Testimony_Rosow_091593.pdf: 180 downloads, before Oct. 1, 2020

Rosow, Jerome M

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Federal Publications Key Workplace Documents 
September 1993 
Testimony of Jerome M. Rosow Before the Commission on the 
Future of Worker-Management Relations 
Jerome M. Rosow 
Work in America Institute 
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Testimony of Jerome M. Rosow Before the Commission on the Future of Worker-
Management Relations 
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Suggested Citation 
Rosow, J. M. (1993). Testimony of Jerome M. Rosow before the Commission on the Future of Worker-
Management Relations. Retrieved [insert date], from Cornell University, School of Industrial and Labor 
Relations site: http://digitalcommons.ilr.cornell.edu/key_workplace/374/ 
This testimony is available at DigitalCommons@ILR: https://digitalcommons.ilr.cornell.edu/key_workplace/374 
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work in amenca institute, inc. 
700 WHITE PLAINS P1QA0 SCARSOALE. NY 10583-5058 • 914 /472 -9600 • FAX 9 1 4 / 4 7 2 . 9 6 0 6 
Founded to advance oroouctwcy ana the auaKy at wortng «le 
COMMISSION ON THE FUTURE OF WORKER/MANAGEMENT RELATIONS 
Washing ton , D.C. 
JEROME M. ROSOW 
Pres iden t and Founder 
Work in America I n s t i t u t e 
September 15 , 1993 
Board of Directors: Chairman 
Dr. Dark Kerr 
President 
Jerome M, Rosow 
Secretary 
Jay W. Waks 
Members: 
Morton Bahr 
Owen Bieber 
Irving Bluestone 
HarokJ W. BuHtngame 
Thomas Donahue 
Frank Doyle 
Herbert Elish 
Wayne E. Glenn 
Stanley Hill 
John T. Joyce 
Clint Larson 
Fred J. Laux 
Oavid F. Linowes 
Ray Marshall 
Jay Maiur 
Mrs. G.G Michelson 
Joyce Miller 
Rep. Eleanor Holmes Norton 
Elliot L. Richardson 
Howard D. Samuel 
Rep Pacncia Schroeder 
Patrick J. Scollard 
Albert Shanker 
Jack Shemkman 
Mitchell Svindoff 
John J. Sweeney 
Victor Weingarten 
Lynn Williams 
Frank Zaro 
r? 
Jerome M. Rosow 
President and Founder 
Work in America Institute 
Presentation to: 
Commission on the Future of Worker/Management Relations 
September 15, 1993 
Washington, D.C. 
I. Brief Description of WAI 
• Origin and mission (tripartite Board) 
Goals: 
• improve labor/management relations 
• improve productivity and the quality of working life 
• encourage E/I and teamwork 
• Productivity Forum: research information services, site visits, 
roundtables, networking ^ 
• Plant Managers' Networks 
• Policy Studies 
II. What Has the Institute Learned Since 1975? 
• Slow start in American industry: skepticism and lack of US models, limited 
confidence in real effects of HR involvement 
• Response begins late 70s 
• Marked increase after '82 recession—especially in manufacturing 
(Note: Manufacturing productivity at 4.5% vs service seaor, which also exduded 
quality changes) 
• Transition from job enlargement/job 
enrichment—QWL—E/I—teams—jointness—TQM 
• High performance work systems—new work systems are systemic paradigm 
changes 
• Slow transfer of concepts from manufacturing (production workers primarily) to 
derical and service employees, managers and professionals 
l 
• Joint programs led the way in autos and telecommunications, followed by steel, 
paper, electrical manufacturing, with modest changes in other sectors of the 
economy 
• Delayering and flat organizations have placed middle management in jeopardy (8 
levels to 3) before, now they are more threatened and more resistant to change 
Current Status 
• Body of evidence re: economic benefits was the critical factor in attracting top 
management attention: move to quantum leaps (GE Bromont, GE Drive Systems) 
Productivity gains of 50% after several years 
• Programs vary between and within organizations 
• Joint programs and non-union management controlled programs exist 
• when the-union is a real partner results are stronger +30% + QWL 
• management is reluctant to delegate and to eliminate the strong autocracy 
which worked so well in the past, the union requires a commitment 
• union partners become committed to change to save the jobs and drive the 
system forward, they ensure that workers have a voice 
• Global competition, loss of market share, demand for higher quality, and cost 
controls have been critical factors inducing a major change, especially towards 
the HR factor within the organization. Organizations in crisis, have been first to 
respond, and were able to turnaround 
• Rate of improvement has shifted from 3 to 5 years to 1 to 2 years as the learning 
curve moved up 
• However, no large corporation has been successful in achieving the 
institutionalization of their own "best practice." Indicating that the resistance to 
change Is imbedded in the culture of each workplace and the system cannot be 
mandated or achieved by bargaining an agreement to change or by management 
edict 
• Today the level of penetration and diffusion of high performance work systems 
appears remarkable vs 1975. BUT as a percentage of employment in the US it 
represents a small fraction (probably 1 to 2%); it is concentrated in the Fortune 
1000 companies; and is quite uneven within and across participating unions 
• The nation has failed to engage other sectors, especially: government, education, 
and healthcare. These are labor intensive and are highly unionized and ripe for 
change. They provide critical targets and since all three sectors are experiencing 
serious problems, the need is obvious. 
• Human resources within an organization truly represent the strategic factor 
which can achieve and sustain competitive advantage since it cannot be easily 
copied by competitors. By contrast technology achieves a short term competitive 
advantage. What we have learned over the past two decades of American 
experience is that workplace innovations built upon genuine employee 
participation in decisions give the successful organization a sharp competitive 
edge, a sustaining life force which goes beyond technology and capital, and an 
inherent capacity for self-renewal. Engaging the fuller potential of human 
resource talent is an art form which cannot be replicated by competitors, since it 
cannot be duplicated within the firm. 
