A&A Blog – Rational Commentary on Employment Issues

FACT: IN 2018/19 GOOD COMPANY MANAGERS COST NEW ZEALAND ORGANISATIONS MILLIONS OF DOLLARS

06 November 2019

Good management negotiators in the collective, union, employee bargaining space have one key attribute that sets them apart from other managers - the ability to project themselves into the other parties’ shoes at the bargaining table. For instance, if you are required to communicate negative information to employees and/or unions, you need to genuinely understand how your message is going to be received, what the reaction is likely to be and therefore how best you should pitch it.

Over the last couple of years, we have repeatedly been involved with individual managers and executives at companies who simply did not understand this. Another key management strength is being able to show genuine compassion and understanding as to the impact of the bad news on the collective employee mindset.

Using logic, facts and solid process does not necessarily result in employees embracing management “bad news”. No or low wage increases, longer working hours, insecure working hours and restructuring, coupled with the potential of redundancy, are all topics that require skilful strategic planning and communications.

We have seen a wave of industrial action in well-known NZ companies because managers who were tasked with leading negotiations simply lacked the knowledge, skill and empathy that is required to do this. Many of these persons are viewed as competent company managers, in the operational sense, who perform and delivered “on time” consistently.   

As these companies and organisations drifted into disputation which disrupted company operations, destroying employee/management trust and damaged workplace relations for many years in the future, these same managers became frustrated, angry and reverted to what they know best. More data, more logic and more process. And if that didn’t achieve the desired outcome as was demanded, then the legal cavalry was summonsed.

It’s common knowledge that some unions and some individual union officials know how to play the “game” and can be frustrating to deal with for Execs, HR, Operations and Line managers. Therefore, managers who have minimal practical experience in collective bargaining, especially in the current environment, may struggle. At worst they can take employee relations of their organisation into a very negative space which can hang around for many years to come.

Collective bargaining is all about balancing employee and organisational “rights and interests”, as well as managing their perceptions. Hence communicating at the bargaining table with empathy and fostering good relationships is as important as focusing on costs, efficiency and productivity. If an organisation gets this balance wrong it can result in quick and generally peaceful negotiations with generous and expensive agreements on the one hand or at the other extreme, long and hostile negotiations which focus on cost, efficiencies and business logic may result in less generous agreements with disgruntled employees        

Just because management is right doesn’t mean employees or unions are going to embrace the management offer or proposal! And forcing this onto the workforce by use of threats, suspension or lock-out may result in a short-term ‘victory’ for management. However, relationships, trust and productivity are likely to go backwards. This often sets the scene for an explosive next round of Collective Agreement negotiation a year or two down the track.

Achieving a state of ‘bargaining balance’ which focuses both on costs and relationships, is essential for a successful CA outcome. However, as this balance shifts continuously, organisations need to start with the right strategy and have informed and experienced people doing their planning.

Whether due to ignorance, inexperience or incompetence, some top managers in New Zealand have cost their organisation millions of dollars!

Fred Adelhelm