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**## LaborRelationsandCollectiveBargainingHRM6304UnitVDB.docx**

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Labor Relations and Collective Bargaining HRM 6304 Unit V Discussion Board

Assume that labor and management are negotiating a labor agreement. The wage spread becomes an issue of disagreement. Management wants a wider wage spread, and the union wants a smaller wage spread. Why should management be cautious about the union's proposal (even though the total costs may be the same)?

Initial post to be a minimum of 500 words and at least one supporting reference. You should also include at least two references.

**## UnitVStudyGuide.pdf**

HRM 6304, Labor Relations and Collective Bargaining 1

Course Learning Outcomes for Unit V

Upon completion of this unit, students should be able to:

2. Examine the challenges for union members in the modern workplace.
2.1 Identify common factors that impact both unions and union members, to include

communication, health care, job changes, wages, strikes, lockouts, and unfair labor practices.

7. Analyze alternative dispute resolutions
7.1 Discuss the purpose and use of mediation and arbitration as options for resolution.

Required Unit Resources

Chapter 7: Economic Issues, pp. 326–364

Chapter 8: Administrative Issues, pp. 388–420

Chapter 9: Resolving Negotiation (Interest) Disputes and the Use of Economic Pressure, pp. 438–475

Unit Lesson

In this unit, we will be looking at the myriad of challenges for unions and employers in the modern workplace,
including communication, strikes, health care, and other market factors. Finding meaningful resolutions is
critical for success for all concerned.

In the last unit, we looked at the old contract and the different areas that management and the union will want
to bargain over before a new contract can be reached. Those areas included management rights, hours of
work, grievances, wages, insurance, pension plans, holidays and miscellaneous days, vacation, sick leave,
strikes and lockouts, facility upgrades, office staff, and shareholder concerns.

The collective bargaining process will consist of offers and counteroffers, but the better supported those offers
and counteroffers are, the more likely they will be to get serious consideration. Both teams need to look at
what the trends are in the industry, the community, the state, and across the nation in terms of wages and
benefits. We know, for example, that the United Chemical and Plastics Union (UCPW) workers were mindful
of the state of the company and the economy during the last contract, and now the union members see the
economy picking up, so they want to also see a raise in wages. Of course, they want an immediate jump to
their counterparts in order to be equal or at least competitive. The company, on the other hand, has a $2
million investment to upgrade the equipment and facilities to be federally compliant. This is not to say that
management does not want to increase wages; after all, they have a reputation of being an organization that
cares about employees. Instead, the negotiation process comes to a matter of establishing priorities. Both
sides have to work together to look at the reality of the situation and come to an agreement that both parties
can live with.

Let’s look at the challenges in the modern workforce. The first challenge is a lack of communication. Going
back to our divorce analogy, a lack of communication is one of the main issues between couples. Couples
often try therapy as a way to increase their communication skills. Lack of communication can also create
problems in an organization, although an organization cannot typically go to therapy. In our case, there are
some rumors floating around that have created some tension and anxiety among the union workers. For
example, there are rumors that the company is going to cut benefits, reduce the workforce, and close the
plant or, alternatively, move the plant overseas. Naturally, the members are concerned because some
members have been at Harper Container Company (HCC) for a very long time, and no one wants to lose their

UNIT V STUDY GUIDE
Administrative and Economic
Considerations: The Use of Leverage

HRM 6304, Labor Relations and Collective Bargaining 2

UNIT x STUDY GUIDE
Title

job. The union has already voted to go on strike if they do not get higher wages. Management, on the other
hand, has not bothered to tell the union that they are required to upgrade the equipment to meet customer
demands for higher quality, comply with federally mandated environmental regulations, and reduce production
costs. Additionally, the upgrade will cost $2 million within the next 3 years and will mean a reduction in 30
jobs. Both sides need to communicate with each other as to the current state of affairs.

Another challenge in the modern workplace is the increasing costs of health care. In the United States, health
care is expensive and continues to rise each year. Consequently, health insurance plans are increasing.
Employers can no longer afford to absorb all of the costs, so they often pass on some of those costs to the
employees in terms of deductibles, copayments, and health maintenance organizations (HMOs). An HMO is a
network of health providers that the employees use first and foremost. This network provides reduced rates
for its members, which means lower out-of-pocket costs for employees. This is important if you have to meet
a deductible before your insurance kicks in. For example, if I have to see a doctor and I have a $500 yearly
deductible, I pay the first $500 of the bill and the insurance picks up the rest. This is different than a copay.

