13.4: Managing Employees

13.4.1: Pay

Learning Objective

Combine internal equity and external equity analysis to determine fair pay

Key Points

• Companies decide the pay associated with each job by analyzing the content of each job, assessing the value each job contributes to the company, pricing each job in the market, and looking at the relationship between what they value internally and what the market values externally.
• A base pay system needs to be internally equitable; the amount of base pay assigned to jobs needs to reflect the relative contribution of each job to the company’s business objectives.
• Job analysis is a systematic method to discover and describe the differences and similarities among jobs. Job evaluation is a process that takes the information gathered by the job analysis and places a value on the job.
• “External equity” refers to the relationship between one company’s pay levels in comparison to what other employers pay. Market definition is important to measuring external equity.
• Market definition is important to measuring external equity.

Key Terms

job evaluation

Job evaluation is a systematic way of determining the value or worth of a job in relation to other jobs in an organisation. It tries to make a systematic comparison between jobs to assess their relative worth for the purpose of establishing a rational pay structure.

internal equity

Internal equity is the idea of compensating employees in similar jobs in a similar way

job analysis

Job analysis is the formal process of identifying the content of a job in terms of activities involved and attributes needed to perform the work.

Example

• Imagine that see a job posted on the internet. It reads, “Office Assistant wanted, starting at $8.00 an hour.” How did the manager decide to pay $8.00 per hour? Why did he or she decide that was fair? The manager looks at the internal and external equity to determine that $8.00 an hour is a fair base pay for workers.

Is the Pay Fair?

Imagine that see a job posted on the internet. It reads, “Office Assistant wanted, starting at $8.00 an hour.” How did the manager decide to pay $8.00 per hour? Why did he or she decide that was fair? In this subchapter, we will cover the two types of “fairness” important in designing a base pay system.

Internal Equity

The first consideration is that the base pay system needs to be internally equitable: the amount of base pay assigned to jobs needs to reflect the relative contribution of each job to the company’s business objectives . In determining this, the manager should ask, “How does the work of the office assistant described above compare with the work of the office manager?” Another question to be asked is, “Does this worker contribute to solutions for customers more than another?”

Hourly wage and compensation growth for production/non-supervisory workers, 1959-2009

This graph shows that compensation and wages have been more or less stagnant since the 1970’s.

Internal equity implies that pay rates should be the same for jobs where the work is similar and different for jobs where the work is dissimilar. Compensation specialists use two tools to help make these decisions: job analysis and job evaluation.

What is Job Analysis?

A job analysis is a systematic method to discover and describe the differences and similarities among jobs. A good job analysis collects sufficient information to adequately identify, define, and describe the content of a job. Since job titles may be misleading (for example, “systems analyst” does not reveal much about the job) the content of the job is more important to the analysis than the title.

In general, a typical job analysis attempts to describe the following:

• skill (the experience, training, education, and ability required by the job);
• effort (the degree of effort actually expended in performing the job);
• responsibility (the degree of accountability required in the performance of a job); and
• working conditions of each job (the physical surroundings and hazards of a job, including dimensions such as inside versus outside work, heat, cold, and poor ventilation).

What is a Job Evaluation?

A job evaluation is a process that takes the information gathered by the job analysis and places a value on the job. It is the process of systematically determining the relative worth of jobs based on a judgment of each job’s value to the organization. The most commonly used method of job evaluation in the United States and Europe is the “point method.” The point method consists of three steps:

1. defining a set of compensable factors;
2. creating a numerical scale for each compensable factor; and
3. weighting each compensable factor.

Each job’s relative value is determined by the total points assigned to it . The result of the job analysis and job evaluation processes will be a pay structure or queue in which jobs are ordered by their value to the organization.

Entry Level Wages for College Graduates, 1973-2009

New college graduates are scarely earning more than they did a few decades ago.

External Equity

“External equity” refers to the relationship between one company’s pay levels in comparison to what other employers pay. Some employers set their pay levels higher than their competition, hoping to attract the best applicants. This is called “leading the market.”

Other employers set their pay levels lower than their competition, hoping to save labor costs. This is called “lagging the market.” The risk in lagging the market is that the company will be unable to attract the best applicants.

Most employers set their pay levels the same as their competition. This is called “matching the market.” Matching the market maximizes the quality of talent while minimizing labor costs. An important question in external equity is how you define your market. Traditionally, markets can be defined in one of three ways:

• By identifying companies who hire employees with the same occupations or skills
• By identifying companies who operate in the same geographic area
• By identifying direct competitors, that is, those companies who produce the same products and services.

Once you have defined your market, the next step is to survey the compensation paid by employers in your market.

Combining Internal and External Equity

How do companies combine internal and external equity to decide the pay associated with each job?

• First, they analyze the content of each job.
• Second, they assess the value each job contributes to the company.
• Third, they price each job in the market.
• Finally, they look at the relationship between what they value internally and what the market values externally.

By following each of these steps, a company will have a fair base pay system, which will lead to attracting and retaining the best employees.

13.4.2: Scheduling Work

Learning Objective

Explain the evolution of job design theory

Key Points

• A task can be best defined as a piece of assigned work expected to be done within a certain time. Motivation describes forces within the individual that account for the level, direction, and persistence of effort expended at work.
• Traditional approaches to job design include Taylorism, Hertzberg’s Motivation-Hygiene Theory, and goal-setting theory.
• Contemporary approaches include the socio-technical systems (STS) approach, and the Job Characteristics Model (JCM).
• The key to effectively crafting a meaningful job for an employee is starting the thought process by looking at the values and strategy of the organization.
• The “Socio-Technical Systems” (STS) approach of job design states that the design of the organization must fit its goals, employees must be actively involved in designing the structure of the organization, support systems must fit in with the design of the organization, et al. The “Job Characteristics Model” (JCM) maintains five important elements that motivate workers and performance: The “Psychological Empowerment Theory” posits that when a person is aware of the impact that they are having, they benefit more than if they cannot relate a positive impact to any of their behaviors or practices.
• The key to effectively crafting a meaningful job for an employee is starting the thought process by looking at the values and strategy of the organization.

Key Terms

resource Allocation

Resource allocation is used to assign the available resources in an economic way. It is part of resource management. In project management, resource allocation is the scheduling of activities and the resources required by those activities while taking into consideration both the resource availability and the project time.

