MHR 520

Module 5 (the Neoliberal, the Pluralist, and the Critical/Marxist paradigms) - not a midterm - Lecture 06 & 07

Theoretical (explanations) paradigm (what produces different theories) - idea, assumptions, views, beliefs, morals,
norms - cluster and simplify to see patterns - paradigms:
1.​ Neoliberal/neoclassical economic: standard neoclassical economic model - views are supported by the
logical framework of this model - pro-free-market (free contracting) - limited government intervention
Market drives behavior - supply and demand (downward sloping in general because the person wants to
maximize utility function (self-interest)
- (upward sloping) all possible relationships between price and quantity demanded in the marketplace - inc.
willingness to sell with a high price [quantity goes up] - equilibrium: one price where the equanimity demanded
and applied is the same)
Equilibrium (quantity demanded and supplied is equal) results in maximization of utilizing quantity - achieved
“naturally” by (buying and selling - individual of freedom and choice) market forces, individual choices, contracting
Monitor the labor market and let it run its course - good comes from it
At a low (wage) price - more demand than supply - below the equilibrium
-​ Excess demand - suppliers raise their prices and find a willing seller naturally b/c people are maximizing
their own utility - driven by efficiency
-​ Excess supply - increasing wages increasing the benefit of working - at Qmin loss of jobs
-​ Government intervention (regulation) of minimum wage drives up the cost of labor
-​ Could be safety laws, unionization laws, discrimination
-​ Assumptions: it isn’t sustainable for an individual employer to push the market value down - workers will
just leave - workers are competing against each other but - moral assumptions - the employers aren’t as
numerous and they can drive market prices up and down (imbalance of power ER>EE)
-​ Positive - what is - how the world works
-​ Perfect information - workers knowing alternative jobs - market wage value could be derived to its
max
-​ Perfect rationality - “I’m better off working somewhere else” - choice-making
-​ Perfect competition - lots of places to work - an infinite amount of buyers and sellers
-​ Perfect mobility - lack of rootedness of going wherever they’d like and leaving when they want -
when there’s a lack of bargaining power goes up
-​ Normative - what ought to be - imposing a judgment based on beliefs (right and wrong)
-​ Value of individual free choice - economic freedom
-​ Efficiency is valued in the supply and demand model

2.​ Pluralist - addressing the power imbalance - markets left on their own are flawed - there can be lots of jobs
while including morals
-​ The opposite of neoliberal
-​ Real-world (balance) is full of workers/employers that don’t have perfect information, rationality,
competition, mobility
-​ Inequality of bargaining power - coerced choices - employers have the bargaining power
-​ Natural force in the market of downward pressure on what the workers get - going back to the 20th century
- allowing employers to get harder on employees
-​ Individual values and efficiency are important (there is value in neoliberalism) but there are other values
(safe working conditions, child labor) that could be a reason for intervention in the market (no arms cut off
at work, children cannot freely sign a contract of employee) - bringing in more morals and principles

3.​ Critical/Marxist
-​ Capitalist (production is in commodity form [everything is produced for the purpose of exchange - has a
value a use value and an exchange value]) social system
 -​ Labor theory of value - Value [$ = labor quantity] of all things is the amount of labor (trace the labor back in
the capital material inputs - the mount of labor fed forward) embedded in it (labor value traces forward from
the machine)
-​ Capitalists - people who organize the production of commodities - they have capital - wealth - value (ability
to get means of production) - have power and leverage - excluding - start with value and buy: means
(inputs - commodities) of production + labor = commodity - they don’t pay for and fully buy labor value:
value is the amount of labor put in - it’s impossible to buy labor - they buy a special commodity (LABOUR
POWER - worker’s ability to work - commodity produced for exchange [commodified labor])
-​ Commodified labor - every time people are working for capitalists they are producing more value than they
are getting - workers can’t be reproduced and that is their value
-​ Mass surplus - workers create surplus value when working in capitalism - the capitalist gets the surplus
value
-​ Conditions of capitalism: 1) Workers must be free to sell their labor power 2.) Workers need to be
dependent on selling labor power (eg. private property) - enabling capitalists (class struggle
shaping this)
It has now been pushed back and changed - people reject the capitalist model.

Reading 05

1.​ The price theory model - a general neoclassical model - the price of a commodity in a competitive market
is determined by its supply and demand
​ The supply of labor and the demand for labor determine the equilibrium wage and the quantity of labor
utilized
Quantity of labor that is available at a particular wage - encouraging non-workers to enter the labour force and to work
more hours employers have no incentive to pay more than the equilibrium wage

Perfectly competitive environment - perfect and costless knowledge of the market (wage rates and job openings) -
they would be completely rational - optimal wages and work/leisure - numerous employees and employers -
employees would be perfectly mobile and able to change jobs without any costs - nobody would act in concert
(collaborating/coordinating actions that affect the market)

2.​ Minimal Terms and the Standard Objection

Minimal terms: provide a benefit to workers and impose a cost on employers - required by the government
[minimum wage, maternity rights, safety, info about plant closings, severance pay, provisions for
retirement/unemployment, health insurance, etc.] all other things being equal (minimal term added to the wage
package, both supply and demand go up)
Standard objection: the effects of an external (not caused by supply and demand) wage increase on the labor
market.
 In the short-run: increasing w1 to w2 reduces number of workers
hired from q1 to q3
-​ Minimal wages don’t benefit workers overall (overall benefits outweigh the overall costs or negative effects)
-​ Higher wages may lead to other workers losing their jobs
-​ Excess supply of labor creates competition for jobs, which may push wages back toward the original
equilibrium level
-​ Wages retuning equilibrium depends on whether employers can offset the wage increase caused by the
minimal terms with reductions in other parts of the wage package (e.g., not possible with a minimum wage
job

minimal terms may cause short-term benefits for some workers, but overall they lead to negative consequences
Counteracting the effects of minimal terms: Workers and employers will find ways to counteract the desired effects
of minimal terms (eg. mandatory wage increase - employers may cut wages in other parts of the wage package:
reducing bonuses, benefits, or other non-wage perks) to balance out the costs - employers do not want to pay
them more money than they have to

Economic forces encourage this response: The "excess supply of labor" (more workers available than jobs) puts
pressure on employers to reduce wages or adjust the overall compensation package. In this situation, employers
may be more likely to find ways to counteract the wage increase imposed by the minimal terms

Worse off after the change: when the wage/labor situation returns to equilibrium after the minimal term is imposed
workers/employers may be worse off than if the minimal had never been implemented - this is b/c: workers might
receive higher wages in one part of their compensation like maternity leave reducing their overall wage

Perfect competition argument: where employers/workers can freely negotiate wage packages, they would have
negotiated that before the government imposed the minimal terms - the government’s intervention with minimal
terms disrupts the wage package they would have preferred

Illusionary benefits: benefits are coming from hidden trade-offs

Karl Marx's Capital

People only see goods for money and money for goods
1.​ Commodities as social objects: products of labor don’t just represent labor by social relationships between
people - the relationship is seen in the product itself rather than the value of the social labor behind it
2.​ Commodities as both physical and social: the social meaning and value of a commodity an hidden beneath
its physical appearance
3.​ Commodity fetishism: people worship (like gods having their own independent existence separate from the
humans who created them) commodities as if they have value by itself - forgetting the human labor that
went into it - getting the thing will make you happy - it isn’t it’s own dependent thing though - everyone
works behind the commodity and then it goes into the market as this thing
 4.​ Mysterious or fantastic: the idea that their value is hidden by the way people perceive them (exchange of
goods)

●​ “The sum total of the labor of all these private individuals forms the aggregate labor of society.” In other
words, society's entire economic output is the combined result of all the labor done by all the workers.
●​ in a capitalist society, they don't directly work for the benefit of society as a whole. So, their individual labor
doesn't automatically connect to the labor of other people or the needs of society at large
○​ The value of their product (what they’ve worked on) is determined by the market, which reflects the
total labor of society
●​ labor of private individuals becomes part of society's total labor - This is where exchange (buying and
selling goods) comes in.
●​ Marx calls these material relations between persons and social relations between things because, through
the act of exchange, the social relations (the connections between workers and how their labor fits into the
economy) become hidden and appear as just material relations (things being exchanged).

