Labor Unrest

Business Management Suggestions for Business Conflict Resolution: Carter: It is apparent from your letter that the Winters Company is facing significant trouble brought about by the inexperience of the new and ambitious junior Winters. While he may be next in line to operate the company, and trusted by Winters Sr., his lack of experience in managing and motivating the floor of his fathers company could result in prolonged disruption of the company's productivity.

As a result, in the best case scenario, the company could slowly recover by replacing the warring workers. However, this seems unlikely, as Winters Sr. will be hesitant to let go workers who have formed the backbone of the company for many years. In the worst case scenario, however, the company's loss in efficiency, combined with increasing competition it he marketplace could force the company onto a track that would stall the company's profitability, and ultimately cause the loss of the entire enterprise.

In order to make proactive changes to the company's current, and future prospects, I would advise the following three steps be suggested to Winters Sr. First, there are significant differences in management style between the senior and junior Winters. While the floor staff and supervisors perceive this as the junior trying to impress the senior through his attention to extraneous detail, this is likely a function of Winters Jr. personality. When the staff perceives that he is trying to show off, they resent the additional work.

If they can be taught to understand the strengths and weaknesses of different personality styles, they will not only be able to understand their new supervisor, but will likely gain skills to understand and motivate their own department's staff. I would recommend that Winters Jr., and the key foremen under him be enrolled in professional, workplace oriented personality training seminars. While this is likely to be resisted, if you can help Winters Sr.

To understand the positive effects of such a program, you will be helping him take steps toward diffusing the hostility which is developing in the plant. Possibly by talking to other graduates in your area, and getting testimonies from them, you would be able to put flesh and blood to the positive results of such an investment in the future of his company.

Secondly, he needs to understand that his employees have developed a psychological contact with the company, based on the wages and benefits the company has been willing to offer in the past. Some of those benefits include the relaxed atmosphere, and cordial relationships between management and staff. Changing this relationship to an adversarial one is similar to cutting the floor staff's pay. They are no longer 'receiving' a perceived benefit from the company.

In order to create the desired change, the change process needs to be designed to continue to include the workers as part of the team, not as an adversarial group that just needs to "work harder." Psychological contracts are a growing area of research in the area of business management. The worker, in an economic relationship to the employer wherein he can voluntarily choose to work at one company of another, makes emotional and psychological commitments to himself, and the company based on what the company gives him.

The worker is willing to maintain the relationship as long as he perceives that he is receiving more than he is being asked to give, in other words his relationship to the company is a profitable one. This affective contract is based in the monetary, emotional, and personal benefits which the worker receives from his relationship to the company.

Changing the 'benefits' the company is willing to provide, by requiring more from the worker, or cutting back on what the company is willing to offer, (such as restricted overtime) will require a 'renegotiation' of the psychological contract. Thirdly, establishing the boundaries of the new psychological contract could be accomplished by tying desired pay increases (an employee desired benefit) to increased efficiency on the floor (a company desired benefit).

Another approach would be to offer overtime to the department which are the most effective at cutting material usage, or other costs, rather than allowing overtime to exist on an 'at will' basis. Simply removing the availability of overtime from the workers is an effective pay cut, and a mistaken approach to cutting costs in the plant. This approach is creating increases in the inefficiency as the workers feel.