Adding Value to Public Organizations: Labor Relations in a Changing Environment Photograph by Michael Rock, Alameda County Submitted by Aracelia G. Esparza Labor Relations Analyst Alameda County Human Resource Services for The California Public Employers Labor Relations Association Academy Master Certificate February 2013 1
Adding Value to Public Organizations: Labor Relations in a Changing Environment Introduction The movement towards new public management and the demands based on environmental factors (e.g., technology and performance management directives) have created a need for public organizations to undergo changes in culture, values, structure, systems, and work processes. In today s environment, changes are inevitable and difficult to manage due to resistance that is most likely to exist. For changes to be successful, effectively managing the human side of organizations is essential. According to McNabb (2009), the function of labor relations is a key driver in facilitating and implementing changes throughout the entire organization. Labor relations professionals, as a strategic partner, can help organizations deliver services in a more efficient and cost-effective manner. Therefore, organizations are recognizing the value of engaging labor relations professionals in the planning process of change management initiatives. Background and History Through policies, procedures, practices, programs, and initiatives, public organizations implement changes and systems to motivate and train human capital and increase performance, service delivery, trust, and accountability. In order for these changes to be successful, buy-in and 2
support from relevant parties, including the board of supervisors, department heads, leadership, union organizations, and employees are critical. The process of including relevant stakeholders from the beginning helps obtain buy-in and facilitates the transition. Therefore, spending a sufficient amount of time analyzing and planning is important to clearly understand what is involved, the issues, the impacts to employees, and work volume. During the planning and change management processes, human resources professionals play a key role in providing specialized labor relations consultation to executive staff to ensure changes are implemented in an efficient and effective manner. Human resources professionals in a strategic role anticipate important potential changes and help shape strategies based on their insights of the organization s environment, challenges, and opportunities. Human resources programs, policies, and initiatives are developed to support the organization s long-term goals and to help the organization be effective and efficient. The essential competencies for human resources professionals in a strategic role according to the Harvard Business School Press (2006) are as follows: (1) understand the organization s service delivery, challenges, and opportunities; (2) translate organizational strategies into human resources implications; 3
(3) engage line managers and other stakeholders in the designing of human resources initiatives; (4) assist executives and management staff to motivate and develop staff; (5) predict human resources issues, develop a plan, and send tough messages to management when necessary; (6) obtain support and buy-in for strategic change throughout the organization; and (7) steer and manage the organization s culture and changes The role of human resources has changed over the years. Human resources management has gone from an undervalued function to a vital function in all organizations (Harvard Business School Press, 2006). Due to the complexity and high-level issues, human resources professionals in labor relations must have the competencies to analyze, make recommendations, and develop systems that support the organization s direction. According to the 2007 Human Resources Competency Study, human resources professionals are expected to play the strategic and customer service roles and will be required to obtain new competencies in order to succeed in today s work environment (Grossman, 2007). 4
Labor Relations in the Planning Process Predict & Plan for Human Resources Issues. Public organizations are facing the need to continuously implement changes in order to improve efficiency and effectiveness in the delivery of public services. Public administrators are obligated not only to achieve efficiency and effectiveness, but to be responsive to the many bodies that help define the public interest (Denhardt, 2009). Labor relations in government are influenced and shaped by many complex factors, including: historical events, social and economic forces, politics, characteristics of work and organization, and public policy. Therefore, public administrators must be mindful of the following three concerns when implementing changes: managerial, political, and ethical. In implementing changes, public administrators have an obligation to comply with federal, state, and administrative laws, including the Meyers Milias Brown Act (MMBA). The MMBA requires public agencies in California to meet and confer in good faith on matters within the scope of representation (e.g., hours, wages, and working conditions) prior to implementation. Failure to do so can result in Public Employment Relations Board (PERB) charges, delays in implementation, perceptions of unfairness, lack of trust, and a decrease in employee-motivation. All of these factors negatively impact the human-side of the organization and the change management efforts. When change is poorly managed, these changes are likely to cause resentment and resistance among the workforce (Cooke, 2006). Therefore, it is essential that 5