The State, Neo-conservatism, and Industrial Relations pages 1-3

●​ Keynesian economics: emphasizes the government’s role in stabilizing the economy and managing
recessions
○​ During downturns, governments should - Spend more money, Cut taxes, Stimulate demand and
reduce unemployment
○​ During growth, governments should: Cut back on spending, Avoid inflation
●​ Gramsci's idea of "hegemony" is about how a ruling group can get people to agree with their political,
economic, and cultural ideas, not through force, but by getting them to believe these ideas are good and
natural. For this to happen, the ruling group’s ideas must connect with the values that people already hold.
○​ The ruling class makes concessions - to lower working classes in material, $, and rights - gaining
the consent of the working class (capitalism is a conversion of exploitation - conversion and
consent to the working class submitting themselves to this)
■​ Using idealogy programming - what a good society is a molded belief from society - but they
promote capitalism

Lecture 08 - The objectives of the employment relationship

Efficiency and effectiveness - everybody has their need/wants met

Equity - fairness - measures of treatment - voice

Three main objectives: efficiency, equity, and voice: fundamental goals - the geometry of the employment
relationship

1. Efficiency - work hard and effectively for productivity - produces more wealth - making more with less
-​ free markets (potentially Pareto efficiency [PPE])
-​ Recall:
-​ Every perfectly competitive equilibrium is pareto optimal
-​ Economic welfare is maximized through the invisible hand of competitive markets, supported by well-defined property
rights, freedom of contract, and tort law, with the Coase Theorem (optimal efficiency occurs in competition regardless of
initial property rights distribution, assuming no transaction costs).
-​ "invisible hand" - when people act in their own self-interest in a free market, it helps everyone by making the economy
work efficiently
-​ In the extreme, when everyone is a free rider, no public goods will be produced even if the aggregate benefits outweigh
the aggregate costs.
-​ Aggregate output allocation (growing the pie) - it is pure truth that things will always be fair and efficient -
somebody’s utility going up and everyone stays the same is an increase in happiness - society should aim
 to not make somebody else worse off - efficient [increasing utility somewhere without it going down
anywhere - gaining more somewhere than losing more somewhere else])
-​ Freedom of contract - imagine everything is perfect - if the real world has imperfections - need to increase
efficiency by interventions in the free market (other than using the free market) - improving information to
make things closer to perfect would be an intervention to increase efficiency
“ALL of the above make it logically feasible, even within neoclassical economic theory, to increase “efficiency” (as
defined within neoclassical economic theory) by deviating from “purely” “free” market, opens door for debates
about different models of governing workplace and employment relationships”

2. Equity (a measure of treatment) - 1) minimum standards of treatment - baseline 2) distributive notions of justice
- eg. men getting paid more than women 3) procedural - eg. you can only be fired when warranted.

Arguably equity-enhancing employment conditions:

​ Various employment standards; min wages; maximum hours; health/safety protection; child labour
protection; various forms of insurance protections; fair distribution of income; fair balance of work/remuneration;
non-discrimination and inclusion.

Justified by various theories of ethics (framed as human dignity), religion, and political theories of justice:
-​ Ethics: Emmanuel Kant - “always treat humanity, whether in your own person, or in the person of any
other, never simply as a means, but always at the same time as an end.” Never violate human dignity. -
Aristotle - people have a moral right to pursue human capabilities - many of these seem clearly linked to
work and employment
-​ Religion: Catholics and Muslims - promote fairness in working
-​ Political: provide means to self-actualize and self-develop - Rawlsian theory of justice (conditions on
acceptance of inequality: neutrality is okay when the worse off is made better off - equity and fairness will
always be fundamentally important) liberation (personal freedom - sometimes people can be mistreated by
another - still need fairness) -

3. Voice (an act) - say, input, speech - ability to exit (drives productivty/good outcomes) unethical situations (high
turnover, lack of motivation - putting pressure on th employer to correct their behavior) - this isn’t enough: they
need to need to use their individual agency and exercise their ability to change their situation - voice/bargaining
power/decision-maker - for self-actualization and self-determination. This influenced lots of studies:
– Cause/effects of voice
– Unions as “voice”
– HR/OB – the importance of employee voice for good performance
– Common (narrow) theme – effect of voice on efficiency. This is not our
sole concern
-​ Unions are a mechanism of voice
-​ Voice enhances efficiency/effectiveness - voice is self-determination
-​ Individual and collective - politically (voiting) - workplace (industrial democracy)

Elements of voice:
1.​ industrial democracy: Heckscher’s 4 core necessary rights at work: 1) due processes - how things will get
decided 2) information 3) speech 4) association - right to join or form groups (trade unions or advocacy
bodies)
-​ Industrial and political democracy enforce each other
-​ when workers don't have the power to negotiate with their employers (like in situations where employers
have all the control), industrial democracy helps level the playing field. It gives workers the right to
participate in association, which balances the power between employers and employees.
-​ Limiting the spillover of employer power into the political arena
 2.​ Individual employee decision-making - self-determination, autonomy, participation in decision-making, and
self-governance for human dignit7
-​ Empirical evidence people want a voice
-​ US workers want a representative to deal with managers - something collective to bargain with managers -
it can be more than just unions
-​ Can be achieved an an individual level, with employee discretion, input, responsibility for some decisions,
etc.

Reading 06 - Chapter 1

Objectives of the employment relationship: efficiency, equity, and voice.​

Efficiency (maximizing profits):

●​ Focuses on economic performance and effective resource use.

●​ An objective for employers to ensure productivity and profitability.
●​ Wasteful (ineffcient) - someone improving without making someone else worse off
●​ Pareto optimality - when no one can be made better off without making someone else worse off
○​ Every perfectly competitive equilibrium is pareto optimal
○​ Economic welfare is maximized through the invisible hand of competitive markets, supported by
well-defined property rights, freedom of contract, and tort law, with the Coase Theorem (optimal
efficiency occurs in competition regardless of initial property rights distribution, assuming no
transaction costs).
○​ "invisible hand" - when people act in their own self-interest in a free market, it helps everyone by
making the economy work efficiently
○​ In the extreme, when everyone is a free rider, no public goods will be produced even if the
aggregate benefits outweigh the aggregate costs.

“Consumers, workers, corporations, suppliers, investors, and other economic agents will maximize their individual
welfare and profits. If they can interact as equals in competitive markets, pursuit of their self-interest yields socially
optimal, efficient outcomes that cannot be improved via government intervention or other means. Unless the
textbook assumptions are violated, laissez-faire economic and legal policies allow freely adjusting prices for inputs
and outputs to signal scarcity and relative worth and guide the participants to efficiency, profit maximization, and
economic prosperity ”

“Economists have pointed out that labor market imperfections give employers more bargaining power than
individual employees, leading to unhealthy competition among workers. Globalization and mobile capital have
strengthened this power in certain industries. Factors like internal labor markets, pension plans, and
employer-specific health insurance also make it harder for workers to switch jobs, increasing employers' control.
This power imbalance can result in poor working conditions, low wages, and exploitation. These issues can harm
efficiency by reducing trust and motivation. To improve efficiency, modern human resource management stresses
fair treatment and employee involvement, as these can reduce turnover, boost loyalty, and enhance performance.
Employee voice, often supported by unions, can improve productivity by addressing issues like information gaps
and unfair procedures”

Equity (instrumental standard of treatment [extrinsic]):

●​ Fair treatment in wages, benefits, job security, job safety, and non-discrimination.
●​ Provides workers with essentials like food, shelter, health care, and leisure.
●​ An objective for labor, ensuring fair conditions.
 ●​ Inputs(effort)=outputs(reward)
●​ Requires: minimum standards, distributive justice, and procedural justice
●​ Religion agrees: islam, catholicism
●​ Political theory of justice - John Rawl: “eryone is entitled to a minimum of resources and to equal
opportunities-in the workplace this amounts to minimum material standards and policies of fair,
nondiscriminatory treatmentP”
●​ “the lack of equity-discriminatory treatment and a lack of minimum standards-is counter to the basic ideals
of political democracy.”
●​ John rawl on one end and Nozick’s “achievement of justice through libertarian rights of individual freedom
and private property in the tradition of John Locke.” - still theory that emphasizes theoretical justice
○​ Libertarians argue that employers should be free to fire workers at any time, but critics say this
undermines workplace equity and equal opportunity laws, and violates respect for employees'
dignity. Unjust dismissal protections are seen as essential for fairness and preventing abusive
firings for personal reasons, challenging the morality of the employment-at-will doctrine.

