Table of Contents
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- 1. Union Impact on Management
- 2. Role of Unions in an Organization
- Unions reduce flexibility of management
- Indirect Influence of trade unions on management practices
- Workplace culture and Organizational Climate
- 3. Role of Unions in the Hospitality Industry
- Representation of Trade Unions
- Influence of Unions
- 4. Employee representation and voice forum
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The aim of this research is to explore an understanding of trade union impacts by studying what role these trade unions play in the functioning of management at the workplace. Trade unions can act a tool of social change, but while involving themselves for a greater role in society; their activities continue at workplace. Their main task is interaction with management for the benefit of workers though their performance, which increase to lobbying, politics, and communities at both international and local scenario. As such, while thinking carefully about such controversy and examining the role of unions at the workplace; it is necessary to study the effect of trade unions on HRM policies of the management. The prime issue for Freeman and Medoff (1984), which they explained in their work, What Do Unions Do at the Workplace, was not to explain this, issue but instead the effects of union on outcomes for instance productivity. The studies conducted by them have been instrumental in improving the information of impact of unions on organizational outcomes.
Freeman and Medoff offer many explanations for their outcome of an advantageous impact of unions on output. Besides, recommending how to reduce quit rates; they also suggest three workable explanations: better job production standards, seniority based rewards, and effective employee-employer communication. These explanations concerning managerial practice do not form a part of this study but examines other aspects that impact trade unions on management practice in an organization. This paper extends further arguing that trade unions can enhance the efficacy by pressurizing management to strengthen standards of job allocation, and answerability for preserving higher profits in respect of higher wages (Achur, 2011).
1. Union Impact on Management
It is possible to divide the influence of trade unions on managerial practice into three categories. First group examines the need of elasticity in unionized functioning, in organizations, and associates with fixed wages and wage consolidation. Then again, nonunion systems are more possibly to accept a diversity of contingent and incentive pay mechanisms. The second group emphasizes on the efficacy, which comes out as an outcome of union presence, for example, standardization and formalization of managerial policies. For instance, unionized organizations have a better training including other mechanisms such as insurance policies and safety measures. A third category does not find key dissimilarity in HR policies though some of these researches primarily stress on innovative techniques for instance, worker participation and flexibility in working conditions. The existence of no distinction between the two sectors signifies permeation of significant innovations that the shift from one sector to another (Bryson, 2010).
2. Role of Unions in an Organization
Unions reduce flexibility of management
There are many ways through which trade unions reduce the flexibility of management. For example, trade union representation can minimize the opportunities of management using flexible staffing policies. Trade unions also support decreased flexibility to organizations by resisting strategies, which can generate flexibility for management.
Precisely, one can cite trade unions impact on personal practices for instance; promotions, staffing, and recruitment are illustrations of restricting the wide range of management privileges. Organizations having labor unions are much probably to use limited ways of recruitment, for example, agencies, walk-ins, newspaper and referrals than nonunionized organizations. Moreover, in the compensation area, it is likely that a trade union presence in an organization significantly decreases the possibility of flexible pay plan adopted by management.
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A study by Blanchflower et al. (2010) supports this study. Since the application of flexible pay is significant mainly to all executives, it would seem that these trade unions minimize management privileges concerning the issue of rewards and compensation. Trade unions restrict management privileges by using their various tools to obtain maximum advantage for workers. Indeed unions restrict organizations from using HR strategies that possibly promote a powerful organizational culture to help worker motivation and dedication, and in many circumstances trade unions can also pose as a barricade to interaction between workers, and management. These practices by the unions support the view that they have a power to reduce management flexibility although this weakened flexibility can endanger the security of job for workers in the long run.
Trade Unions assist in improving management practices.