Taylorism

scientific management; a theory of management of the early 20th century that analyzed workflows in order to improve efficiency

Example

• Intrapreneurship is an example of motivation through job design, either formally or informally. Many companies are famous for setting up internal organizations whose purpose is to promote innovation within their ranks. (1) One of the most well-known is the Skunk Works group at Lockheed Martin. The group was originally named after a reference in a cartoon and was first brought together in 1943 to build the P-80 fighter jet. Because the project was to eventually become a part of the war effort, the project was internally protected and secretive. Kelly Johnson, later famous for Kelly’s 14 rules of intrapreneurship, was the director of this group. (2) Another example could be 3M, who encourage many projects within the company. They give certain freedom to employees to create their own projects, and they even give them funds to use for these projects. (In the days of its founders, HP used to have similar policies and just such an innovation-friendly atmosphere and intrapreneurial reputation. ) (3) Besides 3M, Intel also has a tradition of implementing intrapreneurship. (4) Google is also known to be intrapreneur friendly, allowing their employees to spend up to 20% of their time to pursue projects of their choice.

Scheduling Work

Introduction

Job design is defined as the allocation of specific work tasks to individuals and groups (Schermerhorn, Job Design Alternatives, 2006). Allocating jobs and tasks means specifying the contents, methods and relationships of jobs to satisfy technological and organizational requirements as well as the personal needs of jobholders. If successful job design is not implemented, than the companies general strategy and direction will be strongly diverted. Meaningful jobs must also exemplify the company’s goals and culture.

Elements to Job Design

In order to better understand job design it is helpful to define some key elements and their relationship with job design processes.

A task is a piece of assigned work expected to be done within a certain time. It is important to strictly and thoroughly identify tasks that need completion. In addition, it is essential to design jobs that motivate employees. Motivation describes forces within the individual that account for the level, direction, and persistence of effort expended at work (Schermerhorn). In job design, it is necessary to identify and structure jobs in a way that the company’s resources are being efficiently used. Resource Allocation occurs when organizations decide to appropriate or allocate certain resources to specific jobs, tasks or dilemmas facing the organization.

Jobs need to be constructed so that efficiency of the worker or department is maximized. Organizations need to use the resources and creativity of their employees effectively and efficiently. Reward systems also play a role in job design. Reward systems include compensation, bonuses, raises, job security, benefits, and various other methods of reward for employees.

Traditional Approaches to Job Design

Frederick Taylor developed a theory in an effort to establish a science for every job within an organization (Taylorism or Scientific Management) . The principles of Taylorism are as follows:

Frederick Taylor

Frederick Winslow Taylor lived from 1856 to 1915. Taylorism was named after him.

• Create a standard method for each job;
• Successfully select and hire proper workers;
• Effectively train these workers;
• Support these workers.

Hertzberg’s Motivation-Hygiene Theory attempts to uncover psychological needs of employees and enhance employee satisfaction. Employers are encouraged to design jobs that enhance and motivate employees beyond simply meeting a daily or weekly quota. This theory highlights the importance of rewards systems and monitoring when and how employees are rewarded.

Edwin Locke’s Goal Setting Theory mainly focuses on the motivational properties of task goals (Schermerhorn). Task goals can be highly motivating when set and managed properly. One of the problems with a goal setting theory in job design is that individuals are more strongly motivated by establishing or setting their own personal goals. If organizations set these goals for their employees, then the effectiveness of this technique is diminished.

Current Approaches to Job Design

Technology and the flattening of the global economy have contributed greatly to the changes we now see in jobs and job content across the world. We now recognize that a person presented with quality meaningful work is more likely to do that work well. Because of this insight, job design presently takes some prominent forms.

The first of which is designed around the evolution from individual work to work-groups. This job design practice is called “socio-technical systems” (STS) approach. This approach has the following guiding principles:

• The design of the organization must fit its goals.
• Employees must be actively involved in designing the structure of the organization.
• Control of variances in production or service must be undertaken as close to their source as possible.
• Subsystems must be designed around relatively self-contained and recognizable units of work.
• Support systems must fit in with the design of the organization.
• The design should allow for a high quality of working life.

Another modern job design theory is the Job Characteristics Model (JCM), which maintains five important elements that motivate workers and performance:

• Skill variety,
• Task identity,
• Task significance,
• Autonomy,
• Job feedback.

The individual elements are then proposed, which lead to positive outcomes through three psychological states: experienced meaningfulness, experienced responsibility, and the knowledge of results (Parker & Turner, 2002).

Steps to Effective Job Design

The key to effectively crafting a meaningful job for an employee is starting the thought process by looking at the values and strategy of the organization. By framing the job in these contexts, the job design process is more likely to align potential employees with the purpose of the company. Once you have this context, the following steps will ensure both meaningful and effective job design:

1. Assess skills, needs, abilities, and motivations of employees and the organization.
2. Design the job to meet those needs, abilities and motivations.
3. Implement the new job design.
4. Audit the success of the job design and begin with step one periodically as well as when problems have been identified.

13.4.3: Executive Compensation

Learning Objective

Analyze the arguments for and against huge growth in executive compensation

Key Points

• When looking at the long-term prospects of the company, a good CEO will assemble and maintain a top-notch management team and nurture leaders to take over.
• Executive pay is financial compensation received by an officer of a firm. It is typically a mixture of salary, bonuses, shares of and call options on the company stock, benefits, and perquisites.
• Excessive executive compensation has been criticized from all quarters, but defenders say that it is because of the competition that exists between companies for a limited number of top executives.

Key Term

chief executive officer

The highest-ranking corporate officer or executive officer of a corporation, company, or agency, responsible for carrying out the policies of the board of directors on a day-to-day basis; CEO.

Example

• The ratio of CEO pay to average worker pay is far greater in the U.S. compared with other countries. In Japan, the ratio of CEO pay to average worker pay is 11:1; in Italy, it is 20:1; in Britain, it is 22:1; in Mexico, it is 47:1; and in the U.S., the ratio is 475:1.