public organizations identify mandatory subjects of bargaining under the MMBA during the planning process and incorporate such process into the project timeline. In Alameda County, labor relations analysts participate in departmental leadership meetings where potential organizational changes and initiatives are discussed. Labor relations analysts have the opportunity to identify if certain changes require a meet and confer and provide consultation accordingly. A proactive approach has been taken to: (1) research and analyze the impact, risks, and cost; (2) strategize with relevant stakeholders; (3) develop action, contingency, and communication plans; and (4) notify union organizations. As a result of proper planning, change initiatives have been supported by necessary parties (e.g., board of supervisors, department heads, employees, and union organizations) and successfully implemented without significant delays. Leadership staff has reported that labor relations analysts have provided specialized strategic consultation, which has positively impacted decision-making and implementation. Additionally, they stated that they appreciated the labor relations analysts in-depth understanding of labor law and the consultation on the pros and cons of the different options from a labor relations perspective. According to the Deputy Director of Social Services, The agency has greatly benefited from the labor laws and organizational knowledge that labor relations brings to the leadership table. 6
They help us to focus, organize, and stay on track with the process. Assistant Agency Directors indicated that labor relations analysts have helped them navigate through difficult labor relations issues and be more consistent in human resources practices when managing change. Additionally, Labor Relations Analysts have established a satisfactory balance between compliance with legal mandates and management rights and discretion, which has decreased liability risk and grievances, and improved working relationships between employees, union organizations, and departmental management staff. Consultation. To endure change in public organizations, the following activities are essential: (1) clarifying the purpose; (2) understanding the environment; (3) engaging stakeholders; and (4) building commitment to change (Popovich, 1998). As a strategic partner, labor relations professionals provide specialized consultation to executive and leadership staff in developing a plan of action and strategies that will ensure achievement of the desired results, objectives, and commitment. Additionally, the knowledge and expertise in collective bargaining negotiations will result in a successful change management process. During the planning process, labor relations consultation has steered the organization in the right direction. Labor relations analysts in Alameda County actively participate in executive and leadership meetings when the departments and County are planning change initiatives and proposals. In 7
their strategic role, labor relations analysts have developed a good understanding of the County and its departments, including environmental and political factors. Labor relations analysts have been instrumental in identifying risk and opportunities, and ensuring that such initiatives are in alignment with the departments and County s mission, vision, and values. At the bargaining table, labor relations analysts have been able to identify barriers and opportunities and advise leadership and executive staff accordingly. Labor relations analysts have implemented negotiation strategies to problem-solve and compromise on outcomes that will work well for both, the County and the union organization. This has been achieved through: reviewing and analyzing proposals; understanding both parties position and needs; identifying possible solutions by finding middle grounds; establishing flexibility; and influencing both parties to compromise Data Analysis. It is essential that public organizations conduct useful organizational assessments during the planning process. One of the key elements of bargaining starts with cultivating an understanding of how a business runs (Krell, 2009). Data analysis and assessments will provide such understanding. With an in-depth understanding of the organization, labor relations professionals can help motivate change throughout the 8
organization, select opportunities, and monitor progress. Additionally, adequate planning prior to going to the bargaining table is required for change management to be successful. For these reasons, it is essential that labor relations professionals play a key role in analyzing data and making recommendations during the planning and decision-making processes. In Alameda County, labor relations analysts conducts organizational studies, needs assessments, and internal and external surveys to identify organizational structures, positions, classifications, salaries, benefits, costs, and current trends and practices. Labor relations analysts have presented such information in executive meetings which has been found to be very effective in identifying problems, gaps, and solutions, and in formulating initiatives and proposals. The participation of labor relations analysts in the planning process prior to initiating negotiations has provided the ability to conduct comprehensive research and to interpret written materials. Thus, labor relations analysts have provided valuable consultation to leadership staff on labor relations issues. Therefore, well-informed decisions and proposals have been made with the support of the departmental executive teams. During the negotiation process, labor relations analysts have presented data and information, which was gathered and analyzed during the planning process. Labor relations analysts have coordinated and ensured that all data and information was reviewed by all stakeholders before it was 9