Those organizations affiliated with unions perceive a large number of benefits from organization policy. For instance, there is a strong indication from successful organizations that unionized organizations offer training and educational programs than nonunion organizations. Some recent data also supports the identification of enormous systematization in the selection and recruitment. Unionized organizations have much possibility to implement a conventional method to advertise jobs and adopt more purposefully system instead of prejudiced tests in recruitment. Surely, these practices derive efficiencies, which nonunion firms forgo while pursuing their other goals and their tendency to stay nonunion.
Finally, unions can enhance the quantity and quality of voice in the workplace. Many researches certify the positive correlation between worker voice and unions as their mouth piece and also document that as voice increases the quit rate is minimal. The overall picture emerging from these findings shows that unionized organizations are much formalized in implementation of HR policies and create higher productivity for the organization. These practices incorporate selection, recruitment, training and gains sharing incentive plans. This demonstration endorses a positive rating for trade unions in the sphere of management practices (Heery, 2010).
Indirect Influence of trade unions on management practices
A powerful effect of trade unions on management practice noticed in management selection of HR policies in nonunionized organizations point out how these organizations provide workers with benefits such as voice, which unions usually offer to unionized organizations. This indirect impact of trade unions on management attitude can only be seen in the long time. Cross section exposures of trade union on union differences can not sufficiently capture managerial strategic choices. In case, of nonunion –unionized differences in management practices there is the likelihood that the organization will include such effects in their decision making process regarding where to make investments in the future. During 1980s, many studies documented the trends of management to abstain from unionized practices and invest into Greenfield sites, which have a possibility to run smoothly as nonunionized shops. The development of HR practices in such organizations is a direct impact to the threat of unionization. Hence, it is obvious to express that HR practice of nonunionized organizations as a management response to the threat of unionism. Further, there is concrete proof that many organizations react to the threat of union by providing workers many benefits offered by unionized organizations. The presence of broad voice status in nonunionized organizations such as Delta Airlines, Enron, and Dofasco is an example of such organizations that signify this indirect impact of unionism. Lastly, such indirect impacts of the unionism are not as powerful as the direct impacts, but study of the unionism effect on organization management will not be complete if this milder, yet powerful ignored (Saundry, 2011).
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Over the past two decades, the industrial unrest and strikes initiated decreasing strength of trade unions to launch action, both organizationally and legally. Recent studies depict the positive role by trade unions in resolving workplace disputes. The autonomy from management and powerful, dispute resolution expertise and skills permitted trade unions to launch a more productive role than nonunion officials in resolving disputes. Management in unionized organizations realized that officials from trade union extended assistance ensuring that corrective procedure operates in a cordial, procedural, and effective way than it could be otherwise.
Such results are possible in those organizations where there exist a high level of faith between trade unions and management. In such cases, the union takes flexible rather than hostile approach while bargaining with management. This inclination of management for seeking settlement solutions was visible during the 2009 recession, when the unions used their concession tools while bargaining to decrease working hours for few losses in jobs. It seems that trade unions possess a more significant hold in a situation of resolving conflict, and management in unionized workplaces always expect their cooperation during critical moments of workers crisis.
Workplace culture and Organizational Climate
Unions impact organizational culture and climate in many ways as there is more structured and formalized interaction between workers and management, and a rate of informality in unionized organizations is more. While viewing the other side, in nonunionized organizations, management can create the atmosphere of strong identification and powerful communication with set organizational goal.
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Bryson, Alex, and John observed that trade unions act as a barricade to effective communication with managers. By frequently contradicting management, the union can often cloud the message from management. The role of union as an intervener can hinder and obstruct the direct communication between workers and management. Many nonunionized organizations obtain significant transparency while interacting with their workers since they have a possibility to establish direct links with their workers (Brown, 2010).
3. Role of Unions in the Hospitality Industry
This report also aims to provide an overview of trade unions perspective of work quality and their role in the United Kingdom hospitality industry. Employing an estimated 2.6 million across a wide range of occupations in restaurants, hotels, catering and event management, and with an annual turnover around £95 billion, this sector provides a substantial contribution towards the United Kingdom economy. The paper throws a light on the role of two stakeholders, a trade union and trade association in the hospitality sector and evaluates their performance in resolving the problems of workers who are living in aphetic conditions and continue to suffer from the hands of management.