A Top-notch Team is Needed for Corporate Success

Typically, the chief executive officer (CEO) directs the fortunes of the company. It helps that the CEO has a good team that includes the chief operating officer (COO) who leads the operations of a company, and chief financial officer (CFO) who manages the finances. Also important in different companies are the chief marketing officer (CMO) and the chief information officer (CIO), who manages the information systems. When looking at the long-term prospects of the company, a good CEO will assemble and maintain a top-notch management team and nurture leaders to take over.

Controversy Over Executive Compensation

Executive pay (also known as executive compensation) is financial compensation received by an officer of a firm. It is typically a mixture of salary, bonuses, shares of and call options on the company stock, benefits, and perquisites, ideally configured to take into account government regulations, tax law, the desires of the organization and the executive, and rewards for performance.

Many policy makers are concerned about the huge growth in executive compensation and the lack of a relationship between performance and compensation. An example from the recent financial crisis are the CEOs who led their companies into insolvency and bankruptcy yet were still given huge pay packages .

More Compensation Heading to the Very Top

During the financial crisis of 2008, many CEOs led their companies into insolvency and bankruptcy yet were still given huge pay packages.

In general, the compensation of CEOs in the United States has risen to over 400 times the salary of the average U.S. worker, compared to about 30 times only a few decades ago . This is different from other countries where the disparity is not so great.

Growth of CEO Pay In America

The compensation of CEOs in the United States has risen to over 400 times the salary of the average U.S. worker, compared to about 30 times only a few decades ago.

The explosion in executive pay has become controversial, criticized by not only leftists but conservative establishmentarians such as Ben Bernanke, Peter Drucker, John Bogle, and Warren Buffet. The idea that stock options and other alleged pay-for-performance are driven by economics has also been questioned. A 2001 article in Fortune, “The Great CEO Pay Heist” drew criticism for this line of thinking: instead of arguing that “the stock isn’t moving, so the CEO shouldn’t be rewarded”, it instead argued that “the stock isn’t moving, so we’ve got to find some other basis for rewarding the CEO. ” This line of thinking is exactly why executive compensation has come under so much criticism.

Defenders of high executive pay say that the global war for talent and the rise of private equity firms can explain much of the increase in executive pay. For example, while in conservative Japan a senior executive has few alternatives to his current employer, in the United States it is acceptable and even admirable for a senior executive to jump to a competitor, to a private equity firm, or to a private equity portfolio company. Portfolio company executives take a pay cut but are routinely granted stock options for ownership of 10% of the portfolio company, contingent on a successful tenure. Rather than signaling a conspiracy, defenders argue, the increase in executive pay is a mere byproduct of supply and demand for executive talent. However, U.S. executives make substantially more than their European and Asian counterparts.

As of 20120, the current ratio of CEO pay to average worker pay was:

• Japan 11
• Germany 12
• France 15
• Italy 20
• Canada 20
• South Africa 21
• Britain 22
• Hong Kong 41
• Mexico 47
• Venezuela 50
• United States 475

13.4.4: Sexual Harrassment

Learning Objective

Explain the effects of sexual harassment and how organizational policies can prevent it from occuring

Key Points

• Harassment can include unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature. It includes a range of behavior from mild transgressions to sexual abuse or sexual assault.
• In the workplace, harassment may be considered illegal when it is so frequent or severe that it creates a hostile or offensive work environment, or when it results in an adverse employment decision.
• Psychologists and social workers report that severe or chronic sexual harassment can have the same psychological effects as rape or sexual assault.
• Studies show that the organizational climate (an organization’s tolerance, policy, procedure etc.) and workplace environment are essential for understanding the conditions in which sexual harassment is likely to occur, and the way its victims will be affected.

Key Terms

sexual harassment

bullying or coercion of a sexual nature, or the unwelcome or inappropriate promise of rewards in exchange for sexual favors.

retaliation

a sometimes violent response to an act of harm or perceived injustice.

Example

• Academic studies have carefully shown how cultural differences affect attitudes about sex, sexual advances, and hostility at work. In one study, American, Australian, and German collegians were offered written scenarios of sexual overtures in offices. Responses from all three nationalities were similar, but as a group, they were far more likely to brand the episodes with terms like harassment than were their peers from Brazil. Faced with the same scenarios, the Brazilians tended to see only innocuous pokes at romance and sex that didn’t constitute abuse of power or create a hostile environment. A similar experiment showed a comparable split between typical adults living in the United States (more prone to see harassment) and Ecuador (more likely to see scenarios as flirtatious or harmless sexual jousting).

Sexual Harassment Defined

Sexual harassment is bullying or coercion of a sexual nature, or the unwelcome or inappropriate promise of rewards in exchange for sexual favors. Harassment can include unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature. Sexual harassment can includes a range of behavior from mild transgressions (like jokes or innuendos) to sexual abuse or sexual assault, but laws against sexual harassment typically don’t prohibit simple teasing, offhand comments, or minor isolated incidents. In the workplace, harassment may be considered illegal when it is so frequent or severe that it creates a hostile or offensive work environment, or when it results in an adverse employment decision (such as the victim being fired or demoted, or when the victim decides to quit the job). Sexual harassment may occur in a variety of circumstances. Often, but not always, the harasser is in a position of power or authority over the victim (due to differences in age, level of employment, or years with the company). For many businesses and other organizations, preventing sexual harassment—and addressing any incidents of it— has become a major priority within their ranks.

Effect on Victims

Effects of sexual harassment can vary depending on the individual victim and the severity and duration of the harassment. Psychologists and social workers report that severe or chronic sexual harassment can have the same psychological effects as rape or sexual assault. Victims who do not submit to harassment may also experience other forms of harassment including retaliation in the form of isolation or bullying. Common psychological effects of sexual harassment and retaliation that could affect your academic, professional, financial or social life include:

• Decreased work or school performance as a result of stress conditions, including increased absenteeism in fear of repeated harassment;
• Fear of being fired or refused a promotion or job opportunity; loss of job or career, and loss of income;
• Having one’s personal life offered up for public scrutiny—the victim becomes the “accused,” and his or her person, appearance, lifestyle, and private life can often come under attack;
• Becoming publicly sexualized (i.e. groups of people “evaluate” the victim to establish if he or she is “worth” the sexual attention or the risk to the harasser’s career);
• Defamation of character and reputation;
• Loss of trust in environments similar to where the harassment occurred;
• Loss of trust in the types of people that occupy similar positions as the harasser or his or her colleagues; difficulties or stress with peer relationships, or relationships with colleagues;
• Extreme stress on relationships with significant others, including personal sexual life, sometimes resulting in divorce;
• Weakening of support network, or being ostracized from professional or academic circles (friends, colleagues, or family may distance themselves from the victim, or shun him or her altogether);
• Having to relocate to another city, another job, or another school.

