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Suggested Citation:"Appendix A - Literature Review." National Academies of Sciences, Engineering, and Medicine. 2015. Labor–Management Partnerships for Public Transportation, Volume 2: Final Report. Washington, DC: The National Academies Press. doi: 10.17226/23431.
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Suggested Citation:"Appendix A - Literature Review." National Academies of Sciences, Engineering, and Medicine. 2015. Labor–Management Partnerships for Public Transportation, Volume 2: Final Report. Washington, DC: The National Academies Press. doi: 10.17226/23431.
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Suggested Citation:"Appendix A - Literature Review." National Academies of Sciences, Engineering, and Medicine. 2015. Labor–Management Partnerships for Public Transportation, Volume 2: Final Report. Washington, DC: The National Academies Press. doi: 10.17226/23431.
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Suggested Citation:"Appendix A - Literature Review." National Academies of Sciences, Engineering, and Medicine. 2015. Labor–Management Partnerships for Public Transportation, Volume 2: Final Report. Washington, DC: The National Academies Press. doi: 10.17226/23431.
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Suggested Citation:"Appendix A - Literature Review." National Academies of Sciences, Engineering, and Medicine. 2015. Labor–Management Partnerships for Public Transportation, Volume 2: Final Report. Washington, DC: The National Academies Press. doi: 10.17226/23431.
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A-1 A P P E N D I X A Labor–management partnerships (LMPs) in the United States date back as early as the 1910s, when union–management mutual problem-solving programs emerged in the clothing industry out of the need to survive (Oestreich and Whaley 2001). Nonetheless, the early examples were isolated and short-lived. Labor relations have typically been adversarial in the United States. Historically, most unions do not bargain over the work process or product, or at the strategic level of decision mak- ing. The traditional role of labor unions is confined to contract administration, negotiations, and grievance handling (Eaton, Rubinstein, and McKersie 2004). During the early 1970s, efforts were made in the American industry to expand employee par- ticipation in managerial decision making. Examples include the so-called Quality of Work Life (QWL) programs, many of which were promoted by the federal government. Most of the early efforts of QWL failed, as they faced opposition from both the union and management (Oestreich and Whaley 2001). Since the early 1980s, when economic hardships led both labor and management to explore ways to improve produc- tivity and quality in global competition, labor–management cooperation has been adopted in a broad cross section of settings (Oestreich and Whaley 2001; Preuss and Frost 2003; Eaton, Rubinstein, and McKersie 2004). Today, where labor– management cooperation has been successful, the unions are truly equal partners with the management in strategic and operational decision making and implementation. This literature review scans studies in LMPs in a variety of organizations in the United States. The findings are applicable to the public transit system, which is the focus of this research. Causes Giving Rise to Labor–Management Partnerships LMPs often emerge in times of organizational or financial crisis. Common causes giving rise to LMPs include impend- ing confrontation between labor and management, a financial crisis of existence for the company, or other dramatic events in the relationship (Eaton, Rubinstein, and McKersie 2004). Dur- ing labor conflicts, especially when labor power rises through organized actions like strikes, management may see a part- nership with the labor union as a way to reassert control over labor; whereas in times of financial crisis, labor and manage- ment come together out of a need to survive (Preuss and Frost 2003). For example, in the context of the formation of an LMP between nurses and hospitals in Minnesota, the hospitals in the Twin Cities faced serious financial crisis; and the Minnesota Nursing Association became powerful after a lengthy and suc- cessful strike. There was a nationwide shortage of nurses, which explains the rising labor power of the Minnesota Nursing Asso- ciation (Preuss and Frost 2003). Types of Labor–Management Partnerships LMPs in various industries have shown that there is no one- size-fits-all model. Successful partnerships were established in response to different crises or problems; these partnerships later evolved to adapt to the changing needs of organizations. Table A-1 summarizes some of the most prominent LMPs, including areas of union–management cooperation and the organizational level of the partnerships. From these examples, we see that LMPs can be successful in nearly all aspects of business operation and strategic decision- making. For some partnerships, collective bargaining is strictly excluded, while for others, it is a major aspect. It should be noted that partnerships that focus on a wide range of areas typically started with specific operational issues that are less controver- sial and then expanded to cover more operational issues and eventually more strategic issues. The examples in Table A-1 show that successful LMPs exist in all levels of an organization. Nearly all partnerships reviewed have some forms of joint committees or work groups at the frontline and mid-level. Depending on organizations, the top- level of partnership varies. Some organizations (e.g., Metra and Saturn) have top-level partnerships at the executive level, usu- Literature Review