Voice (intrinsic):

●​ Deserve voice stemming from: political theory, religious thought, human dignity,
●​ and elsewhere, extending voice into the workplace is a "moral imperative"
●​ Employees' right to participate in decision-making.
●​ Valued as an intrinsic (stimulation, satisfaction, interest in a task, and selfdetermination or repsonsibiltiy)
good, important in itself for democratic societies.
●​ Relevant regardless of its impact on economic outcomes.

“This conception of voice has two elements: industrial democracyrooted in political theories of
self-determination,and employee decision making that stems from the importance of autonomy for 24 I
Employment with a Human Face human dignity”

●​ Industrial democracy: freedom of speech is necessary for meaningful voice in the determination of working
conditions based on the political principles of democracy. This must be backed up by three other
protections: due process (can only be disciplined for just cause)
●​ 2) theology or moral philosophy - human dignity:to exercise agency - autonomy and self-determination
○​ Kant - self-governance - basis of human dignity - free-speech, participation in workplace
decision-making - a moral obligation
○​ Stake-holder throy of the corporation - employees have a mrl interest or stake in the company and
are entitled to voice - stemmed from property rights, “Once one
○​ admits that property rights are not unrestricted because of restrictions against
○​ harming others, then multiple interests automatically enter into the equation
○​ of rights”... “Donaldson and Preston (1995) assert that employees' interests, whether based on
effort in contributing to the development of a company or on employee needs, fit
○​ into standard models of distributive justice.”

Beyond efficiency, beyond equity

“Barbash (I 9 84) sees industrial relations as resolving conflicts between management's drive for
cost discipline (efficiency) and labor's objectives of price, equity, effort, and power (PEEP). "Price" is labor's
compensation, "equity" is distributive jus- tice or fairness, "effort" is the degree of on-the-job exertion, and "power"
is "having a voice in the terms of employment" (Barbash I984, 40). Price and effort, however, are inextricably
linked to equity and efficiency. As such, Barbash's cost discipline and PEEP reduces to efficiency, equity, and
voice.”
Kaufman's (I993, I3) definition of the concepts comes in his discussion of the establishment of industrial relations
in the I92os: "greater efficiency in production; greater equity in the distribution of economic rewards, the utilization
of labor, and the administration of employment policies in the workplace; and greater individual happiness and
opportunities for personal growth and development." “Kaufman (I993, I3 -IS) further cites the early industrial
relations beliefs in due process, dignity and respect, and opportunities for skill and leadership development.”
“Osterman et al. (2ooi, II) also explicitly reject an efficiency-only objective of the employment relationship and
stress that "an employment system must 30 I Employment with a Human Face be judged on its ability to find and
maintain a balance between efficiency and a series of other goals." They articulate the following "moral
foundations" for the employment relationship: (1) work as a source of dignity; (2) a living wage; (3) diversity and
equality of opportunity; (4) solidarity or social cohesion; and (5) voice and participation (Osterman et al. 2001,
11-12)”

Reading 07 Chapter 3

Balancing outcomes: The Environment and Human Agents

Socia nteractions and person-sepcific needs, feelings, and mental processes - employment schholarship in
psychology, sociology, and orgnzaitional behaviour

Employment relationship outcomes are a product of both the environment and the internal needs, feelings, and
mental prcesses of individual human agents

Dimensions of the environment

The legal environment:

●​ Legal system shapes labor relations: Laws set employer behaviors and impact bargaining power.
●​ Labor law reform debates: Critics argue reforms hurt efficiency; unions say laws favor management.
●​ Common law impact: Affects employment contracts, union organizing, and power balance.
●​ External factors: Tax laws and deregulation influence labor outcomes.
●​ Regulations vs. behavior: Laws don’t always address root causes of conflict

The economic environment:

●​ Economic environment shapes power: The labor market, product markets, and macroeconomy
determine labor's bargaining power and employment outcomes.
●​ Labor demand and bargaining power: Higher bargaining power occurs when labor is essential, product
demand is inelastic, labor costs are low, or other production factors are inelastic.
●​ Labor market conditions: Tight labor markets or hard-to-replace skills increase bargaining power.
●​ Macroeconomic factors: A strong economy or low unemployment boosts labor bargaining power;
globalization reduces it by increasing competition and capital mobility.
●​ Labor supply elasticity: High demand for workers in a booming economy increases labor's bargaining
power, while high unemployment lowers it.
●​ Demographic changes: Increases in female labor force participation and education levels affect labor
supply elasticity and bargaining power.

The technical context:

●​
●​ Technical context influences outcomes: Workplace characteristics (e.g., fixed vs. variable locations,
workforce stability, job content) shape employment outcomes and bargaining power.
 ●​ Workplace structure and control: Differences in workforce stability and structure affect social relations
and the issues that workplace rules must govern.
●​ Shift from mass manufacturing to flexible specialization: New challenges arise as workplaces move to
more flexible organizational models.
●​ Technology's impact:
●​ Skill-biased technological change increases demand for high-skilled workers, widening wage gaps.
●​ De-skilling reduces skill requirements, simplifying jobs for greater control (e.g., scientific management).
●​ Context matters: Technological change effects depend on industry and managerial strategies (e.g.,
semiconductor vs. grocery store automation).
●​ Technology and bargaining power: Skill upgrades can increase employee bargaining power, while
de-skilling reduces it by making employees easier to replace.

The political environment:

●​ Political environment shapes employment: Lawmakers influence laws, their enforcement, and
adjudication, directly impacting union bargaining power and employment outcomes.
●​ Public sector unions: Elected officials' dependence on union support for reelection boosts union
bargaining power; unions can also gain support by advocating for mutually beneficial services.
●​ Debate on public sector unionization: Some argue public sector unions should be banned to prevent
excessive union power due to weak market constraints.
●​ Private sector unions: Political environment influences union strategies, such as "responsible unionism"
to avoid government interference (e.g., during WWII).
●​ Historical influence of politics: Depoliticization of labor issues weakened union power post-WWII, and
government actions (e.g., Reagan’s firing of air traffic controllers) shaped the climate for private sector
industrial relations.

The social environment:

●​
●​ Social context affects employment: Interpersonal interactions and social norms influence workplace
dynamics and employee behavior (e.g., group solidarity, socialization to norms).
●​ Social identification and mobilization: Workers may address workplace injustices individually or
collectively based on their social identity.
●​ Functions of work groups: Social aspects support norms, solidarity, personal space, and workplace
identities, influencing both worker and managerial behavior.
●​ Norms and power: Workplace norms shape managerial authority and employee compliance; societal
norms influence workplace hierarchies and roles (e.g., gender, disability).
●​ State's role: The state helps shape cognitive and normative rules that influence employer decisions
beyond legal frameworks.
●​ Social environment affects power: Union power and legitimacy are linked to national consciousness and
societal views on labor movements (e.g., supporting collective bargaining during the New Deal).
●​ Public perception of unions: Union legitimacy depends on public support; stronger labor movements
exist in societies with greater acceptance of collective action and less tolerance for anti-union behavior.

The business context:

●​ Business context influences employment: Business strategy (e.g., cost leadership vs. differentiation)
impacts HR practices, pay plans, and workforce composition.
●​ Strategy and HR practices: Cost leadership often leads to low benefits, narrow job roles, and low-skilled
workers, while differentiation strategies lead to broader roles, higher benefits, and skilled workers.
●​ Strategy and bargaining: Business strategies, like those in airlines or General Motors, influence collective
bargaining and employment outcomes.
 ●​ Influence of leadership and external environment: Business strategy is shaped by both external factors
and the ethical beliefs of leaders, affecting HR policies and employee behavior.
●​ Union avoidance and business strategy: Companies with fewer unionized plants tend to adopt union
avoidance strategies, complicating the analysis of business strategy on employment outcomes.
●​ Corporate governance: Different models of governance (shareholder vs. stakeholder) create varied
environments for employment relationships.
●​ Corporate power: Large corporations, especially multinationals, influence local and global economies,
affecting the employment relationship beyond just legal and economic factors.

