Are Unions Good or Bad for Organizations? The Moderating Role of Management's Response

Employment Relations Unions Strategic HRM Voice

Unions can be good or bad. It depends on management's strategies and response toward its employees and the union.

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Are Unions Good or Bad for Organizations? The Moderating Role of Management's Response

Pohler, D., & Luchak, A. (2015) Are Unions Good or Bad for Organizations? The Moderating Role of Management's Response. British Journal of Industrial Relations, 53(3): 423-459. Read a shorter summary of this research here.

 

Union impact research has been hindered by an underdeveloped conceptualization of management response, contributing to inconclusive empirical findings. Integrating the collective voice/institutional response model with the appropriateness framework, we propose that an employee-focused business strategy is a critical moderating variable in the relationship between union density and organizational outcomes that mitigates the negative effects of unions and enhances the positive effects by sending a clear signal of management's intentions to co-operate. Using a panel dataset of Canadian organizations over six years, we provide empirical evidence to support our arguments.

Unions can be good or bad. It depends on management's strategies and response toward its employees and the union.

2018-01-15 18:34:50

Multinationals' Compliance with Employment Law: An Empirical Assessment Using Administrative Data from Ontario, 2004-2015

Governance Law Public Policy Unions

Do multinational companies comply with the law in a developed country like Canada? Our key findings based on data from Ontario suggest that unions predict compliance across all foreign MNCs, and there are systematic country-of-origin effects on MNC compliance in non-unionized workplaces.

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Multinationals' Compliance with Employment Law: An Empirical Assessment Using Administrative Data from Ontario, 2004-2015

Pohler, D., & Riddell, C. (accepted) Multinationals' compliance with employment law: An empirical assessment using administrative data from Ontario, 2004-2015. Industrial and Labor Relations Review.

Our study contributes new evidence to the literature on MNC behaviors by exploring three related questions: (1) Do MNCs comply with local employment laws in a developed country? (2) To the extent that compliance varies across MNCs, what factors are important in shaping compliance? (3) Is there a “foreignness” effect for MNCs operating in developed countries, and does this effect vary according to country-of-origin and/or union status? To investigate these questions, we compiled unique firm-level administrative data on MNC compliance with regulatory and quasi-regulatory employment practices during mass layoffs in Ontario, Canada. Adopting a research design that uses the behavior of Canadian MNCs as the comparison group, our key findings suggest that unions are a very robust predictor of compliance across all foreign MNCs, and that there are systematic country-of-origin effects on MNC compliance in non-unionized workplaces.

Do multinational companies comply with the law in a developed country like Canada? Our key findings based on data from Ontario suggest that unions predict compliance across all foreign MNCs, and there are systematic country-of-origin effects on MNC compliance in non-unionized workplaces.

2018-01-15 17:27:43

Does Pay-For-Performance Strain the Employment Relationship? The Effect of Manager Bonus Eligibility on Non-Management Employee Turnover

Employment Relations Strategic HRM

Are performance incentives a good or a bad thing for employees and organizations? We find evidence that managerial eligibility for bonuses may strain the employment relationship and increase nonmanagemnet employee turnover, unless there are also HR practices that train and incentivize managers to treat employees well.

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Does Pay-For-Performance Strain the Employment Relationship? The Effect of Manager Bonus Eligibility on Non-Management Employee Turnover

We tested the organization-level effects of manager pay-for-performance practices on nonmanagement employee turnover within the context of agency theory and equity theory—two frameworks commonly applied to understand compensation policy and practice. We also propose an alternative theoretical perspective that predicts that managerial pay-for-performance policies may strain the employment relationship and increase nonmanagement employee turnover, unless there are HR practices that train and incentivize managers to treat employees well. We compare these alternative models to establish how well each framework explains the observed effects. Agency theory and equity theory receive limited empirical support in our lagged panel data set of organizations, whereas broader empirical support is established for the strain effect of manager pay-for-performance on the employment relationship. We discuss the implications of our findings for compensation theory, research, and practice.

Are performance incentives a good or a bad thing for employees and organizations? We find evidence that managerial eligibility for bonuses may strain the employment relationship and increase nonmanagemnet employee turnover, unless there are also HR practices that train and incentivize managers to treat employees well.

2017-10-31 17:17:13

Strategic HR System Differentiation between Jobs: The Effects on Firm Performance and Employee Outcomes

Inequality HR Practices Strategic HRM

Does treating employees differently based on the job they perform affect firm performance and employee attitudes? We found that while organizations may benefit from treating employees differently, employees who were recipients of lower HR investments perceived the organization to be less fair and were more likely to leave.

