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U.S. DEPARTMENT OF LABOR
Working Together for Public Service

CHAPTER FOUR
NUTS AND BOLTS
HOW TO BUILD AND SUSTAIN COOPERATIVE,
SERVICE-FOCUSED WORKPLACE RELATIONSHIPS

Much has been learned in the private sector during the past decade about producing service excellence. In an effort to properly serve and retain customers, a growing number of businesses and their workers have greatly increased worker participation as an effective tool to produce and deliver high quality products or services in the most efficient and cost-effective manner possible.

Contrary to popular belief, this push for excellence is not limited to the private sector. In fact, the Task Force saw dramatic and compelling evidence that high performance through greater employee participation is being achieved in the public sector, as well. The Task Force saw much of this being achieved through labor-management partnerships where employees are represented by unions or otherwise play a role in selecting their representatives. In some settings, improved performance is being achieved through employee involvement and other approaches.

Over the past few years, an increasing number of elected officials, administrators, employees and union leaders around the country have come to realize that the public is impatient for and demanding excellence in public service delivered in the most cost-effective manner possible. They have come to realize that, despite the differences between them, they all face the same daunting challenge to provide services to the taxpayers in an era of limited resources coupled with greater societal needs, competing demands and more complex tasks. Moreover, these challenges are being raised in an atmosphere of growing hostility by a public increasingly skeptical of government's ability to effectively operate in this environment.

Where this new cooperative approach has been taken, leaders and workers also realized it was in their collective best interest and that it was their collective task to regain public trust by re-examining and ensuring that they deliver quality services at a reasonable cost. These pioneering leaders and workers are involved in joint efforts that are transforming states, cities, towns and their agencies into more flexible, customer-responsive organizations better equipped to serve the public.

"We see this movement toward cooperation as an essential ingredient in improving the quality of government services and the delivery of those services," testified Gerald W. McEntee, president of the American Federation of State, County and Municipal Employees.

"Labor and management must both accept that jointly achieving excellence is necessary for each side to achieve its goals," agreed John J. Sweeney, testifying as International President, Service Employees International Union. "Furthermore, we must accept as the final arbiters of excellence our customers -- taxpayers and clients. Meeting our responsibility to taxpayers includes undertaking joint steps to eliminate wasteful and unnecessary spending."

Mayor Paul Soglin of Madison, Wisconsin, whose city initiated its quality improvement efforts in 1985, pointed out: "Quality customer service requires the involvement of all stockholders, both customers and employees, in the defining of excellence and making sure our delivery systems reflect those requirements. The more we strive to meet our customer needs, the more our unions and management must work together. Our continuing efforts are aimed at building these opportunities into the day-to-day activities of the organization and not as special events."

The mayor of Louisville, Kentucky, Jerry Abramson, agrees. His city also has begun to replace the top-down management style that dominates typical government organization with a high-performance system built around collaboration and problem-solving teams, called CityWork.

"If you engage the hearts and minds of the people closest to the problem, their knowledge and experience will give them an edge in figuring out a better way to do the job," says the mayor, whose city won a 1995 Innovations in American Government Award given by the Ford Foundation and the John F. Kennedy School of Government at Harvard University.

"CityWork has proved that engaging workers with different perspectives and experiences in structured problem-solving can produce breakthroughs on problems that have confounded managers, workers, and union leaders for years. CityWork also demonstrates that a culture of innovation can become a permanent fixture of local government."

Similar comments to these were expressed by elected officials and managers throughout the Task Force's year of research, which included five regional visits across the United States, seven Washington, D.C. hearings and 55 detailed responses to a Task Force survey.

During the regional visits, the Task Force carefully observed and analyzed 47 examples that support the premise that cooperative labor-management partnerships in the public sector produce far more innovation in services than traditional relationships, and that this approach supports development of new and better approaches to work. These findings were further supported by survey responses reporting impressive service improvements in jurisdictions the Task Force was unable to visit. In addition, many other examples and observations by experts in both the public and private sectors were related during the Task Force's seven Washington, D.C. hearings.

Obviously, there are many examples of this trend occurring in more places than could be visited or invited by the Task Force. What's even more evident, is that this cooperative participatory approach can -- and should -- be adopted in more public jurisdictions and agencies as a primary tool for pursuing service improvements.

While every situation is different, there appear to be common ingredients that can help foster cooperative relationships. This chapter summarizes the factors and ingredients the Task Force found contributed to or were necessary for a successful service-oriented workplace relationship -- from how to initiate a cooperative, service-oriented relationship, to how to sustain it over time. The chapter also points out some common barriers that often have to be overcome in order to be successful. The examples included here are drawn from situations reviewed by the Task Force.

It is useful to note that labor-management cooperation that is specifically focused upon employee participation and service improvement represents a fundamentally different approach from more traditional labor-management relations. In traditional relationships employee involvement in problem-solving is limited or absent and the organization is characterized by hierarchical service delivery and decision-making systems. Workplace problems and conflicts are likely to be more difficult to identify and resolve. In a successful and stable labor-management partnership, labor and management agree to assume and allow new roles for managers, workers and their representatives in workplace decision-making. This means that employees participate on a daily basis in decisions about services in areas traditionally reserved only for supervisors and managers. In exchange, the workers and their representatives are committed to responsible improvement of public services.

"Contrary to the prevailing view that unions block workplace innovations, when given the chance for genuine involvement in strategic, operational and working level decision-making, unions can and do work as allies with public management to elicit and sustain commitment that is essential to teamwork and improving productivity," testified Jerome M. Rosow, president of Work in America Institute. This institute, founded in 1975, strives to improve U.S. productivity and the quality of working life through labor-management partnerships, using its national research and diverse members, which include leaders from labor, management, government and academia. "Workplace innovations built upon genuine employee participation give the organization a sharp competitive edge, a sustaining life force which goes beyond technology and capital, and an inherent capacity for self-renewal," according to Rosow.

To begin these new relationships, however, requires bold action, takes time and careful nurturing in order to grow. Labor and management leaders at the local, state and national levels must be willing to take some risks, to learn some new ways and to break some molds. The pace of change in communities, in the national and local economies, in workforce demographics and in technological advancements all demand that labor-management relations be carried out in ways that depart from traditional practices. Or as AFSCME President Gerald McEntee observed, "The way I see it is that we all need to change simply to stay alive to be able to serve our customers."

The Task Force challenges elected and appointed officials, union leaders, personnel and labor relations experts, researchers, and others to step forward, to learn from their peers, to be willing to try something new, to provide the strong, creative leadership necessary to make labor-management relations a strong tool for problem-solving and achieving service excellence within their own communities.

Barriers to Overcome

Adopting a cooperative approach will not mean all conflict will be eliminated in labor-management interactions or that labor and management will agree on every issue. By providing an avenue for meaningful participation by employees, cooperation can provide a creative response to our changing times. These approaches embody several of the practices generally associated with high-performance work systems, such as joint problem-solving activities at various levels and self-managed teams at the workplace level; continuous training, and other learning opportunities.

Characteristics of a High-Performance Workplace Employee Participation Employment Security Stratiegies Education, Training/Retraining , Skill Upgrading Gainsharing Safe, Flexible, Family-Friendly Workplace

Starting something new, however, entails a willingness to try something new. It means taking risks. Therefore, it is important to recognize that significant change in the culture of a workplace will occur. Patience and flexibility -- demonstrated first by elected officials and union leaders -- will be needed by everyone involved. Increased and refocused training and other systems changes also are necessary to develop a service-oriented partnership based upon excellence.

In every example examined by the Task Force, those present faced -- and overcame -- one or more similar obstacles in order to proceed with a cooperative relationship. Workers and managers in jurisdictions or agencies whose leaders choose the cooperative route should be prepared to face at least some of the following common barriers to changing the workplace relationship:

Difficulty in Convincing Everyone of the Need to Change

The Task Force observed that it can be difficult to convince some mid-level managers, shop stewards, senior managers, elected officials, and front-line employees or union leaders of the need to change. No group is immune from being difficult on these matters. Typically, people who are positioned in the middle rungs of the organizational or union hierarchy exhibited the most resistance and misunderstanding and experienced the greatest sense of threat from the outset of a workplace partnership or participation scenario.

Unaddressed Personal or Institutional Concerns

In the absence of assurances or arrangements to the contrary, fears of layoffs as a means to achieve efficiencies -- or as a result of efficiencies -- understandably inhibit employees' willingness to engage in service improvement. Where a union is present, and union leaders see the efficiency initiatives as union-busting or as a circumvention of representation rights and duties, they will not be willing to cooperate. If members' personal security concerns or the union's viability is thus threatened, union leaders and the members they represent frequently will feel there is no choice but to defend the status quo. Conversely, if a mayor's need to clearly demonstrate concerns to constituents for efficiency is not acknowledged or understood by the union, he or she is unlikely to begin a cooperative relationship.

