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Students frequently have a general sense of the exploitive conditions of those times so rather than lecture about these conditions, encourage them to offer ideas that can be written on the board the testimony from Table 2.
Then have students brainstorm about possible causes to the labor problem. Once a variety of alternatives are on the blackboard, take these responses and shape them into the four schools of thought.
To make these schools of thought stand out, reinforce them by using the cartoons that appear in the text. The imagery of Figure 2. Once the students accept the differing views of the four schools from a historical perspective, discuss how they continue to be essential for understanding contemporary labor relations and all aspects of the employment relationship and broader economic and social debates, such as over globalization.
Make sure students understand the significant difference between the HRM vision of unitarist conflict and the IR vision of pluralist conflict, and between the mainstream economics faith in free markets versus the IR desire to place checks and balances on markets to help them work better and produce fairer outcomes. If desired, you can also reinforce the power of these schools of thought by showing how they provide important frames of reference for not only evaluating labor unions, but also HRM practices as summarized in the following table:.
Of secondary importance because they are administrative or institutional mechanisms for implementing implicit contracts, incentives, and other manifestations of self-interested economic actors interacting in competitive labor markets.
Essential because they are the key method for creating productive employment relationships by aligning the interests of employees and employers. Useful for aligning those employee-employer interests that are shared, but insufficient for balancing competing interests because of problems of unilateral employer authority and power. Source: John W. The last two sections of chapter 2 can be covered more quickly. To evaluate the effects of unions, you can use slides that summarize the varying effects of labor unions.
Then, the subsection on the labor movement is a reminder to students that unions have diverse roles in society, even though this book focuses primarily on their workplace roles.
For both of these topics, reinforce the importance of the four frames of reference for how we evaluate what unions do. A powerful example is the contrast between the common critique of excessive union wages rooted in the free market beliefs of mainstream economics , and the aim of U. But this material is not essential. Lecture Outline Learning Objectives: 1. Explain the four distinct schools of thought about the employment relationship—mainstream economics, human resource management, industrial relations, and critical or Marxist industrial relations.
Understand how different views of labor unions are fundamentally rooted in the basic assumptions of these four schools of thought. Discuss various roles of labor unions in the employment relationship and in society.
Identify alternative methods for making workplace rules. Compare employee representation through labor unions to other methods of workplace governance. The mainstream media in the United States—that is, the major TV networks and newspapers that are themselves corporations concerned with making profits—reinforce important stereotypes of labor unions. In general terms, the media report on issues from a consumer rather than worker perspective while emphasizing the accomplishments of business leaders and entrepreneurs.
It is important for students of labor relations to recognize their own stereotypes of labor unions and to replace them with an informed understanding of the central issues in labor relations, and to appreciate multiple perspectives on labor relations and labor unions.
The Labor Problem A. Growing labor market disparities 2. Corporate pressures for cost control, quality, and flexibility to compete in a global, information-rich economy. The critical human resources and industrial relations issue in the early s was the labor problem: undesirable outcomes that stem from an inequitable and contentious, or perhaps even oppressive and exploitative, employment relationship.
Labor was frequently viewed as just another production input—no different from machines or raw materials. With mass manufacturing methods emphasizing repetitive, narrowly defined tasks by individual workers to achieve high output, workers had no contact with the final product and minimal control over the content of their jobs.
The poor conditions of the labor problem were a problem for two broad reasons: 1. The societal or human perspective—people should have better lives. This is partly an economic issue, that is, workers should be able to afford decent housing, clothing, food, and the like; in other words, equity is important.
The business perspective—are the workers motivated? Absenteeism and turnover were costly. Strikes and other forms of industrial conflict that resulted from the labor problem in both the private and public sectors were costly to business and to society more generally. The Mainstream Economics School. The mainstream economics school of thought focuses on the economic activity of self-interested agents, such as firms and workers, who interact in competitive markets.
Under some assumptions such as perfect information , competition results in the optimal allocation and pricing of resources. The conditions of the labor problem are not seen as exploitation if there is sufficient labor market competition.
Employees are paid their economic value and are free to quit if they feel they are being exploited. Competition should be ensured if market failures prevent competitive markets from working properly. The best protection an employee has against his or her current employer is not the government, a lawyer, or a union, but rather other employers.
Outcomes are value-free, so there may be a labor situation which simply describes the outcomes but not a labor problem which implies that the outcomes are undesirable. Unions are seen as labor market monopolies that restrict the supply of labor and interfere with the invisible hand of free-market competition.
The economics view of work is that it is a lousy activity endured only to earn money. The role of government is not to establish labor standards but only to promote competition. The role of law is to protect individual freedoms that are necessary for competition. The Human Resource Management School. The human resource management school, which was formerly called the personnel management school, believes that the labor problem stems from poor management.
This school of thought presents a different underlying cause of the labor problem: poor management. To create motivated and efficient workers, firms should design and implement better supervisory methods, selection procedures, training methods, compensation systems, and evaluation and promotion mechanisms.
If workers want justice, security, respect, and opportunities for advancement, then firms should design human resource management policies that are responsive to these needs to create motivated and efficient employees.
Voice is typically informal, such as in open-door resolution procedures in which workers individually discuss complaints with their managers. To consider the role of unions in the human resource management school of thought, it is important to distinguish independent labor unions from nonindependent employee organizations: Independent labor unions—are legally and functionally independent of employers and governments and have the power to elect their own leaders, collect and spend their own dues money, establish their organizational objectives and strategies, and lead strikes.
Nonindependent employee organizations— lack such authority as enjoyed by independent labor unions and are controlled by employers like the company unions in the United States in the s or by governments as traditionally is the case for unions in China.