The institutional context:

●​ Institutional context: Includes nonmarket institutions such as community groups, churches, NGOs, and
labor unions that influence the employment relationship.
●​ Labor unions: Unions shift the employment relationship from individual to collective negotiations, which is
crucial in countering corporate power in imperfect labor markets.
●​ Unionism context: The strength, cooperation, and competition within unions (e.g., Teamsters'
aggressiveness vs. responsible unionism strategies of Reuther and Hillman) affect bargaining strategies.
●​ Bargaining structures: Union strategies, like pattern bargaining, are shaped by internal pressures and
organizational structures, influencing employment outcomes across industries.
●​ Demographics and history: Union membership and strategies are influenced by demographic trends and
historical events, such as the WWII-era emphasis on discipline and arbitration.
●​ Historical context: The U.S. labor movement's shape and management resistance to unions have roots
in early 20th-century economics, politics, and ideologies.
●​ Strategic choices and environmental influence: Community group growth and union strategies are
influenced by the economic and political environment, and labor market conditions shape union behaviors
and bargaining tactics.
●​ Path dependency: Union strategies and behaviors are influenced by past events, making their
development path-dependent.

Strategy:

●​ Strategy: Broadly refers to individual choices and actions consistent with personal ethical beliefs, needs,
and characteristics.
●​ Employer and employee movement: Employers and employees develop strategies at different levels
(workplace, functional, strategic, sociopolitical) to achieve goals.
●​ Workplace level: Involves interactions between individual employees, work groups, unions, and
managers.
●​ Functional level: Involves HR policies and collective bargaining processes.
●​ Strategic level: Focuses on organization-specific employment relationships; sociopolitical level addresses
broader social and political interactions, e.g., union corporate campaigns.
●​ Employer side strategies: Includes HR management policies (from authoritarian to high-performance
systems) and approaches to union relations (acceptance, avoidance, etc.).
●​ Employee side strategies: Includes unionizing, pursuing individual representation, or actions to achieve
workplace dignity.
●​ Union strategies: Can be approached from different perspectives (instrumental, multi-identity, mobilization
theory) with varying philosophies and actions.
Lecture 09 - Employment outcomes - observable

Key concept – “employment outcomes”?

• The thing you are seeking to explain
• flexible – broad range of what may be conceived an outcome
• Can be conceived at various levels, micro, macro etc.

“IR System” concept – can “model” how employment outcomes are generated
• helps understand forces determining employment outcomes in a given context (micro or
macro)
• helpful to analysts, and to actors themselves
• through better understanding of how employment outcomes are determined, a society
can alter the existing balance between efficiency, equity and voice, as socially preferred.
– “content” of dimensions (circles/boxes) of model – may depend on which outcomes trying to understand

7 dimensions
1.​ Legal environment
-​ What employment is (creates/establishes these concepts) - defines sales of labour as employment: if
youre an employee that you receive certain rights - part of what’s driving every factor employment:
“employment”, “employee, “employer”, etc.

Sources:
-​ Common law: judge made rules have established rules about employment relationships should be (eg. no
just cause then there must be reasonable notice)
-​ Statutes and regulations: federal, parliament, legislator (pass and revise laws - employment standards act
passed by legislator) - government body - constitution - charter of rights and freedoms - international law
and conventions - continent wide trady agreement
-​ Constitution
-​ International treaties and convections

-​ Level of outcomes - allocation of rights - bargaining power (employees having increased knowledge based
on certain laws) direct: increasing minimum wage - indirect: collective power - improving wages by giving
easy access to unionization - their power to demand something has gone up and maybe wages and hours
 too
-​ government enables collective or individual bargaining power (eg. enabling unionization) - influenced by
the allocation of rights and powers by the legal system

2.​ Economic environment

-​ Business demands labour for another market (labour market: market for specific employer’s product;
market for other factors of production; overall macroeconomy) - demand for labour is indirect “derived
demand” - derived from the need of needing something else - labour’s role in production of good/service
sold in market

-​ Bargaining power - can affect the relative bargaining power of the EE and ER - both EE and ER bargaining
power higher when labour demand is inelastic (not as reactive to prices changing - increased coffee orices
but you still want coffee)

Marshall’s conditions four conditions that create bargaining power:

1) labour essential or hard to replace - product maker needs a certain kind of labour to make its product (eg.
doctors, nuclear powerplant engineers, oil rig worker, firefighter)

2) demand for resulting product/service is inelastic - collectively pushing around (eg. BELL or RODGERS) -
customer will keep paying, empowering the worker: higher wage demand - company can grow - wages is effected
by market power (product growth) - exploitation of the customer passes on to the employee

3) Labour accounts for small fraction of other factors of production - some huge machine being run by
labour is small percentage of its cost - it’s mostly capital that runs it - the employer, holding market power, can
leverage this to set prices, while labor creates demand (people able to spend more) - in a highly competitive
market, the employer's ability to pass on bargaining power is reduced (more options for workers and employers)

4) supply of other factors of production is inelastic - automating labour machines - if the supply of them is
limited, results in a massive increase of price - empowers human labour - there’s less of alternative to that type of
labour

3.​ Techinclal context

-​ The nature of the production process, the organization of work, and/or technical factors affecting its
organization
-​ Physical context - product or work changed by technology - nature of work determines things (has to be
done a certain way or alternatives are bargained [eg. how many students in a class]): may set many other
issues needing to be governed and/or bargained between EE/ER
-​ May be subject to bargaining between EE/ER
-​ Technological change: deskilling workers (disempowering them - not replying on an employee’s skill -
avoiding skill by using a machine’s skill) - skill-biased effects (enhances the skill in a different way -
creating value in the market demanded)

4.​ Politcal environment

-​ Laws come from politicians - overlapping with legal environment
-​ Public sector - size, fiscal policy - amount of money taxed to put into the public sector - it’s been gradually
down and shrinking, public goods provisions, social welfare protections, etc.
-​ changing the pubic sector (bargaining dynamics: baragining in pursuit of votes) effects employment
(employment disinctiveness)
-​ Public sector employment - distinct - workds for someone tied up in political power
 -​ Collective bargaining - political environment effects collective bargaining - unions in the piblic sector
bargain with the government and need the public’s support to increase their bargaining power (the more
likely the government will cave if the public is taking a side - appealing to the voters)
-​ Effect on private sector EE or EE views, attitudes, strategy - highest leaders of the land set social norms
sobcontiously - setting symbolic examples influencing private sectors (eg. employment behaviour)

5.​ Social environment

-​ Cultural - not formally in law/politics - ideas in society - norms attitudes and values - micro level: social
relations, aittiudes about the workplace as well as beyond the workplace
-​ Social norms and values: influenced by the legal environment - conformity to social standards
-​ Social identity - identification (commonlaity with workers, conscious of class or grievances might mobolize
[doing something about it]) - remobolization theory - social attitude
-​ Prevailing ideology - thought systems we have OR consciousness (+ ethics)

6.​ Business context

-​ Differences in business strategies overtime - different products sold by different businesses who are low
cost, special, or high quality (differentiation tends to be higher price)
-​ Labour: low cost producers take the low road in employment relation - luxury costs are higher wages and
better employment relarions/conditions
-​ Different corporate governance models - rules and laws
-​ Degree of corporate power in society - corporation: company’s duty to imporve the shareholders
investment (elect directors or the ceo) - big level strategy - big level governance models

7.​ Institutional context - self-created bodies can have an effect too

-​ Overlap with culture and law
-​ Variety of instituions, social constructs (community groups, industry associations, labour unions):
-​ Eg. churches, media, news, labour unions, employer associations, non-profit sector
-​ Unions could belong to multiple firms (US) or one firm (Canada) (industry) - these affect
employment in the two countries
-​ They function differently - but they are bargaining structures (eg. industry-wide bargaining structure
- threaten to go on strike and nobody would get coffee or private bargaining structure) that need to
be followed

●​ Role of strategy - choices of employees or employers make a difference at the four levels - strategy based
on goals that affect the different outcomes (levels) - interaction between those entities - could be:
environmental/psychological bariables/forces not purely determined
○​ strategic: deciding when a strike will end - businesses make this decsions all the time - EE and ER
satretgy related to employment but beyond the workplace (partcipating in politics or community -
startegy to protect employment conditions)
○​ Strategic interaction at 4 levels:
■​ Workplace (Daily decisions between employers and employees)
■​ Functional (Policies and procedures within HR or labor relations functions)
■​ Strategic (Broader organizational choices related to competitive positioning)
■​ Socio-political (nteractions with external institutions like governments, unions, and
advocacy groups that shape the rules of the game)
-​ You can use this strategic model to assess how environmental pressures influence employment outcomes,
especially in balancing efficiency, equity, and voice

US employment environment reflects:

●​ Strong emphasis on efficiency, mostly framed by neoclassical economic ideas (e.g., maximizing
 productivity and minimizing costs).
●​ Weak support for equity and voice, meaning worker fairness and participation are often sidelined or
undervalued in policy and practice.

