Fractional Bargaining
Professor Bruce Fortado
University of NorthFlorida
MAN 4401/6411 Labor Relations
The formal and periodic centralized labor-management decision-making in pattern bargaining and company wide bargaining has a micro-level counterpart. The informal and continuous labor-management decision-making that takes place at the work group and plant level has been termed “fractional bargaining” (Kuhn, 1961). Some of these agreements are reached within the framework of the grievance process. Other agreements between the parties have become local work rules. In other cases, the parties reach an agreement to bend the rules and keep this quiet (Dalton, 1959: 111). Still other accords consist of unwritten agreements on how things will be handled in the future. What little training most supervisors have historically been given in contract administration has focused on how matters are handled in arbitration (Kuhn, 1961: 37). This left them largely unprepared. The imaginative use of fractional bargaining can greatly improve work relationships, providing the parties with much needed freedom from the legalisms and bureaucratic restrictions of centralized decision making (Kennedy, 1954: 291).
The description of interests being handled in contract negotiations, and rights being taken care of in the grievance process, is a bit simplistic. No contract is complete. Some situations are impossible to foresee. As conditions change, new issues may surface. Some vague or ambiguous language may be agreed upon in contract negotiation in order to reach a settlement and avoid a strike. This means these passages contain issues that must be sorted out during the life of the agreement. Moreover, the English language is simply not clear enough to avoid all possible misunderstandings. For all these reasons, the parties must negotiate during the life of the contract, rather than just applying the contract. In the prior package of notes, the process of filling in the gaps was called “interpolation,” which is different from “interpretation.”
Neither party can exert the costs involved in a strike or a lockout against the other in day-to-day negotiations. Both sides, however, still have bargaining power.
The workers can apply pressure by engaging in wildcat strikes, slowdowns, flooding the grievance procedure, working to rule (i.e. following procedures so precisely the work process is slowed), turning in the employer for health and safety violations, sabotage, sickouts, refusing overtime, and rawhiding (i.e. playing dumb). These methods detract from productivity, consume managerial time and energy, and may worsen quality. Some people think of such activities as solely existing in unionized settings. It should be kept in mind some of the earliest field studies documented output restriction in nonunion manufacturing (Roethlisberger and Dickson, 1939; Mathewson, 1931). A union simply provides greater structure and elected leaders for such efforts.
The union can function like a pest that keeps stinging the large and powerful employer. Small actions can foreshadow future problems. Further, as the story of Gulliver illustrates, even a giant can be overcome by a determined and organized group of little people. The true costs of the workers’ output restriction may be powerfully conveyed when they corkscrew production from very high to very low levels from one day to the next (Kuhn, 1980). It can be very enervating for supervisors to come to work not knowing what to expect from one day to the next. At the same time, the workers can vent their frustrations and assert greater control over their own destiny. The process of applying pressure tactics can be so emotionally intoxicating, the union leaders need to watch out for members who may get carried away (Kotlowitz, 1987: 15).
In some instances, the union will ask for something like the toilets to be painted pink, when in fact they want the aisles to be narrowed (Kuhn, 1980). This indirect approach might work if the first item demanded is large and costly, while the second is smaller and less costly. Indirection could also allow management to save face when they refuse to do the stated complaint, and comply with the real concern behind the scenes. If what the workers really want is formally out of bounds, this sort of indirect pursuit of an issue may be the only avenue available (Gouldner, 1954).
The stewards and committeemen can offer inducements as well. For example, unforeseen production requirements might be met by the flexible use of workers and working time (Kuhn, 1985: 255). A much needed worker may be brought over without using formal channels, formal work classifications may not be observed for a time, work pace may be increased, and normal break time can be used to get the job done. In return, the union representatives and the workers expect some movement on their issues. Many union leaders have learned more can be obtained via swaps than by being tough (Dalton, 1959: 116). Both sides need to learn to recognize situations that are critical to the other.
The managers also have bargaining power. Management can wield the heavy costs of lost jobs and wages involved in subcontracting and layoffs. Transfers and mandatory overtime can also provide leverage where the contract gives management power in these areas. The supervisors also have the managerial prerogative to set reasonable rules. When they are concerned about a matter, they can implement a rule to deal with the matter. The company normally has more resources to support arbitration. This leverage can be put into play by refusing to settle cases, forcing the union to expend time and money to enforce the contract. Eventually, the union may have to pick and choose what cases to pursue with its dwindling resources (Dalton, 1959: 145).