Internal Inability to Agree or to Develop Cohesion

The inability of managers or workers to agree among themselves internally about issues makes it difficult for them to work cooperatively with the each other. Thus, it is critical to have some way to develop internal cohesion within labor or management, respectively. If division and department managers -- or employees and leaders of several bargaining units -- can not agree sufficiently among themselves on issues that arise, then the necessary relationships with other groups cannot begin or succeed. Often, important obstacles and problems lie within one group or another, just as much or more than across the table.

As John Loos of the Communications Workers of America told the Task Force in describing an agreement between the New Jersey State Judiciary and some 6,500 employees represented by about 75 bargaining units across 21 counties, "Labor-management cooperation is challenging, but you shouldn't forget the challenge of labor-labor cooperation!"

Must Learn to Work Together; Cannot Impose Cooperation

Just as you cannot impose trust -- you have to build it -- cooperative relationships cannot be imposed. If budget or personnel office managers want to initiate "total quality management," but they don't engage the cooperation and support of program managers, the affected workers and their representatives, as well as the city council and mayor, it won't work. The parties have to start early together, before a plan is well developed, and then march down the road together. Otherwise the process of cooperation is very difficult to start.

Political Considerations or Forces

Another common obstacle is found in situations in which candidates for public office "run against" workers or where union leaders "run against" management. While such situations obviously make it more difficult to begin cooperative work, they don't make it impossible if early efforts are made to initiate or restore trust. For instance, the Task Force observed situations where chief elected officials, whose campaigns were run against public employees, now are considered among the leaders of cooperative work. Similarly, the Task Force also saw union leaders who were aggressive in their adversarial approach turning to a partnership approach as being in the best interests of their members. In other situations, the Task Force saw unions that were fully engaged with total quality management programs yet politicaly opposed to the elected officials who were their workplace partners.

Intent to Contract Out "No Matter What"

The Task Force observed that a management intention to contract out "no matter what" can interfere with cooperation because of the lack of trust engendered by the implicitly negative message to employees. However, the Task Force also observed that where criteria and systems for making relevant cost and quality comparisons are developed through discussions or negotiations with workers and their unions, or in the context of a partnership, contracting out can be considered in a more objective, service-oriented manner. (See Chapters Two and Three for a more thorough discussion of these conditions.)

Over-Reliance on Legalisms and Formalities; Formalistic Traditions of Personnel/Practices and Labor Relations

In instances where the parties emphasized legalisms and formalities, vital issues can go undiscussed because governing bodies may fear losing a non-negotiable managerial prerogative or unions may fear the dilution of a statutory or contractual benefit. Fear of setting a precedent often seems to interfere with developing a solution to a significant problem. These attitudes can be obstacles to making the commitments necessary to resolving personnel, labor relations and service-related issues.

The nature of most civil service systems and practices also creates a barrier to change and service effectiveness. Prominent are the difficulties imposed by traditional job classifications, which make it difficult to adapt positions and redeploy and train workers to address changing workplace needs and to developing new skills in response.

Scope of Bargaining

The Task Force heard conflicting testimony on the scope of bargaining as it affects participative, service-oriented relationships. Because it affects the capacity of an agency or jurisdiction to improve service, the clearest need is for workers, managers, and union leaders to be able to discuss the full range of issues affecting the service they are working to improve. In a traditional labor-management relationship characterized by formal or legalistic approaches, such discussion often is precluded by concerns over setting precedents that might lead to giving up prerogatives. When focused on the process question, many parties fail to discuss service and workplace issues that could improve service as well as their relationship. Cooperative relationships that foster joint work between labor and management rarely fall prey to this failure. These parties find a way to talk about what must be addressed either within the existing contract framework or by modifying that framework to accommodate the mutual interest and responsibilities for service excellence.

In a comment reflective of what the Task Force saw in successful examples of labor-management partnerships, Albert Shanker, president of the American Federation of Teachers, noted that those parties with a successful cooperative relationship in place that improved a school or system found a way to talk about all issues affecting education, despite any restrictive statutory or contract language. Where it was necessary to bargain over an issue, he said, the issue was brought to the appropriate forum and effectively handled.

As this report was being prepared, legislative battles were taking place in a number of states over efforts to restrict the statutory scope of bargaining. The Task Force recognizes that this is a highly symbolic issue to many labor and management leaders. However, relative to the capacity for cooperation, these initiatives and battles may miss the point in the quest for better public service. Service problems can best be solved and innovation encouraged when workers can talk with management about a wide range of issues within appropriate problem-solving settings. While it is important not to inappropriately delegate or interfere with the responsibilities of elected officials and managers, the importance of the opportunity to discuss seriously matters affecting the quality of service and related aspects of the workplace should not be overlooked.

Pensions and Financial Security

An important backdrop to cooperation and trust is the issue of employee pensions. In tight economic times, pensions can be a controversial issue, particularly if there is the suspicion that monies in pension funds are being used to balance budgets.

Harold Schaitberger, legislative counsel to the National Conference on Public Employee Retirement Systems and assistant to the president of the International Association of Fire Fighters, testified that public sector retirement systems should guarantee the future financial security of employees' families. He noted, however, that some jurisdictions treat pension obligations as a budget item and, consequently, some retirement systems face dangers. Such threats and fears can become another wedge separating labor and management.

Schaitberger and Ian Lanoff, a former Administrator of Employee Retirement Income Security at the U.S. Department of Labor and presently a partner in the law firm of Groom and Nordberg, testified persuasively on the need to govern the administration of public sector retirement funds in accordance with recognized professional practices. Applicable standards, they noted, always should be utilized to protect the integrity of the funds. This would include representation by both labor and management on pension boards of trustees. Schaitberger noted that conflicts in the pension area can be very destabilizing to labor and management cooperation. As an example, he cited the present situation where Orange County, California, has filed for bankruptcy, where pensions have become the subject of controversy and labor-management relations are in a highly unproductive status.

Mistrust and Difficulty in Beginning New Relationship

A key obstacle observed in many places is an institutional history of mistrust, which makes it difficult to begin a new relationship. Building trust takes time and usually is achieved in small steps. It also takes leadership courage because someone has to be the first to step out and accept the risk to try something new. (There are many techniques for building trust, as observed in the subsequent section, "Where to Begin.")

In summary, however, the Task Force saw examples of all of these obstacles successfully overcome by agencies or jurisdictions ultimately more interested in jointly establishing and achieving workplace excellence and more effective relationships.

Where to Begin

Over the course of a year, the Task Force saw four prevalent approaches serving as catalysts for labor-management cooperation. Some began from workplace relationships that were very contentious; others came from more positive roots. In the majority of the situations reviewed, some sort of crisis or difficulty provided the motivation to try something new. Here are the four beginnings most frequently observed:

1. Service Improvement Project

A changed relationship with employee participation often began when labor and management successfully worked together on a specific project with the defined goal being to improve a particular service or its cost-effectiveness to the public. In these instances, the experiences and expertise of front-line employees were drawn upon, making them partners in the decision-making processes and thus shifting away from traditional, hierarchical decision-making relationships.

For instance, city officials in Portland, Maine, working with the employees and leaders of AFSCME Local 481, built a baseball stadium for the city's minor league franchise in record time and at a record price, providing the catalyst for labor and management to view cooperation as an effective and powerful means to improve a wide variety of services. Since this initial and dramatic success, the entire public works system for providing infrastructure and other services has been revamped into self-managed teams with a high level of community, labor and management satisfaction. Cost savings, faster response times, less conflict and continuous innovation are now regular features of much of the public service in Portland. (See "Snapshot: Portland, Maine")

2. Improved Bargaining

In some jurisdictions, the desire to improve the bargaining relationship -- perhaps after a strike or a series of impasses -- prompted an effort to depart from a tradition of confrontation. In these situations, bargaining had become increasingly bitter, prolonged and focused more upon legalistic challenges and procedures than on ways to improve services or the work place environment.

Such was the case in the transit and sewer utility (METRO) that serves King County, Washington, where employees are represented by the Amalgamated Transit Union, the Service Employees International Union, and the International Brotherhood of Electrical Workers. Increasingly dissatisfied with their adversarial relationship, labor and management turned to interest-based negotiations, seeking a more cooperative, service-oriented partnership. Since the introduction of interest-based negotiations, the collective bargaining process has moved much more smoothly and quickly -- an agreement recently was reached in one month instead of the usual two years experienced in prior talks. Equally important, this new approach has allowed METRO to embark on a major cultural change process that involves considerable employee involvement with restructuring and redesign of work. This process has given rise to widespread labor-management partnerships throughout the agency ranging from maintenance to scheduling, marketing, and customer service.

3. Better Conflict Resolution

The Task Force also saw examples of jurisdictions or agencies confronted with a clogged-up grievance system or other workplace conflicts that were diverting the attention and energy of all involved away from service improvements and creating mistrust that precluded candor necessary for cooperation.That was the situation at the State of Oregon Health Care Sciences University. Here employees, represented by AFSCME and the Oregon Nurses Association, and management turned to interest-based negotiations in an effort to stem the growing tide of worker grievances, among other issues. Labor and management received training to learn how to solve problems themselves, instead of resorting to arbitration. The grievance-handling system was changed, eliminating two of the five steps involved, to push the process down lower in the hierarchy and closer to where the problems occurred. As a result, filed grievances have been reduced by 40 percent and a grievance adjustment board composed of four members, two each from labor and management, has reduced reliance on arbitration. Later, the parties used the same skills and relationships to cooperatively develop a major cost savings plan for the hospitals at the University.