Lecture 10 - Alternative Models of Workplace Governance

Employment relationship - an agreement

-​ Web of outcomes/rules between two sides affects each other - how the rules get created - how should the
workplace be governed - (rule-making rules - mechanisms - who and how?)

Budd – reviews historical analysis of governance (pp 82-85)

Workplace governance - Budd: Six Alternative Models (in a pure form):

1.​ Free markets (with common law support)

-​ Common law support: leaving to employees and employers to engage in a contract - rights for contracting
(no inference that alters the bargaining power on the other side), it to become enforceable, and freedom to
contract (property rights)
-​ External - everything going on in the market - free market drives EE and ER to certain outcomes (not free)
- they determine what the EE and ER have to face (determining the employment conditions - governed
and coerced into these decsions)
-​ Employment at will - bargaining, firing, etc. - either side can end the job at any time - decided if you work
there - affecting how they act
-​ based on neoclassical model (free markets and individual choice lead to fair outcomes): favors
efficiency, free market produces efficiency and maximizes utlization no externalities market failure
-​ Critique: free market can’t achieve an efficient market on its own - there are other values that need
recognition

2.​ Statutory government regulation

-​ Government determining employment (eg. condition employment standards act workplace safety act) -
how things occur - rules imposed and determined
-​ Since the free market wont work - external factors (impacting somebody else when exchanging between
two parties - naturally they don’t do whats best for everyone [free market causes damage to others -
government could impose rules that correct that failiure])
-​ justifying intervening in the market to improve outcomes make them more equitable, fair, voice
-​ Individuals can’t bargain for things that are group oriented (Externality - [eg. clean air filters]) - so the
government helps with the public good corrections (externality corrects)
-​ Government regulation aids voice and equity
-​ Critique: millions of different people and jobs and government don’t experience the problems at hand so
they don’t have enough information to fix it - they are a third party - resulting in general rules and
 principles: interpreted in different ways, ambiguous, needing lawyers to comply with the rules
-​ May not be clear when to intervene or not - eg. potential market failiure - may be unintended
consequences of regulation
-​ Enforcement challenges: politics of the current environment - government has a political agenda
instead of perfect rationality
-​ Generates cost of enforcement/compliance
-​ Polticians have their own special interests

3.​ Human resource management

-​ Employers have choice in how they treat workers, not everything is determined by the market
-​ This includes training, education, good supervision, and opportunities for employee input ("voice")
-​ HRM focuses on employer-led efforts to treat workers well to boost productivity
-​ Employer-controlled voice allows input from employees but still under employer control
-​ These models can lead to win-win outcomes (happy workers = better productivity)
-​ Can boost efficiency and productivity
-​ Helps with better communication, coordination, and information sharing
-​ Builds trust and loyalty among workers
-​ Increases job satisfaction and motivation
-​ Voice mechanisms are often seen as efficiency-enhancing and helping to increase productivity
-​ Direct benefits of voice: Harness employee input (EE), obtain useful feedback, improve communication
and coordination
-​ Indirect benefits: Builds trust, increases loyalty, improves job satisfaction and motivation
-​ Criticism of HRM: Voice should not only be for efficiency—it should also be for equity and employee
empowerment
-​ Voluntary managerial/HRM practices that enable voice are less likely to produce equity or fairness
-​ Unilateral control over voice mechanisms means it depends on managerial goodwill, which isn't always
reliable
-​ Management may weaken equity or voice if it’s more profitable for them, undermining fairness
-​ Not all employers have the same level of goodwill towards equity and voice
-​ Managers are often constrained by market pressures or business norms, even if they want to implement
fairness or equity
-​ Power imbalance remains—workers have less bargaining power and cannot always influence the terms of
their work
-​ HRM and voice models depend heavily on individual managers and may vary across companies

4.​ Human resource management, with employee voice

-​ HRM (and HRM with EE voice) is similar to the free market because it operates without unions or
government regulation
-​ But it's different from the pure market model because it assumes management has real choices in how to
treat workers, even with market pressures
-​ It sees employers as having strategic freedom to shape work conditions
-​ Many HRM practices show that market forces are not the only influence, such as: Recruitment and
selection processes
-​ Training and development opportunities
-​ Respectful supervision styles
-​ Use of due process and procedural fairness
-​ Compensation policies that support equity, job security, and work-life balance

5.​ Worker control

-​ Worker control is the opposite of HRM, where workers—not managers—make the key decisions
-​ Involves worker unilateralism—workers have full control over rules, goals, and how the organization
operates
-​ Workers are not just partial owners; they act as the ultimate decision-makers or managers
-​ Examples include worker cooperatives (like Mondragon) and early U.S. craft unions
-​ According to Weiler, full worker control can replace management authority with labor authority, which may
not always be ideal
-​ A system of shared control between workers and management may offer a more balanced and effective
approach

6.​ Independent employee representation

-​ Independent employee representation is separate from management and gives workers a distinct voice
-​ It replaces pure HRM with a limited form of shared authority between workers and employers
-​ Can take many forms, such as:
-​ Unions, works councils, professional associations, joint governance structures, or employee
representation on boards
-​ The classic North American example is an independent union using collective bargaining
-​ Collective bargaining allows workers to negotiate as a group, reducing competition among workers and
increasing collective power
-​ As Sidney and Beatrice Webb noted, this prevents employers from lowering wages by playing workers
against each other
-​ It helps address the imbalance of power between employers and individual employees in both the labor
market and legal system
-​ The Wagner Act recognized that unequal bargaining power can harm the economy by lowering wages,
reducing purchasing power, and causing instability
-​ Unionization corrects market failures, making the labor market more balanced and fair
-​ It promotes equity and voice, and may also improve efficiency, just like HRM or government regulation
-​ Without representation, workers’ “freedom to contract” may be undermined, since real choice requires
equal footing

7.​ Workplace governance

-​ Workplace governance is about how decisions are made regarding resources, investment, and labor
relations within a company
-​ It’s closely tied to corporate governance models, which shape who has power and whose interests are
prioritized
-​ The dominant corporate model today is the shareholder value model — focused mainly on maximizing
returns for investors
-​ An alternative is the stakeholder model, which considers the interests of all parties, including employees
-​ The shareholder model can conflict with effective workplace governance, especially when it ignores
employee voice, equity, and long-term stability
-​ To support fairer and more effective workplace governance, society may need to shift away from strict
shareholder-focused governance
-​ Budd outlines four key beliefs that shape how we view workplace governance:
-​ Is labour a commodity?
-​ Are employers and employees equals in free markets?
-​ Is there an inherent conflict of interest between them?
-​ Is employee voice important?
-​ If we believe labour is not just a commodity, that there’s a power imbalance and conflicting interests, and
that voice matters...
-​ → Then employee representation becomes a crucial part of workplace governance
-​ Effective workplace governance means shared decision-making power, especially where workers are
 affected
-​ Governance models affect not just profits, but also equity, fairness, and organizational performance

Reading 08 - Chapter 5

What type of workplace governance mechanisms should be imposed on the environment to promote efficiency,
equity, and voice

Analyzing th employment relationship: individuals, markets, institutions, organzational strategies, and public
policies

Father of industrial relations, John R. Commons - demand and uspply determines wages - scarce labor = higher
wages - abundant labor = lower wages

Goodwill (intangible value of a business, including its brand reputation, customer loyalty, and other non-physical
assets that contribute to its profitability) - motivating workforce through mutual respect and a harmony of interests

Public utility theory - government regulation of minimum working conditions to prevent worker exploitation is in the
public interest

“Commons (1919) effectively captures the range of alternatives for governing the workplace: markets (the
"anarchistic equality of individuals"); human resource management; worker control ("the socialistic dictatorship of
labor"); government regulation; and representative industrial democracy-labor unions.”