A copay means I have a specified amount for the service rendered. For example, my current insurance has a
$40 copay for a doctor’s visit and a $500 deductible. This means I pay $40 to see the doctor, and I will
contribute the first $500 toward anything else (e.g., labs, shots, scans). Employees have access to medical
benefits, but there are some out-of-pocket expenses. This was not the case before at HCC. During the last
contract, the employees had a first-dollar (no deductible or copay) health benefits package. The current
market is such that the company can no longer offer a first-dollar benefit package. The company cannot afford
to bear the full health care costs when the projections are a 10% increase each year for the next 3 years. A
change here will come at a cost to the employees. Also, the current proposal from management on health
care insurance requires a 3-year commitment to the health care insurance provider, but the union only wants
to see a 1-year contract. This will become a bargaining issue.

Another challenge in the modern workplace is a
change in jobs. As more technology is entered into the
workplace—especially in manufacturing facilities—the
less need there is for employees. Often, technology
either replaces employees, or the work becomes more
efficient and the need for employees is reduced. The
current market demands that organizations are
competitive, and in order to be competitive and meet
the needs of the customers in terms of quality,
organizations must become more efficient and more
effective. The HCC case explains that the plant has
not had an upgrade in 10 years, and the last upgrade
did not eliminate any jobs. Current technology is
absolutely required. In our HCC and UCPW case, we
know we now have foreign competition in our industry
to contend with, and in order to be competitive, we
have to be more efficient. However, technology comes
with a price. It is estimated the once the equipment is
upgraded, 30 piecework-molding jobs will be
eliminated. At the same time, the plant will operate on
a continuous 7-day, 24-hours-per-day schedule.

Management will want to see the elimination of the 30 jobs because they want to reduce labor costs by at
least 4% each year over the next 3 years. The 30 jobs that will be eliminated by the equipment upgrades just
happen to be the highest-paid workers in the union, earning $17.50 an hour. This will present a problem with
the union. The union, on the other hand, wants to retain all workers at their current rate of pay—even if moved
to another job. They do not want to see anyone laid off. The two teams will have to work together to agree on
what can be done about the 30 positions eliminated and their rate of pay. Since the plant will now be able to
operate 7 days a week instead of 5, there may be room to keep the 30 employees. The bargaining issue will
become the rate of pay. Technology is a fact of life, and, as technology increases, jobs are unfortunately
eliminated in most manufacturing plants.

Effects of technology

HRM 6304, Labor Relations and Collective Bargaining 3

UNIT x STUDY GUIDE
Title

Wages also present a challenge in the modern workforce. People want to be paid a fair wage. States have a
minimum wage established to ensure all wage earners are earning at least enough to survive. Also, people
expect to see a pay increase as an organization starts to make money.

Our case is no different. The union members want to be paid in such a way that is comparable to their
counterparts in the plastics industry and in their community. Sometimes, an organization may pay a bit less
but offer better benefits that are important to the employees. In our case, the union wants an increase in
wages and an increase in benefits.

One of the main areas that all collective bargaining
teams address is that of wages and the different
elements that are a part of a pay package: benefits.
As you may recall, wages are a part of the mandatory
bargaining items. Pay and benefit costs are typically a
large part of any organization’s budget. For example,
an average organization can count on spending
between 20–30% of its gross revenue on wages, and
wages are about 70% of an employee’s
compensation—benefits being the other 30%.
Different industries spend differently; for example, in
service industries, you would expect these rates to be
higher.

In the HCC and UCPW case study, you can see that
HCC is currently paying, on average, $112,106 a
week in wages for 200 employees. That comes to
over $5,829,500 a year. If you add in vacation time,
you need to increase those amounts by $561 a week
and around $500,000 a year for the 200 employees.
As you can see, wages will be a major part of the
bargaining process—particularly when UCPW

members are earning less than their counterparts and because they made a wage concession for the last
contract. Management needs to be prepared to address a wage and benefit increase and have a counteroffer
ready.

The last issues in the modern workforce, unfortunately, are strikes, lockouts, and unfair labor practices. It is
common to see organizations on strike for higher wages, increased benefits, or working without a contract.
Unfortunately, strikes and lockouts damage customer relations and often an organization’s reputation. Strikes
and lockouts also cost money on both sides. Employees are not paid during a strike or a lockout.
Management projects the gross sales will be reduced by 1%, and material costs will increase by 1%. Union
members often get a small stipend from the union during a strike, but it is considerably less than their usual
wages. Management can hire replacement workers during a strike, but the replacement workers often come
at a higher cost.

As times change, so must the realization and expectations of an organization and its members change. The
world is global, meaning competition is everywhere. If an organization wants to compete and be successful, it
must produce a quality product, meet the needs of the customer, and be efficient in doing so. HCC and
UCPW must come to an understanding through their negotiation process of what the strategic goal is for the
organization and how they can get there together if the organization is going to survive. It will mean
compromises on both sides.

In the next unit, we will look at the compromise process a bit more.

