Unionization and Purpose: Achieving Competitive Advantage through Frontline Engagement

Building on the old term of art: “unionization takes wages out of competition”…

In today’s world where only 5% of workers are unionized in the private sector and only 10-12% overall, that old strategy barely exists. Today, we should think of how unionization becomes a “competitive advantage” for all stakeholders impacted by enterprises: workers, shareholders, community, and public policy which supports unionization.

The Competitive Advantage: High employee engagement through frontline-driven continuous improvement work systems.

Our nation has had low employee engagement for a very long time.  Gallup and other trackers of employee engagement tell us that employee engagement scores run between 25-35%. Further, on average as many as 53% of the workforce is “actively” disengaged” from work. U.S. Employee Engagement Holds Steady in First Half of 2021 (gallup.com)

We know that high employee engagement is an essential ingredient in the attainment of high and sustained high performance 

Since 2007, the largest, longest lasting, and most complex labor-management partnership (LMP) in the United States, the LMP at Kaiser Permanente, charted a course of maximum engagement of frontline workers through Unit Based Teams (UBTs).  

Over the course of several cycles of collective bargaining, unions, physician leaders, and leaders of Kaiser Permanente health plan and hospitals built accountable systems to engage frontline staff in performance driven teams. Further, a rating system of performance of the teams was established from 1-5, with high performing teams at levels 4-5.

From a major study done about the Kaiser Permanente Labor Management Partnership (Culture Matters, Office of the Labor Management Partnership, 2012), we can see direct correlations of frontline staff’s high engagement scores, involvement in high performing unit based teams, and higher performance.

From the study, here are the key employee engagement factors that contributed to high performance:

•  Efficient work procedures in dept (71%)
•  Know about department goals (78%)
•  Understand how my job contributes to our goals (89%)
•  Confident management would respond to unethical behavior (74%)
•  Comfortable raising ethical concerns to sup/ management (78%)
•  Department operates effectively as a team (71%)
•  Dept doing things to improve patient safety (86%)
•  Usually enough people in department to do job right (54%)
•  KP provides resources necessary to work effectively (77%)
•  Steps taken in dept to ensure employee/ physician safety (87%)
• 33. Encouraged to suggest better ways to do work in dept (78%)
• 41. Supervisor recognizes me when I do a good job (73%)

How does high employee engagement fit with what kind of Union non-union workers wish to belong to?

What kind of Union do workers want to belong to? What is the relationship between what workers are telling us about the answer to that question, high engagement, and potential union growth?

A recent comprehensive research study (What kind of labor organizations do U.S. workers want? - Equitable Growth) of non-union workers tells us the kind of union people wish to belong to. Among the most important characteristics are unions that would support worker involvement in decision-making about how work is done, as well as the fascinating interest in collective bargaining for workers across and industry within a region (see highlighted items below).

• Be open to all current workers at the business or organization, regardless of job
• Engage in collective bargaining on compensation, hours, and working conditions on behalf of all workers in the industry within a region
• Provide health and retirement benefits
• Have mandatory dues only for workers who receive benefits from the organization
• Offer workers opportunities to work with management to recommend improvements in how workers carry out their responsibilities
• Offer legal representation to workers with common non workplace legal problems
• Represent workers in a joint committee with top management to decide how the organization should operate
• Never use the threat of strikes
• Campaign for pro-worker politicians

The categories of high engagement as shown in the KP study also helps us identify those characteristics of a workplace that impact high performance.  The survey of non-union workers tells us that many of the characteristics of a high-performing enterprise, high worker engagement, and participation in high performing teams overlap with why workers would join a union.

The Theory of the Case for Union Growth: Unions can mobilize the power of knowledge and experience of workers in work settings that will enable and sustain high performance.

At KP, the LMP developed the Value Compass, not an exhortation or a slogan, but a strategic call to action which tied together purpose, shared vision, daily action, and measurable improvement.

The Value Compass envisions that by keeping the patient (consumer, taxpayer, etc.)  in the center of all activity and purpose, the work of all employees, managers, doctors, executives, and union leaders commit to continuous high performance in all four quadrants of the compass.

In “Best Place to Work”, union growth, career security, and highest wages and benefits, are equal to the measures in quality, service, and affordability.

Today, the Value Compass is part of all KP official reports; is part of the National Agreement (collective bargaining agreement), and is the central guide to work in more than 3500 unit based teams across KP.

I and others have suggested for a long time that labor management partnership when defined as a labor-management relationship for the purpose of building high frontline engagement to achieve whole systems change and continuous high performance, unionization can be seen as a true competitive advantage.

Over the course of nearly four decades, there have been many attempts at transforming the labor-management relationship. In the 1970s, 1980s, and 1990s, unions and various enterprises in a number of industries made efforts to offset losses of market share or outright failure based on competition, technology, de-regulation, and other prevailing dynamics of the period.  The efforts, done in partnership turned out not to be sustainable for many reasons. 

However from those many efforts, much was learned, and organizations have begun to merge approaches into four basic concepts. 

(1) Organizations are systems, which means that achieving high performance requires changing the entire organization, not merely a few of its parts. 

(2) People are the critical element in achieving high performance. Employees must understand the business, have the skills as well as the opportunities to self-manage, and be rewarded for performance.

(3) Serving customers well is the crucial priority. 

(4) Processes are essential in achieving consistent outcomes, which means that processes must be analyzed, reinvented, standardized, and followed.” 

(Schneider and Stepp, “The Evolution of U.S. Labor Management Relations”, National Policy Association, Chapter One, from Through the Glass Darkly – Building the New Workplace in the 21st Century, James A. Auerbach, 2008).

It would seem that along with many innovations and new efforts underway today in how to enable and empower employee voice, it is an opportune moment to build on a rich tradition of enabling frontline voice to achieve whole system change and improvement.