4. Cultural Change

In some instances, cooperation sprang from efforts at large-scale change in the work culture initiated by a desire for a different workplace environment and service improvement in the pursuit of excellence. This method was less usual as a beginning strategy, but often resulted after a cooperative relationship was first established through these other routes, underscoring its importance not only as a place to start, but as a strategy to sustain or institutionalize the cooperative relationship.

Cultural change was how Madison, Wisconsin, started on the road to labor-management cooperation with unions and employee associations -- Teamsters Local 60, AFSCME Local 690, Madison Professional Police Officers Association, Laborers International Union Local 236. In 1985, under then-Mayor Sensenbrenner, the city initiated training and other techniques for both management and its workforce to establish a total quality management culture throughout city agencies. These ongoing efforts have resulted in numerous service improvements projects, reduction in grievances and other workplace conflicts and have improved the bargaining relationship. For example, the streets and sanitation activities have saved more than $550,000 in five years and added services as a result of joint labor-management efforts in their quality program. Preventative maintenance programs prioritized and developed as a result of worker input have saved nearly $200,000 in the Motor Vehicle Equipment Division and in the Police and Fire Departments. Other cost savings have been realized in public health and forestry activities as well as in the public library.

The RESULTS (Reaching Excellent Service Using Leadership & Team Strategies) plan in Multnomah County, Oregon, is a more recent but similarly comprehensive approach to quality improvement. RESULTS is conducted through a partnership with AFSCME Local 88, the Oregon Nurses Association, the Multnomah County Corrections Officers Association and six other unions. Here, the approach is to combine a quality program with a move toward a cooperative labor-management relationship in a strategy to change the culture to one of high-performance workplace. (For a more detailed example of cultural change, see "Snapshot: State of Ohio.")

In summary, the Task Force found that regardless of the route taken toward cooperation, the approach often migrated into the other areas -- service improvement projects, better bargaining, better conflict resolution, or changed culture. The same skills, the same people, the same trust that allowed workers and management to work together on a service improvement project eventually produced positive benefits in other areas, such as improved bargaining or conflict resolution. Where there is a structure established for carrying out and expanding the partnership-- such as a senior-level joint committee -- these improved relationships and problem-solving skills can more easily migrate.

In short, the basic skills and relationships are transferable. To begin, the parties must choose a starting point that fits their circumstances and possibilities. Every workplace is different and each should take into consideration its own organization's history and particular workplace and service characteristics. But it takes leadership on both sides to move the trust and skills to other parts of the organization and other services or processes. The truly strategic and flexible leaders interested in a cooperative approach, whether labor or management, will begin early to lay the groundwork for trust and constantly look for opportunities to initiate cooperative relationships. In so doing, they will always be looking ahead, anticipating what will be needed to begin and sustain cooperative relationships. They will avoid situations that place them in the traditional, rigid, adversarial-only mode that restrains them from achieving excellence in a demanding environment.

People also must recognize that success is not guaranteed, and acknowledge that the road may not be smooth. Similarly, parties should not be afraid to try something new for fear of failing. Sometimes it takes several attempts before the effort really begins to take root and succeed, as was the case in the state of Ohio, which is now among the leading examples.

But the opportunity to achieve excellence in service for the benefit of citizens surely is worth the risk.

Key Ingredients to Begin Cooperative Relationships

Breaking with the past and beginning a new, service-oriented relationship built upon trust and cooperation will require more than a single event. It will require a careful strategy and structure that recognizes the unique characteristics, traditions, histories, politics and so forth of each jurisdiction and then adopts techniques and approaches to address these elements today and in the future. During its work, the Task Force observed several key elements that helped to foster cooperative, service-oriented relationships:

Top Leadership Support

Top officials of both labor and management must be supportive of any cooperative, participative effort. Without top leadership support on both sides, it's difficult to get started, convince others to take a new approach, allocate resources and, particularly, to guide the process through inevitable problems in the early going. In a typical scenario, someone will revert to doing things the "old" way. Then someone on the other side sees it as retreat from the new, not-yet-fully trusted approach. Normally, at these moments, assurances from top management or labor officials to one another and admonitions to their own side are necessary to put things back on track.

Commitment to Real and Responsible Decision-making

Cooperative, service-oriented partnerships require a different approach to decision making. Employees gain significant participation and often become primarily responsible for decisions previously made by supervisors. Employees and their representatives must be committed to responsible participation and managers must be committed to real involvement and power sharing.

Breaking Past Habits

In order to engage in a new, cooperative relationship, it almost always is necessary for all parties to acquire new skills through such processes as:

Joint training: The use of joint training -- jointly sponsored and jointly attended by labor and management -- in conflict resolution and group problem-solving skills typically is used to help parties break with past habits. Almost all successful new relationships observed by the Task Force contained some such training at the outset. In addition, in the more sophisticated or longer-lasting experiments and innovations, joint training for labor and management was conducted in process analysis to teach techniques of identifying service problems and in using organizational systems, such as budgeting, procurement and so forth.

Benchmarking: The ability to establish measurements or benchmarks to gauge progress or to identify effective practices often can be developed by visiting high performance organizations in other locations in the public and private sector performing similar services. Witnesses told the Task Force that some improved relationships and trust can begin on such visits while the parties learn lessons to bring home.

Neutral assistance: Bringing in some neutral assistance from the outside normally helps the parties move along farther and faster in the new relationship.

Recognizing the Need to Attend to Individual Security Concerns

Workplaces that wish to engage in innovation need to create a safe environment that encourages employees to come forward with new ideas and ways to improve the efficiency and effectiveness of their work. In almost all cases examined by the Task Force, there was some very substantial employment security "safety net" or program for at-risk employees that paid attention to their income and personal security. In these employment security/safety net programs, significant and valuable investments in retraining combined with placement and classification reforms served to increase both trust and productivity. Typically, a jointly developed set of tools used to create this assurance would include:

• Planning ahead to see where jobs will change, what kinds of skills will be needed;

• Worker re-training to prepare for new positions;

• Eased transfers, often through centralization of vacancies and simplification of job classification policies;

• Building of an "Income Safety Net" for those who do lose their jobs, such as early retirements, employment services and so forth; and

• Active pursuit of new jobs, in the public or private sector, for laid-off workers.

Key players in this process, along with senior management and top employee representatives, are human resource departments and labor relations professionals.

For example, the Wisconsin Department of Industry, Labor and Human Resources (DILHR), working with AFSCME, the State Engineers Association and the Wisconsin Professional Employees Council, developed a joint Labor-Management Advisory Council in May1992 to improve labor relations within the department. This Council subsequently created an "at-risk" program for workers facing job loss due to work redesign, introduction of technology and so forth. When voice mail was introduced in the Unemployment Insurance offices and weekly claims could be filed by phone, AFSCME anticipated that the jobs of 360 employees were at risk. However, only one worker actually was laid off. Displaced workers were given priority for vacancies within the department. They received time off to interview and were reimbursed for travel, moving expenses and training. The state later adopted this "at-risk" system for all its agencies as they faced cutbacks -- a system that did not require any modification to civil service laws.

Contrary to many expectations, even where full job security was addressed by a "no layoff" guarantee, the Task Force still saw tangible benefits to citizens and major cost reductions because of the improvements in systems, managing attrition and so on.

Acceptance of Union Presence and Role

In situations where employees are considering whether or not to be represented, negative tactics should not be used by either side. Otherwise, antagonisms between labor and management naturally will develop. This initial antagonism can significantly interfere with subsequent attempts to develop a cooperative labor-management program and a high-performance workplace due to the residual, negative impact on trust and credibility.

In situations where a cooperative relationship was established within a unionized setting, formal management recognition of, and commitment to, working with the union enabled the union leadership to fully participate in the cooperative process and to serve as a focus for employee leadership and communication. With recognition and acceptance, union leadership can participate without feeling it has to defend its legitimacy. Even in established relationships, clear acceptance of the union role enables the participative process to go forward.

For instance, Bill Burwell, manager at the Renton Water Treatment Plant operated by METRO of King County (Seattle), Washington, credited SEIU Local 6's leadership as critical to his agency's successful transformation into a "Participative Workplace Program" built upon the principles of labor-management cooperation. "If you had asked me six years ago, I would have said otherwise," he said during a Task Force visit to the plant. But he has since realized that "we have gotten farther, faster with the union" as it adds structure to the process, helps convince employees of the legitimacy of the effort needing attention and helps to identify problems.