Reference

Holley, W. H., Jr., Ross, W. H., & Wolters, R. S. (2017). The labor relations process (11th ed.). Cengage

Learning. https://online.vitalsource.com/#/books/9781337025959

Organization budget example

**## UnitVStudyGuide.pdf**

HRM 6304, Labor Relations and Collective Bargaining 1

Course Learning Outcomes for Unit V

Upon completion of this unit, students should be able to:

2. Examine the challenges for union members in the modern workplace.
2.1 Identify common factors that impact both unions and union members, to include

communication, health care, job changes, wages, strikes, lockouts, and unfair labor practices.

7. Analyze alternative dispute resolutions
7.1 Discuss the purpose and use of mediation and arbitration as options for resolution.

Required Unit Resources

Chapter 7: Economic Issues, pp. 326–364

Chapter 8: Administrative Issues, pp. 388–420

Chapter 9: Resolving Negotiation (Interest) Disputes and the Use of Economic Pressure, pp. 438–475

Unit Lesson

In this unit, we will be looking at the myriad of challenges for unions and employers in the modern workplace,
including communication, strikes, health care, and other market factors. Finding meaningful resolutions is
critical for success for all concerned.

In the last unit, we looked at the old contract and the different areas that management and the union will want
to bargain over before a new contract can be reached. Those areas included management rights, hours of
work, grievances, wages, insurance, pension plans, holidays and miscellaneous days, vacation, sick leave,
strikes and lockouts, facility upgrades, office staff, and shareholder concerns.

The collective bargaining process will consist of offers and counteroffers, but the better supported those offers
and counteroffers are, the more likely they will be to get serious consideration. Both teams need to look at
what the trends are in the industry, the community, the state, and across the nation in terms of wages and
benefits. We know, for example, that the United Chemical and Plastics Union (UCPW) workers were mindful
of the state of the company and the economy during the last contract, and now the union members see the
economy picking up, so they want to also see a raise in wages. Of course, they want an immediate jump to
their counterparts in order to be equal or at least competitive. The company, on the other hand, has a $2
million investment to upgrade the equipment and facilities to be federally compliant. This is not to say that
management does not want to increase wages; after all, they have a reputation of being an organization that
cares about employees. Instead, the negotiation process comes to a matter of establishing priorities. Both
sides have to work together to look at the reality of the situation and come to an agreement that both parties
can live with.

Let’s look at the challenges in the modern workforce. The first challenge is a lack of communication. Going
back to our divorce analogy, a lack of communication is one of the main issues between couples. Couples
often try therapy as a way to increase their communication skills. Lack of communication can also create
problems in an organization, although an organization cannot typically go to therapy. In our case, there are
some rumors floating around that have created some tension and anxiety among the union workers. For
example, there are rumors that the company is going to cut benefits, reduce the workforce, and close the
plant or, alternatively, move the plant overseas. Naturally, the members are concerned because some
members have been at Harper Container Company (HCC) for a very long time, and no one wants to lose their

UNIT V STUDY GUIDE
Administrative and Economic
Considerations: The Use of Leverage

HRM 6304, Labor Relations and Collective Bargaining 2

UNIT x STUDY GUIDE
Title

job. The union has already voted to go on strike if they do not get higher wages. Management, on the other
hand, has not bothered to tell the union that they are required to upgrade the equipment to meet customer
demands for higher quality, comply with federally mandated environmental regulations, and reduce production
costs. Additionally, the upgrade will cost $2 million within the next 3 years and will mean a reduction in 30
jobs. Both sides need to communicate with each other as to the current state of affairs.

Another challenge in the modern workplace is the increasing costs of health care. In the United States, health
care is expensive and continues to rise each year. Consequently, health insurance plans are increasing.
Employers can no longer afford to absorb all of the costs, so they often pass on some of those costs to the
employees in terms of deductibles, copayments, and health maintenance organizations (HMOs). An HMO is a
network of health providers that the employees use first and foremost. This network provides reduced rates
for its members, which means lower out-of-pocket costs for employees. This is important if you have to meet
a deductible before your insurance kicks in. For example, if I have to see a doctor and I have a $500 yearly
deductible, I pay the first $500 of the bill and the insurance picks up the rest. This is different than a copay.

A copay means I have a specified amount for the service rendered. For example, my current insurance has a
$40 copay for a doctor’s visit and a $500 deductible. This means I pay $40 to see the doctor, and I will
contribute the first $500 toward anything else (e.g., labs, shots, scans). Employees have access to medical
benefits, but there are some out-of-pocket expenses. This was not the case before at HCC. During the last
contract, the employees had a first-dollar (no deductible or copay) health benefits package. The current
market is such that the company can no longer offer a first-dollar benefit package. The company cannot afford
to bear the full health care costs when the projections are a 10% increase each year for the next 3 years. A
change here will come at a cost to the employees. Also, the current proposal from management on health
care insurance requires a 3-year commitment to the health care insurance provider, but the union only wants
to see a 1-year contract. This will become a bargaining issue.

