RISI

Good labor relations – imperative in today’s economy, part II

By Michael Fitzpatrick Mon, Oct 11, 2010
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USA, Oct. 11, 2010 (RISI) -Michael Fitzpatrick continues part II of his article highlighting how partnerships between employers and employees is the way forward to a mutually successful future in the pulp and paper industry. Part I of the article can be readhere

Negotiations still drag on

In the current uncertain economic climate, where one would think workers would have the incentive to settle a contract, we have seen a trend toward lengthy unsuccessful bargaining. With particular respect to the paper industry, it is not uncommon for negotiations to be ongoing for a year with no resolution. In some cases, workers continue to distrust management and the company's motives. Some of this is central to rising costs, especially health care and other benefit plans, but also reflects the manner in which management treats workers and communicates with them.

I was part of an organization in the paper industry that had the typical adversarial relationship with the union and employees. Recognizing the need for a dramatic change in delivering performance, a consulting firm, Team Development Group (TDG) was hired to work with employees at all levels and to deliver a change management initiative that would streamline processes, increase efficiencies and reduce waste.

TDG's process - improving productivity, decreasing waste, lowering costs, and improving maintenance reliability - is grounded in employee and management engagement to meet or exceed performance goals. A design team was formed to integrate input on suggested changes. The team was cross-functional and facility-wide; its aim was to break down barriers that had thwarted the company's ability to be successful. This was accomplished by employee participation, transparent communication, and bridging barriers between workers and supervisors. In addition, the change involved eliminating the win-lose scenario between workers and management, with the message that it was an imperative to be successful together. On this platform, success resulted in increased productivity and improved maintenance reliability. With the union's buy-in, significant costly work rules were modified to allow for multi-skill, multi-function, and job combination measures. This had a tremendous impact on the operation.

It's good business

Positive labor relations just make good business sense. It allows companies to be successful; employees to be fully engaged in the business; reduces turnover; attracts high potential candidates; fosters positive morale; encourages employees to be innovative; and allows for the business to expand and drives performance improvements. Clearly, the benefits of positive labor relations go beyond the bargaining table or an organizing drive. It relates to the day-to-day operation of the facility, interactions with all involved in the manufacturing process, and ways to accomplish continuous improvement. Positive relations are built on experience and trust, with a balance between competing interests to attain the goals of both the working unit and the business. This platform removes the autocratic form of management, leaving ultimate business decisions with management where it should always reside, but also includes significant input from the workforce. This is not management by consensus; rather a team environment with increased responsibility and accountability for all parties to maintain and sustain a successful operation.

I have visited numerous paper mills that are interested in developing new initiatives to improve performance and maintenance reliability but are unable to because of "labor problems." They do not have a workforce in 2010 that is cooperative enough to engage in new ideas to allow the firm to be successful. One of these managers actually lamented that the union leadership will not even converse with him. These facilities are unable to leverage improvement with their employees because of the relationship between the company and employees. It seems to me that the people in the best position to help identify possible performance improvements are employees. Why wouldn't you tap into this valuable asset? Those firms that partner with their employees to attain business and operational improvements will do well, and those that do not will struggle to compete with increasingly innovative and efficient competitors.

Although positive labor relations takes a commitment from management and the workforce alike to make it work, it's worth it; because this method of interacting and problem solving is extremely effective and it is what successful competitors have been employing for years. It works.

Michael Fitzpatrick has worked in the pulp and paper industry for more than 25 years in human resources, labor relations and production. He can be reached at 360-749-4677, or e-mailed atmfitzpatrick@teamdevelopmentmn.com

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