Organizational Policies and Procedures

When organizations do not take the satisfactory measures for properly investigating sexual harassment, do not offer psychological counseling and guidance, or just decide to ignore the problem or not take it seriously, this could lead to:

• Decreased productivity and increased team conflict;
• Decreased study or job satisfaction;
• Loss of students or staff;
• Resignations of alleged harassers;
• Increased absenteeism by staff or students experiencing harassment;
• Decrease in success at meeting academic or financial goals;
• Increased health care costs and sick pay costs because of the health consequences of harassment and/or retaliation;
• High jury awards for the victim of the harassment;

If the problem is ignored or not treated properly, a company’s or school’s image can suffer. Moreover, the knowledge that harassment is permitted can undermine the ethical standards of the organization in general, as staff and/or students lose respect for, and trust in, their superiors or supervisors who indulge in, turn a blind eye to, or handle incidents of sexual harassment improperly.

Studies show that the organizational climate (an organization’s tolerance, policies, procedures, etc.) and workplace environment are essential for understanding the conditions in which sexual harassment is likely to occur, and the way its victims will be affected. According to Dr. Orit Kamir, the most effective way to avoid sexual harassment in the workplace, and also influence the public’s state of mind, is for the employer to adopt a clear policy prohibiting sexual harassment and to make it very clear to his or her employees.

Sexual Harassment In the Military

Historically, sexual harassment has been prevalent in the military. Pictured here are members of I.A.M. Strong, the Army’s campaign to combat sexual harassment and sexual assaults.

13.4.5: Childcare

Learning Objective

Understand the value of various parental benefits from the organizational perspective

Key Points

• Benefits that empower employees to establish a strong work/life balance can provide significant organizational benefits.
• New parents need more support than most, and integrating chlid care programs, maternity/paternity leave, and emergency leave is absolutely critical to building a strong and more focused workforce.
• There are various ways to approach child care, but most smaller to medium sized organizations will outsource this to local professionals. Keep in mind, different childcare centers specialize in different age groups.
• Providing child care benefits increases employee loyalty and focus, decreases anxiety, and reduces absenteeism while building a strong, family-oriented organizational culture.

Key Terms

childcare

The act or practice of taking care of children.

absenteeism

The practice of missing days of work.

Providing benefits such as childcare, maternity/paternity leave, flexible working, and emergency leave is critical for helping employees keep a healthy work/life balance. The responsibilities of parenting require a great deal of time and energy, and supporting new parents as they find time for everything can significantly improve employee satisfaction, retaining key talent through good benefits and employee support. 

How To Support Parents

Childcare

The scope of a child care program is up to the business itself, as well as the decision to create this benefit in house or to outsource it. Most commonly, businesses will create agreements with childcare providers in the local area, covering or sharing the costs of childcare while the parents are at work. However, not all programs will fit all age groups. Larger organizations may want to consider partnerships for the following:

• Infant care (0-1 year old)
• Corporate child center (0-3 years old)
• Corporate kindergarten (3-6 years old)
• Corporate camp for holidays (3-14 years old)

Through providing childcare benefits, employers can potentially realize the following benefits:

• Reduced employee absenteeism
• Increased focus at work
• Decreased healthcare costs
• Development of a strong, family-oriented culture
• Increased employee loyalty
• Reduced HR costs (recruiting/onboarding new employees)

Other Parental Support Programs

New parents need more than childcare to fully balance work and life demands. Providing ample time for maternal and paternal leave is critical to empowering employees to adjust to their new responsibilities. Parents need time to organize their new lives, and create a strong ecosystem for their family to thrive.

Along similar lines, emergency leave is also absolutely necessary in case something happens. Employees who are afraid of getting in trouble for having to leave work early will be less loyal, less focused and more anxious about the demands of their home and work lives. Trusting employees to get the job done when and how they can, and providing a flexible and family-oriented work culture, is an incredible advantage.

Daycare

This image shows children at a daycare, where employee children can socialize and learn while the parents are at work.

This image depicts children at daycare, where they can learn and socialize while parents are at work.

13.4.6: Drug Screening

Learning Objective

Explain the common practice of firms’ drug testing

Key Points

• While most employees feel the purpose of drug screening is to identify people doing something illegal off duty and then punish them, the real point is to prevent impaired workers from hurting themselves or others.
• There are two kinds of employment drug testing: pre-employment drug screening and publish-employment drug testing.
• There are legal issues relating to drug testing that must be adhered to. For instance, the Fourth Amendment ensures protection against unreasonable search and seizure, and drug testing can be argued to fall under this.
• There are issues regarding the legality of drug testing.

Key Term

drug test

Any chemical check for the presence of (usually illegal) drugs in a sample of one’s blood, hair, or urine.

Example

• In Maryland, drug testing laws make it possible to screen for drugs using a hair specimen for pre-employment purposes only.

Drug Screening

When employees discuss the subject of examinations for illegal or illicit chemical use, there is almost always a negative tone to the discourse. No person really likes the idea that he or she is in any way suspected of such activity. As an unfortunate consequence of our societal behavior, however, a company requiring a drug test is reasonable, and can be done without rancor.

As with almost any managerial policy, the more the workforce understands about why it was created and what it entails, the less resistance there will likely be.

The Purpose of Drug Testing

There are two kinds of employment drug testing: pre-employment drug screening and publish-employment drug testing.

Pre-employment testing is carried out prior to recruiting individuals to make certain that drug abusers do not enter into the business. This is done under the premise that human assets are the biggest assets of a reputed organization. Talented staff members have a positive impact on productivity. However, this productivity is jeopardized when a company’s workers use illicit drugs.

In accordance with the most recent reports (2009) released by Compound Abuse and Mental Health Expert services Administration (SAMHSA), out of 19.3 million illicit drug abusers aged 18 many years or older, 12.9 million had been employed full time or part time in United States. This knowledge signifies that many illicit drug users are finding employment and that they may well impact the organizational lifestyle.