Another challenge in the modern workplace is a
change in jobs. As more technology is entered into the
workplace—especially in manufacturing facilities—the
less need there is for employees. Often, technology
either replaces employees, or the work becomes more
efficient and the need for employees is reduced. The
current market demands that organizations are
competitive, and in order to be competitive and meet
the needs of the customers in terms of quality,
organizations must become more efficient and more
effective. The HCC case explains that the plant has
not had an upgrade in 10 years, and the last upgrade
did not eliminate any jobs. Current technology is
absolutely required. In our HCC and UCPW case, we
know we now have foreign competition in our industry
to contend with, and in order to be competitive, we
have to be more efficient. However, technology comes
with a price. It is estimated the once the equipment is
upgraded, 30 piecework-molding jobs will be
eliminated. At the same time, the plant will operate on
a continuous 7-day, 24-hours-per-day schedule.

Management will want to see the elimination of the 30 jobs because they want to reduce labor costs by at
least 4% each year over the next 3 years. The 30 jobs that will be eliminated by the equipment upgrades just
happen to be the highest-paid workers in the union, earning $17.50 an hour. This will present a problem with
the union. The union, on the other hand, wants to retain all workers at their current rate of pay—even if moved
to another job. They do not want to see anyone laid off. The two teams will have to work together to agree on
what can be done about the 30 positions eliminated and their rate of pay. Since the plant will now be able to
operate 7 days a week instead of 5, there may be room to keep the 30 employees. The bargaining issue will
become the rate of pay. Technology is a fact of life, and, as technology increases, jobs are unfortunately
eliminated in most manufacturing plants.

Effects of technology

HRM 6304, Labor Relations and Collective Bargaining 3

UNIT x STUDY GUIDE
Title

Wages also present a challenge in the modern workforce. People want to be paid a fair wage. States have a
minimum wage established to ensure all wage earners are earning at least enough to survive. Also, people
expect to see a pay increase as an organization starts to make money.

Our case is no different. The union members want to be paid in such a way that is comparable to their
counterparts in the plastics industry and in their community. Sometimes, an organization may pay a bit less
but offer better benefits that are important to the employees. In our case, the union wants an increase in
wages and an increase in benefits.

One of the main areas that all collective bargaining
teams address is that of wages and the different
elements that are a part of a pay package: benefits.
As you may recall, wages are a part of the mandatory
bargaining items. Pay and benefit costs are typically a
large part of any organization’s budget. For example,
an average organization can count on spending
between 20–30% of its gross revenue on wages, and
wages are about 70% of an employee’s
compensation—benefits being the other 30%.
Different industries spend differently; for example, in
service industries, you would expect these rates to be
higher.

In the HCC and UCPW case study, you can see that
HCC is currently paying, on average, $112,106 a
week in wages for 200 employees. That comes to
over $5,829,500 a year. If you add in vacation time,
you need to increase those amounts by $561 a week
and around $500,000 a year for the 200 employees.
As you can see, wages will be a major part of the
bargaining process—particularly when UCPW

members are earning less than their counterparts and because they made a wage concession for the last
contract. Management needs to be prepared to address a wage and benefit increase and have a counteroffer
ready.

The last issues in the modern workforce, unfortunately, are strikes, lockouts, and unfair labor practices. It is
common to see organizations on strike for higher wages, increased benefits, or working without a contract.
Unfortunately, strikes and lockouts damage customer relations and often an organization’s reputation. Strikes
and lockouts also cost money on both sides. Employees are not paid during a strike or a lockout.
Management projects the gross sales will be reduced by 1%, and material costs will increase by 1%. Union
members often get a small stipend from the union during a strike, but it is considerably less than their usual
wages. Management can hire replacement workers during a strike, but the replacement workers often come
at a higher cost.

As times change, so must the realization and expectations of an organization and its members change. The
world is global, meaning competition is everywhere. If an organization wants to compete and be successful, it
must produce a quality product, meet the needs of the customer, and be efficient in doing so. HCC and
UCPW must come to an understanding through their negotiation process of what the strategic goal is for the
organization and how they can get there together if the organization is going to survive. It will mean
compromises on both sides.

In the next unit, we will look at the compromise process a bit more.

Reference

Holley, W. H., Jr., Ross, W. H., & Wolters, R. S. (2017). The labor relations process (11th ed.). Cengage

Learning. https://online.vitalsource.com/#/books/9781337025959

Organization budget example

**## LaborRelationsandCollectiveBargainingHRM6304UnitVDB.docx**

2

Labor Relations and Collective Bargaining HRM 6304 Unit V Discussion Board

Assume that labor and management are negotiating a labor agreement. The wage spread becomes an issue of disagreement. Management wants a wider wage spread, and the union wants a smaller wage spread. Why should management be cautious about the union's proposal (even though the total costs may be the same)?