Echoing these reasons, the Task Force observed in summarizing its observations that collective bargaining relationships, applied in cooperative, service-oriented ways, provide the most consistently valuable structure for beginning and sustaining a workplace partnership with effective service results. Neither collective bargaining nor any other workplace arrangements automatically produce these results, but a collective bargining framework and roles provide the essential elements, if applied appropriately with the necessary mutual commitments and energy. The various ingredients in this chapter pertaining to labor-management relationship suggest some of the elements helpful to building and sustaining such a service-oriented relationship.

Program Managers Directly Involved in Labor Relations

Traditionally, personnel experts or labor negotiators are the primary individuals involved in labor relations. But for true cooperation to work, program managers who influence resources and have day-to-day decision making authority must be involved in order to help share that authority and the practical perspective of the workplace. In the Wisconsin DILHR, the involvement of Department Secretary Carol Skolnika and several assistant secretaries was credited with making the process work.

Flexibility by Both Sides Towards New Approaches

Flexibility requires the willingness to take risks and try new approaches. But the necessary trust to take risks isn't created overnight. Therefore, openness to new approaches on the part of leaders on both sides is critical.

Leaving Old Structures In Place as a "Fallback"

The Task Force found that both sides often feel more secure while advancing and trying new ideas if they know that they still have access to the formal, traditional personnel and labor practices, including access to administrative bodies, courts and so forth. Interestingly, rarely -- if ever-- did the Task Force see anyone return to the traditional practices once they began to develop cooperative, service-oriented approaches to achieving cost improvement and excellence. Nevertheless, parties frequently gain substantial comfort from the fact that those protections remain. This is especially important to convince recalcitrant members of management, union leadership or the workforce to experiment with a new, more cooperative approach.

For instance, in Montana, the cooperative relationship between the University Teachers Union (AFT) and the state Department of Higher Education eventually fell into place when it was pointed out to some of the stalwarts that access to the old methods remained available.

Cohesive Management; Cohesive Work Force

On both sides, management and labor, there must be an internal sense of shared commitment and a means of accommodating internal differences in interests. In union settings, where there is more than one bargaining unit, typically a multi-unit coalition is necessary. Many issues and programs require crossover between departments and skills to improve or provide services effectively. The multi-unit coalition is almost always present in successful service improvements and cost savings. Similarly, on the management side, program managers, executives, the legislative body and others have to be sufficiently in agreement.

Referring again to Montana's higher education system, the university regents were part of the partnership that was developed to solve long-standing budget, wage, quality and working condition problems that had previously been handled only between bargaining representatives.

Attention to the Value of Leadership Roles by Both Management and Labor

Management leadership plays a very valuable role in helping to bring along recalcitrant managers by clearly supporting the commitment to share power with labor. In the same fashion, union leadership, including local officers, shop stewards, building representatives and so forth, serve a crucial role in bringing other union leaders and employees into the process. Where there is a union or association, union leaders serve as a point of contact with management: they can come to the table with program ideas and speak with one voice on behalf of employees and then go back to employees with a valid program and persuade them to become engaged.

Motivating Factors: Trust or Tension

Either trust or tension can be a motivating factor in developing labor-management cooperation: A trust-producing event is one where leaders on one side or the other have some vision and develop a constructive relationship based upon mutual interest in service excellence. A tension-producing event, usually involves some sort of crisis or threat, such as a highly criticized service, a strike, financial pressures, a difficult negotiation, the threat of contracting out services to the private sector, etc. However, a crisis situation can only lead to a more positive, cooperative effort if both parties ultimately use it as a catalyst to build trust and an effective approach to joint problem-solving.

Key Ingredients to Sustain Cooperative Relationships

Once a program is put into place, what elements are needed to keep it in place over time? Creating continuity is a critical element in sustaining cooperative programs, yet can be difficult to achieve in the public sector where there may be a frequent turnover of elected leaders and top administrators. In addition, cooperative relationships need to find ways to maintain participants' interest and abilities to ensure their participation as full partners.

The Task Force identified certain ingredients that are useful to help sustain the cooperative relationship. These should be considered by jurisdictions or agencies when developing their strategies for change. Specifically, the Task Force found that as cooperative, service-focused relationships matured, shifts in the nature of the labor-management relationship often were coordinated with, and supportive of, efforts to reform an organization's "systems," including budget and accounting, personnel and other administrative systems that often become anachronistic and impede service quality and efficiency improvements in government. In fact, the Task Force saw significant reform take place in key systems as a by-product of a service improvement strategy, and often more easily than when such improvements were sought for their own sake. For example, local parties reported more easily achieving changes in specific personnel system reforms as part of a service improvement effort than when seeking on their own reforms to improve the personnel system overall.

The following are some common ingredients the Task Force found necessary to sustain innovative relationships:

Trust

Repeatedly, parties involved in cooperative workplace arrangements spoke of the trust that had developed and how essential it was to resolving matters, especially the more complex and seemingly insoluble problems. They also acknowledged that at the beginning of the process, they did not have such trust and did not forsee the extent of its development. Nevertheless, trust was among the most frequently cited ingredients of successful workplace partnerships. The many other items listed in this chapter contributed in various combinations to the development of the necessary trust.

Project Goal or Service Standard with Customer Focus

Once a program of workplace innovation and service excellence begins, having an agreed upon project goal or service standard with a customer focus almost always is necessary to sustain the initiative. No matter what the goal is -- cost reduction, quality or productivity improvement -- what really matters is that the goal be clearly understood and agreed upon by all involved -- management and labor -- and that it relate to customer service and excellence. Then, plans, projects and day-to-day decisions can be made to help advance the goal.

Cost and Quality Comparison Measures

In order to measure internal improvements over time or to make comparisons with other public or private sector providers, it is important to have comparable data that accurately measure cost and quality of providing services. Otherwise, it is not possible to determine if a service is improving or performing at an equivalent level to other public jurisdictions. Also, it is difficult to determine whether a private contractor is presenting a more attractive alternative. However, public jurisdictions traditionally do not collect budget data in a way that allows such comparisons. (See following section on budget and accounting systems.)

Budget and Accounting Systems Changes and Improvements

Most line-item budget systems do not collect information or produce incentives to improve services. Thus, in successful cooperative relationships, the parties normally turn to some budget reforms to help them focus upon service improvements. The City of Milwaukee's representative described to the Task Force many of the deficiencies in most public budgeting systems relative to supporting service improvement. He also outlined efforts to begin addressing those problems.

In this and other testimony and observations, several trends were noted in budgeting systems. The fabled year-end incentive to spend the remainder of a budget now is giving way to a gainsharing approach. Budget information is available to those responsible for providing service and cost control, including front-line people and their representatives, project managers, crew chiefs and foremen. Better cost accounting information is collected so that actual costs of particular services, like handling a public assistance case, making standard street repairs or hauling a certain tonnage of trash, can be determined and usefully measured and compared.

The very act of collecting good cost comparison data and reforming the cost accounting system compels workers and management to re-examine every step of a process, including what it takes in employee hours, materials and overhead, to provide each service or unit of service. Reforms flow from the development of such data as well as from subsequent examinations and comparisons that the data make possible. In developing such data in Indianapolis, the consultant, KPMG Peat Marwick, worked with front-line employees and managers to identify the full range of cost components and to develop cost figures for specific tasks.

Bridget Anderson, partner, KPMG Marwick, in her testimony, emphasized that if workers are empowered to understand and manage their own budgets, it is possible for labor and management to work together to reduce costs.

For instance, team leaders and front-line employees were trained in budget and accounting systems so that they could access and use those systems as part of their responsibilities for cost effectiveness. Dominic Mangine, president of AFSCME Local 3131 in Indianapolis, who helped to lead many cost and quality innovations, said, "The best thing management ever did was to teach me to read the budget." Mangine oversees numerous cost savings in his role in a cooperative workplace partnership, and has even initiated decisions to contract out non-core services as a result.

Personnel Systems Changes and Improvements

There have been a number of efforts at civil service reform since the late 1970s, with varying degrees of success. One observation that can be made from the work of the Task Force is that dramatic changes in classification, pay, discipline and other features of public personnel systems came as part of the response to a needed service improvement. So, rather than reforming civil service systems as an end in itself, reform in response to specific, mutually determined service needs seems to be a more effective and agreeable route, particularly in light of the complex nature of such reform. Not only can the collective talent and lobbying support of the parties be applied to the change, but energy can be focused upon the features most in need of change.

Classification systems: The Task Force saw important changes in personnel systems in those places where there was successful service innovation. Most common were changes to classification systems, thus helping to reform a structure that many found to be a major barrier to service improvement and cooperative relationships. In almost every instance of success, the systems were simplified, resulting in fewer and broader classifications. By reducing the number of classifications by as much as half and by "broad-banding" the remaining classifications, barriers to redeployment or improvements in pay often were substantially reduced. This was especially important in facilitating redesign and other service improvements that created efficiencies in one area and permitted the addition of employees or the transfer of employees to other areas as required. Hence, simplification of the classification systems strongly supported service improvement as well as job security.