The delay involved in the appeal process also gives the managers some advantages (Fortado, 1991: 87-88). In essence, supervisors can impose their will in the short term. A worker can be made an example of in various ways. For instance, a worker may be given distasteful jobs, frequently switching him/her from bad job to bad job, or imposing unjust discipline upon him/her. A touring manager might fire a worker to get the remaining workers to exert themselves (Whyte, 1951). Such actions can alter the tone in making workplaces, because many workers will not want to fight to have his/her rights restored. The grievance procedure often offers something less than complete justice. Unlike court, the union grievance procedure does not include compensatory or punitive damages. A grievant may have to fight for many months if not over a year merely to restore his/her original condition.
On the inducement side, managers may provide informal rewards for those who cooperate: such as, allowing extra break time, looking the other way on small thefts and work rule violations, looking the other way on disciplinary violations, and the use of company materials, equipment and time for the employees’ personal projects (Dalton, 1959). Many managers may find making informal and secret deals desirable, because they can regain some of the power they lost when their organizations became more centralized bureaucracies (Kuhn, 1961: 31). Both sides may find it helpful to get out of the restrictions of the central accord, substituting personal relations for contractual relations (Dalton, 1959: 112). If these informal deals and rewards get out of hand, a periodic crackdown can be used to tighten things up. Conditions may later return to “normal,” because these informal arrangements are a key part of getting the work done.
Human relations researchers noted very early on that workers were much more receptive to decisions when they were involved in the decision-making than when decisions were dictated from above (Whyte, 1948). In keeping with this, upper level managers must be very cautious about unilaterally changing rules and policies. While greater uniformity may be the result, the workers and union leaders will normally greatly resent and resist the loss of their hard won gains (Kuhn, 1985: 255). The workers and union representatives develop norms regarding how the managers should interact with them based on their past experiences (Gouldner, 1954). Supervisors may make deals with their group to overcome a short-term production problem, not thinking of the long-term consequences. If they later revoke or tighten up what the workers now regard as their rights, one can anticipate problems. When the leadership of either the union or the company changes, it is also possible new policies will be implemented that disturb the informal arrangements made in the past. In such situations, people may feel their good faith informal bargains have been violated. Unilateral decision-making is being substituted for bilateral decision-making. Very harsh reactions can be expected when managers are perceived as exerting tighter discipline to show they are the bosses, and they care more about the almighty dollar than their men (Gouldner, 1954). A period of conflict can be expected to occur, until a new understanding is achieved. The people best able to change conditions are those who originally negotiated the conditions. This realization has seldom been recognized in practice (Kuhn, 1985: 255).
Some managers approach contract administration in a defensive way, thinking the managers have the right to manage and they must strive to win any dispute that arises. Alternatively, managers can view grievances as problems to be solved, not arguments to be won (Kuhn, 1961: 31). Under this problem solving approach, the grievance procedure can be used to identify problems, implement solutions, and thereby prevent future difficulties. Can one ever win a conflict when there is an ongoing relationship? There are many managers who think they can get ahead and stay there (Fortado, 1991: 94; Fortado, 1994: 268). As the economy fluctuates, and time passes, will the workers eventually be able to get even later? Some managers have found it pays to work with their groups rather than trying to defeat them (Fortado, 2001). Many managers do not have enough formal authority and rewards to adequately get their jobs done (Dalton, 1959). This means informal local arrangements, possibly secret ones, can be very beneficial. The more illicit the agreement, the more tightly it will bind the parties, both of whom must keep it quiet (Dalton, 1959: 117). Such agreements fill the gap left by the formal design. The key question is, do the informal deals provide a useful supplement to formal activities, or are they contradictory and harmful (Fortado, 1991: 93; Fortado, 1994: 270-71)? There is no universal answer to this question. One must judge what conditions exist on a case-by-case basis.
Some work groups are undoubtedly in a better position to pursue their interests than others. Some groups hold critical positions in the production process, so they have bargaining power. Some workers have special skills that make them very valuable, because there are few other workers like them in the job market, and their contribution is crucial in the production process. Some groups have more shared grievances than others. Some groups have better communication channels than others. Some groups have more status and prestige in the workplace than others.