Pre-employment drug testing can help in generating a sense of fear in people looking for work, as the odds are, if they use drugs, their application will be rejected due to them screening positive.

Comparing it with the automatic process undergone by everyone in federal service will help clarify the importance of having “clean” employees, as the idea of impaired FBI agents is clearly problematic to all. Relating that to the performance of duties at the corporate level is not a huge leap of logic.

Drug Screening and Constitutional Law

Some states do not have specific laws addressing this issue, so it is up to corporate policy to determine the best approach.

The Fourth Amendment ensures protection against unreasonable search and seizure, and these examinations have been held to be covered by this provision. One issue that comes up in the practice of conducting these processes is how much is too much. Even people who understand the rationale and grudgingly approve of it become incensed if the checks occur too often. All citizens are protected against the denial of life, liberty and the pursuit of happiness, and this has been ruled to mean excessive intrusion on person or privacy.

Making Employees Understand the Necessity of Drug Testing

One key to approaching the subject with the workforce is to address it in the venue of safety.

Most employees feel the purpose of drug screening is to identify people doing something illegal off duty and then punish them. Keeping the focus on what the real point is, which is the prevention of impaired workers from hurting themselves or others, can be key to acceptance. Many employees do not consider the ramifications to the enterprise or employer should their actions result in loss, injury, or fatality. They do not know the legal responsibility an employer has to ensure that employees are competent and ready to work.

Knowing that their mishaps could cost the employer will help employees realize why it is important that everyone be substance free on the job. Even though they understand the reasons for it, the physical process of the examination is ultimately humiliating and degrading, with some workers tolerating it better than others. Choosing a company that has a good reputation, who are willing to collect feedback from those who are examined will also ease the effort. Testing at the workplace, instead of some third-party location, is less disruptive and faster.

Nevertheless, the practice of drug testing in a company protects everyone. Remaining careful to avoid any perception of bias through uniform and fair exercise will appease workers as much as possible. Following proven process guidelines will ensure that any challenge to the program will result in a finding for the company.

Strand of Hair

A strand of hair is all it takes to tell the story of illicit drug use.

13.4.7: Violence in the Workplace

Learning Objective

Explain the causes of and solutions to conflict in the workplace

Key Points

• Human resource managers report spending 24% to 60% of their time dealing with employee disputes.
• Causes for conflict within the workplace may include poor organizational structures, a strong spirit of competitiveness and non-cooperation, poor communication, personality conflicts, frequent change, and lack of teamwork.
• Strategies to help resolve worker conflict may include listening carefully, staying impartial, and agreeing to work on an action plan going forward.

Key Term

conflict

A clash or disagreement, often violent, between two opposing groups or individuals.

Example

• A disgruntled employee may violently act out against another employee if she feels slighted or the need to retaliate. However, due to different styles of interaction or differing values or beliefs, the cause of the conflict may just be a miscommunication.

Introduction

The Pillow Fight

Unfortunately, most employee conflicts aren’t as good-natured as this pillow fight.

Human resource managers report spending 24% to 60% of their time dealing with employee disputes.

According to a study by the Society of Human Resource Management (SHRM), the number of violent incidents in the workplace has been increasing. Nearly 60% of respondents said violence had occurred in their organization during the past three years, and they identified “personality conflicts” as the leading cause.

Why Conflicts Arise

Conflict arises when one or more person tries to ensure their preferred outcome is achieved to the exclusion of the preferred outcome of others. Causes of conflict within an organization include:

1. Poor organization structures where people may feel alienated or isolated, thus the spirit of competitiveness and non-cooperation may be strong.
2. Poor communication where people don’t have the opportunity to express how they feel or to clear up causes of conflict which may arise.
3. Personality conflicts which cause people to clash with each other due to different styles of interaction or differing values or beliefs.
4. Poorly managed change within an organization, which can lead to people feeling insecure and threatened.
5. Lack of teamwork /poor performance, where some members of the team believe other colleagues are not competent in the jobs they do.

Overall, conflict arises when there is a non-acceptance of the differences which exist between people at work. It is also more likely to happen in organizations where there is a high level of uncertainty, or where there are poor industrial relations. The atmosphere this causes can result in a raising of tension levels and poor relationships at work.

Conflict Resolution Strategies

The following strategies can help effectively resolve worker conflict:

1. Be a good listener. The parties involved should all want to tell their story. Even though getting people to speak freely can increase the level of conflict, it’s a good idea to get all the complaints and issues out so you can begin working on a solution.
2. Stay impartial without getting the the staff to hate you and the establishment. If your staff has been divided into camps, each espousing one idea over another, make sure you understand the motivations of each group.
3. Stay logical. Don’t let your feelings for the people on staff influence your decision. If you don’t get along with the people in one group, do not dismiss their ideas and claims.
4. Agree an action plan. Who will do what , when and how. Monitor progress and review within an agreed period. Move on from the conflict once it has been resolved.

13.4.8: Complaint Procedures

Learning Objective

Explain employee influence in an organization

Key Points

• Employees are the resources of an organization in the same way as material assets but they are also the firm’s stakeholders. Even so, they do not often command the majority of attention in terms of decision-making influences.
• Grievance and due process systems allow employees to address grievances and to argue their point if they feel they are wronged by management or another employee.
• Employers benefit from the increased trust that comes from sharing information and giving employees influence.
• Open-book management empowers employees with the information they need to see the reality of the organizational situation and to give relevant and helpful input.
• Feedback programs can be a less expensive way to get feedback from employees concerning specific programs or policies.
• Team mechanisms such as quality circles, work teams, and total-quality management teams provide employees with the ability to synthesize their individual input into a better solution to organizational problems.

Key Terms

open-book management

A management phrase coined by John Case of Inc. magazine, who began using the term in 1993 (Aggarwal & Simkins, 2001). The basis of OBM is that the information received by employees should not only help them do their jobs effectively, but help them understand how the company is doing as a whole (Kidwell & Scherer, 2001). The technique is to give employees all relevant financial information about the company so they can make better decisions as workers. This information includes, but is not limited to, revenue, profit, cost of goods, cash flow and expenses.

grievance

A wrong or hardship suffered, which is the grounds of a complaint.

feedback

Critical assessment on information produced.