Clegg lists five options for procedural rules: collective bargaining, managerialism, trade union regulation, statutory
regulation, and joint consultation (Managerialism and trade union regulation are at opposite ends, with collective
bargaining in the middle, balancing power between employers and employees. Joint consultation is more like
managerialism, where workers give input, but management makes the final choice)

Adding to Clegg: nobody knows someone’s situation better than themselves - emphasis on collective bargaining
power

Budd’s 6 dimensional model:

1) free markets supported by common law
1. neoclassical economic theories of the superior outcomes derived from self-interested, utility-maximizing
agents guided by the invisible hand of free markets; and
2. legal doctrine supporting the primacy of individuals free to enter into economic relationships of their
choosing

(External model) “Employees are free to choose among many jobs so that substandard employers who are not
responsive to workers' preferences will be unable to hire employees. Thus, free markets and competition for labor
will govern the workplace.”
Questioning: “he wisdom of having the lives of human beings controlled by market forces alone and whether
markets can provide more than very limited conceptualizations of equity and voice”
2) statutory government regulation
Kaufman: to establish protective labor standards and social insurance to assure equitable employment outcomes

Unlike competitive markets, equity concerns can be incorporated. Lastly, laws can be determined by reasoned
debate and informed research rather than by the invisible hand of free markets or the power struggle of collective
bargaining.

Weaknesses: 1) participation or usbsidiarity is removed from the system - so it is difficult to shape agreements to
fit particular needs and constraints 2) economy is complex and difficult to craft different laws for narrowly defined
groups - regulations become too broad or too narrow and perhaps more costly than no regulation 3) regulation is
too ambiguous - only way to find out if a regulation is legal is to do it and pay the consequence if it is illegal 4)
determining when market failiures exsit is challenging - the ffects may be worse than the problem trying to be fixed
5) laws aren’t catered to the public 6) enforcement and administration problems

3) human resource management with employer-initiated employee voice

-​ Training and development opportyniteis, respectful methods, dsitributive and procedural justice,
compensate employees via rewards, provide more than a living wage, provide benefits that foster personal
growth, security, and worklife balance
-​ Employee participation and decision-making, indirec participation, and dispute resolution procedures that
include important due process elements (w/ and w/out voice)
-​ Effective dispute rsoluition procedures with due process
-​ The concerns with human resource management are similar to those with free markets. While these
systems may work for some, is it wise to rely on them alone? What prevents employers from exploiting
workers? Since HR focuses on profit, how can we protect workers and ensure fairness and a voice in
decisions?
4) worker control
-​ Opposite of human resources management
-​ Weiler, “Worker control gives employees full control over rules and decisions, but this can replace one form
of authority (management) with another (labor), so shared control might be a better solution.”
6) independent employee representation
-​ Eg. labour union
-​ Sidney and Beatrice Webb, “In collective bargaining, workers negotiate as a group, preventing employers
from using competition among workers to reduce wages.”
-​ laissez-faire economic and legal model that there are a number of reasons why employers and individual
employees might not be equals in the labor market and the legal arena. Unionization can overcome these
market failures so that employers and collective employees are more like equals in the labor market and
legal arena
-​ Wagner act: imbalance of bargaining power between workers and employers harms commerce, lowers
wages, reduces workers' purchasing power, and contributes to business depressions by preventing stable
wages and working conditions.
-​ Violating the libery to freely enter contracts
7) Corporate governance
-​ How rules and decisions regarding resource allocation (such as investment) within corporations are made
-​ decision-making processes within a company regarding resources, investment, and strategic
actions, and is closely connected to workplace governance models that shape how companies
manage labor and relations with employees

Lecture 10 - Module 9 - see slides

Wagner act model - system that addresses relevant issues for employees - model of labour relations - Rooseelt
promsing massive change - fixing the labour problem “The New Deal” - new economic arrangement - employment
representation - socials ecuity protections - unemployment insurance - old-age security - mimum labour standards
- Privy COuncil 1003 (Canada’s version)
​ Can’t drive labour costs up if you can’t sell products - pumps up consumer purchasing power - making
from the employer - more money where it needs to be and stimulate the economy - pump consumer demand -
grow the economy - didn’t eliminate cpaitlism, the maret, free-enterpise - market forces is still there - can’t negtiate
with weak employees - balancing the rights of labour rights and property rights - pumping up labour rights:
business, owners of capital still exist (property rights)

1. Right to participate unioniszation [Link] the employers power - unfair legal practice - ilegal now to
threaten intimate employees to not have a voice (protector workers form employer anti-unionism)
-​ Democratic principle - certification process: government involvement - give people whow ant to unionize
given them a vote (bargaining unit - group of people defined in any workplace that’s going to be
represented by a union) government is the approved bargaining unit structure - the union is not eternal to
the firm but an organzation ,ooking for bargaining units - the union represents the bargaining units when/if
they get certified by the government (when will they certify a union? When then application is filed, the vote
is held, and the majority in the defined bargaining unit decides yes) can’t scare workers into voting a
certain way - this si the only union that represents them - has to exclusively represent the bargaining unit -
the members are represented by the union - restraining and protecting workers rights
-​ Limits: employee can be involved in this worker’s collection - free speech - employers have influence -
significant limit to the promise of unioonzization - could give employers the power to coerce employees
-​ Employers can acquire employees in mandatory meeting with a spokesperson - if employees want
to discuss this but it can’t be during work-time or work-place - can’t talk abou it - can be disciplined
-​ if/when the union gets certified the employer has to proceed - bargain ocllectve agreement union
and employer - employers try to evade this process (liked the old way) - employer msy bargain in
good faith ([required] can be forceful with demands but you can’t try to avoid the process - try to
reach an outcome - an open mind and listen and answer tier questions) - employers can’t bargain
certain bu tothers are protected as employer perorgitives

Limits the effectiveness of the system - this process should be for the workers - no managers/supervisory (the US
has excluded lots of people from this process because there are so many supervisory people - limited to
negotiating smaller isssues) individuals cannot be a part of the bargaining process - management works in the
best interest of th orgnization instead of the employees - owners of companies do not want their repsresentaives
to be apart of a union that will be bargaining with the company

Wagner model (decentralized bargaining and fissuring - expands the weakness) - the night to strike - limits: (In
Canada) you can never leglly strike during the term of a collective agreement - or the opposite: employers locking
employees b/c they could face liability because of the costs of work suspension - conciliation process
(government employee help the two sides settle) - meditator - vs. arberatrator - have to go through meeting before
strike - temporary replacement (employer can hire someone to come into work when workers go on strike - in the
US the employer can say as soon as the job’s become “available” then we will bring the striking workers back) in
Canada clear 6 month period that the striked workers can/have to come back - they can still hire the replacement
in the first place but they’ll have to fire the temporary workers - past 6 months: waiting to sort out - employer is
supposed to put reasonable efforts to bring people back
-​ Point of bargaining - reach a contract - agreement to set the new terms - reach deals and live on them a
long time - file a grievance and arbritrations (unionized working places - arbertratiors can order employers
to not do something if it’s a right under the contract - then workers don’t have to quit - prevent people from
going to court for every dispute) - can’t take self-action
 -​ Process has become very cpmtrolled by lawyers - legal due process - makes it harder to make
decisions quick
-​ Key part of mode: individual “enterprise-lel” bargaining is going to take place in a decentralized manner - it
has to be one employer at a time bargaining for the workers - bargaining units are employees of one
employer - structural barrier of pushing costs high enough for wage increases - could result in the firm
losing sales/jobs - barrier to the point of unionizing - bargaining is weak in terms of the collective
bargaining of the workers - but if the effect on the product market competition - puts downward prpessure
on wages - the only firm unionizing is in trouble and indirectly a weakness for workers being alone in the
endeavor to get wages up - nobody can unionize (eg. baristas) - empowers baristas too much b/c
competitors pay the same
-​ Non-unon employee representation - American’s model says (employees are protected against unfair
labour practices - in any sort of concertive [working together {eg. retaliate}] action - different ways other
than the main system) can’t be a manger and set up an employer run voice representation structure -
councils that give bargaining rights eternally - company unions - employee empowerment program -
canadian model didn’t
-​ You’re protected when going through the unionization process and that’s how you become
protected
-​ Taft-Hartley (1947) and Landrum Griffin Act (1959) the American Wagner Act model was substantially
revised - more towards employers giving more say - balance of property rights and labour rights -
individual states governance can pass right to work laws (law that bans union security arrangements - eg.
unions and employers cannot agree to close shop rules etc. - in Candian law they’re entitled to that to
keep the union secure) - union unfair labour practices - charging an offense under the labour relations act
(eg. organizaing union practices during worker time - employer free speech - supervisors are ecluded form
the union) - pressur eon unions to restrain organizaing leading to a decline
-​ b/c the model is “wrong” - doesn’t match the conditions (restricts workers’ power, makes power less
effective)
-​ Depends on the structure of the industry - shifts in kinds of work/employment - these
workers were never unionized before
-​ People don’t want unions - internal preference of not demanding a union service b/c the
service is too bearactized etc. or growth of HR management displaces unionization or
government regulation displaces a need for a union
-​ OR employers are resisting unionization
-​ Theoretical explanations: no unions for businesses “are you an employee?” - penalties for
unfair labour behaviour: almost no penalty for laborers breaking the law and preventing a
laborer from forming - more support for more centralized bargaining - shift away from
equity/worker voice
-​ The system isn’t achieving any efficiency gains - huge process, irrational bargaining
structure
-​ Pg. 117

