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employee interests, including formal committees with employee and management repre-sentatives. Some employers have gone as far as allowing these committees to make binding decisions. The training and skill development required does not refer just to technical skills.
In order for employees to be able to work in teams and become more involved, they will need training in areas such as communication, conflict resolution, and decision making.
Some of the proponents of HPWS note that in order for a system to be successful, it cannot be adopted in piecemeal fashion because some of the components support each other. For example, if an organization invested additional resources in training and skill development, but did not provide for increased compensation, it is possible that employees would quit and take their additional skills to a new employer.
adoption of High-Performance systems in canada The evidence indicates that high-performance work systems have not yet been widely adopted in Canada. It appears that a majority of Canadian employers have adopted some high-performance workplace features and practices, but only a few have adopted a complete package.13 The majority maintain a traditional system in which little strategic priority is placed on human resources.14 The high-performance model seems to have been more widely adopted in the United States.
effectiveness of High-Performance Practices Whether high-performance practices have been effective is a matter of some debate. A HPWS could entail additional costs, espe-cially in the areas of training and development, and compensation. Some observers point to U.S. and Canadian research that shows high-performance systems produce positive finan-cial results.15 However, others say that “it would appear that, on average, the full adoption of this paradigm may not yield outcomes that are appreciably more positive than those yielded by practices that have long been associated with good management, including pro-fessional personnel practices (e.g., job ladders, employment security, grievance systems, formal training, above-market pay), group work organization, information sharing and accommodative union relation policies.”16 One study indicates that in-depth industry stud-ies show that there are specific industry contexts in which there is a distinct possibility that firms will benefit from the high-involvement route to high performance. The most conclu-sive evidence comes from the work on automobile manufacturing and from the studies of steel production. In these cases, there is good evidence that willing worker engagement in problem solving in a technologically sensitive production process enhances machine uptime, quality, and on-time delivery. However, the authors of the study also noted that there is clearly a need for caution with overgeneralized claims of economic benefits, and that the path ahead is very much one of studying production processes in specific worksites and industries.17
significance for labour relations The adoption of high-performance practices by some employers has implications for labour relations. Some have questioned whether high-performance practices have had negative effects for employees, including increased work-load, more stress, longer hours, and a faster pace of work.18 Unionized employers seeking to adopt features of HPWS will likely encounter union resistance to some components of an HPWS. To improve product quality and productivity, firms must pursue technological innovation. Unions will seek protection in collective agreements from technological change leading to job losses. Employers may seek contingent or variable pay plans for the purposes of increasing productivity that might include gain sharing and profit sharing.
Where the employer seeks to implement changes such as variable pay that are different from established collective agreement terms, the likelihood of union resistance appears to be high. Although employers may be able to implement some changes without the consent of the union where the changes are not prohibited by the collective agreement, the effec-tiveness of this approach is questionable.
There is evidence that union participation and support of innovation programs can improve the chances of their success. In the United States, increased employee involvement has been part of employer attempts to avoid unionization. Canadian unions fear employee involve-ment as a tactic employers might use to influence employees and weaken the union. Employers who wish to increase employee and union involvement will have to address these concerns.
implications for Practice
1. The firm’s competitive strategy has implications for its labour relations strategy; the reverse is also true. The firm’s labour relations strategy should fit its competitive business model.
Where the firm’s competitive strategy puts a premium on employee involvement and union cooperation, a strategy of union removal may not be advisable.
2. Canadian employers should be wary of copying strategies adopted by some U.S. firms, including union removal, without first considering the social, political, and legal environ-ment in Canada, which may not be suitable for some of these strategies.
3. Employers who wish to pursue high-performance work practices should consider the extent to which the current collective agreement prevents their adoption. The employer should address any such problems in contract negotiations.
4. Employers who wish to pursue high-performance work practices that do not require union approval because they are not covered by the collective agreement should con-sider the extent to which the union should be involved in designing such practices.
Although union involvement may not be required, it may increase the likelihood of acceptance and success.
competitive strategy, p. 76 concession bargaining, p. 74 cost leadership, p. 76 differentiation, p. 76 high commitment HR
strategy, p. 79
labour relations strategy, p. 76 low commitment HR
strategy, p. 79 union acceptance, p. 78 union avoidance, p. 78
union opposition, p. 78 union removal, p. 78 union resistance, p. 78
Key terms
review Questions
1. What are two key objectives of employers? In the light of each of these objectives, explain at least one process or method a company could use to achieve each objective.
2. Identify three different factors affecting an employer’s labour relations strategy.
3. Distinguish between a cost leadership and a differentiation strategy for a business.
4. Outline the difference between a union substitution strategy and one other possible employer labour relations approach.
5. Describe the implications of a cost leadership or differentiation strategy for labour relations.
6. Explain the significance of a high-performance work system for labour relations.
discussion Questions
1. Walmart is one firm that seems opposed to its employees joining a union. What are the possible reasons for this organization’s approach toward unions?
2. Generally, Canadian employers have not adopted a strategy to eliminate unions. What are the possible reasons for this?
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3. Contrast the likely desire and ability of the following two employers to oppose unionization:
(a) A fast-food outlet
(b) A publicly owned nuclear power facility
4. Why will it be difficult for some employers to adopt what is known as a low commitment approach to human resources?
5. Review the policies and practices associated with a high-performance work system in Key Considerations 4-1. Explain which of these items could lead to disagreement between a union and an employer.
Web research
LabourWatch (www.labourwatch.com) has a public website operated by the Canadian LabourWatch Association. Members of the association include the Canadian Federation of Inde-pendent Business, the Canadian Restaurant and Foodservices Association, and the Retail Council of Canada. The site provides information for employers who want to avoid or eliminate a union.
Here are some suggested activities:
1. Go to the Resource Centre tab on the site’s homepage. In the drop-down menu, select Decisions and Legislation to choose an example of a federal or provincial court decision that may have an impact on Canadian employers.
2. Under the tab Special Topics, select Union Fines and read a Related Press story that may be of interest to a Canadian company.
In November 2003 Walmart opened a new store in Weyburn, Saskatchewan. Soon after-wards, employees contacted the United Food and Commercial Workers Union (UFCW) seeking representation. In April 2004 the union filed an application with the Saskatchewan Labour Relations Board to represent these employees. The application to represent is an application for certification, the details of which are referred to in Chapter 6. This filing was the start of a legal battle that lasted until 2013.
The union sought an order from the Board to require Walmart to produce docu-ments. It was alleged that Walmart had provided managers with materials that showed Walmart was guilty of illegal practices, including a document titled “A Manager’s Toolbox to Remain Union Free.” The Board ordered Walmart to produce records and Walmart appealed this decision. On the appeal a lower court judge quashed the subpoena and in his decision appeared to suggest that the Board was biased in favour of unions.
Subsequently there were numerous comments on the situation in the media, some of which were critical of the Labour Relations Board and the provisions of the Trade Union Act that allowed a union to be certified without an employee vote. There were calls for amendments to the legislation and changes at the Board. Some critics alleged that union contributions to the NDP party which was in power at the time made change unlikely.
The Court of Appeal overturned the lower court decision and ordered Walmart to produce the documentation. The Court of Appeal also indicated that the lower court’s concerns regarding a possible bias in favour of unions by the Labour Relations Board were unfounded. Walmart attempted to appeal this decision to the Supreme Court of Canada, and this further delayed the certification application.