Example

• In order to benefit from complaints and observations of employees, an employer may use a feedback program, which for example, may entail her creating a survey for the employees to complete and review various aspects of the organizational situation in the workplace.

Employees: Often the Unheard Stakeholders

Employees are the resources of an organization in much the same way as material assets. They are also the firm’s stakeholders.

The concept of employees as stakeholders refers to the interest employees have in the success of the company and the fact that actions taken by the organization directly affect the employees (Olson, 2003). Though employees are the stakeholders who are arguably most visible to management on a day-to-day basis, they do not often command the majority of attention in terms of decision-making influences.

Employees can get their Voices Heard

Employers benefit from the increased trust that comes from sharing information and giving employees influence (Pfeffer & Viega, Putting People First for Organizational Success, 1998). However, managers who are used to having control often find it “disconcerting, difficult and even impossible” to share power in the form of influence in exchange for the many organizational benefits (Marken, 2004).

Employees can obtain influence in organizational decisions in several ways :

Employees

They can obtain influence in organizational decisions in several ways.

• Grievance and due process systems allow employees to address grievances and to argue their point if they feel they are wronged by management or another employee.
• Many different participation systems can be implemented to authentically get employee input and to capitalize on the benefits associated with employee influence.
• Open-book management empowers employees with the information they need to see the reality of the organizational situation and to give relevant and helpful input (Case, 1997).
• Similar to open-book management are open-door policies, where management makes it clear that employees can informally raise issues or give input at any time.
• Feedback programs, sometimes implemented in the form of employee surveys or through direct employee-management interaction, can be a less expensive way to get feedback from employees concerning specific programs or policies (Solnik, 2006).
• Team mechanisms such as quality circles, work teams, and total-quality management teams provide employees with the ability to synthesize their individual input into a better solution to organizational problems.

13.5: Union Negotiation Tactics

13.5.1: Strikes

Strike action, also called a labor strike, is a work stoppage caused by the mass refusal of employees to work.

Learning Objective

Outline the basic procedures of a workers strike

Key Points

• A strike usually takes place in response to employee grievances.
• A strike is typically reserved as a threat of last resort during negotiations between the company and the union, which may occur just before or immediately after the contract expires.
• Occasionally, workers decide to strike without the sanction of a labor union. In many countries, these unofficial strikes do not enjoy the same legal protections as recognized union strikes.
• Sometimes people continue to work during a strike action, or temporary and permanent replacement workers are hired to take the place of those on strike.
• Unions faced with a strikebreaking situation may try to inhibit the use of strikebreakers by a variety of methods. Companies may respond by increasing security forces and seeking court injunctions.
• Unions faced with a strikebreaking situation may try to inhibit the use of strikebreakers by a variety of methods. Companies may respond by increasing security forces and seeking court injunctions.

Key Terms

work-to-rule

Of or pertaining to a labor protest in which employees do only the minimum work required by the rules of a workplace, following safety or other regulations to the letter in order to cause a slowdown.

labor union

A continuous association of wage-earners for the purpose of maintaining or improving the conditions of their employment; a trade union.

collective bargaining

A method of negotiation in which employees negotiate as a group with their employers, usually via a trade union

Example

• The Minneapolis General Strike of 1934 grew out of a strike by Teamsters against most of the trucking companies operating in Minneapolis, a major distribution center for the Upper Midwest. The strike began on May 16, 1934 in the Market District (the modern day Warehouse District) and ensuing violence lasted periodically throughout the summer. Led by local leaders associated with the Trotskyist Communist League of America, a group that later founded the Socialist Workers Party (United States), the strike paved the way for the organization of over-the-road drivers and the growth of the Teamsters labor union.

What is a Strike?

A strike action, also called labor strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances.

Strikes became important during the Industrial Revolution when mass labor became important in factories and mines. In most countries, strike actions were quickly made illegal, as factory owners had far more political power than workers. Most western countries partially legalized striking in the late 19^th or early 20^th centuries.

Why Do Workers Strike?

Most strikes are undertaken by labor unions during collective bargaining. The object of collective bargaining is to obtain a contract (an agreement between the union and the company) which may include a no-strike clause or penalizes the union and/or the workers if they walk out while the contract is in force. The strike is typically reserved as a threat of last resort during negotiations between the company and the union.

Occasionally, workers decide to strike without the sanction of a labor union. This is either because the union refuses to endorse the tactic, or because the workers concerned are not unionized. Such strikes are often described as unofficial.

Strikes without formal union authorization are also known as wildcat strikes. In many countries, wildcat strikes do not enjoy the same legal protections as recognized union strikes, and may result in penalties for the union members who participate.

What Happens During A Strike?

1. A strike may consist of workers refusing to attend work or picketing outside the workplace to prevent or dissuade people from working in their place or conducting business with their employer.
2. Less frequently workers may occupy the workplace, but refuse either to do their jobs or to leave. This is known as a sit-down strike.
3. A similar tactic is the work-in, where employees occupy the workplace but still continue work, often without pay. This tactic attempts to show they are still useful, or that worker self-management can be successful. This occurred with factory occupations in the Bienno Rossi strikes-the “two red years” of Italy from 1919-1920.
4. Another unconventional tactic is work-to-rule, in which workers perform their tasks exactly as they are required but no better. For example, workers might follow all safety regulations in a way that it impedes their productivity. Such strikes may be a form of “partial strike” or “slowdown. “

What is a Strikebreaker?

A strikebreaker continues to work during strike action by trade unionists or acts as a temporary or permanent replacement worker hired to take the place of those on strike.

The act of working during a strike – whether by strikebreakers, management personnel, non-unionized employees or members of other unions not on strike – is known as “crossing the picket line,” regardless of whether it involves actually physically crossing a line of picketing strikers. Crossing a picket line can result in passive and/or active retaliation against that working person.

What Methods do Employers use to Deal with Strikes?

Most strikes called by unions are somewhat predictable; they typically occur after the contract has expired.

