative gas pedal.
Let's hope that default labour relations doesn't prevail in the Saturn "experiment". The better way may not be the easiest but it is certainly worth the effort.