Initial post to be a minimum of 500 words and at least one supporting reference. You should also include at least two references.

**## UnitVStudyGuide.pdf**

HRM 6304, Labor Relations and Collective Bargaining 1

Course Learning Outcomes for Unit V

Upon completion of this unit, students should be able to:

2. Examine the challenges for union members in the modern workplace.
2.1 Identify common factors that impact both unions and union members, to include

communication, health care, job changes, wages, strikes, lockouts, and unfair labor practices.

7. Analyze alternative dispute resolutions
7.1 Discuss the purpose and use of mediation and arbitration as options for resolution.

Required Unit Resources

Chapter 7: Economic Issues, pp. 326–364

Chapter 8: Administrative Issues, pp. 388–420

Chapter 9: Resolving Negotiation (Interest) Disputes and the Use of Economic Pressure, pp. 438–475

Unit Lesson

In this unit, we will be looking at the myriad of challenges for unions and employers in the modern workplace,
including communication, strikes, health care, and other market factors. Finding meaningful resolutions is
critical for success for all concerned.

In the last unit, we looked at the old contract and the different areas that management and the union will want
to bargain over before a new contract can be reached. Those areas included management rights, hours of
work, grievances, wages, insurance, pension plans, holidays and miscellaneous days, vacation, sick leave,
strikes and lockouts, facility upgrades, office staff, and shareholder concerns.

The collective bargaining process will consist of offers and counteroffers, but the better supported those offers
and counteroffers are, the more likely they will be to get serious consideration. Both teams need to look at
what the trends are in the industry, the community, the state, and across the nation in terms of wages and
benefits. We know, for example, that the United Chemical and Plastics Union (UCPW) workers were mindful
of the state of the company and the economy during the last contract, and now the union members see the
economy picking up, so they want to also see a raise in wages. Of course, they want an immediate jump to
their counterparts in order to be equal or at least competitive. The company, on the other hand, has a $2
million investment to upgrade the equipment and facilities to be federally compliant. This is not to say that
management does not want to increase wages; after all, they have a reputation of being an organization that
cares about employees. Instead, the negotiation process comes to a matter of establishing priorities. Both
sides have to work together to look at the reality of the situation and come to an agreement that both parties
can live with.

Let’s look at the challenges in the modern workforce. The first challenge is a lack of communication. Going
back to our divorce analogy, a lack of communication is one of the main issues between couples. Couples
often try therapy as a way to increase their communication skills. Lack of communication can also create
problems in an organization, although an organization cannot typically go to therapy. In our case, there are
some rumors floating around that have created some tension and anxiety among the union workers. For
example, there are rumors that the company is going to cut benefits, reduce the workforce, and close the
plant or, alternatively, move the plant overseas. Naturally, the members are concerned because some
members have been at Harper Container Company (HCC) for a very long time, and no one wants to lose their

UNIT V STUDY GUIDE
Administrative and Economic
Considerations: The Use of Leverage

HRM 6304, Labor Relations and Collective Bargaining 2

UNIT x STUDY GUIDE
Title

job. The union has already voted to go on strike if they do not get higher wages. Management, on the other
hand, has not bothered to tell the union that they are required to upgrade the equipment to meet customer
demands for higher quality, comply with federally mandated environmental regulations, and reduce production
costs. Additionally, the upgrade will cost $2 million within the next 3 years and will mean a reduction in 30
jobs. Both sides need to communicate with each other as to the current state of affairs.

Another challenge in the modern workplace is the increasing costs of health care. In the United States, health
care is expensive and continues to rise each year. Consequently, health insurance plans are increasing.
Employers can no longer afford to absorb all of the costs, so they often pass on some of those costs to the
employees in terms of deductibles, copayments, and health maintenance organizations (HMOs). An HMO is a
network of health providers that the employees use first and foremost. This network provides reduced rates
for its members, which means lower out-of-pocket costs for employees. This is important if you have to meet
a deductible before your insurance kicks in. For example, if I have to see a doctor and I have a $500 yearly
deductible, I pay the first $500 of the bill and the insurance picks up the rest. This is different than a copay.

A copay means I have a specified amount for the service rendered. For example, my current insurance has a
$40 copay for a doctor’s visit and a $500 deductible. This means I pay $40 to see the doctor, and I will
contribute the first $500 toward anything else (e.g., labs, shots, scans). Employees have access to medical
benefits, but there are some out-of-pocket expenses. This was not the case before at HCC. During the last
contract, the employees had a first-dollar (no deductible or copay) health benefits package. The current
market is such that the company can no longer offer a first-dollar benefit package. The company cannot afford
to bear the full health care costs when the projections are a 10% increase each year for the next 3 years. A
change here will come at a cost to the employees. Also, the current proposal from management on health
care insurance requires a 3-year commitment to the health care insurance provider, but the union only wants
to see a 1-year contract. This will become a bargaining issue.