Charlotte, North Carolina, provided an example of classification reform. Here, employee committees were established in the general government area and separate committees for the specialized systems in police and fire. Each committee produced changes in the classification and other systems that were adopted as city policy. (For more detail, see " Snapshot: Charlotte.")

Many other successful jurisdictions also simplified their classification systems. In these instances, the system is now seen as fairer, less regulatory, more logical and as providing more flexibility to program management and more opportunities for job security.

Pay systems: Although traditional pay systems often work well, the Task Force saw a substantial trend towards more team-based rewards and lesser reliance on individual pay-for-performance comparisons. In some select instances, pay systems were emerging where employees were compensated based upon relevant skills, rather than on a point system or pure seniority. Where successful, such as in Mercer Island, Washington, labor and management had developed sophisticated measuring systems and methodology.

The Task Force also saw the beginnings of different kinds of compensation activities. Taking advantage at times of more flexible, broad-banded systems, workers who qualified were being upgraded to reflect their broader responsibilities and the cross-trained skill levels that came from changes in practices that improved services and job quality. Performance-appraisal systems were developed that evaluated team performance, rather than individual performance. Other reforms were made in appraisal systems as part of participative relationships. In police and fire department examples, many kinds of team-based incentive programs are being developed to reflect, for example, community policing approaches.

The Task Force discovered an increase in the use of "gainsharing" (i.e. when savings are accomplished, some of that is shared with workers), particularly to help teams focus upon achieving savings and efficiencies. Sometimes the gainsharing shows up in employees' pay; sometimes it takes the form of more resources for training, better equipment and other means to improve productivity and the quality of work life. The gainsharing is based upon team performance. King County Metro/SEIU in Washington and the Portland Water Bureau/AFSCME Council 75 in Oregon, have prepared booklets that carefully explain their methodology in gainsharing and are available for others to review. (See Appendix D for contact persons.)

The Task Force also noted some helpful efforts to correct a misuse of classification systems, namely that of promoting strong performers and others to supervisory positions in order to reward them via increased recognition and pay. By using other approaches to reward and compensate, this practice was being scaled back and better means of recognition sought.

Care should be taken in any pay system reform, however, particularly when compensation is linked and dependent upon the measurement of individual skills and performance. It is difficult to make fine distinctions among individuals. With the move towards team-oriented work or problem-solving in the context of partnerships, there could be a variety of difficulties with any overemphasis on measuring individual performance and skills. Nevertheless, these new developments deserve examination and the parties involved seemed pleased with their efforts.

The Task Force also observed that there are other ways that management and peers successfully recognize workers for a job well done. Task Force members repeatedly heard workers comment that it is not just money that motivates them to provide excellent service, it's also the personal satisfaction that comes from knowing that they are doing a good job and contributing expertise to better service -- and getting some recognition for it from peers and the community. Far-sighted managers and union leaders understand the valuable role that recognition plays. A wide range of formal and informal employee recognition programs connected to team and individual work were observed. In some sense, the very act of becoming engaged in service improvement provides important personal recognition and intrinsic motivation, but awards, banquets, letters, praise and other forms can add to the sense of achievement as long as it is customized to have meaning to those involved.

Evaluation and Assistance for Accountability: Interestingly, the Task Force found many examples in public schools, public safety and other sectors where the disciplinary system was simplified by agreement of the parties. These improved systems were developed by joint agreement and characterized by joint approaches to necessary administrative and legislative bodies or through contract change. They often featured significant peer review, coaching and judgment, as seen with the AFT locals and school administrators in the Toledo and Cincinnati, Ohio schools. This cooperative process began in 1985 with a program of peer assistance and evaluation. The intent is to help new or struggling teachers. Master or consulting teachers intervene as mentors, assisting and evaluating such teachers. New teachers must pass an "apprenticeship" in two years or be subject to removal under a review process in which the effective recommendation comes from a review panel, thus avoiding arbitrations over dismissals. (For more detail, see " Snapshot: Cincinnati.")

Where employees are engaged in high performance workplace environments, all agree that ensuring full participation and performance by the entire peer group is critical. Hence, some alternatives for traditional discipline were sought and developed that focused upon encouraging positive behavior versus the more traditional, complicated and negative disciplinary processes. When necessary, the systems permit more effective discipline that is seen as fair and effective by both management and labor leadership. These types of changes in coaching and disciplinary systems gain effectiveness and credibility by their joint nature and are helped by the work and presence of worker-selected employee representatives.

Holding managers accountable: Just as there are systems to hold employees accountable for performing their work, parallel actions should exist to ensure managers are doing their jobs as well in the new environment. The emphasis -- as on the employee side -- should be on developing ways to assist managers to do a better job. In addition to evaluation, coaching and training, the more advanced workplaces are seriously reviewing criteria for placement and promotion to supervisory positions to better select individuals with the appropriate leadership skills for the new workplace.

Increased Training: Without increased training, workers and managers have insufficient means to develop the necessary new skills and habits required to engage in cooperative and service-oriented relationships. Although training is often cut off when looking for cost savings, it is a critical ingredient for identifying and sustaining cost savings and service improvements and for producing a humane and effective workplace.

Nearly all of the successful examples included significantly increased training, most often sponsored on a joint labor-management basis, that improved service and the underlying capacity to resolve problems. In addition to joint training in workplace relations and problem-solving, such as conflict resolution, this included retraining for redeployment in response to changed job responsibilities; cross-training, which resulted in skill upgrades; and training for workers and managers in the analysis of work processes in order to become more efficient and eliminate unnecessary steps. Training activity went well beyond the initial stages of instilling workplace cooperation to include ongoing training so that as new people came into the workforce, they became knowledgeable about the way that workplace operated. Among the successes, jointly developed safety training can produce dividends, as in the State of Connecticut/SEIU example described in Chapter One. Training workers and managers in better use of budget, personnel and procurement systems also produces dividends. Many successful jurisdictions began to build some in-house capacity to conduct quality and other training, recognizing the constant need to acquaint new entrants, transfers and the like, as well as continuous management training.

Overall administration of civil service and personnel systems: To effectively accommodate labor-management cooperation, civil service and personnel systems must change from a rule-driven focus to one of customer service emphasizing flexibility and responsiveness. In Hennepin County, Minnesota, Human Resources Administrator Charles Sprafka noted that cooperative labor-management efforts began a decade ago, and so predate current efforts such as "reinventing government" or Total Quality Management. Working with AFSCME Council 14, the county has enacted changes in civil service as well as other cooperative labor-management efforts to meet the challenge of health care costs. Sprafka noted that while his department has become much more customer-oriented, it still continues to operate within merit principles. That concept was underscored by testimony from Linda Hanson of the Iowa Department of Personnel, who noted that it is important to remember that it is systems -- not the merit principles -- that often are not working to provide the flexibility and responsiveness called for in customer-driven programs.

Procurement and Other Administrative Systems Changes and Improvements

Governments often have internal procedures that interfere with productivity and service effectiveness. As Mayor Stephen Goldsmith of Indianapolis has observed, "Contrary to their undeserved poor public image, most civil servants are hard-working and talented, and they know a lot more about how to do their jobs well than mayors or union presidents do. The problem is that they historically have been trapped in a system that punishes initiative, ignores efficiency and rewards big spenders. It's time to free them from the shackles of bureaucracy."

Labor and management together can identify barriers imposed by procurement and other systems and jointly identify changes. As a result, procurement and administrative systems typically are simplified with an increased customer orientation.

Rather than seeking overall procurement system reform, the parties are able to focus their efforts on the areas that most hinder effective service. This targeted approach, driven by jointly identified service imperatives, is seen as the more effective route to administrative reforms.

Organizational Structures and Communication

Rarely was reorganization itself a primary tool to gain service improvement. Instead, the changes came about by adopting different approaches to accomplishing specific tasks, which usually included teams configured around a problem or project. These approaches included:

Organization-wide labor-management committees and project teams: As at the Wisconsin DILHR and in the Ohio models, a common mechanism was the presence of a top-level labor-management committee to guide the cooperative effort. Such committees must involve the key players (the people considered leaders on both sides), usually with equal representation of both labor and management. These joint committees often appoint specific teams to find solutions to problems needing attention. This top leadership group ordinarily deals with a wide range of labor-management issues and policy questions, depending upon the nature of the agreement and the maturity of the relationship. This group, in various ways, will sponsor or oversee joint teams put together for specific tasks or projects. This does not substitute for normal organizational lines of accountability; rather it complements them.

One example of such a joint committee structure and subgroup in operation is the Joint Labor-Management Committee of the Washington State Department of Labor and Industries. Under the umbrella of the labor contract, this committee established a sophisticated and practical set of protocols and practices regarding the formation, resources and responsibility of quality teams and the way in which the overall labor-management committee would accept and implement teams' recommendations. (Three unions represent the department's 2,600 employees: AFSCME, IBEW and Plumbers and Pipefitters.) The agency's quality initiative included a large training component to ensure that team members and facilitators had the appropriate skills. Among many initiatives, the joint labor-management effort included a large data automation project that dramatically reduced the time needed to process worker compensation claims. The new technology, which allows for instant retrieval of files by computer instead of the previous two to three weeks under the old microfiche system, cost $19 million. It is projected to save the state $10 million a year.

