Explain Analytically How Trade Unions Can Influence Firm Performance. How Best Should Employers Deal with Trade Unions?
Explain analytically how trade unions can influence firm performance. How best should employers deal with trade unions?
Introduction
A trade union is an organisation of workers who have come together to achieve common goals such as increasing pay, increasing the number of employees which an employer hires, and improving working conditions. The trade union bargains with employers on behalf of all its members and negotiates labour contracts; the most common purpose of a union is to maintain or improve employment conditions.
There is the difficulty of measuring performance however this paper will only look to examine the effect of trade unions on a firms performance in economic and productivity terms. We will then look to analyse the different methods used by employers when dealing with trade unions and whether there actually is a best way to address them, whilst also arguing the benefits and disadvantages of each.
Trade unions have been defined as having two faces; as outlined by Freeman and Medoff in What Do Unions Do? As the basis of much of the literature surrounding unions has stemmed from this, I will be centring my discussions using Freeman and Medoff 's theory.
The power of unions rests in their two main tools of influence which restrict labour supply and increase labour demand. Through collective bargaining, unions negotiate the wages that employers must pay; unions ask for a higher wage than the inter-sectional point of the labour supply and labour demand curve. This will most likely lower the hours demanded by employers and so unions may looks to increasing the demand for labour instead using several different techniques.
Trade Unionism
Trade unions not only covers the relations between an employer and employee but also the relationship between employers and unions. Trade unions usually look at the collective aspect of these relationships; this is confirmed from the
Introduction
A trade union is an organisation of workers who have come together to achieve common goals such as increasing pay, increasing the number of employees which an employer hires, and improving working conditions. The trade union bargains with employers on behalf of all its members and negotiates labour contracts; the most common purpose of a union is to maintain or improve employment conditions.
There is the difficulty of measuring performance however this paper will only look to examine the effect of trade unions on a firms performance in economic and productivity terms. We will then look to analyse the different methods used by employers when dealing with trade unions and whether there actually is a best way to address them, whilst also arguing the benefits and disadvantages of each.
Trade unions have been defined as having two faces; as outlined by Freeman and Medoff in What Do Unions Do? As the basis of much of the literature surrounding unions has stemmed from this, I will be centring my discussions using Freeman and Medoff 's theory.
The power of unions rests in their two main tools of influence which restrict labour supply and increase labour demand. Through collective bargaining, unions negotiate the wages that employers must pay; unions ask for a higher wage than the inter-sectional point of the labour supply and labour demand curve. This will most likely lower the hours demanded by employers and so unions may looks to increasing the demand for labour instead using several different techniques.
Trade Unionism
Trade unions not only covers the relations between an employer and employee but also the relationship between employers and unions. Trade unions usually look at the collective aspect of these relationships; this is confirmed from the
References: Machin, Stephen. (1996). Trade Unions and Financial Performance.Oxford Economic Papers. 48 (2), 213-241. Badigannavar, V. (2007) ‘Does Labor-Management Partnership Deliver Mutual Gains? Evidence from UK Public Services’, Advances in Industrial and Labor Relations Kelly, J. (2004) ‘Social partnership agreements in Britain: Labor cooperation and compliance’ Industrial Relations, 43(1): 267-292 Zafiris Tzannatos. (2008). Trade unions, collective bargaining and macroeconomic performance: a review. Industrial Relations Journal. 39 (4), 258 - 295.