Lecture 11 - Rules to make/determine th eoutcomes - the rule sof the employment relationship

Gooodwill - welfare capitalism - leaving firms ungoverned in the market model - this model still isn’t governed -
players are governed by themselves and enlightenment - supporting these ideas creates a different kind of
market that works for everyone - other firms were dirven by market conditions - instead of better employment
conditions - HRM (ideal type): how si ti different than the market? Firms ares till deciding - no minimal terms
imposing anything there is still employee bargaining - let’s say the market isn’t bound - choices and strategies -
room to make different decisions in how to treat labour - the market is only determining what firms (eternally)
do to a degree - training, research, education - proving a goodwill standards model - building uhman capital -
supervising (range of outcomes [on slide]) - belief in win win
​ This can be two models: 1) HRM 2) voice (controlleld by the employer) - efficiency enhancing - trusting -
loyalty - come from listening - committed people work harder
-​ Criticism of HRM: unilateralism (what the employer still thinks is right for everyone) - inequality of
bargaining power = unilaterism determing power with the employer - managerial goodwill is the only force
for fairness, equity, and voice - what if the win win doesn’t go far or is circumstantial (more profitable to do
things that suppress equity and voice - productivity conditions pushing away from goodwill [realism -
capitalism, market conditions - even if they want to have goodwill they are subject to constraints])
-​ Criticism of voice (fundamenetal objective): it may not be strong enough - limited
-​ There used to be more worker control movements (eg. coop program - craft unions) - hard r to imagine in
acapitilost economy

Indpendent employee representation - employers interest is represented in their decison-making - shared

authorities: some other power to make a difference for employees - to a degree (eg. works council - employee
representation or professional assocsiations - unions or similar [assosciation inputting in decision-making] -
enabled by unionization model - independent from employers - set up by the company would be HR workforce)

Aside of 6 models: always og governance - leave them alone (free market) or impose government rules - self
overn - or bound legally by a union - this is a corporate governance model: laws that govern corporate
decision-making - managing corporation is maximizing shareholder value - could be stakeholder’s interest as well
- this is it’s own model working indirectly

4 questions:
1)​ Labour as a commidy
2)​ Employers and employees equal in the freemarket (nobody has power - perfectly comepetitve) -
imperfections lead to employee bargaining power
3)​ Is there an inherent conflict of interest betweeen EERs/EEs - if they have the exact same interest than
either one of them being in charge is okay - differing interest is th problem
4)​ Is EE voice important?

These answers logically conclude the need for government regulation - a amcheanism that addresses this reality

7 Models: ideal-types - general characteristics and functional tendencies

1.​ Social partnerships - enhances organized labour’s power, relevance, and effect on efficiency and voice
- social planning of social dialogue
- corporatism - a society that has peak level organization (labour, business, government [intentional
structures that speak on behalf of labour and business])
- voice of labour
- what business/labour wants in society/economy - involved in government in an official process - federal
vote - centralized policy-making
- organizations making the plan - level of immigration/spending of housing/inflation - economic plan (policy)
- social policy - labour/employee interests at the top - labour movement, government may be consulted in
the process

-​ CRITIQUES: no official structure for (eg. national economic plan) - working bargaining power should be
increased - enhance worker voice in a macro sense - efficiency problem - conflict with differentiated needs
and demands of flexibillity at firm level
-​ Arrangements may seem just for show - cooption (dilute original meaning) - weak on equity and voice
2.​ Sectoral bargaining - bargaining through broadly representative associations of both employers &
employees
- centralized collective bargaining - across multiple firms - industry (defined by a product market) wide
- broadly represented associations of both employers and employees (an employer bargaining
associations {organize employers} - [collective - creating a body {enter into a deal with a union - a contract
that governs everybody - sectorial bargaining - multi-employer agreement, applying to everybody -
sometime voluntary but mostly imposed by the government} - a contract binding companies])
-​ Increases employee bargaining power - take wages out of comeptitition - everybody pays the wage gain
(standardized) - businesses are competing, but not on who can increase wages - positive for equity and
voice
-​ The union can apply to have the collective agreement - extended to the rest - centralized common terms
across the industry - increase willingness to to participate because they can bargain with this extention -
employers resist less no longer a unique disadvantage
-​ Expand worker bargaining power
-​ What about flexibility at the firm level? The voice lost at the local level

3.​ Centralized awards - arbitrated awards - not mediating - no bargaining - outcome is binding by the
system- arbitrator is impartial
-​ Do this on a mass scale instead of collective bargaining - interest arbriatrtion (whether rights are this or
that - determining rights are going to be - at the beginning - writing of the contract [more of an award])
-​ Government tribunal (body) - centralized government actor - wages, benefits, hours - doing it by
occupation or industry
-​ Increases to increase equity and aggregate voice b/c it tends to be at high coverage rates
-​ - dont have to go through the unionization process (unions may still aid this) - government issuing awards
for all occupations - firm level flexibility is underplayed - collective regulation/imposing - known as award
-​ Centralization mah reduce local input and voice

4.​ Enterprise unionism - unionism is only at the level of the enterprise (one company/firm) - contrasting
with - unionism is bounded by the boundaries of the firm - unions share resources, pull funds, and put
together a larger fund
-​ Strong culture of identifying with the enterprise - only way of colectivise is be in a union of the employer -
the employer’s success is more important because you identify with the company
-​ Japanese model - efficiency back from the workers - unions embedded in the firms - unions are
corporerative/repsonsive to employers needs - additional consultation process removed issues from
collective bargaining, further reducing conflict
-​ This system is positive fro workers but weak as a model of unionization - low power base - small firm - low
level of collectivity - equity/voice lessens - but still given from the management side benefiting efficiency

5.​ Exclusice representation with majority rule - majoritarism could be on large scale - bargining union
across employers with a vote represented by a union
-​ Independent unions represent specific groups of workers, called bargaining units.
-​ If a union gets majority support from workers in a bargaining unit, it becomes the only group allowed to
represent them in negotiations.
-​ Union membership usually goes hand-in-hand with being represented.
-​ In theory, bargaining could be done at a national or local level (centralized or decentralized), but in
practice, it’s mostly decentralized in the U.S. and Canada.
-​ This is mainly due to legal systems that don’t support centralized bargaining.
-​ Whether unions can effectively improve fairness (equity) and give workers a voice depends on how many
workers are in unions (union density/coverage).
 -​ Because bargaining is so decentralized, unions often have less power, fewer members, and less impact on
fairness and worker voice.