presented at the bargaining table. The presentation of accurate and relevant data to union organizations is beneficial in identifying problems, establishing credibility, and keeping both sides focused on developing solutions. As a result, meet and confer sessions are more productive and are finalized in a shorter period of time. Communication Plan. For change to be successful, a structured and proactive communication plan must be developed and implemented. The communication plan should include a comprehensive road map to obtain support and commitment from all levels of the organization and include contingency plans outlining how to manage resistance. According to Price Waterhouse Change Integration Team (1995), the five Cs of successful communication plans are as follows: Candid: Always tell the truth; your employees will probably know when you don t. Constructive: Guard against counterproductive comments that work against team and stakeholder unity. Contextual: Provide your stakeholders with the big picture as you explain the relevance of the project to the organization. Consistent: Ensure that verbal, written and nonverbal forms of communication are consistent from message to message, and that your actions support your messages. 10
Continuous: Provide ongoing reinforcement of your commitment to the change initiative. As emphasized by Ulrich and Brockbank, as change agents, HR strategic partners diagnose organization problems help set an agenda for the future and create plans for making things happen (2005). Labor relations professionals can help organizations effectively communicate what is changing, the reason for the change, and how the change will affect employees and the work environment. Labor relations professionals help diagnose and solve communication problems, both vertically across levels and horizontally among units, which is a critical prerequisite to the strategic planning efforts (Condrey, 2010). For change management to be successful, effective communication is critical throughout the entire process and at all levels of the organization. In Alameda County, labor relations analysts have provided consultation to executive and leadership staff on when and how to communicate change to avoid wrongful perceptions that may create resistance to change. Strategies may include, when and how to raise issues with the County Administrator, Board of Supervisors, union organizations, and employees. Through the development of relationships and collaborations, labor relations analysts have been able to obtain support and commitment from key stakeholders. Additionally, labor relations analysts have facilitated internal county discussions to provide clarification, ensure 11
consistency, problem-solve, and help establish a uniform direction. As a result, changes in county and departmental policies and procedures have been successfully implemented. Conclusion Public administrators are expected to transform their units, divisions and organization to a more business-centered and customer-driven system. Major changes can affect organizations across all levels of the organization. As change initiatives become more frequent, effectively managing employees through change is highly important. The consequences for not effectively managing change initiatives are employee dissatisfaction, resentment, and distrust, and a decrease in employee morale, motivation, and productivity. To increase efficiency and effectiveness, public managers must collaborate and partner with relevant stakeholders. Labor relations professionals play an important and critical role in planning and implementing organizational changes by providing strategic consultation and helping public organizations avoid pitfalls, risk, and liability that threaten success. Including labor relations in the change management process will help organizations consider political impact of proposed changes, communicate and clarify the purpose of the change, identify environmental 12
factors, and obtain cooperation and support from stakeholders and employees throughout all levels of the organization. References Condrey, S. (2010). Human Resource Management in Government (3rd ed). San Francisco: John Wiley & Sons, Inc. Cook, F. (2006), Modeling an HR Shared Services Center: Experience of an MNC in the United Kingdom. Human Resource Management. Retrieved January 15, 2013, http://0-proquest.umi.com.library.ggu.edu Denhardt, J. & Denhardt, R. (2009). Public Administration: An Action Orientation. Belmont: Thomson Wadsworth Grossman, R. (2007). New Competencies for HR. HR Magazine. Retrieved January 15, 2013, from http://www.shrm.org Harvard Business School Press. (2006). Strategy and the HR Professional. The Essential of Strategy (pp.1-19). Boston, MA: Harvard Business School Publishing Corporation. Krell, E. (2009), The Rebirth of Labor Relations. Society for Human Resrouce Management. Retrieved January 30, 2013 http://www.shrm.org. McNabb, D. (2009). The New Face of Government. New York: CRC Press. Price Waterhouse Change Integration Team. (1995). Better change: Best 13
practices for transforming your organization. New York: Irwin Professional Publishing. Ulrich, D., & Brockbank, W. (2005). The HR value proposition. Boston, MA: Harvard Business School Press. Author: Aracelia G. Esparza Labor Relations Analyst Alameda County Human Resource Services 1401 Lakeside Dr., Suite 200 Oakland, CA 94612 14