A-2 Duration of Labor–Management Partnerships and Their Causes of Decline LMPs are typically precarious and short-lived. Many of them only lasted through a particular project, or could not survive changes in management and labor conflicts like layoff (Preuss and Frost 2003). The common direct causes of labor– management partnership declines include end of financial crisis, elimination of the need to control labor power, manage- ment finding an alternative mechanism to cut costs and con- trol labor, changes in management, new labor–management conflicts, and external factors (Preuss and Frost 2003). LMPs are precarious because (1) the power distribution in both management and labor organizations shifts, which is ally in the form of joint committees or councils with members from both management and union; while in the steel industry, unions elect members to the company’s board of directors, so that the concerns and views of the union can be shared at the highest level of the company. Benefits of Establishing Labor–Management Partnerships Successful LMPs can help organizations overcome (1) orga- nizational crisis by increasing wages, employment secu- rities, work schedule flexibility, and union membership; and (2) financial and competitive crisis by lowering costs and improving productivity and competitiveness (Eaton, Rubinstein, and McKersie 2004; Cooke 1990). Table A-1. Successful labor–management partnerships: areas and level of partnership. Organizaon or Industry Areas of Partnership Level of Partnership AT&T Collecve bargaining Expanded from top management and union leaders to all company levels Saturn Operaon Strategic decision making Joint labor–management governance bodies at all levels from the shop floor to the strategic level Union leaders served as co- managers of departments consisng of self-directed work teams UAW retained membership in the Strategic Acon Council Kaiser Permanente Started with employment and income security, and joint work redesign efforts Then expanded to consultaon with unions on key strategic maers Envisioned to have joint decision making by consensus Collecve bargaining is excluded Coalion of union representaves meet regularly with key management members in a top-level council Joint commiees at mulple levels: naonal, regional, medical centers, clinics, and departments Northeast Illinois Regional Commuter Railroad Corpora on (Metra) Started with non-controversial issues (e.g., employee safety, prevenon of drug and alcohol abuse, technical skills training) Collecve bargaining is excluded Problem-solving teams (frontline) Labor–management commiees (mid-level) A coordinang steering commiee (top-level) U.S. Steel Industry Employment security, training, informaon sharing, joint structures for problem solving, producvity and quality problems, and consultaon on strategic decisions Unions elected members to the company’s board of directors (Sources: Eaton, Rubinstein, and McKersie 2004; Oestreich and Whaley 2001)

A-3 increased trust, joint problem solving, and attention to the interests of multiple stakeholders. This includes the devel- opment of processes that facilitate alignment on goals and responsibilities (Eaton, Rubinstein, and McKersie 2004). In Metra’s case, the transit system started small and moved slowly to build trust. It started with projects that had a high probability of success. Management maintained open and honest sharing of information with union representatives. Union and management maintained mutual respect. Both sides had a long-term perspective. Both sides quickly dealt with early warning signs of potential conflicts. As a result, the LMP in Metra had clear and unqualified support from the Metra Board of Directors through the labor–management committee program, as well as buy-in from all the unions at the highest level (Oestreich and Whaley 2001). • Dense communication network. A dense network of communications, which includes interdepartmental com- munications, coordination between union leaders and their non-represented partners, and communication with all other stakeholders, is essential in building LMPs (Eaton, Rubinstein, and McKersie 2004). • Allow sufficient off-line time. Establishing an LMP should be a separate, parallel, and off-line activity rather than the way we do business every day. The organization should allow sufficient off-line time to dedicate to partnership initiatives for all involved in the joint work process (Lazes, Katz, and Figueroa 2012). • Enabling contract and agreement language. It is most effec- tive when negotiated language focuses on the key principles for partnership arrangements rather than on specific stan- dards. National contract language should accommodate and build upon