Any legislation or NLRB rulings which impede genuine workplace reforms 
would seriously limit our ability to compete and be adverse to growth. Since 
these work innovations are so important to the economic future of America, 
what are the obstacles which impede their diffusion across all sectors, and what 
prevents their institutionalization with major organizations which have achieved 
models of excellence? 
III. High Performance Systems 
Participative leadership is characterized by the following principles: 
1. Management command and control systems are replaced by employee and 
union involvement, joint decisions, and self-managing teams. 
2. The organization and work system support employee involvement in decision 
making as basic to high performance. 
3. Employee involvement is based upon a foundation of mutual trust and 
respect between leaders and employees and, where unions are present, between 
labor and management 
4. The institutional relationship between management and union are redefined 
to achieve mutual trust, mutual goals, and sharing of knowledge. 
5. Open communications are real and continuous. 
6. Authority is decentralized and delegated to the lowest level feasible. 
7. High performance goals are reinforced by human resource, training, and 
industrial relations practices which support a high quality of working life, including 
sensitivity to the employee need for a secure future. 
8. Continuous learning is built into the system with training, training and more 
training 
3 
9. The rewards system recognizes and reinforces the participative process, the 
team, and the individual. 
IV What are the Real Obstacles to Diffusion of These Ideas? 
• Only the employer has the power to engage a process of systemic change; 
however, the prevailing values of top management prefer the status quo and 
stability. The mindset resists systemtic change. 
• Historic adversarial relations between management and labor is an ever-present 
barrier to creating a relationship which must begin and remain founded on Thist 
• Management sets unrealistic expectations and is too impatient for quick results 
• Unions are ambivalent in their policy position viz joint programs in view of past 
history of relations and in light of anti-union policies which prevail in the nation 
• Employers shy away from joint programs in the belief that unions are rigid about 
work rules, seniority rights, overtime, and multi-skilling 
• Middle management resistance to change is a serious problem. Loss of status 
and job security resulting from cutting the levels of supervision (8 to 3 levels) has 
intensified resistance. 
• Downsizing in America is often the result of work reorganization; therefore, 
unions and employees are fearful that participation is not in their self interest 
• Resistance to change, a universal condition in human behavior and especially 
where vested interests may be at stake 
• Inadequate investment in the change process, especially training at all levels, top 
to bottom, with special emphasis upon so-called "soft 510115": problem solving, 
conflict resolution, peer relationships, cooperation and teamwork, and business 
economics 
These obstacles may be viewed as daunting. But the facts are that they have been 
overcome with great success in many companies and unions where the will and deter-
mination was present. 
V. Outlook for Growth and Development of High Performance Work Systems 
1. Based upon the high added value of these systems, their growth should 
become a first priority of business strategy. They are a unique competitive 
advantage and blend the interests of management, worker and unions in a 
manner which is envied by competitors and which cannot be matched easily, 
if at all. 
2. The leadership of President Clinton and Secretary of Labor Reich and 
Secretary of Commerce Brown introduces a new and important political 
significance. It has already elevated the level of national attention. Continued 
4 
education, information, and propaganda should serve to promote and expand 
efforts to diffuse the best practices and encourage pilot programs and 
experimentation. However, the Clinton Administration must develop a support 
system with adequate financial resources to stimulate increased initiatives by 
employers in all sectors of the economy. 
3. Downsizing has adverse effects on employee morale, union membership, 
lowers expectations, and impedes the willingness to change. Employment security 
must be part and parcel of the process (within defined, reasonable limits). It is more 
important than any other reward system. Unless employment security is part of the 
bargain, the rate of growth will be slower and more difficult to achieve. 
4. The state of the American economy and the global marketplace pressures 
create a powerful incentive to change and to grasp the competitive advantage 
offered in high performance work systems. Thus, there is a real need to accelerate 
top management exposure to the bottom line results and stimulate more initiatives 
to change. 
VI. Joint Labor/Management Committees 
Joint committees have a long and checkered history in American labor relations. 
Such committees have addressed: health and safety, apprenticeship training, benefit 
plan administration, drug abuse and alcoholism, pre-retirement counseling, absen-
teeism Ad hoc committees to address critical issues prior to collective bargaining. 
These committees have made valuable contributions to the enterprise and to the 
quality of working life for the union members and the workforce as a whole. 
However, they are not equivalent to Joint Labor/Management Committees which 
create and support high performance work systems. Labor/management joint 
programs have encouraged leaders on both sides to find areas of mutual interest. The 
new partnerships are helping to ensure competitiveness and thus build long-term 
employment security. While respect for differences continues, the improved relation-
ships are contributing to more collaborative bargaining approaches. 
5 


Testimony of Jerome M. Rosow Before the Commission on the Future of Worker-Management Relations

Rosow, Jerome M.

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