Human resource professionals have greater influence in companies when there is a threat of unionization, but an important objective is often to keep unions out. Critics see human resource management as nothing more than a sophisticated albeit gentle antiunion device. The Industrial Relations School.
The industrial relations school, formerly called the institutional labor economics school, believes that labor problems stem from unequal bargaining power between corporations and individual workers. Institutional labor economists saw the following market imperfections: Persistent unemployment Company towns dominated by a single employer Lack of worker savings and other safety nets Large, monopolistic employers with undue influence in markets, politics, and the legal system.
With greater bargaining power, employers can pay low wages for working long hours under dangerous working conditions. This greater bargaining power allows managers to be autocratic and authoritarian.
When there is a balance of power between labor and management, there is an abundant harvest for both to share. The Critical Industrial Relations School. This school focuses on how dominant groups design and control institutions to serve their own interests, albeit imperfectly due to resistance from competing groups.
A labor law that legally protects workers who try to unionize is seen as an attempt to mollify the working class and prevent it from agitating for deeper changes in the capitalist system. Within their own organizations, employers are seen as structuring the organization of work and human resource management practices to serve their interests at the expense of labor. The division of labor is viewed as a strategy to make labor easily replaceable and therefore weak. Some of the strategies to prevent workers from unionizing include the following: Fair treatment through progressive human resources policies The perception of input through nonunion voice mechanisms The creation of pro-company attitudes through the development of distinctive corporate cultures.
Labor unions can be important in critical industrial relations. Low wages for long hours of dangerous work under autocratic supervision and periods of insecurity can be traced to four possible underlying causes: Market failures Poor management Unequal bargaining power between employers and individual employees The domination of labor by the capitalist class.
Underlying these views are three fundamental assumptions about how markets work and the nature of employment: Is labor just a commodity? Are employers and employees equals in competitive labor markets?
What is the nature of conflict between employers and employees? What is the nature of labor? Mainstream economics views the purpose of the economic system as consumption. Labor is just another commodity or machine in.
The other three schools human resource management, industrial relations, and critical industrial relations reject the belief that labor is just a commodity and instead see labor as human beings with aspirations, feelings, and rights. Work fulfills important psychological and social needs and provides more than extrinsic, monetary rewards that support consumerism.
Are employers and employees equal in the labor market and the legal arena? The assertion that employers and employees are equal is equivalent to believing that the fundamental assumptions of mainstream economics, such as perfect information and no transaction costs, are fulfilled.
The other schools of thought, however, assert that employers and employees are not equals, either in the labor market or in the legal arena. Three different answers distinguish the human resource management, industrial relations, and critical industrial relations schools of thought—and are therefore important. The human resource management school has a unitarist view of employment relationship conflict. Conflict is not seen as an inherent or a permanent feature of the employment relationship; conflict is seen as a manifestation of poor human resource management policies or interpersonal clashes such as personality conflicts.
In contrast, the industrial relations school sees the workplace as characterized by multiple interests—that is, a plurality of legitimate interests akin to a pluralist political system—so this school embraces a pluralist view of conflict in the employment relationship.
Believers in pluralist workplace conflict see government laws and labor unions as balancing conflict—striking a balance among efficiency, equity, and voice. The critical industrial relations school believes in an inherent conflict between employers and employees, but it is significantly broader than the limited economic conflict in the pluralist view. Conflict is not limited to higher wages or better benefits; it is a social conflict of unequal power relations or class conflict.
The power of these alternative perspectives on the true nature of the employment relationship is that they yield different visions of the practice of human resource management, diversity initiatives, public policies on work, and of particular importance here, employee voice mechanisms. Employee voice is an important component of many contemporary human resource strategies; and with a unitarist view of conflict, workplace voice can successfully be provided through policies that encourage individual voice or through a nonunion employee representation plan.
In contrast, if employment relationship conflict is in fact pluralist the industrial relations belief in the existence of some inherent conflicts of interest , it follows. Only independent unions can fight for the protection necessary for industrial democracy such as free speech and due process protections. Workplace Governance.
All workplaces need rules. In addition to standard rules of behavior and performance, these rules also include compensation, benefits, policies, and procedures. Workplace governance determines the nature of the balance that is struck among efficiency, equity, and voice. And though it is called workplace governance because of the focuses on how workplace rules are determined, the ramifications are much broader and determine the quality of life for retirees, spouses, dependents, and communities.
Analyzing workplace governance is particularly instructive for understanding labor relations because it provides the context for evaluating whether unions are good or bad. Unions are assumed good if they achieve a better balance among efficiency, equity, and voice than do alternative mechanisms. Unions are assumed bad if alternative mechanisms strike a better balance.
The five major possibilities for creating workplace rules or for governing the workplace are as follows: Competitive labor markets Human resource management Worker control Bargaining with independent employee representatives labor unions Statutory government regulation. Mainstream economic theories Common-law legal rules that protect individual liberties to enter contracts 6. Workplace rules—broadly defined to include implicit and explicit rules governing compensation, benefits, working conditions, and performance standards—result from self-interested individuals interacting in competitive markets.
In the human resource management model of workplace governance, managers establish employment conditions. They are perhaps constrained to a range of alternatives established by the marketplace, but within this range managers choose specific terms and conditions of employment. One possibility for governing the workplace is to replace the unilateral authority of the human resource management or worker control models with a system of shared, bilateral authority in which employee voice is independent of managerial authority.
The major example of this shared control mechanism is collective bargaining. Workplace rules can be set by government regulation. Major U.
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