6.​ Codetermination - employee voice built into the firms' governance - formal rights to participate in
business’ decision-making
-​ management power is collectively filled by
-​ the government imposes codetermining to manage what will happen with employment conditions
-​ Eg. Works councils – workplace level committee of employees, elected to represent employees in certain
dealings with management – relationship to unionisms varies in different contexts - Works councils at the
company level can support sector-wide bargaining by handling local issues, and minority worker
representation on corporate boards adds another layer of worker input
-​ Codetermination – work rules, discipline, hours, leave schedules, etc.
-​ Consultation – re any changes in nature of work and plant location
-​ Information rights – financial information, marketing and investment plans, etc
-​ Germany: {3 systems: 1) secotrial bargaining 2) has works council consulting information on hwo the company
works supported by a union 3) workers have seats on the board of directors}
-​ Ontario example: health and safety - joint employer and employee health and safety committee with legal
rights to demand health & safety in that organization - during covid, these flourished and came up more in
the workplace

7.​ Voluntarism - a model never imposed but merged voluntarily between business and labour
-​ Legal enforcement is limited, but it's not a total free-for-all—some rules (like common law) still apply.
-​ Historically, Britain had strong unions without formal legal recognition, relying on economic strength to
push employers to negotiate.
-​ As union power declined, especially after Thatcher’s reforms in the 1980s, so did union influence.
-​ Some companies began using “quasi-nonunion” systems—accepting unions only if they agreed to limited
bargaining, giving management more control.
-​ Decline of bargaining power after the depression caused by consequences of not complying with this
“decline” - government involvement weakens unions

Some may not produce as much voice and equity - hence why we have more than one system outside of Wagner
Model with these 7 added - these models could also be combined - relative importance placed on each of
efficiency, voice, and equity

Lecture 12 - moduole 10

Globalization - increased international economic integration

- different national economies - different measures of integration (in history, a lot of trade stimulating growth)
- flows (goods, capital, service, finance): international trade, foreign direct investment, international financial
transactions, immigration (labour mobility) - free-trade - international agreemeents led by western economies to
inc. economic integration
​
Positives of free-trade:
1) Increase allocative efficiency across larger zone; focus on comparative advantage increases aggregate
productivity, and thus economic growth
2) Economies of scale for firms – larger market
3) Employment conditions improve due to increased efficiencies, growth

Negatives of free-trade:
1) Assumptions of economic model not correct in real world, market failure, etc.
2) So, global market for products and labour exacerbates problem of imbalance of power in employment, results
in “race to the bottom” in global employment conditions
3) Model assumes “growth is good”, winners within an economy can potentially compensate losers, due to
aggregate gain in output overall - how does this occur? What if it does not occur?
4) Concept of “comparative advantage” flawed – eg. can this include cheap labour due to poor worker rights?
Modern slavery?

Free-trade in developed countries:

1) Globalization puts downward pressure on job quality and wages by increasing competition from foreign
companies and workers.
2) It’s not just low-wage countries—even trade with other wealthy nations makes it easier for companies to
threaten to move jobs or investments, giving them more power in negotiations.
3) Low-skilled immigration can increase the supply of labor for certain jobs, which can lead to lower pay and job
security for local low-skilled workers.

Theory of comparative advantage - everyone emphasizes their own comparative advantage - two countries under
free-trade will tend to produce the things they have an eternal relevant efficiency in producing - through natural
market forces they will export what they are efficient in producing and import what they are less efficient in
producing
- more produce - more wealth - increase alocative efficiency of resources eternally - everybody is producing more
- economies of scale in production everywhere - more wealth to go to workers and up to the political environment
​ Inequality of bargaining power (downward pressure on labour standards [terms and conditions of
employment]) vs. free trade - now global downward pressure
​ Product market affected by labour costs (in competition via product markert) - labour cost advantage puts
other producers labour costs under downward pressure (free trade with no rules is another level)
- opening the product market up with different labour costs everywhere - differences creates pressure on
where anywhere laboyr costs are higher
​ Social dumping - dumping the bad social behaviour that spreads through trade

How to address outcomes produced by globalization? How to balance efficiency, equity and voice?

Options that mirror workplace governance:

1.​ Free trade - lasseiz-faire - largely constructed to be a free trade world - trade barriers still exist - limit
importing to protect local markets - dependent on foreign countries
-​ GATT - post WWII - general agreement on trade and tarrifs - bring down tariffs between countries -
multilateral system - coordinating the movement to bring down tariffs - the WTO
-​ WTO - World Trade Organization: continue negotiations/communications to bring down tariffs in the world
(trading more freely)
-​ cannot impose restrictions to help your local businesseswith special rules
-​ this can make it harder for governments to support local jobs or industries
-​ not meant o protect workers or job conditions (allowing poor practices)

2.​ Corporate codes of conduct - employer self-governance (set their own standards) - mirrors HRM
governance model
-​ corporate set of promises - code of conduct of how the company behaves in the global economy
-​ voluntary (they don’t have to - not government - firm choices) - multinational corporate behaviour problems -
firms should follow good practices
-​ Pledges (promise to behave in a certain way - labour standards - environmental practices)
 -​ Can take form of individual corporate codes, or Association
-​ Eg. Fair Labor Association – organizational partnership between large global apparel/footwear firms and
human rights group
-​ Impetus: 1976 OECD Guidelines for Multinational Enterprises, updated in 2000 – “labour practices” was
one area of concern identified
-​ Codes tend to reference ILO - International Labour Organization - part of the UN - promote positive labour
standards around the world
-​ has member countries - adopt treaties on labour standards - member countries are supposed to
adopt these treaties (its still a choice after they go to the meeting - the ILO treaty is not enforceable
[voluntary]),
-​ The ILO universal declaration of fundamental rights (fundamental core statement) 4 labour rights:
​ 1. Forced labour
​ 2. Chiild labour
​ 3. Discrimniatory treatment
​ 4. Freedom of asssciation

-​ CRITICISM:
-​ Effective monitoring is key, but it’s hard to track the whole supply chain, including suppliers and
subcontractors.
-​ Companies often limit access to information, making it hard to know if they’re truly following their own
codes.
-​ These codes rely heavily on public pressure and consumer activism, but without transparency, they can
create a false impression of responsibility.
-​ To protect the corporate brand - people think it’s good and more likely to spend there - aligning the brand
image with what is consistent with them wanting to buy it - brand consciousness covers a narrow part of
products in our lives (eg. chair, light, table) - public relations potential - gives this strength
-​ People could not have the information or misleading external impressions
-​ How much the of the overall production chain included in this process? - a lot of the time doesn’y
include suppliers and independent contractors - fissuring - what is an employee?

3.​ International labour standards - mirrors government regulation, minimum standards, here imposed
across borders government rules in the international system
-​ ILO could become enforceableor through WTO
-​ Local and smaller trade agreements (Canada, US, Mexico) - put downwards pressure on labor,
environmental, and social standards - labor costs too high - countries won’t flourish
-​ Labour side agreement - under NAFTA: 3 countries promised to promote 4 core labour rights
-​ Incorporate labour rights/standards into regional/bilateral trade agreements
-​ NAFTA – has labour side agreement (NAALC) but no minimum standards (someone must
complain that a country outside of the country disobeying the agreement for it to be reported - require
a consultation between the minister of labour and Canda, US, Mexico - no concrete, material
monetary consequences when rules are broken), mostly focuses on voluntary cooperation
-​ w/out any rules on which standards should be adopted - an agreed standard must be enforced

4.​ Transnational employee representation - a way to allow worker voice to have an effect on employment
conditions internationally - assuming worker voice is developed domestically - but that isn’t the case
-​ Eg. works councils (can/can’t make a difference - may be purely symbolic - can only produce so much -
gets more done when there is a union that supports it), require all mega corporations to bring worker voice
into different countries associated with the business
-​ European works councils (big, global businesses need to have a European wide works council for
workers in different places being brought in centrally [eternal to Eropean workers])
-​ Imposed by 1994 EU Directive – transnational company-level committee
 -​ If firm has 1000 employees, and at least 150 in 2 or more EU countries
-​ Committee has Information and consultation rights
-​ Range of different practices of how these EWCs function, from purely symbolic to more engaged and
developing further capacities, improving bargaining power
-​ Relations with existing unions important factor
-​ Transnational collective bargaining - global system of cooperation workers - they may have different
interests - competing with eachother - restrained by domestic laws - examples:
-​ ITWF - workers that work in the global economy - eg. international ports - docks/ships - stand up for
one another
-​ ICFTU - global confederation of national unions - knowledge sharing - networking- or maybe a
company in commodity productions that uninoized that bargains with international companies to
form a framework agreement
-​ Outcomes (cheaper product being possible - competing on the basis of price) = lower wages, poor
workhing conditions, unethical practices