A number of issues continue to emerge for the trade union and trade association, while involving them in the hospitality sector for workers benefit, and these issues are representation, changes in sectoral employment and traditionally vulnerable groups.
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Representation of Trade Unions
More than 110 years old, the trade association has the longest history and the trade union in this study was ten years old and formed after a merger between older trade unions. Despite unions presence in this sector, trade union did not find the involvement of other unions in this sector satisfactory; an issue that concerns low levels of union recognition amongst employers and high labor turnover. Unionization in London, however, was higher than in other area because of greater presence of the hospitality industry. There has been active involvement of employers and trade unions in wage council, which establishes national wages, until their abolishment by the UK conservative government in the year 1993. Overall, this hospitality industry appears to be adequately represented by the unions, but it is difficult to evaluate their impacts on privately owned small enterprises that make up the majority of this sector, and who does not belong to any unionized affiliation (British Hospitality Association, 2010).
Union’s pursuit for implementation of minimum wages resulted in enforcement of National Wage Act (1998) and their efforts to enforce Employment Relations Act (1999) have significantly improved workers rights in this sector. In the first case, this means that hospitality workers, who were traditionally low paid, now have an entitlement to the national minimum wages. According to trade union, due to rising costs, this was initially challenging for owners in this industry; despite this, employment continued to grow year by year.
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In the second case, workers now have the right to legal representation for their grievances and disciplinarians, a responsibility undertaken by union representatives. This acted as a double edge sword: the right ensured the support for workers and also promoted positive attitudes and recognition of trade unions amongst owners, however, the increased demand on resources of the union was untenable. This resulted trade union to change their membership rules that require workers to enroll for union member for a required period. It left a negative effect on their relationship with employers and workers. Further, the sector responded to the economic downturn by realizing cost savings through subcontracting to agencies that can supply cheap labor as and when required to meet fluctuating demands. According to Unions, agency hire workers that are for low paid jobs, working as housekeepers, maids, attendants, room cleaners, porters, kitchen workers and stewards. Unions also struggled with agencies for causing harm to existing workers in the hospitality sector and discouraged the heavy use of agency workers in contract catering.
Employers always exploit costs through utilizing loopholes in the National Minimum Wage Act that permit payment for piece rate work, for example, workers should be paid according to the National Minimum Wage Act only after completion of required job. Other issues for trade union include growth in the use of part time contract and changes in workers’ existing contracts that include frozen pay, cut pay, or reduced number of hours workers can work (Oxford Economics, 2010).
Influence of Unions
The trade unions always receive criticism regarding the extent of their impact over employment conditions in the hospitality sector from employers as well as workers. The role of the union is to hold discussions with government on issues that can benefit workers for their wellness and better working conditions. Much focused was on the regulation and legislation perceived to be limiting growth in this sector such as rise in VAT.
For the trade union, their main role was through their powerful campaign against unfair work practices by the employers. One such campaign brought a change in the legislation said that employers can no longer use the gratuities to make up the basic wages earned by workers. Since trade union had a limited level of sectoral unionization, it was in a weaker position with regard to direct influence over conditions such as wage levels (Koumenta, 2011).
Trade unions negotiated collective agreements, but the dominating factor of private sector and low levels of unionization limited their power and scope. Collective agreements described as anything from pay and conditions, grievances, equal opportunities, health and safety, changes to work patterns and other similar issues that effects workers in their working life. These agreements have no typical duration and can be terminated by either party. The elected representatives of trade unions and a system of elected shop stewards negotiate and enforce these agreements.
The trade union has two clear goals for improving pay and working conditions of employees. The first one is the promotion of London Living Wage in the hospitality sector. The LLW is akin to the NMW act but applicable in the vicinity of London on account of higher cost of living in this area. The trade unions regularly engage in dialogue with hotels and contract caterers about the LLW and acquaint them the advantages of unionization. The second was to promote more social dialogue about conditions in the hospitality sector and active campaigning for pay and gratuities (Brown, 2009).