workplace innovation that is already in place at local levels (Eaton, Rubinstein, and McKersie 2004). • Manage relationships with all stakeholders. The capacity for managing across organizational boundaries is increas- ingly important in order to maintain healthy relationships with other stakeholders such as the corporation, national union, other locals, customers, and suppliers (Rubinstein 2001). In Metra’s case, there was clear and unqualified sup- port from the Metra Board of Directors through the labor– management committee program. The LMP maintained a customer service perspective in all of its projects. Middle management was included in the program, empowering them to implement agreed-upon improvements (Oestreich and Whaley 2001). • Confronting and overcoming pivotal events. Organiza- tions should maintain continuity in the face of change. They should provide training to managers and union leaders who are not directly involved in LMPs. Management and union leaders should negotiate partnership principles into collective bargaining agreements and develop a succession strategy before changes take place (U.S. Office of Personnel Management 2000). usually costly and sometimes risky, (2) the performance pay- off to the power redistribution becomes ambiguous once the organization gets out of the crisis zone, and (3) lower-level innovations in labor–management partnerships can hardly diffuse across the organization or up the hierarchy given the ambiguous pay-off and high costs of change (Kochan et al. 2008). Summary of Key Success Factors for Labor–Management Partnerships Research on existing and previous LMPs found certain factors to be crucial to the success of these partnerships. The following is a summary of those factors. • Good leadership on both sides. As the experience of Metra shows, representatives from both union and the manage- ment should be carefully selected to initiate LMP building efforts. Keen interest and participation of the top manage- ment in the activities of LMPs is crucial (Oestreich and Whaley 2001). The LMP experience in Kaiser Permanente, a healthcare consortium, also showed that strong champions and effective leadership played crucial roles in the trajec- tory of partnership efforts. When key champions of the partnership left the organization, the partnership was often challenged by discontinuity (Kochan et al. 2008). • Set clear goals. The goals should include partnership build- ing alongside specific service delivery, workplace environ- ment, and organizational relations outcomes (Lazes, Katz, and Figueroa 2012). • Training and education. A strong commitment to training and education is important in building successful LMPs. Organizations should provide training in conflict resolu- tion, problem solving, interest-based bargaining, as well as strategic planning, budgeting, procurement, and work pro- cess analysis (U.S. Office of Personnel Management 2000). Training by outside consultants in the early stages of LMP programs to make participants understand the process and techniques involved is also crucial (U.S. Office of Personnel Management 2000; Oestreich and Whaley 2001). • Good facilitators and consultants. The presence of knowl- edgeable, skillful, and well-accepted facilitators, developed internally from either management or union, or hired through external consultants and academics, can benefit the formation of LMPs. “Facilitation is especially crucial in helping the parties move from the traditional configu- ration wherein management acts and the union reacts to a decision making process characterized by interest based problem solving and consensus decision making” (Eaton, Rubinstein, and McKersie 2004). • Joint collaborations at all levels. It is important to build on mutual understanding and trust. Collaboration on one end but fighting on another will only ruin partnerships. LMPs require enhanced communications, information sharing,

A-4 is a problem on the flip side as well. “Union leaders expect as a result of the partnership to be apprised of all-important strategic decisions. When management holds back infor- mation, for example because of Securities and Exchange Commission (SEC) rules, the union leadership feels mar- ginalized and basic partnership relationships area threat- ened” (Eaton, Rubinstein, and McKersie 2004). • Structures do not adapt to new issues over time. LMPs are often created to resolve a specific problem. Thus the programs are structured and institutionalized for a par- ticular purpose. As the original problem gets resolved, if the structure of the LMP does not change and adapt itself to new issues that have come up, LMPs are likely to decline (Preuss and Frost 2003). Also, successful LMPs have been ruined by a preoccupation with written rules and proce- dures. “The spirit is more important than the procedures” (Oestreich and Whaley 2001). • Leadership turnover. Changes of management and union leaders place threats to the continuity of already successful LMPs (Eaton, Rubinstein, and McKersie 2004; U.S. Office of Personnel Management 2000). • Weak and fragmented union. A weak and fragmented union typically offers more disadvantages than advantages for management. It cannot facilitate the collective bargain- ing