Impact of Collective Bargaining
It is important for an enterprise to recognize that the relationship between
the employer and the employees is the organization’s foundation. And
negotiations and agreements are part of development of harmonious relations
between the two parties. Negotiations vary depending on the purpose of either
party. And one of the most used types of negotiation is the collective bargaining.
Collective bargaining is the process of voluntary negotiation between the
employers and the employees in which is aimed at reaching agreements about
regulating working conditions. The employees are typically represented by a
trade union while a single employer or a lawyer represents the stakeholders.
Collective agreements usually cover issues such as wages, labor contract,
benefits, health and safety, and rules of the workplace. Once the both sides have
reached an agreement, it is signed and legally acceptable for certain period of
time.
Collective bargaining roots in the late 19th century when workers began to
fight for more rights in terms of employment. Many skilled workers started to use
their skills as bargaining tools in forcing their employers to meet their workplace
conditions. While other workers solely rely on their numbers in creating general
strikes fighting poor working conditions. Thus, marches and agitation moved
several labor pioneers in starting to establish a collective bargaining system so
that labor negotiations would run smoothly and the production would not be
halted.
However, according to a UK study published in May 2002, the presence of
trade unions and collective bargaining relationships has little effect on workplace
performance. The report entitled “Collective Bargaining and Workplace
Performance” implicates multivariate statistical methods in modeling the
relationship between the collective bargaining and key outcomes in controlling
the effects in larger number of possible influences. Also, the study was
stimulated by the changes in collective bargaining, notably simplifying the
arrangements moving towards ‘single-table bargaining’ wherein several trade
unions negotiate with the management as one group. Moreover, the study maps
the collective bargaining agreements in linking to two measures of performance –
the perceptions of financial performance and the quality of employee relations
climate.
Financial performance is rated by managers in relation to the industry
average. Union recognition and the nature of bargaining arrangements are
irrelevant in assessing the performance of the employees. While the employee
relations climate is rated by the overall relationships at the workplace. In this
case, it gives an insight to the managerial practices and interactions among co-
workers.
Moreover, collective bargaining does not guarantee protection on the
employees. Not all issues raised during the bargaining process would end up in
labor agreements. There are demands of the employees that the management
cannot provide. When a gap exists in the bargaining agreements between the
trade union and the management, the party with the higher frequency of
agreement terms adapt to the closer possible solutions to the issues raised. An
example is when the employees demand job security, the management responds
by giving work flexibility rules.
Cross analysis of collective bargaining on countries overseas are already
been conducted through the years. However, due to differences on wages
legislation and socio-cultural factors, there are no conclusive results in
generalizing the effect of collective bargaining in the economy of every country.
Collective bargaining develops the mutual trust and relations between the
employers and the employees. It does not only provide protection and guarantee
on either party but it elevates the level of respect on treating each other. The
employees should demand what they deserve while doing their best in terms of
accomplishing their work. And in the part of management, they should treat the
employees humanely because they profit from the productivity of the employees.
It is a give and take relationship, and they definitely need each other.
References:
Impact of collective bargaining on workplace performance assessed, September 2002, http://www.eurofound.europa.eu
Jensen, Uwe, and Sussane Rassler, The Effects of Collective Bargaining in Firm Performance, November 2007 Cramton, Peter et. al, The Effect of Collective Bargaining Legislation on Strikes and Wages, May 1999
Credit:ivythesis.typepad.com
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