Field studies suggested that the work groups who had power tended to exert it (Sayles, 1958; Sayles and Strauss, 1967). These groups often have more rights than those provided for in the contract. Conversely, groups that do not have much power may not even get all of the rights provided for in the contract (Kuhn, 1985: 256). Foremen frequently take advantage of groups that lack power.
Does fractional bargaining provide greater workplace democracy or will it foster chaos? If a group pursued interests under the control and direction of the union leadership, it might help many workers, and provide greater democracy. If a group pursued its own parochial interests, and paid little attention to the union leadership, it could create chaos. In sum, fractional bargaining holds the promise and the potential for both greater democracy and more chaos (Kuhn, 1961).
What type of day-to-day treatment do the workers desire? The workers want to be heard, but this alone is not enough. The impartial adjudication offered by the grievance procedure meets some additional needs, but this also is not enough. Post hoc adjustments seldom totally remedy injustices. Putting a person back to his/her original condition, or providing some back pay, often do not do the trick. Dignity and respect are lost during the delay involved in the grievance process. The workers would like to have very rapid hearings and adjustments. Beyond this, they would like to be consulted ahead of time (Kuhn, 1961).
The employees and union officers would like to establish a rapport where their interests are democratically taken into account in the normal decision-making process. Such involvement will provide greater prestige than the workers have had heretofore. In sum, how issues are handled can be as important, if not more important, than the issues themselves (Whyte, 1948). The process necessarily conveys important messages in terms of status, face, self-esteem and respect. Every decision reflects the current state of the relationship. For instance, if a supervisor will bend a rule, regardless of which specific rule it is, a certain rapport evidently exists with his men. By bending the rule, the supervisor recognizes the men and shows a willingness to accommodate their interests.
There are certain issues, though, that the workers and union officers want nothing to do with. They do not want to be consulted on hot topics like discipline and unpopular assignments. The union officers dealing with grievances can hardly be involved in making the decisions that may favor one worker over another or lead to a grievance where they must represent the employee in question.
Inside Strategies In the 1986, the AFL-CIO issued a publication entitled The Inside Game: Winning Workplace Strategies. The difficulties posed by new employer tactics were recognized. Long before bargaining began, some employers would claim financial distress. A publicity campaign was sometimes started with both the workers and the surrounding community. Huge concessions would be demanded in bargaining. Surface bargaining was sometimes employed. The employer would go to impasse and implement the last and best offer. If the workers struck as expected, replacement workers would be brought in. In some cases, a decertification election would be initiated after a year had passed. In other instances, contracts were abrogated when bankruptcy was declared. Unions were being broken. Instead of leaving the workplace and allowing scabs to be brought in, the AFL-CIO went back to the past to describe how unions could win by having their members work and apply internal pressure tactics.
A key initial step is involving the workers. An organizing committee should be formed to orchestrate the inside game. Whether one calls the recruitment of activists “one-on-one,” internal organizing or building solidarity, a large network of supporters must be formed. A “Solidarity Fund” should be built up to support any worker that is unfairly suspended or discharged. Donations can be obtained both externally from other unions and internally from one’s own union brothers and sisters. Research, education and communication must be undertaken to get out the word about how unfair what the employer has insisted upon is.
As far as the internal strategies go, the aim is to take the employer out of known and predictable territory. Informational picketing, daily rallies, and wearing symbols of solidarity (hats, buttons armbands, bumper stickers and t-shirts). As mentioned earlier, the employees may work-to-rule, refuse to work out of classification, cite safety and health violations, take sick days, take their own hand-fashioned tools home, refuse overtime and call-ins, and take sick days in groups. Friends in the community may flood company phone lines and simultaneously draw attention to the unfairness of what is going on. Community groups should be contacted to obtain support. Media events should be held to get key messages into the press. Other labor unions should be solicited for their support. If the contract no longer applies, the grievance and arbitration procedures may no longer be in operation. Using the right to concerted activity guaranteed by law, five workers may notify their superiors that they are going to present a grievance case to management. Since there are no existing procedures, it may take hours to negotiate how things should be handled. One company sent the first five workers home, only to be confronted by another five and another five.
The employer may become tired of the internal strategies and lockout the workers. This is legally preferable to the union to a strike. Under a lockout, only temporary replacement workers may be brought in. Further, the workers may be entitled to unemployment compensation that they would not receive in a strike.