Another challenge in the modern workplace is a
change in jobs. As more technology is entered into the
workplace—especially in manufacturing facilities—the
less need there is for employees. Often, technology
either replaces employees, or the work becomes more
efficient and the need for employees is reduced. The
current market demands that organizations are
competitive, and in order to be competitive and meet
the needs of the customers in terms of quality,
organizations must become more efficient and more
effective. The HCC case explains that the plant has
not had an upgrade in 10 years, and the last upgrade
did not eliminate any jobs. Current technology is
absolutely required. In our HCC and UCPW case, we
know we now have foreign competition in our industry
to contend with, and in order to be competitive, we
have to be more efficient. However, technology comes
with a price. It is estimated the once the equipment is
upgraded, 30 piecework-molding jobs will be
eliminated. At the same time, the plant will operate on
a continuous 7-day, 24-hours-per-day schedule.

Management will want to see the elimination of the 30 jobs because they want to reduce labor costs by at
least 4% each year over the next 3 years. The 30 jobs that will be eliminated by the equipment upgrades just
happen to be the highest-paid workers in the union, earning $17.50 an hour. This will present a problem with
the union. The union, on the other hand, wants to retain all workers at their current rate of pay—even if moved
to another job. They do not want to see anyone laid off. The two teams will have to work together to agree on
what can be done about the 30 positions eliminated and their rate of pay. Since the plant will now be able to
operate 7 days a week instead of 5, there may be room to keep the 30 employees. The bargaining issue will
become the rate of pay. Technology is a fact of life, and, as technology increases, jobs are unfortunately
eliminated in most manufacturing plants.

Effects of technology

HRM 6304, Labor Relations and Collective Bargaining 3

UNIT x STUDY GUIDE
Title

Wages also present a challenge in the modern workforce. People want to be paid a fair wage. States have a
minimum wage established to ensure all wage earners are earning at least enough to survive. Also, people
expect to see a pay increase as an organization starts to make money.

Our case is no different. The union members want to be paid in such a way that is comparable to their
counterparts in the plastics industry and in their community. Sometimes, an organization may pay a bit less
but offer better benefits that are important to the employees. In our case, the union wants an increase in
wages and an increase in benefits.

One of the main areas that all collective bargaining
teams address is that of wages and the different
elements that are a part of a pay package: benefits.
As you may recall, wages are a part of the mandatory
bargaining items. Pay and benefit costs are typically a
large part of any organization’s budget. For example,
an average organization can count on spending
between 20–30% of its gross revenue on wages, and
wages are about 70% of an employee’s
compensation—benefits being the other 30%.
Different industries spend differently; for example, in
service industries, you would expect these rates to be
higher.

In the HCC and UCPW case study, you can see that
HCC is currently paying, on average, $112,106 a
week in wages for 200 employees. That comes to
over $5,829,500 a year. If you add in vacation time,
you need to increase those amounts by $561 a week
and around $500,000 a year for the 200 employees.
As you can see, wages will be a major part of the
bargaining process—particularly when UCPW

members are earning less than their counterparts and because they made a wage concession for the last
contract. Management needs to be prepared to address a wage and benefit increase and have a counteroffer
ready.

The last issues in the modern workforce, unfortunately, are strikes, lockouts, and unfair labor practices. It is
common to see organizations on strike for higher wages, increased benefits, or working without a contract.
Unfortunately, strikes and lockouts damage customer relations and often an organization’s reputation. Strikes
and lockouts also cost money on both sides. Employees are not paid during a strike or a lockout.
Management projects the gross sales will be reduced by 1%, and material costs will increase by 1%. Union
members often get a small stipend from the union during a strike, but it is considerably less than their usual
wages. Management can hire replacement workers during a strike, but the replacement workers often come
at a higher cost.

As times change, so must the realization and expectations of an organization and its members change. The
world is global, meaning competition is everywhere. If an organization wants to compete and be successful, it
must produce a quality product, meet the needs of the customer, and be efficient in doing so. HCC and
UCPW must come to an understanding through their negotiation process of what the strategic goal is for the
organization and how they can get there together if the organization is going to survive. It will mean
compromises on both sides.

In the next unit, we will look at the compromise process a bit more.

Reference

Holley, W. H., Jr., Ross, W. H., & Wolters, R. S. (2017). The labor relations process (11th ed.). Cengage

Learning. https://online.vitalsource.com/#/books/9781337025959

Organization budget example

**## LaborRelationsandCollectiveBargainingHRM6304UnitVDB.docx**

2

Labor Relations and Collective Bargaining HRM 6304 Unit V Discussion Board

Assume that labor and management are negotiating a labor agreement. The wage spread becomes an issue of disagreement. Management wants a wider wage spread, and the union wants a smaller wage spread. Why should management be cautious about the union's proposal (even though the total costs may be the same)?