1. Strike preparation: Companies which produce products for sale will frequently increase inventories prior to a strike. Salaried employees may be called upon to take the place of strikers, which may entail advance training. If the company has multiple locations, personnel may be redeployed to meet the needs of reduced staff.
2. Companies may also take out strike insurance prior to an anticipated strike, helping to offset the losses which the strike would cause.
3. One of the weapons traditionally wielded by already-established unions is strike action. Some companies may decline entirely to negotiate with the union, and respond to the strike by hiring replacement workers. This may create a crisis situation for strikers — do they stick to their original plan and rely upon their solidarity, or is there a chance that the strike may be lost? How long will the strike last? Will strikers’ jobs still be there if the strike fails? Are other strikers defecting from the strike? Companies that hire strikebreakers typically play upon these fears when they attempt to convince union members to abandon the strike and cross the union’s picket line.
4. Another counter to a strike is a lockout, the form of work stoppage in which an employer refuses to allow employees to work.

Unions faced with a strikebreaking situation may try to inhibit the use of strikebreakers by a variety of methods:

• establishing picket lines where the strikebreakers enter the workplace
• discouraging strike breakers from taking or keeping strikebreaking jobs
• raising the cost of hiring strikebreakers for the company
• employing public relations tactics

Teamsters clash with armed police in Minneapolis, 1934.

Members of the Teamsters union wielding pipes clash with armed police during a 1934 strike in Minneapolis.

13.5.2: Boycotts

Union boycotts are a form of industrial action by a trade union in support of a strike initiated by workers in another, separate enterprise.

Learning Objective

Differentiate between a trade dispute with a worker’s direct employer and “secondary action”

Key Points

• The term “secondary action” is intended to be distinct from a trade dispute with a worker’s direct employer, and so may be used to refer to a dispute with the employer’s parent company, its suppliers, financiers, contracting parties, or any other employer in another industry.
• In most countries there are limits on the purpose for which people can go on strike. In many English-speaking nations, restrictions have been placed on which organizations trade unions may strike against.
• Secondary action is illegal in the United States. It is banned by the Sherman Antitrust Act and by the Taft-Hartley Act, which amends the Wagner Act of 1935.

Key Terms

agribusiness

Big business connected to agriculture, either owning or operating large scale farms, or catering to those who do.

boycott

To abstain, either as an individual or group, from using, buying, or dealing with someone or some organization as an expression of protest.

industrial action

In a workplace, a strike or other protest by workers.

Example

• Because farm laborers in the United States are not covered by the Wagner Act, the United Farm Workers’ (UFW) union has been able to legally use secondary boycotting of grocery store chains as an aid to their strikes against California agribusinesses and to their primary boycotts of California grapes, lettuce, and wine. The UFW’s secondary boycotts involved asking consumers to stop shopping at a grocery store chain until such time as the chain stopped carrying the boycotted grapes, lettuce, or wine.

Union Boycotts: Supporting Strikers

Union boycotts, or secondary action, is industrial action by a trade union in support of a strike initiated by workers in another, separate enterprise .

Union Boycotts

Also known as secondary action, is industrial action by a trade union in support of a strike initiated by workers in another, separate enterprise.

The term “secondary action” is intended to be distinct from a trade dispute with a worker’s direct employer, and so may be used to refer to a dispute with the employer’s parent company, its suppliers, financiers, contracting parties, or any other employer in another industry.

Going on Strike: Legal Limits

In most countries there are limits on the purpose for which people can go on strike, and in many English-speaking nations restrictions have been placed on which organisations trade unions may strike against. In the U.S. and U.K., workers can typically strike against their direct employer only.

In continental Europe, secondary action is generally lawful and the right to strike is seen as a part of a broader political freedom. Secondary action is illegal in the United States. It is banned by the Sherman Antitrust Act and by the Taft-Hartley Act, which amends the Wagner Act of 1935.

Because farm laborers in the United States are not covered by the Wagner Act, the United Farm Workers’ (UFW) union has been able to legally use secondary boycotting of grocery store chains as an aid to their strikes against California agribusinesses and to their primary boycotts of California grapes, lettuce, and wine. The UFW’s secondary boycotts involved asking consumers to stop shopping at a grocery store chain until such time as the chain stopped carrying the boycotted grapes, lettuce, or wine.

13.5.3: Lockouts

Employers are generally motivated to prevent, mitigate the impact of, and undermine strikes when they occur by using a variety of tactics.

Learning Objective

Explain how companies prevent and stop strikes

Key Points

• One of the weapons traditionally wielded by already established unions is strike action.
• Unions faced with a strikebreaking situation may try to inhibit the use of strikebreakers by a variety of methods.
• One method of inhibiting or ending a strike is firing union members who are striking, which can result in the elimination of the union, This is often referred to as union busting.
• At the federal level President John Kennedy, a Democrat, in 1962 issued Executive Order 10988, upgrading the status of unions of federal workers.
• In 2011 as states faced a growing fiscal crisis and the Republicans made major gains in the 2010 elections, public sector unions came under heavy attack in Wisconsin, Indiana, New Jersey and Ohio from conservative Republican legislatures.
• Traditionally, women had been under-represented in union organizing due to the belief that “it was a woman’s ‘nature’ to be a loyal ‘office wife'” and to not show disloyalty by joining a union. As the industrial sector began to decline more attention has turned to organizing women in white-collar service jobs, or what has been called the pink-collar sector. The increased membership of women has also shed new light on gender issues, with family issues and other women’s concerns gaining more legitimacy in the work place.

Key Terms

Solidarity

A bond of unity between individuals, united around a common goal or against a common enemy, such as the unifying principle that defines the labor movement.

picket line

The boundary created by striking workers, generally at the workplace entrance, which other workers are asked not to pass.

strikebreaking

Activity intended to disrupt or end without an agreement a strike by workers.

Example

• The United Auto Workers’ numbers of automobile union members are representative of the decline in unions in the manufacturing sector: 1,619,000 active members in 1970, 1,446,000 in 1980, 952,000 in 1990, 623,000 in 2004, and 377,000 in 2010 (with far more retired than active members).

Union Tactics

Methods to Deal with Strikes

Most strikes called by unions are somewhat predictable; they typically occur after the contract has expired. However, not all strikes are called by union organizations. Some strikes have been called in an effort to pressure employers to recognize unions. Other strikes may be spontaneous actions by working people. Spontaneous strikes are sometimes called “wildcat strikes;” they were the key fighting point in May 1968 in France. Most commonly, they are responses to serious (often life-threatening) safety hazards in the workplace rather than wage or hour disputes, etc.

Whatever the cause of the strike, employers are generally motivated to take measures to prevent them, mitigate the impact, or to undermine strikes when they do occur.