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Strategic HR System Differentiation between Jobs: The Effects on Firm Performance and Employee Outcomes

Schmidt, J., Pohler, D., & Willness, C. (accepted) Strategic HR System Differentiation between Jobs: The Effects on Firm Performance and Employee Outcomes. Human Resource Management.

The purpose of this research was to understand whether firms apply different human resource management systems to different occupations within the same organization (HR differentiation) and how the extent to which they do so may influence firm and employee outcomes. We conducted two studies pertaining to these questions. The first study was based on data collected from managers, and the results suggest that firms differentiate their HR investments based on the strategic value of occupations to the firm, which was further associated with the human capital of those occupations. Differentiation in human capital was also associated with firm performance. The second study was based on data obtained from nonmanagement employees. The findings indicated that employees who were recipients of less HR system investment had lower fairness perceptions, which were further associated with higher turnover intentions and lower organizational citizenship behavior. Although the evidence from these studies suggests that firms may realize benefits from strategic HR system differentiation, managers should carefully consider how to balance the effects of differentiation on firm performance and employee well-being before implementing such systems.

Does treating employees differently based on the job they perform affect firm performance and employee attitudes? We found that while organizations may benefit from treating employees differently, employees who were recipients of lower HR investments perceived the organization to be less fair and were more likely to leave.

2017-01-24 21:56:24

Federated Co-operatives Limited: Change Management

Governance Co-ops

Federated Co-operatives Limited struggles with implementing massive organizational changes in talent management, technology, and branding.

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Federated Co-operatives Limited: Change Management

Pohler, D. (2016) Federated Co-operatives Limited: Change Management. Ivey Publishing.

In 2013, after almost three years of making organizational changes, the chief executive officer of Federated Co-Operatives Limited (FCL) wondered if he was pushing his unique company through a transformation too quickly or if he was not pushing hard enough to modernize the company. FCL was a co-operative, a remnant of a farmers’ purchasing association that had grown to become one of the 50 largest companies in Canada. However, the company’s financial success and democratic governance structure had lulled FCL into a situation characterized by outdated processes and systems. Information technology, branding, leadership, and talent management processes needed to be transformed, and a culture change was necessary to move forward. But some employees were resisting, possibly as a result of burnout due to the magnitude of change or the co-operative governance structure that complicated the process of change. The chief executive officer needed to address his employees at a questions and answers session about the progress of the transformation. What should he tell them?

Federated Co-operatives Limited struggles with implementing massive organizational changes in talent management, technology, and branding.

2017-01-24 21:55:03

Balancing Efficiency, Equity and Voice: The Impact of Unions and High Involvement Work Practices on Work Outcomes

Employment Relations Unions Strategic HRM Voice

Are HR practices that encourage employee voice and involvement in decision-making, high involvement work practices, substitutes for unions? We propose that unions and high involvement work practices and systems are complements. Greater balance is achieved between efficiency, equity, and voice when good management practices are employed in the presence of unions.

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Balancing Efficiency, Equity and Voice: The Impact of Unions and High Involvement Work Practices on Work Outcomes

Pohler, D., & Luchak, A. (2014) Balancing Efficiency, Equity and Voice: The Impact of Unions and High Involvement Work Practices on Work Outcomes. Industrial and Labor Relations Review, 67(4): 1063-1094. Read a shorter summary of this research here.

Theory and research surrounding employee voice in organizations have often treated high-involvement work practices (HIWPs) as substitutes for unions. Drawing on recent theoretical developments in the field of industrial relations, specifically the collective voice/institutional response model of union impact and research on HIWPs in organizations, the authors propose that these institutions are better seen as complements whereby greater balance is achieved between efficiency, equity, and voice when HIWPs are implemented in the presence of unions. Based on a national sample of Canadian organizations, they find employees covered by a union experience fewer intensification pressures under higher levels of diffusion of HIWPs such that they work less unpaid overtime, have fewer grievances, and take fewer paid sick days. Job satisfaction is maximized under the combination of unions and HIWPs.

Are HR practices that encourage employee voice and involvement in decision-making, high involvement work practices, substitutes for unions? We propose that unions and high involvement work practices and systems are complements. Greater balance is achieved between efficiency, equity, and voice when good management practices are employed in the presence of unions.

2017-01-24 20:32:48

The Missing Employee in Employee Voice Research

Employment Relations Voice Unions

A review of the research on employee voice in the workplace, with associated insights and recommendations for future research.

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The Missing Employee in Employee Voice Research

Pohler, D., & Luchak, A. (2014) The Missing Employee in Employee Voice Research. In Wilkinson, A., Donaghey, J., Dundon, T., & Freeman, R. (eds). The Handbook of Research on Employee Voice. Edward Elgar.

A review of the research on employee voice in the workplace, with associated insights and recommendations for future research.

