A group of welders is trying to decide if they should join the union or not. They have heard pros and cons about unions. As the manager of this group, you are in support of them joining the union because of its effect on productivity. What do you think the manager knows about unions that the welders may not?

Question

What will be an ideal response?

Answer 1

Unions are believed to decrease productivity in at least three ways: (1) the union pay advantage causes employers to use less labor and more capital per worker than they would otherwise, which reduces efficiency across society; (2) union contract provisions may limit permissible workloads, restrict the tasks that particular workers are allowed to perform, and require employers to use more employees for certain jobs than they otherwise would; and (3) strikes, slowdowns, and working-to-rule (slowing down production by following every workplace rule to an extreme) result in lost production. On the other hand, unions can have positive effects on productivity. Unions are believed to increase the operation and effectiveness of the voice mechanism. "Voice" refers to communicating one's concerns to management without necessarily leaving the employer. This, in turn, is likely to reduce employee turnover and its associated costs. More broadly, voice can be seen as including the union's contribution to the success of labor-management cooperation programs that make use of employee suggestions and increased involvement in decisions. A second way that unions can increase productivity is through their emphasis on the use of seniority in pay, promotion, and layoff decisions. Finally, the introduction of a union may have a "shock effect" on management, pressuring it into tightening standards and accountability and paying greater heed to employee input in the design and management of production.