Concerning project teams and committees, the Task Force observed and survey results suggest that employees in union and non-union situations prefer that representatives not be selected by management. Even in non-union settings, employees involved in decision-making committees for which they were not selected by their peers, found that their standing and capacity to act would have been enhanced if they had been chosen by their co-workers rather than by management. Thus, in either case, labor-management cooperation towards service results is better achieved if workers select their own representatives. When employees have an opportunity to select representatives to reflect their viewpoints and interests, the results of participative teams and committees and similar activities are more likely to be trusted, accepted and implemented.

Work teams: Organizations successfully employing labor-management cooperation often find themselves moving toward flattened hierarchies with less dependency upon reorganization, a popular tool of the past few decades. The ongoing use of work teams (different from the often temporary project teams described above) and team leaders leads to a need for fewer supervisors, many of whom will be redeployed. The teams themselves can display better coordination, moving easily across departmental and divisional lines, resulting in better project information.

Changes and uncertainties for supervisors and mid-level managers: It is common to find a reduction in supervisory layers where a cooperative, participative relationship is in place. Several reasons were identified for this trend:

1. The roles of supervisors and mid-level managers change significantly as does the role of union stewards. Supervisors and mid-level managers generally serve as the link between employees and management and therefore possess significant implementation powers. In the participative arrangements, however, employees tend to deal more directly with upper management. The roles of many mid-level union or management officials become more facilitative, resulting in less clarity regarding their authority, but with more real influence in the workplace.

2. The use of self-managed teams and team leaders reduces the need for supervisors.

3. In reversing old patterns in job classifications, many supervisory positions are removed with the acknowledgment that these positions initially were created as a way to get around restrictions within classification systems that precluded higher pay for skilled professionals at the top of their classification. An end to this practice is welcomed by labor, management and human resource professionals alike. More positive programs also have helped.

   As an example, the Cincinnati Public School District and the American Federation of Teachers developed a Master Teacher Program which recognizes and gives more responsibility to particularly skilled teachers. This eliminates the practice of pulling highly skilled teachers out of the classroom and promoting them to administrative positions in order to increase their pay. Now, these teachers receive a higher level of compensation and recognition commensurate with their skills, while remaining in the classroom to do what they do best.

4. Not surprising, this changing role and status may produce confusion and some anxiety among affected mid-managers and union officers. Therefore, it is not uncommon to find these mid-level people resistant to the cooperative structures. Interestingly, at least on the management side, the job security of these middle managers often is more at risk than either top-level managers or front-line employees. Where the cooperative relationships prove successful, the roles and needs of this middle management group are usually addressed in some explicit fashion. More should be learned about this dynamic, as these individuals can be an important source of resistance to change.

Improved communications: A major reform, which may seem like common sense, is that work-related communications also improves within teams, among teams, between front-line workers and management and across departments. This is done through use of regular or improved team meeting arrangements that cross traditional lines and draw better upon group problem-solving skills.

The Task Force also observed that when cooperative relationships begin, it normally is important for labor and management to communicate with the rest of the organization and key outside parties about the nature of the new relationship and what activities are taking place. This often is done through newsletters, e-mail or other communication avenues the parties find jointly useful. Also, there is much one-on-one discussion between leaders of the effort and skeptics.

Because cooperative partnerships are new -- and possibly threatening -- it is important to provide information to allay fears. It is also important to invite comment and participation. The more inclusive the parties can be at the outset and as the relationship progresses, the easier it seems to be to gain acceptance for the new approach.

Changing roles: In service-oriented, cooperative arrangements it is common -- and essential -- for managers to move away from their traditional, hierarchical roles. As the private and public sector experience makes clear, to make this partnership succeed, managers must be prepared to share decision-making authority with employees and their unions and to encourage others to do the same. Union leaders must similarly be prepared to engage in responsible power sharing.

In cooperative partnerships, it is common to find union local presidents and stewards serving as team leaders, coordinators and facilitators. Union leadership under these arrangements has a much greater responsibility for, and voice in, ensuring service delivery improvements. And this leadership proves pivotal to rapid and effective movement to cooperative workplace partnerships. At the Massachusetts Highway Department, for example, cooperation between labor and management has resulted in the role of union leaders changing dramatically as they became much more involved with determining how the actual work would be performed. (See " Snapshot: MassHighway," and the following section, "Changes in Labor-Management Relationships: Change in Emphasis for Union Leadership")

The roles of the human resources office, human resource professionals and labor relations professionals also change with the adoption of cooperative programs. These individuals become more facilitative and less regulatory. Increasingly, they serve as sources for objective information and for facilitation of problem-solving. For instance, in some successful programs, the human resources office provides all information to both sides on labor-management committees working on benefits, health care and other workplace issues.

Also, rather than being management's lead in labor negotiations, human resource and labor relations officials now work more substantially with department and program directors in labor negotiations, rather than going it alone. Changing roles often is one of the most significant variables in building cooperative relationships. Human resource and labor relations professionals, whose roles changed in this large way, reported a much greater degree of job satisfaction as they become increasingly focused upon service outcomes, rather than process, and become a meaningful part of improving service delivery.

Maintaining Continuity

As administrations change -- either labor or management, but particularly on the management side -- there is an inherent danger that the cooperative structure, and particularly the trust that underlies the structure, will be jeopardized. There is evidence in both the private and public sectors that moments of leadership turnover represents a danger point in the life of a partnership, especially in the early years.

While recognizing the prerogative of newly elected officials to implement change and to promote agendas on which they were elected, the Task Force observed that parties involved with cooperative structures were concerned that the more productive relationships might be dismantled for political or other reasons, despite their effectiveness. In communities where such turnover has been experienced, several strategies seemed fruitful.

Where there is a collective bargaining agreement, one tactic observed was the negotiation of a cooperative structure into a contract. In one example, a school superintendent, when confronted with the cooperative structure in the contract, after some brief observation reportedly responded, "Well then, I guess we'd better make it work." He then suggested a more comprehensive structure in the next contract, which was agreed upon by both management and labor. Sometimes the cooperative structure is put into a local ordinance, thus ensuring basic continuity.

Whatever the specific program objectives may be, it would seem a useful priority to find ways to preserve the infrastructure that is working to produce excellence. In addition, it is common to see union or management officials use their personal or institutional standing to fight for cooperative programs through a leadership transition. Generally speaking, the union is in a stronger position to make this effort, but the Task Force saw managers who also were vocal and effective champions for maintaining the cooperative structure and approach.

Such strategies include building community support for the improvements, often by communicating the benefits attained and sustained by successful partnerships. When local community leaders visibly support cooperative approaches, for instance, it becomes more difficult for skeptical elected or appointed leaders to dismantle them. Often, community leaders who recognize the benefits of the partnership are able to discuss the value with newly elected officials.

Some union and management officials alike realize it is important to develop a succession strategy before leadership changes occur, and to ensure that the cooperative structure is one that would serve any leader striving for excellence. Thus, leadership development on both sides can help avoid dismantling programs of a successful partnership.

Continuity of union leadership or contractual provisions appear to be extremely helpful in maintaining a cooperative, service-focused partnership. Continuity of a mayor or city manager also is important, especially in non-union situations: most workplace service partnerships and other significant employee participation arrangements in non-union situations are sponsored by long-serving chief executives.

In the end, however, longevity of a program will depend mostly upon its acceptance by the front-line workers. The Task Force saw and heard that the more people involved -- workers and managers -- the more ingrained the cooperative model became. As the sense of ownership for this approach spreads among many, cooperative labor-management relations simply become the way of doing business. As the approach continues to meet with success, labor and management increasingly will feel more secure in the new processes, making it more difficult for others to ignore or remove the process.

Changes in Labor-Management Relationships

There are changes in labor-management relationships that go along with cooperative, service-oriented workplace partnerships. Conflictual or even many traditional approaches to collective bargaining do not foster cooperation and partnerships affecting service improvements. Instead, where the Task Force found service improvements arising from cooperation, it found workplace relationships and other aspects of collective bargaining practices used much more constructively.

Making a change from a conflictual approach in labor-management relations will not be an overnight process. Most importantly, no such change can take place unless both labor and management are prepared to accept each other's legitimate role. The Task Force noted some important features that characterize productive labor-management relationships that support participation and service improvement:

Reduction in Conflict

To the extent that both sides can reduce unnecessary conflict, their energies can be focused upon improving service and working together. The Task Force saw many examples of better contract resolution, primarily through the use of interest-based bargaining and similar techniques; and improved grievance resolution, through mediation and other uses of alternative dispute resolution principles. A wide variety of approaches have evolved to fit local circumstances.

Stephen Goldberg, professor of law at Northwestern University, testifying about grievance mediation, suggested that it assists the overall labor-management relationship in several ways:

Mediation teaches settlement skills and generally improves how parties get along, which has positive, spill-over effects on the overall relationship. In fact, the goal of mediation is to put all arbitrators and mediators out of business eventually by teaching problem-solving skills to the parties.