Initial post to be a minimum of 500 words and at least one supporting reference. You should also include at least two references.

**## UnitVStudyGuide.pdf**

HRM 6304, Labor Relations and Collective Bargaining 1

Course Learning Outcomes for Unit V

Upon completion of this unit, students should be able to:

2. Examine the challenges for union members in the modern workplace.
2.1 Identify common factors that impact both unions and union members, to include

communication, health care, job changes, wages, strikes, lockouts, and unfair labor practices.

7. Analyze alternative dispute resolutions
7.1 Discuss the purpose and use of mediation and arbitration as options for resolution.

Required Unit Resources

Chapter 7: Economic Issues, pp. 326–364

Chapter 8: Administrative Issues, pp. 388–420

Chapter 9: Resolving Negotiation (Interest) Disputes and the Use of Economic Pressure, pp. 438–475

Unit Lesson

In this unit, we will be looking at the myriad of challenges for unions and employers in the modern workplace,
including communication, strikes, health care, and other market factors. Finding meaningful resolutions is
critical for success for all concerned.

In the last unit, we looked at the old contract and the different areas that management and the union will want
to bargain over before a new contract can be reached. Those areas included management rights, hours of
work, grievances, wages, insurance, pension plans, holidays and miscellaneous days, vacation, sick leave,
strikes and lockouts, facility upgrades, office staff, and shareholder concerns.

The collective bargaining process will consist of offers and counteroffers, but the better supported those offers
and counteroffers are, the more likely they will be to get serious consideration. Both teams need to look at
what the trends are in the industry, the community, the state, and across the nation in terms of wages and
benefits. We know, for example, that the United Chemical and Plastics Union (UCPW) workers were mindful
of the state of the company and the economy during the last contract, and now the union members see the
economy picking up, so they want to also see a raise in wages. Of course, they want an immediate jump to
their counterparts in order to be equal or at least competitive. The company, on the other hand, has a $2
million investment to upgrade the equipment and facilities to be federally compliant. This is not to say that
management does not want to increase wages; after all, they have a reputation of being an organization that
cares about employees. Instead, the negotiation process comes to a matter of establishing priorities. Both
sides have to work together to look at the reality of the situation and come to an agreement that both parties
can live with.

Let’s look at the challenges in the modern workforce. The first challenge is a lack of communication. Going
back to our divorce analogy, a lack of communication is one of the main issues between couples. Couples
often try therapy as a way to increase their communication skills. Lack of communication can also create
problems in an organization, although an organization cannot typically go to therapy. In our case, there are
some rumors floating around that have created some tension and anxiety among the union workers. For
example, there are rumors that the company is going to cut benefits, reduce the workforce, and close the
plant or, alternatively, move the plant overseas. Naturally, the members are concerned because some
members have been at Harper Container Company (HCC) for a very long time, and no one wants to lose their

UNIT V STUDY GUIDE
Administrative and Economic
Considerations: The Use of Leverage

HRM 6304, Labor Relations and Collective Bargaining 2

UNIT x STUDY GUIDE
Title

job. The union has already voted to go on strike if they do not get higher wages. Management, on the other
hand, has not bothered to tell the union that they are required to upgrade the equipment to meet customer
demands for higher quality, comply with federally mandated environmental regulations, and reduce production
costs. Additionally, the upgrade will cost $2 million within the next 3 years and will mean a reduction in 30
jobs. Both sides need to communicate with each other as to the current state of affairs.

Another challenge in the modern workplace is the increasing costs of health care. In the United States, health
care is expensive and continues to rise each year. Consequently, health insurance plans are increasing.
Employers can no longer afford to absorb all of the costs, so they often pass on some of those costs to the
employees in terms of deductibles, copayments, and health maintenance organizations (HMOs). An HMO is a
network of health providers that the employees use first and foremost. This network provides reduced rates
for its members, which means lower out-of-pocket costs for employees. This is important if you have to meet
a deductible before your insurance kicks in. For example, if I have to see a doctor and I have a $500 yearly
deductible, I pay the first $500 of the bill and the insurance picks up the rest. This is different than a copay.

A copay means I have a specified amount for the service rendered. For example, my current insurance has a
$40 copay for a doctor’s visit and a $500 deductible. This means I pay $40 to see the doctor, and I will
contribute the first $500 toward anything else (e.g., labs, shots, scans). Employees have access to medical
benefits, but there are some out-of-pocket expenses. This was not the case before at HCC. During the last
contract, the employees had a first-dollar (no deductible or copay) health benefits package. The current
market is such that the company can no longer offer a first-dollar benefit package. The company cannot afford
to bear the full health care costs when the projections are a 10% increase each year for the next 3 years. A
change here will come at a cost to the employees. Also, the current proposal from management on health
care insurance requires a 3-year commitment to the health care insurance provider, but the union only wants
to see a 1-year contract. This will become a bargaining issue.

