HR1100 Discussion Post 2, Fall 2019
Question
1. What industrial relations strategy towards unions has WestJet adopted?
Explain which practices point to this strategy and which practices do not seem
entirely consistent with this strategy.
Originally,
WestJet had taken a proactive approach toward unions. They utilized the union substitution/avoidance strategy,
or, to “remain union free in situations where workers are not yet unionized.”
They had a non-union representation system established. While they appeared to offer
union-level pay and benefits and many of the perks and compensation usual of
unionized workforces, it turns out that many employees were unhappy with the
arrangement. The CEO’s vision of being employee-centric was largely
philosophical, so from an outsider’s perspective it would look as if WestJet
was succeeding in keeping employees happy while out of union. However, many of
their practices contradicted this strategy, such as paying salaries
considerably below industry averages.
While
WestJet promised to keep employees satisfied and well-taken care of (presumably
so that they didn’t unionize), this approach only lasted until about August of
2018. They did manage to stay union free for almost 20 years. However, many
WestJet employees grew unhappy with their contracts and the various decisions
that were being made that impacted their lives.
Question
2. What factors affected WestJet’s decision regarding which industrial
relations strategy to adopt?
Clive
Beddoe had a vision for a low-fare, no-frills airline company. This mission
likely shaped the decisions regarding IR strategies. Keeping costs low was an
important economical consideration in order to keep fees low for customers.
Unions tend to drive up the operating costs of a business—with more competitive
wages, pension plans, health benefits, etc. It is fair to assume that most
companies that attempt to take the low-cost, no-frills approach to sales will
be strongly avoiding unionization (look at WalMart, McDonalds, for more
examples of this.) So how do you get employees to work for less and provide the
same level of service? Through the philosophy that excellent customer service
comes from taking excellent care of employees. I feel that that attitudes and intentions were likely to “put employees first”, however, it cannot
simply be lip-service. Good intentions and upper-management attitudes don’t
compensate for lack of security, the need for improved wage structures, and
unsafe working conditions.
Question
3. Reflecting on the discussion regarding current management practices, explain
the ways in which WestJet’s human resource practices resemble a high
performance work system?
High
performance work systems “often include rigorous recruitment and selection
procedures, incentive-base compensation, intensive training and development,
and reductions in pay and status differentials.” Ways In which WestJet’s HR
practices resemble HPWS is in their incentive-based compensation. Prior to
unionization, WestJet offered employees a generous profit-sharing so that they
could benefit financially from the success of the company. This tactic hopes to
instill a sense of ownership in each employee so that they are motivated toward
company success. They also employed the technique of flatter hierarchies, avoiding
class boundaries and having upper-management and pilots contributing toward
lower-level duties, such as offloading baggage and tidying the plane between
flights. Employees also had much autonomy and were encouraged to rely on their
own intuition in problem-solving and guest compensation. There was also a
non-union association called PACT, which was another proactive approach to
handling employee concerns without the need for unionization. All these methods
worked out for WestJet for 2 decades, but eventually, like everything in
economics, there was a tipping point where employees began to push back.
Question
4. Do you think that a HPWS is enough to prevent a union from becoming
established at a work place?
As
of August 2018, WestJet has unionized. It started with the pilots, then the
rest of the crew, and there were periods of hostility at the bargaining table.
This is based on the fact that eventually, there will be a fundamental
disagreement. You cannot please everyone
all the time. Additionally, if the rest of the industry is unionized, and
as non-union workers age and get to retirement years, this caused a shift in
WestJet employee attitudes since the senior staff may not be protected like
they expected, and this could cause an upheaval.
Like
any economy, the ebbs and flows swing like a pendulum. All the way in one
direction until a tipping point, and then all the way back the other way, and
so on. When economic factors interfere, it can be hard to predict if any
long-term arrangement will persist. Higher fuel prices, competition and
disputes with pilots (WestJet was contracting out their work which was a huge
issues, and they were growing unsettled that their contracts were not in-line
with that of the rest of the industry) were the ultimate catalysts in WestJet
going from one of the only non-unionized airlines in North America, to joining
CUPE, a union for airline employees.
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