process. Agreements reached with weak union leaders will easily unravel (Oestreich and Whaley 2001). • Expect too much too soon. Expect failures—ups and downs are normal (Oestreich and Whaley 2001). • Assessments of LMPs by statistical measures of produc- tivity. Trying to assess the success or failure of LMPs with statistical measures of productivity is risky. There are often too many factors beyond the control of the participants in the transit system that cause productivity to rise or fall. For example, such measures as number of passengers moved or passenger miles driven per employee suffer from the fact that they are more influenced by the riders than the drivers, by peak and off-peak ridership, by traffic congestion, and other factors. There is a justified mistrust of the numbers by the unions representing these employees in the organization, and that mistrust may negatively affect other aspects of the trust between unions and management that is so badly needed in a successful labor-management partnership. “There are many valuable but vaguely defined benefits of union- management cooperative efforts that cannot be accurately measured, such as improvement of quality of work life, employee morale, customer satisfaction, employee loyalty, employee sense of ownership of their jobs, and many others” (Oestreich and Whaley 2001). • Other challenges include political pressures from within and without, economic crisis, and other external factors (Eaton, Rubinstein and McKersie 2004). Challenges and Words of Caution Research on existing and previous LMPs found that certain challenges and barriers could undermine the partnership if they are not properly dealt with. The following is a summary of these challenges and barriers. • Labor disputes. Even with a successful LMP, conflicts over different interests between labor and management remain. Failure to balance conflicts and cooperation can undermine the established LMP (Preuss and Frost 2003). Organizations should determine the appropriate institutional structure and correct balance of resources among individual repre- sentation, collective bargaining, governance, and manage- ment (Rubinstein 2001). • Failure to engage middle managers and union stewards. Resistance from powerful mid-level managers and union officials is inevitable—mid-level managers may “put their heads down and hope this too will pass;” union stewards may be so trained in the “confrontational” or grievance mode that partnership is problematic for them, or at least they do not feel confident or possess the skills required to engage in LMPs productively (Eaton, Rubinstein, and McKersie 2004; Kochan et al. 2008). • Lack common understanding of partnership. Manage- ment and union leaders face difficult questions when they attempt to form partnerships. What are the critical elements of a genuine partnership? What are the roles of labor and management in a partnership versus a traditional relation- ship? Does partnership mean that labor and management will make decisions jointly on every issue? How do partners deal with issues that are outside the scope of bargaining? What is the connection between collective bargaining and partnership? Who should sit on the partnership council? Who sets the agenda? Are some issues off limits? There are no simple answers. Responses to those questions should be unique to each organization and the answers should be reviewed periodically to reflect new issues and needs. Failure to develop a common understanding of an LMP will result in the decline or dysfunction of the partnership (U.S. Office of Personnel Management 2000). • Tension between confidentiality and representative democracy. When union leaders participate in strategic- level decision making, they come across confidential infor- mation about business plans. “Some union leaders are nervous about having information that they cannot share, and if the plans call for changes that are averse to the short run interests of the members, they fear they may be blamed for the decisions. In addition, they feel that they have some obligation to report back to the membership who elected them. This is one reason why some unions ask outside directors to serve on boards in lieu of union officers.” There

A-5 essential to have continuity in leadership and to quickly adapt to new organizational challenges. Management should be proactive in its dealings with union officials if it wants to reverse hostile labor relations. It cannot wait for the union to make the first move toward a more con- ciliatory approach (Oestreich and Whaley 2001). Union leaders should: • Rethink local structures, reorganize resources around mul- tiple roles, and acquire new skills in strategy and business processes • Create a vision for the union that balances the responsibil- ity for running the business and collective bargaining • Develop political skills needed to balance multiple roles It is equally important for both management and union to recognize the existence of integrative and distributive issues and deal with these two types of issues separately with different approaches. An LMP is well suited to address integrative issues where management and union share similar goals and inter- ests, especially in the early stages