• The mediator has both mediation and arbitration experience and gives an advisory opinion on the spot.

• Mediation is off the record and "no risk."

• The process is faster and cheaper than arbitration as no attorneys are involved.

• Mediation has few drawbacks. Mainly, it could discourage settlement at earlier stages and adds a step if arbitration follows mediation as a matter of course.

Goldberg said results from mediation are demonstrable. He presented figures showing that in the grievance mediation systems, 83 percent of grievances are resolved without arbitration. Among his examples, he described a 95 percent success rate with grievance mediation of discipline and discharge grievances in a previously difficult corporate environment.

In a private utility example presented by Boston Edison and Local 369 of the Utility Workers Union of America, a new vice president for labor relations approached Local 369 about a mediation program to reduce a large backlog and reduce future conflict in the collective bargaining relationship. After a successful program of training in grievance mediation and expedited problem resolution, the parties went on to a much changed labor-management relationship. The old phrase so often used previously to prevent resolution -- "that will set a precedent" -- was set aside and problems then were rapidly resolved.

In contrast to the contentiousness of the past, the new relationship was characterized by rapid settlement of a six year collective bargaining agreement that used to be a highly acrimonious event, and a long-term no-layoff and retraining program to prepare the company and the workforce for changes coming in the utilities industry. Problem-solving methods that began with a joint effort to resolve grievances and reduce the backlog has migrated to every part of the workplace relationship and to overall business planning, and includes a long-term reform in the selection and development of managers. Also changed is the development of a more positive, service orientation for personnel department staff and first line managers.

Leadership commitment, training, and effective use of outside neutral facilitation helped the parties move to a productive partnership following the success of improved conflict resolution and the trust that then developed. This sequence of events -- improved conflict resolution leading to a transformation of the overall relationship, leading to a greater service orientation and a more satisfactory work environment -- was a common theme of Task Force observations.

Another good example is the City of Phoenix, Arizona and the Phoenix Firefighters Association Local 493. The two have jointly sponsored a novel, annual retreat of labor-management leadership since 1984 to deal with collective bargaining issues. Originally conceived with the assistance of the Federal Mediation and Conciliation Service, the retreat is used to tackle issues labor and management feel they can resolve. Similarly, both sides agree not to allow difficult issues to distract them from working on areas of agreement.

Use of Alternative Dispute Resolution for Rights Guaranteed By Law and for Other Workplace Disputes

Noting that resolution of conflicts helps create the necessary trust for a cooperative workplace relationship, the Task Force looked into efforts and ideas for better conflict resolution. Testimony was invited from knowledgeable parties and reference was made to the extensive work of the Dunlop Commission. This led the Task Force to discussions of grievance mediation and other means of resolving contract disputes. But there were also significant vestiges of other types of conflicts affecting employees in union and non-union workplaces, usually conflicts over statutory workplace rights.

In Chapter IV of its May 1994 Fact Finding Report, the Dunlop Commission explored in some detail[10] the topic of "Employment Regulation, Litigation and Dispute Resolution" and reviewed some of the difficulties and expense in resolving a variety of workplace disputes through established administrative procedures and the courts. It also noted that the dwindling resources, clogging of courts and administrative processes, and the complexity of enforcement of statutory workplace rights leaves conflicts outstanding for years, some virtually never to be resolved. In this regard the Commission reported difficulties in employees' gaining access to resolution and closure in disputes under such diverse statutes as those dealing with employment discrimination, including the Equal Employment Opportunity Act, the Americans With Disabilities Act, as well as the Family and Medical Leave Act, the Occupational Safety and Health Act, and other programs of the Labor Department.

Illustrating some of these difficulties, on page 113 in its Fact Finding Report, the Dunlop Commission summarized that:

"The administrative procedures and remedies used to enforce workplace laws vary widely, involve multiple agencies from different departments of the federal government, and are administered on a stand-alone basis, with little or no regard for overlap or conflicting requirements."

"The number of employment suits in federal courts increased by 430 percent between 1971 and 1991. Another 10,000 cases charging unlawful discharge are filed annually in state courts."

"The EEOC handles approximately 90,000 complaints per year, compared to 56,000 in 1980." (Elsewhere, on page 12, the Dunlop Commission notes that only 10 percent of these cases are eventually filed in court, most by individuals, not the agency.)

"Access to legal relief through the courts is limited for the majority of employees whose earnings are too low to cope with the high costs and contingency fee requirements of private lawyers."

Noting these barriers to closure of the conflicts in these legal and regulatory disputes, significant attention in that Commission's proceedings was then devoted to the exploration of alternative dispute resolution methods, including mediation and arbitration. A series of quality standards was adopted in the Final Report, pp. 30-33, intended to guide the formation of any private dispute resolution alternatives that might develop in the private sector, where there is already some admired, as well as controversial, experience with ADR systems for employment disputes.

Concerned about the effect of unresolved conflict on the possibilities for developing cooperative workplace relationships and also concerned about the lack of access to justice, the Secretary's Task Force decided to look further into the possibilities for addressing such conflicts in the state and local government workplace setting. The Task Force invited comment from several witnesses who appeared before the Dunlop Commission on the applicability of such mechanisms in the public sector to resolve disputes that otherwise might not have a sufficient channel for fair and prompt resolution.

Overall, it appeared that the public workplace might be more receptive to such alternative systems, particularly to setting them up in a manner that protected the fact and appearance of neutrality and independence, and providing employees access to courts if they felt their case was meritorious or did not choose to use the ADR system. Among other controversies, one of the stumbling blocks to widespread acceptance of such systems in the private sector was the insistence of some private employers and employer representatives that use of a company ADR system be a pre-condition of employment, precluding access to courts. The Dunlop report reviews some of the legal history and experience with this sort of arrangement in the Fact Finding report, cited above, and in its Final Report, recommends strongly against such pre-employment requirements. This Task Force agrees.

In exploring possibilities in the public sector, there was more receptivity and fewer barriers to such ADR mechanisms. As part of its effort to ensure a workplace environment where conflict does not unduly interfere with cooperation, the Task Force created a subgroup to further explore the possibilities and conditions for introducing more extensive use of ADR systems into the public workplace for resolving conflict over these statutory and other mechanisms. Recognizing the need for systems that are fair, well-understood, effective and which clearly preserve employee and employer rights, the Task Force consulted further with the witnesses who appeared, as well as others in the employer, employee and workplace civil rights communities who have followed these issues.

Quality Standards and Key Principles for Effective Alternative Dispute Resolution Systems for Rights Guaranteed by Public Law and for Other Workplace Disputes[11] A neutral mediator or arbitrator who is trained in and applies expertise in the substantive area of law, and diversity and balance in the pool of available neutrals. A fair and simple method by which the employee can secure the necessary information to present his or her claim, including the right to discovery and deposition. A fair method of cost sharing between the employer and employees to ensure affordable access to the system for all employees. The right to independent representation A range of remedies equal to those available through litigation A written opinion by the arbitrator explaining the rationale or the result, demonstrating appropriate application of relevant statutes. Sufficient judicial review to ensure that the result is consistent with the governing laws and that the process is consistent with these standards. Employee agreement to mediate or arbitrate shall be voluntary and post-dispute. Where an employer agrees to be party to such an ADR system, litigation will only be pursued should the employee refuse to remain within the ADR system. If an employee opts for litigation, he or she can only re-enter the system by mutual agreement. Employees should receive clear notice, including but not limited to right to counsel, to ensure that they are informed of their rights and alternatives for pursuing those rights. ADR should normally not be used in cases that represent tests of significant legal principles or class action. There should be an equitable arrangement for compensating neutrals that does not influence their role or rehire considerations. Arrangements should be made for suitable reimbursement of employees' representation fees that encourages access and appropriate use of the system. There should be joint selection of the mediators and arbitrators, or an agreed upon procedure for their appointment. ADR systems not conforming with these quality standards should be challengeable. See Appendix H for further details.

The result is a set of principles which the Task Force recommends as necessary to a workable and fair ADR system which it believes would have broad acceptability, and would not interfere in the exercise of collective bargaining rights. In order to meet local conditions and be seen as fair, such systems would need to be set up as a neutral forum by local parties.

The Task Force encourages the voluntary development of such systems and urges national employer, labor and rights groups to assist local parties in developing such systems.

Included with this chapter is a table that is a general summary of the principles recommended by this Task Force. The first seven are drawn from the Dunlop report, the remainder are added from the work of this Task Force, but appear consistent with the Dunlop principles. Appendix G details these principles and describes key administrative and other features.

Contract negotiations and administration focus upon service purpose

Where present in a cooperative relationship, the collective bargaining agreement offers an established infrastructure to communicate, problem-solve and provide leadership. In some instances, the contracts are changed to provide a greater focus upon service purposes. Where the contract is used as the foundation of cooperation, it becomes a more flexible and service-oriented instrument and less focused upon legalistic resolutions of disputes.

