Human Resource Management 12th Edition by John Ivancevich,Robert Konopaske

Exercise 9

Objective
To permit individuals to become involved in labor-management contract negotiations in a role-playing session.
Set Up the Exercise
1. Form an even number of groups of four to eight people. Half of the groups will be union teams and the other half will be management teams.
2. Read the description of the Dana Lou Corporation of Hamilton, Ohio.
3. Review and discuss in groups the four bargaining issues and the data collected on competitors (15 minutes).
4. The instructor will provide the union teams with the union negotiator's instructions and the management teams with the management negotiator's instructions.
5. Groups face off against each other (one management team versus one union team). The negotiator represents the team's position.
Individuals should answer the exercise questions after step 2 of the negotiations.
Dana Lou Corporation
Dana Lou Corporation is a medium-sized company with about 1,100 employees in Hamilton, Ohio, a suburb of Cincinnati. It competes in the electronic repair parts industry and is slightly larger than most of its main competitors. The firm's success (profitability and growth) has been attributed to a dedicated workforce that takes great pride in its work.
In 1964, the Communications Workers of America (CWA) organized the plant. Since then, labor-management relations have been good, and there were only two days lost to a strike, in 1972. Labor and management both feel that the cooperation between them is much better than that found in other firms of the same size in the area.
The current labor-management contract expires in three weeks. Representatives from the union and management have been negotiating a number of bargaining issues for the last three days, but there seems to be little agreement.

2. Preventive health director, staff, and participation
a. Present contract: Dana Lou has two part-time physicians and two full-time nurses (cost is $66,000 per year).
b. New contract issues: CWA wants a full-time fitness director, a full-time physician, counselors for alcohol and drug abuse problems, and partial payment of employees' use of YMCA and YWCA exercise facilities (estimated increase over present arrangement, $108,000).
3. Vacation benefits
a. Present contract: One week with full pay for the first year; two weeks for employees with 2 to 10 years of service, and three weeks for employees with over 10 years.
b. New contract issues: CWA wants all employees with 15 or more years of service to have four weeks of full paid vacation. Management wants to change in the present program.
Wage increases for skilled quality inspectors
a. Present contract: Inspectors' rate is $10.05 per hour; the rate for inspector apprentices is $6.40.
b. New contract issues: CWA wants an increase of $0.50 per hour for the plant's 95 inspectors and a $0.40 per hour increase for the plant's 25 inspector apprentices. Management wants to hold the line on salary increases because it believes that layoffs will have to occur. The union's proposal would cost Dana Lou 95 times $0.50 = $47.50 and 25 times $0.40 + $10.00 or $57.50 total per hour.
Negotiations
1. One member from each of the two groups facing each other will negotiate the four issues. The rest of the group must remain quiet during the negotiations. The negotiators should role-play for exactly 20 minutes. At the end of this time, they should record the agreement points reached.