Another challenge in the modern workplace is a
change in jobs. As more technology is entered into the
workplace—especially in manufacturing facilities—the
less need there is for employees. Often, technology
either replaces employees, or the work becomes more
efficient and the need for employees is reduced. The
current market demands that organizations are
competitive, and in order to be competitive and meet
the needs of the customers in terms of quality,
organizations must become more efficient and more
effective. The HCC case explains that the plant has
not had an upgrade in 10 years, and the last upgrade
did not eliminate any jobs. Current technology is
absolutely required. In our HCC and UCPW case, we
know we now have foreign competition in our industry
to contend with, and in order to be competitive, we
have to be more efficient. However, technology comes
with a price. It is estimated the once the equipment is
upgraded, 30 piecework-molding jobs will be
eliminated. At the same time, the plant will operate on
a continuous 7-day, 24-hours-per-day schedule.

Management will want to see the elimination of the 30 jobs because they want to reduce labor costs by at
least 4% each year over the next 3 years. The 30 jobs that will be eliminated by the equipment upgrades just
happen to be the highest-paid workers in the union, earning $17.50 an hour. This will present a problem with
the union. The union, on the other hand, wants to retain all workers at their current rate of pay—even if moved
to another job. They do not want to see anyone laid off. The two teams will have to work together to agree on
what can be done about the 30 positions eliminated and their rate of pay. Since the plant will now be able to
operate 7 days a week instead of 5, there may be room to keep the 30 employees. The bargaining issue will
become the rate of pay. Technology is a fact of life, and, as technology increases, jobs are unfortunately
eliminated in most manufacturing plants.

Effects of technology

HRM 6304, Labor Relations and Collective Bargaining 3

UNIT x STUDY GUIDE
Title

Wages also present a challenge in the modern workforce. People want to be paid a fair wage. States have a
minimum wage established to ensure all wage earners are earning at least enough to survive. Also, people
expect to see a pay increase as an organization starts to make money.

Our case is no different. The union members want to be paid in such a way that is comparable to their
counterparts in the plastics industry and in their community. Sometimes, an organization may pay a bit less
but offer better benefits that are important to the employees. In our case, the union wants an increase in
wages and an increase in benefits.

One of the main areas that all collective bargaining
teams address is that of wages and the different
elements that are a part of a pay package: benefits.
As you may recall, wages are a part of the mandatory
bargaining items. Pay and benefit costs are typically a
large part of any organization’s budget. For example,
an average organization can count on spending
between 20–30% of its gross revenue on wages, and
wages are about 70% of an employee’s
compensation—benefits being the other 30%.
Different industries spend differently; for example, in
service industries, you would expect these rates to be
higher.

In the HCC and UCPW case study, you can see that
HCC is currently paying, on average, $112,106 a
week in wages for 200 employees. That comes to
over $5,829,500 a year. If you add in vacation time,
you need to increase those amounts by $561 a week
and around $500,000 a year for the 200 employees.
As you can see, wages will be a major part of the
bargaining process—particularly when UCPW

members are earning less than their counterparts and because they made a wage concession for the last
contract. Management needs to be prepared to address a wage and benefit increase and have a counteroffer
ready.

The last issues in the modern workforce, unfortunately, are strikes, lockouts, and unfair labor practices. It is
common to see organizations on strike for higher wages, increased benefits, or working without a contract.
Unfortunately, strikes and lockouts damage customer relations and often an organization’s reputation. Strikes
and lockouts also cost money on both sides. Employees are not paid during a strike or a lockout.
Management projects the gross sales will be reduced by 1%, and material costs will increase by 1%. Union
members often get a small stipend from the union during a strike, but it is considerably less than their usual
wages. Management can hire replacement workers during a strike, but the replacement workers often come
at a higher cost.

As times change, so must the realization and expectations of an organization and its members change. The
world is global, meaning competition is everywhere. If an organization wants to compete and be successful, it
must produce a quality product, meet the needs of the customer, and be efficient in doing so. HCC and
UCPW must come to an understanding through their negotiation process of what the strategic goal is for the
organization and how they can get there together if the organization is going to survive. It will mean
compromises on both sides.

In the next unit, we will look at the compromise process a bit more.

Reference

Holley, W. H., Jr., Ross, W. H., & Wolters, R. S. (2017). The labor relations process (11th ed.). Cengage

Learning. https://online.vitalsource.com/#/books/9781337025959

Organization budget example