of a partnership. The trust that grows in the cooperative problem-solving process will reinforce the partnership and provide a foundation for the partnership to expand to more integrative issues, and possibly, some dis- tributive issues as well. References Cooke, W. N. (1990). Labor–Management Cooperation: New Partner- ships or Going in Circles. Kalamazoo, MI: W. E. Upjohn Institute for Employment Research. Eaton, S. C., Rubinstein, S. A., & McKersie, R. B. (2004). Building and sus- taining labor-management partnerships: recent experiences in the U.S. In D. Lewin, & P. Gollan (Eds.), Advances in Industrial & Labor Relations (Vol. 13, pp. 137–156). Emerald Group Publishing Limited. Kaiser Permanente. (2000). Pathways to Partnership. Retrieved Dec 4, 2012, from http://www.lmpartnership.org/tools/pathways-partnership- report. Kochan, T., et al. (2008). The potential and precariousness of partnership: the case of the Kaiser Permanente labor management partnership. Industrial Relations, Vol. 47, No. 1. Lazes, P., Katz, L., & Figueroa, M. (2012). How Labor-Management Part- nerships Improve Patient Care, Cost Control, and Labor Relations: Case Studies of Fletcher Allen Health Care, Kaiser Permanente, and Montefiore Medical Center’s Care Management Company, LLC. Retrieved Dec. 12, 2012, from http://www.ilr.cornell.edu/ news/upload/How-Labor-Management-Partnerships-Improve- Patient-Care-Cost-Control-and-Labor-Relations.pdf. Oestreich, H. H., & Whaley, G. L. (2001). Transit Labor Relations Guide. San Jose, CA: Mineta Transportation Institute. Preuss, G. A., & Frost, A. C. (2003). The rise and decline of labor- management cooperation: lessons from health care in the Twin Cities. California Management Review, 45 (2), 85–106. Rubinstein, S. A. (2001). The local union revisited: new voices from the front lines. Industrial Relations, 40 (3), 405–435. US Office of Personnel Management. (2000). Labor-management part- nership: a report to the President. Retrieved Dec. 4, 2012, from http:// www.opm.gov/lmr/report/index.htm. Process of Establishing Labor–Management Partnerships Kaiser Permanente’s experience of establishing a successful LMP, which is still functioning, shows the process of partner- ship building: (1) foundation building, (2) transition phases, and (3) full partnership (Kaiser Permanente 2000). Kaiser Permanente’s LMP guidebook suggests that the organization form local labor–management teams. The teams should develop action plans, which include targeting projects for breakthroughs, defining new leadership roles for both sides, providing orientation and education for all employees, and developing performance targets and measures (Kaiser Permanente 2000). The U.S. Office of Personnel Management also suggests that the organization develop a strategic plan for establishing LMPs, including a timetable monitoring the process toward the completion of plans. Such plans should be developed in conjunction with the organization’s strategic plans (U.S. Office of Personnel Management 2000). In the transition phases, the labor–management teams should extend shared decision-making, give more voice to employees, and widen the understanding of quality and measures. Dur- ing the transition phases, the organization should see business results improved and employees enthusiastic about marketing their organization (Kaiser Permanente 2000). In the last phase, the organization enters into a full partner- ship. Decisions are now made by consensus; jobs are empower- ing and fulfilling; managers support teams; management and union solve problems jointly and collaboratively; employees enjoy employment security; with everyone contributing, the organization delivers the highest quality of products or services; management and employees share responsibility for company success and failure (Kaiser Permanente 2000). In a labor relations study specifically focused on the tran- sit industry, the authors recommend that labor–management committees should be introduced to establish LMPs (Oestreich and Whaley 2001). Similar to the labor–management teams in Kaiser Permanente’s example, a labor–management commit- tee is a team of employees, selected by both union and manage- ment, who are empowered to study and solve organizational problems. Conclusion LMPs are effective ways to improve productivity and over- come organizational and financial crises. There is no one- size-fits-all model for successful LMPs. Organizations should establish their LMPs with structures and procedures that best cater to their unique needs. Previous experience in establishing and maintaining effective LMPs reveal some valuable lessons for public transportation. Successful LMPs typically are endeavors separate from the collective bargaining process. To sustain effective LMPs, it is

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TRB’s Transit Cooperative Research Program (TCRP) Report 181: Labor–Management Partnerships for Public Transportation, Volume 2: Final Report, documents the materials used to develop Volume 1: Toolkit. Volume 1 provides resources for public transportation management and labor union leaders to establish, manage, and improve labor–management partnerships.

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