Strike Preparation

Companies which produce products for sale will frequently increase inventories prior to a strike. Salaried employees may be called upon to take the place of strikers, which may entail advance training. If the company has multiple locations, personnel may be redeployed to meet the needs of reduced staff.

Companies may also take out strike insurance prior to an anticipated strike, to help offset the losses which the strike would cause.

One of the weapons traditionally wielded by already-established unions is strike action. Some companies may decline entirely to negotiate with the union, and respond to the strike by hiring replacement workers. This may create a crisis situation for strikers. Do they stick to their original plan and rely upon their solidarity, or is there a chance that the strike may be lost? How long will the strike last? Will strikers’ jobs still be there if the strike fails? Are other strikers defecting from the strike? Companies that hire strikebreakers typically play upon these fears when they attempt to convince union members to abandon the strike and cross the union’s picket line.

Unions faced with a strikebreaking situation may try to inhibit the use of strikebreakers by a variety of methods, establishing picket lines where the strikebreakers enter the workplace; discouraging strike breakers from taking, or from keeping strikebreaking jobs; raising the cost of hiring strikebreakers for the company; or employing public relations tactics. Companies may respond by increasing security forces and seeking court injunctions.

Strikebreaking

Some companies negotiate with the union during a strike; other companies may see a strike as an opportunity to eliminate the union. This is sometimes accomplished by the importation of replacement workers, strikebreakers, or “scabs. ” Historically, strike breaking has often coincided with union busting. It was also called “Black legging” in the early twentieth century, during the Russian socialist movement.

Strikebreaker

Strikebreaking tactics are often met with hostile reactions from strikers

Union Busting

One method of inhibiting or ending a strike is firing union members who are striking, which can result in elimination of the union. Although this has happened, it is rare due to laws regarding firing and “right to strike” having a wide range of differences in the United States, depending on whether union members are public or private sector. Laws also vary country to country. In the United States, it is legal to fire striking public sector employees if the strike is illegal. Conversely in the United Kingdom, “It is important to understand that there is no right to strike in UK law.” Employees who strike risk dismissal, unless it is an official strike (one called or endorsed by their union), in which case they are protected from unlawful dismissal and cannot be fired for at least 12 weeks.

Lockouts

Another counter to a strike is a lockout, the form of work stoppage in which an employer refuses to allow employees to work. Two of the three employers involved in the Caravan park grocery workers strike of 2003-2004 locked out their employees in response to a strike against the third member of the employer bargaining group. Lockouts are, with certain exceptions, lawful under United States labor law.

Violence

Historically, some employers have attempted to break union strikes by force. One of the most famous examples of this occurred during the Homestead Strike of 1892. Industrialist Henry Clay Frick sent private security agents from the Pinkerton National Detective Agency to break the Amalgamated Association of Iron and Steel Workers strike at a Homestead, Pennsylvania steel mill. Two strikers were killed, 12 wounded, along with 2 Pinkertons killed and 11 wounded. In the aftermath, Frick was shot in the neck and then stabbed by Alexander Berkman, surviving the attack, while Berkman was sentenced to 22 years in prison.

13.5.4: Trends in Labor-Management Relations

Labor-Management relations have been impacted by the decline in union participation, alongside the increase of globalization.

Learning Objective

Understand why unions are declining, both in the United States and elsewhere, and the impact this may have on labor-management relations

Key Points

• The most notable recent trend in management-labor relations is a decline in union participation.
• Unions have declined significantly in the United States since the 1950’s, representing less than 20% of the modern day workforce.
• Globalization and the outsourcing of many jobs, notably in manufacturing, has reduced labor union participation and created a barrier between the organization and the labor they utilize to produce.

Key Term

deregulation

The act of reducing or removing legal or regulatory intervention on a specific issue.

The relationship between management and unions is complex. On the one hand, unions and management collaborate and come to agreement on how workers should be compensated, and what rights and safety measures must be observed to maintain a healthy working environment. 

On the other hand, there is inherently some conflict of interest. Indeed, the foundations of unions is largely one of bringing workers together to ensure (and fight for) proper rights, compensation, and treatment by the organizations. As a result, there is some compromise involved in how unions and management negotiate.

Current Trends in Labor Unions

The most significant trend in the United States when considering labor unions is fairly simple. They are far less prevalent now than they used to be. The initial rise of labor unions in the United States occurred during the Great Depression (1930’s), which has steadily decreased over time. This decrease in labor union participation has also been seen internationally, particularly in recent years. This could be for a number of reasons, but the outcome is the same. Labor unions since the turn of the millennium only represent a small fraction of the U.S. workforce (as illustrated in the chart below).

The trends in labor unions are many, but particularly worthy of note are the impacts of globalization, decrease in manufacturing, and deregulation.

Union Membership

Lower union membership is an important trend in labor dynamics, reducing the conversation between organizations and unions overall.

Lower union membership is an important trend in labor dynamics, reducing the conversation between organizations and unions overall.

Globalization

Union labor laws are domestic, which is to say that the rights of employees are protected by the national government where they reside. As a result, globalization offers the capability for businesses to exploit areas without unions (often with lower labor costs) while diminishing the bargaining power of unions domestically (wherever that may be).

Manufacturing

It’s also worth noting that many union-oriented industries have seen some declines in the United States. Manufacturing, for example, is often outsourced. With fewer employees in union-protected industries, it’s a natural trend that unions will represent a smaller portion of the overall national workforce.

Deregulation

Finally, politics and unions are interdependent. Some economists and researchers have noted that political approaches during the 1980’s created an impact on the ability for employers to diminish the power of unions. This supposition is supported by the decline of unions alongside the propensity for illegal firings during union campaigns (see chart below).

Illegal Union Firings (U.S.)

This chart illustrates the rise of illegal firings during union elections, notably rising in the 1980’s and continuing onwards from there. This is an important trend in the regulatory side of management and union relations.

This chart illustrates the rise of illegal firings during union elections, notably rising in the 1980’s and continuing onwards from there. This is an important trend in the regulatory side of management and union relations.

Conclusion

All and all, management in modern times has seen a lower amount of participation in union negotiations on behalf of organizations. This is primarily reflected by lower union involvement in many industries, alongside the rise of globalization and outsourcing.