Page 168 - DMGT106_MANAGING_HUMAN_ELEMENTS_AT_WORK

Managing Human Element at Work

Notes and supervisors who are ill-informed may inadvertently mislead the workers who work
under them about the current state of negotiations, the management’s objectives and so on.
In fact, it is necessary to involve managers in deciding on objectives and solutions, and such
participation is likely to ensure greater acceptance and therefore better implementation by
them.

Advantages of Collective Bargaining
It is sometimes claimed that in non-industrialized countries settlement of wage issues
through collective bargaining - especially on a national or industry wise basis - can be an
obstacle to a wage policy to promote specific economic objectives because wage rates are
not necessarily fixed on criteria designed to promote specific economic and social objectives
(other than as compensation for cost of living increases), and that they often tend to reflect
the bargaining strength of the parties or the supply and demand conditions of labour. With
some exceptions (such as Japan) wage increases through collective bargaining in Asia pay
little attention to productivity, individual or group performance and to skills. However,
collective bargaining has many advantages which have been claimed for it as a means of
resolving differences between management and employees, though it has made little positive
contribution to higher productivity and higher earnings by linking pay to performance and
skills.

Collective bargaining has the advantage that it settles issues through dialogue and consensus
rather than through conflict and confrontation. It differs from arbitration because the latter
represents a solution based on a decision of a third party, while arrangements resulting from
collective bargaining usually represent the choices or compromises of the parties themselves.
Arbitration may invariably displease one party because it usually involves a win/lose
situation, and sometimes it may even displease both parties.
Collective bargaining agreements often institutionalize settlement through dialogue. For
instance, a collective agreement may provide for methods by which disputes between the
parties will be settled. This has the distinct advantage that the parties know beforehand that
if they are in disagreement there is an agreed method by which such disagreement may be
resolved.

Collective bargaining is a form of participation. Both parties participate in deciding what
proportion of the ‘cake’ is to be shared by the parties entitled to a share. At the end of an
agreed term labour again insists on participating in deciding what share of the fruits of their
labour should be apportioned to them. Collective bargaining is a form of participation also
because it involves a sharing of rule making power between employers and unions, and this
has eroded areas which in earlier times were regarded as management prerogatives e.g.
transfers, promotion, redundancy, discipline, modernization, production norms. However,
in some countries such as Singapore and Malaysia, certain subjects such as promotion,
transfer, recruitment, termination of employment on grounds of redundancy or reorganization,
dismissal and reinstatement, and assignment of duties within the scope of the contract of
employment, are regarded as management prerogatives and outside the scope of collective
bargaining. But collective bargaining suffers from the drawback that it seldom deals with
how to enlarge the “cake”, as the way of increasing the share of each party without eroding
competitiveness.
Collective bargaining agreements sometimes renounce or limit the settlement of disputes
through trade union action or lock out. Therefore collective bargaining agreements can have
the effect of guaranteeing industrial peace for the duration of the agreements, either generally
or more usually on matters covered by the agreement.
Collective bargaining is an essential feature in the concept of social partnership towards
which labour relations should strive. Social partnership in this context may be described as
a partnership between organized employer institutions and organized labour institutions

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