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4. Employee representation and voice forum
Whenever there is an impact of economic changes and legal reforms such as the exposure of UK markets to global competition, the pressure of markets on public sector leads to decline in membership of unions and their influence within workplace. In the hospitality sector, employers respond to tough competition by narrowing their controls, and refuse to communicate with unions. The growth in employer sponsorship ways of worker representation and participation is representative of this drift. Since 1990, a tremendous uneven growth in the segment of organizations using nonunion voice systems has been undergoing, but the number of organizations with employee voice mechanism stayed consistently. This shows that aptitude of worker representation and participation has not finished, but instead drifted to various forms with involvement of unions. While the decrease in unionized organizations tries to demonstrate the tendency moving away from unionized voice systems, it also shows a change in employers’ preference. Moreover, inclination of organizations to replace unionized voice mechanisms with nonunion ones reflects an impression among organizations that mere unionized voice mechanisms will not provide value to their organizational or business goals. Various researches confirm that trade unions are most powerful mechanism for deciding interests of worker, and nonunion voice mechanisms generate few benefits for organizations in terms of productivity. The propensity of employers is always to use nonunion channels for maximization of control than to enhance worker voice. Since there is a large number of organizations having dual voice mechanisms than those who use only voice regimes, unions expect to accept their representation and participation from organizations that allow both union and employer goals to be accomplished (Samuel, 2010).
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The application of I&CER (information and consultation of employees) in 2005 provided a possibility to the unions in this regard. This regulation provides workers in an organization of more than fifty workers the right to form an independent body, which will have the accessibility to irrefutable information regarding the organization activities as wells as economic and financial strength. While the regulations do not precisely mention unions’ involvement, workers expect that unions would involve themselves for a dialogue with employers to promote their representation and interests (Saundry, 2011).
The United Kingdom hospitality industry is growing rapidly, but simultaneously impacted by the recent economic crisis that resulted in job losses, in the catering sector. Here, tough working conditions blanketed by low pay, insufficient training and skills and employers avoidance to interact with unions for their personal gains provide a marginal opportunity to trade unions for resolving problems of workers. Although, there is the presence of unions in this sector, but so far they are not fully successful in improving the quality of workers conditions. The fragmentation of labor market in the hospitality sector and a single employer model concerning employment law create more difficulties for trade unions despite their strong presence. Unions strongly associates by providing employees a voice support in the organization. This holds true in those unionized organizations where formal grievance practices and procedures are present. Unions also associates with a large number of voice forums by representing workers’ interest at the Board of Directors or joint committees for policy matters and deliberation. This gives a positive rating to unions. Trade unions can associate themselves for raising voice in the nonunionized organizations, as well. Since the last decade, nonunionized organizations are largely adopting joint committees, employee surveys, focus groups, grievance procedures and other variants of worker voice. Moreover, the acceptance of voice mechanisms can be an outcome of a threat of unionization. In these cases, the whole credit goes to unions. Of course, there are other factors, for example, high litigation costs may also force organizations to accept voice mechanisms such as complaint procedure. In these cases, the unions cannot take whole credit for diffusing voice mechanism. Further, grievance procedure form only a small fraction of voice mechanism, a substantial credit for diffusing voice mechanisms in nonunion organizations goes indirectly or directly to trade unions.
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Trade unions possess a powerful influence on managerial practices and organization HR policies. This impact, however, is not easy to differentiate from other influences. The trade union impact on management lasts for a certain time differs with respect to the strategic position, and financial performance of the company. For answering more precisely the question of trade unions impact on management, carefully in depth designed studies need to be researched that restrict the impact of other factors. Until there is the availability of positive results, the differences between the unionized and nonunionized organizations continue to remain symptomatic but not decisive of the unions’ impact.
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