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2017-01-24 20:30:12

The Employee Psychology of Retirement and Pensions

Employment Relations Retirement

Are committed employees disadvantaged by retiring too late? What do employees think of their pensions? Understanding the employee psychology surrounding retirement and pensions is important in an era where many lament the replacement of employer-sponsored defined-beneift pension plans with defined-contribution plans.

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The Employee Psychology of Retirement and Pensions

Luchak, A., & Pohler, D. (2010) Pensions as Psychological Contracts: Implications for Work Outcomes. Industrial Relations, 49(1): 61-82

Luchak, A., Pohler, D., & Gellatly, I. (2008) When Do Committed Employees Retire? The Effects of Organizational Commitment on Retirement Plans Under a Defined-Benefit Pension Plan. Human Resource Management, 47(3): 581-599

Pensions as Psychological Contracts: Drawing on psychological contract theory, we develop predictions regarding the moderating influence of the meaning employees assign to their marginal quit costs, as well as on the role of stayer perceptions and saver effects, on various work outcomes under a defined-benefit pension. Results show pension incentives can have favorable or unfavorable effects depending on whether employees perceive them as supportive relational contracts or as low-trust transactional contracts. Read a summary of this article here.

When Do Committed Employees Retire? The question of when committed employees retire is important to consider under a defined-benefit pension plan, which credits employees with benefits of lower overall value for retiring either too early or too late. We find employees with higher levels of affective commitment more likely to plan to retire later and past the age when it is most financially attractive for them to leave the organization. In contrast, employees with moderate to high levels of continuance commitment plan to retire earlier and at ages when it is most attractive for them to do so.

Are committed employees disadvantaged by retiring too late? What do employees think of their pensions? Understanding the employee psychology surrounding retirement and pensions is important in an era where many lament the replacement of employer-sponsored defined-beneift pension plans with defined-contribution plans.

2017-01-24 20:29:21

The Merit of a Points-Based Merit System at the Edwards School of Business

Employment Relations Unions HR Practices Strategic HRM

A case study of the challenges in implementing a points-based merit system at a business school.

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The Merit of a Points-Based Merit System at the Edwards School of Business

A new faculty member is engaged in a decision-making process surrounding the development of a points-based system designed to allocate merit pay at a business school. The process is forcing her to evaluate how she is structuring the allocation of her work, which is directly affecting her motivation toward coaching a student case competition team. Edwards has historically used a judgment-based approach to the allocation of merit. The case outlines the rationale used in the design of the new points-based system, discusses the potential advantages and disadvantages, and highlights the perspectives of different stakeholders throughout the process, including the union, the faculty, and senior administration. The union is opposed to merit, so has outlined fairly stringent criteria for the awarding of merit in the new collective agreement. Faculty opinion is mixed surrounding merit more generally, and the implementation of a points-based system versus a judgment-based system in particular. Senior university administration is committed to the continuation of the merit system at the university as a tool to reward outstanding performance and to retain star faculty. The individual departments at Edwards are in the midst of finalizing the standards and procedures for allocation of merit-based pay. The protagonist is uncertain about how her department will proceed in the design and allocation of points, and how it will result in her re-allocating her work tasks.

A case study of the challenges in implementing a points-based merit system at a business school.

2017-01-24 20:24:50

Employee Inclusivity and Inequality in America: The Promises and Perils of Shared Capitalism

Inequality HR Practices Public Policy Strategic HRM

Do shared capitalism practices that give employees an “ownership” stake in the companies for which they work—through profit sharing, gain sharing, share grants, or stock options—present a viable solution to address inclusivity and income and wealth inequality issues in America? Or is shared capitalism simply "old wine in new bottles"?

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Employee Inclusivity and Inequality in America: The Promises and Perils of Shared Capitalism

Pohler, D. (2015) Employee Inclusivity and Inequality in America. Perspectives on Work, 19: 18-21; 76--77.

There has been increasing interest in the promise of shared capitalism to improve firm performance, increase employee productivity, enhance employee well-being, increase employee voice and participation, and reduce wealth and income inequality. Recent research has found correlations between shared capitalism practices and many of these outcomes, particularly firm performance. However, shared-capitalism practices that increase employee financial ownership of the organizations for which they work do not usually fundamentally alter the governance structure and power dynamics inside the firm that really matter for ensuring employee inclusivity and reducing inequality at the firm level. To do so requires greater employee participation and influence over the decisions that determine the distribution of organizational benefits than is currently the norm in the United States.

Do shared capitalism practices that give employees an “ownership” stake in the companies for which they work—through profit sharing, gain sharing, share grants, or stock options—present a viable solution to address inclusivity and income and wealth inequality issues in America? Or is shared capitalism simply "old wine in new bottles"?

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2017-01-24 02:49:00