All the rage about Union rights..... and Employee Engagement

It is very interesting to me that just two years ago - the big union issue was the effort to pass the so called "Free Choice Act" (popularly described in some HR circles as the Forced Choice Act). After the election of the Democratic administration after years of Republican dominance - it was time for the unions to exert their powers.

The current unionization process allows for solicitation of interest with a signature indicating the employee would be interested in unionization (this is often done in secrecy). With enough interest - a campaign is held and both parties (Union and Management) have the right to discuss the issue and employees vote yay or nay "behind the curtain". The proposed Free Choice Act would require the Company to recognize the union with just the signature process (card check).

Now - just two years later - we are no longer talking about expanding unionization - but in Wisconsin, Ohio and other states - the talk and controversy is about limiting union bargaining rights. Historically, unions, once certified, can bargain on wages, benefits and working conditions. With the state budget issues - one of the areas that is targeted for cuts are state workers benefits. State workers are largely unionized - so the unilateral Governor budget proposal to cut benefits without bargaining has created an uproar around union bargaining rights. Ironically, the unions have now agreed to the budget cuts but state government are not backing down on the state rights to unilaterally make these changes (i.e. the unions protest on weakening of their bargaining rights).

So with that background - how does this impact the Energy Industry? With the exception of Refining, Chemicals and Power sectors - the Energy industry has largely gone union free... so the impact should not be large.

In most companies that "get it" - engaged employees are the key to improved business results. There are numerous studies that shows that companies with engaged employees deliver far better performance than companies with low engagement. A TowersPerrin Global Workforce Study showed that companies with high employee engagement had a 19% increase in operating income a 28% growth in earnings per share. Conversely, companies with low levels of engagement saw operating income drop more than 32% and earnings per share decline by 11%.

So what is the connection -- in my view - during the industrial revolution era - companies did not get the need to engage employees and thus there was a need to unionize to get basic rights. However, in today's highly competitive global environment - enlightened companies treat their employees basic needs and involve them in the business creating an environment where unions are not needed. In fact, my view is that the inclusion of a third party (unions) in the Employer and Employee relationship is a hindrance to engagement. However, if you do find yourself in a union environment, don't forget that you have rights to engage your employees directly.