Unionization is the process by which employees of a particular company or firm are organized to join a labor union, which acts as a representative of the employees' rights and liberties. According to the United States Department of Labor’s Bureau of Labour Statistics, 14.8 million workers are part of one or more labor unions. In certain instances, employees may feel that their rights are not being upheld or that there are poor working conditions that are consistently being overlooked. In such a scenario, these employees come together and join a labor union that will advocate for better wages and better working conditions on their behalf. In the United States, labor unions only cover 7% of private-sector jobs ( Taschereau-Dumouchel, 2019). Labour unions are entrusted with improving employees' wages and benefits to ensure the employee's job security and to also to protect the employee from unfair treatment by the employer (Hammer & Avgar, 2017).
Unionization has merits and demerits to both employers and employees. Labour unions ensure that employees are protected and that employers can’t terminate their contracts without a valid reason. In other words, there must be a just cause for termination of employment. There is a great difference between unionized workers and non-unionized employees. Unionized workers are far better off as compared to non-unionized employees in terms of wages, benefits, and pensions (Hammer & Avgar, 2017). Also, employees might be intimidated by their employers and fear that if they raise concerns about a specific issue affecting them, they may lose their jobs. Labour unions advocate on behalf of employees, and in this way, there is unity among the employees, and the employer can't discriminate on one particular employee. Before unions came into place, employers used to force workers to work even on weekends and to work overtime without compensation. Those that support labor unions believe that unions lay a strong foundation towards a strong working-class in the country.
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However, unionization has adverse effects both on the employer and the employees. To the employers, unionization lowers productivity because employers cease to work when their grievances have not been met. Unionization ensures that all employee grievances are bargained for collectively. When one employee is dissatisfied, all employees are dissatisfied (Taschereau-Dumouchel, 2019). Also, unionization lowers the firm’s total revenue because of the increase in employee wages. Studies have shown that unionization leads to a substantial decline in overall stock return (Taschereau-Dumouchel, 2019). To the employees, unionization can pose a risk to their jobs. Furthermore, numerous layoffs happen after employees join labor unions because employers look for alternative ways to increase the wages of the employees, and layoffs are often the most viable solution. Besides, unionization creates rifts and conflicts between the workers themselves (Taschereau-Dumouchel, 2019). Also, unions require that all members pay a certain monthly fee, which is often deducted automatically from the employee's paycheck. This can cause financial strain to the workers, but they have no otherwise if they want the union to continue representing their interests.
When companies start noticing a trend among their workers when they start joining unions, they take necessary actions to avoid unionization. Unionization has adverse effects on a firm's profitability. When companies begin to incur losses as a result of the formation of labor unions, there is increased pressure on top management to prevent the formation and growth of these labor unions (Taschereau-Dumouchel, 2019). They use different strategies to avoid the formation of labor unions within their ranks. Some of these strategies employed can be legal and others illegal. One such strategy that companies use in a bid to avoid unionization is by hiring highly skilled workers who challenge the lower-skilled workers in terms of performance. When lower-skilled workers work with highly skilled workers and can't match the level of performance, their self-esteem is lowered. In this way, they can't advocate for better wages when the highly skilled workers are not advocating for better salaries themselves. Also, organizations over-hire these highly skilled workers who, in turn, vote against the formation of labor unions, thereby creating a situation whereby the under-skilled workers who vote in favor of the labor unions are outnumbered (Taschereau-Dumouchel, 2019).
Another strategy that companies use to prevent unionization is by benchmarking the data of the wages and benefits of the employees. Employees often ponder on the prospect of joining labor unions because these unions promise them better wages and benefits. It is, therefore, imperative that companies seeking to avoid unionization come up with convincing ideas to explain to the employees how their salaries and perks are more than fair (Smith, 2018). This is often a more proactive approach that can yield excellent results if executed in the right way. Further, in a bid to prevent collective bargaining, the company can conduct one on one individual meetings with the employees to learn about their concerns and address these concerns immediately. Workers feel the need to join labor unions when they are dissatisfied, and when they feel the wages they receive are not reflective or equivalent to the efforts they put in (Hammer & Avgar, 2017). This strategy will alleviate all employee concerns and remove the need of formation of a labor union.
By training the management personnel on positive employee labor relations, companies can avoid unionization. When workers feel that there is a direct line of communication between them and top management, they tend to be more calm and satisfied. They feel that there is a platform where they can voice any grievances or concerns. When employees feel that there is a gulf between them and the managers and that there is no platform to speak freely, they feel the need to join labor unions, which are more vocal and can represent them effectively. Firms can also take the bold step of explaining to the employees the demerits of collective bargaining to prevent the formation of labor unions (Hammer & Avgar, 2017). Employees need to know that union membership comes with both economic and social costs. When workers are informed that they will be paying a substantial monthly fee which will be deducted directly from their salaries, they will take a step back and avoid the formation of these unions. Also, most unions are known to incite strikes, and this can be an even better argument employers can use to convince employees not to unionize. Strikes lead to loss of income, and the outcomes of strikes are not necessarily always positive. Therefore employees should be made to see that the cons of collective bargaining outweigh the pros (Hammer & Avgar, 2017).
Lastly, companies can also enlighten the workers on the impact that collective bargaining will have on the level of job satisfaction. Several studies have shown that union workers are equally satisfied in terms of wages, benefits, and job security as non-union workers (Hammer & Avgar, 2017). It goes without saying that when workers unionize, they permanently damage the relationship they had built with their employers. Unionization creates an unamendable rift between employees and top management. When employees join labor unions, employers fight back by creating a hostile working environment. Employers do this by increasing the level of supervision, altering the job description of employees regularly, limit their freedom to make various job decisions, and also decrease the opportunities available for promotion (Hammer & Avgar, 2017). When employees are faced with such adverse conditions, it forces them to quit their membership in labor unions to be in good standing with their employers. In conclusion, in all companies, there is bound to be dissatisfaction among employees when they feel their efforts are not being appreciated enough. They feel the need to unionize to get better wages and benefits. However, collective bargaining should be a last resort effort, and employees should find ways to voice their concerns to their employers amicably. Unionization only creates rifts between workers and top management, and the cons of unionizing in most cases outweigh the pros.
References
Hammer, T. H., & Avgar, A. (2017). The impact of unions on job satisfaction, organizational commitment, and turnover. In What Do Unions Do? (pp. 346-372). Routledge.
Smith, A. (2018, June 19). Take 7 Steps to Minimize Chances of Unionization. Retrieved from https://www.shrm.org/hr-today/news/hr-news/conference-today/pages/2018/take-7-steps-to-minimize-chances-of-unionization.aspx
Taschereau-Dumouchel, M. (2019). The union threat. Available at SSRN 2567359 .