Similarly, administration of collective bargaining agreements becomes considerably more connected to the service-improvement effort and the need to improve the labor-management relationship. Contract administration is often explicitly or implicitly carried out, or at least guided by, a senior-level joint labor-management team. The joint committee is able to provide a broad perspective on the relationship between service needs and workplace needs, allowing resolution of contract problems that are respectful both of the contract and of customer service. The parallel need exists for resolving workplace conflicts in non-bargaining situations or with exempt employees.

Most conflicts are resolved with reference to the service and the cooperative philosophy, and not isolated. Grievances are sometimes handled in a separate process, and sometimes part of the service effort, depending on how the parties choose to do it.

Quality Improvement Efforts and Bargaining

The Task Force saw two primary approaches to the relationship between an organization's "continuous quality improvement" and its collective bargaining relationship: Some relationships purposefully separate quality improvement procedures from the bargaining relationship; Others integrate it with the bargaining relationship.

For instance, the state of Ohio, which has a comprehensive labor-management and service improvement relationship, consciously separates bargaining from quality improvement initiatives. The city of Portland, Maine, chose a more explicitly integrated way.

Regardless of which approach, it is important that the relationship between quality efforts and the bargaining process be clear so that issues can find their way to the appropriate forum. Secondly, the decision whether or not to combine the two should be decided by those directly involved based upon their collective judgment on what would work best for them.

However, the informal relationship of quality efforts to bargaining is always present: It is the same people with the same skills. More fundamentally, service improvements require changes in the way work is done, thus touching upon bargaining subjects. It is impossible to separate service quality discussion from discussion of underlying work practices and systems. Frequently, the level of trust gradually builds up so that there is some informal integration of the two processes even when kept formally separate. In non-bargaining settings, the quality effort and the functioning and structure of the formal personnel system also have inevitable linkages for change.

Change in Emphasis for Union Leadership

Under a cooperative model, union leaders find the focus of their roles shifting. As opposed to the old assumption that union leaders sometimes spend 90 percent of their time settling grievances and other issues of conflict for a minority of the workers, they now are engaged in leading service improvement and cost effectiveness efforts -- things in which 90 percent of the employees want to engage.

"My job used to be to go around and ask people what grievances they had. My job is now to go around asking people what ideas they have to improve this job," related Frank Borges, President of SEIU Local 285, who gained first-hand experience with labor management cooperation in the Massachusetts Highway Department. (See " Snapshot: MassHighway.")

Local union leaders in these partnerships now spend a great deal of time educating their members on how to participate and how to become involved in the cooperative process without fear of downgrading or job loss. Differences between labor and management are settled on a more informal basis, closer to the source of any conflicts.

As Steve Fantauzzo, executive director of Indiana Council 62, AFSCME, who has been intimately involved with the City of Indianapolis's move to labor-management cooperation, put it: "My job is to get people involved, one at a time, and the more of them I get involved, the more excited they get about it."

It is a matter of Task Force record that union leaders who testified spoke of the increased satisfaction from the work they are doing in the cooperative, participatory environment. Also, contrary to another common assumption, union leaders who were engaged in cooperative, service oriented efforts found themselves most often re-elected.

Change in Emphasis for Labor Negotiators

Common to a cooperative relationship is that the two parties become more focused on problem-solving than winning and more focused on services than legal issues. Thus, management spokespersons, too, report enjoying greater job satisfaction as they become more involved in resolving service issues.

Cooperative or Interest-Based Bargaining

Cooperative bargaining normally is a part of service improvement efforts. At the outset, participants usually lack an understanding of how to make the shift away from adversarial relations. Usually and most effectively, that can be overcome through the assistance of neutral facilitators and training to create a more cooperative, service-oriented negotiating process. In instances of complete lack of trust between labor and management, the Task Force saw successful examples of a neutral, third party coming in to jointly teach and later help both sides use new skills and processes to cooperate and team problem-solve.

In Oregon, for instance, a representative of the Oregon Nurses Association testified that she had developed an ulcer when the union and an employer had been involved in traditional bargaining. When they finally turned to interest-based negotiations following training by a state mediator, it was so successful that now they "wouldn't do it any other way."

In Ulster County, New York, with a workforce of about 1,600, a joint labor-management committee was established 20 years ago in the collective bargaining agreement with Civil Service Employees Association, Local 856. According to testimony from the parties, the relationship did not become a truly productive joint problem-solving team until nearly 10 years later. In 1985-86, the county, union and state employment relations board received a grant from the Federal Mediation and Conciliation Service that included extensive process and communications training and the hiring of a full-time coordinator to facilitate the meetings and the work of the group. The cooperative relationship is now characterized by trust. As in many other successful relationships, the parties testified that now "you can't tell who is management and who is labor in meetings." There also has been a salutary effect on collective bargaining: In 1992, the agreement took 24 months toreach. In 1995, agreement was reached in "only a few days."

Cooperative bargaining does require both sides to essentially "leave their credentials at the door." They then are able to concentrate on how to solve problems rather than play traditional roles Again, this type of approach generally involves significant use of smaller subcommittees that come together often to solve current problems.

The following table illustrates a useful view of the contrast between traditional and cooperative bargaining.

One View of the Contrast between
Traditional Collective Bargaining and Problem-Solving or Interest Based Bargaining[12]

TRADITIONAL BARGAINING	INTEREST BASED BARGAINING
PREPARATION Scrutinize the existing contract and survey constituencies to identify each and every provision that might be improved. Prepare formal demands and proposals, often in the form of rewritten or new contract articles. Keep demands and goals more or less "secret" from the other side until they are revealed at the table. Speculate about the other party's demands and strategy.	PREPARATION Consider whether there are compelling concerns related to the existing contract. Discuss those issues openly and widely, well prior to the start of bargaining. Focus on major concerns that may require a contract change to resolve. Do not draft contract language or draw up demands, but do contemplate possible solutions. Enter high-level, joint, informal, preliminary meetings to discuss broad concerns and goals, identify and limit the issues, and set the tone for negotiations.
COMMUNICATION Maintain contact with both constituencies and public through various media to promote positions on issues. After settlement, prepare press releases describing gains.	COMMUNICATION Issue joint communications to constituencies and public on progress of negotiations. Prepare a joint press release describing mutual gains.
NEGOTIATIONS Exchange demands in contract language. Try to obtain all the other party's demands before revealing all of yours. Prepare and exchange formal counter-proposals. Obscure your "bottom line" by keeping many proposals on the table and modifying positions slowly. Settle minor matters first, leaving "real" concerns for later marathon sessions. Maintain bargaining team discipline. Permit only authorized team members to speak and, especially, to make proposals. Save sidebar meetings of chief negotiators and/or subcommittees until late in negotiations. Initial final written agreements. Management prepares new contract for union to review.	NEGOTIATIONS Enter into a discussion of concerns and possible solutions, keeping written exchanges minimal, informal, and explanatory. Approach each other's concerns as joint problems for mutual resolution. Discuss your major goals immediately and openly. Encourage the exchange of ideas by team members, recognizing that such discussions can help solve problems. Use sidebar meetings whenever they appear useful, early or late in the process. Reach a "meeting of the minds," then jointly draft contract language in subcommittee for examination and approval by teams. Discuss loose ends (with prior commitment to deal reasonably with any overlooked matters). Jointly prepare, review, and proofread new contract.
POST-BARGAINING RELATIONS Enforce the new contract. Maintain record of contract problems with a view to preparing demands for future negotiations.	POST-BARGAINING RELATIONS Implement the new contract, with an eye to catching problems early to facilitate informal resolution. Maintain a problem-solving approach through regular discussions between contract administrators, as well as periodic, high-level, informal meetings. Try to solve problems promptly and reduce agenda for future negotiations.

Recognize Electoral and Union Politics

Both sides must recognize the importance and impact of electoral and union politics upon labor-management relations. If they don't, they generally have a much harder time dealing with each other. By better recognition of factors like the timing of elections and each other's respective constituencies, the parties can better resolve service problems and other issues.

Don't Hold the Relationship Hostage to Other Issues

Many parties reported that it is important not to hold the labor-management cooperative relationship hostage to a particular issue, no matter how difficult. In fact, those who refused to engage in such tactics as, "No, we won't talk until this issue is resolved," but rather kept up the dialogue, seem to have the most success with the more difficult issues.

Starting Along the Road to Improvement

As this chapter describes, there are many key ingredients to establishing and sustaining a cooperative labor-management relationship in pursuit of excellence in the public workplace. The Task Force found that there is no single route to follow when embarking upon this new path. The challenge for labor and management leaders is to find the right mix of ingredients that can begin and sustain this better way of working together in each service or community. This challenge also provides an unparalleled opportunity for creative leaders to build upon the best practices, to experiment with innovative approaches and to forge productive partnerships that fit the local circumstances. Managers, elected officials, administrators, and citizens all benefit from employee participation and involvement in determining how best to provide public services.

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