Magazine

Management<br /> The Power of Partnerships<br /><i>Expanding labor-management partnerships beyond the traditional issues.</i>

November 1, 2000

n the past seven years, some agencies have ignored President Clinton's 1993 executive order to create labor-management partnerships. Others have created partnership councils, but limited their reach to traditional labor-management issues such as working conditions and employee grievances. But the Health and Human Services Department recently has expanded its partnership to include not only traditional labor-management issues, but also basic business decisions about staffing, technology and work processes. When President Clinton signed Executive Order 12871, he recognized that "only by changing the nature of the federal labor-management relations so that managers, employees and employees' elected union representatives serve as partners will it be possible to design and implement comprehensive changes necessary to reform government." HHS Secretary Donna Shalala, in a memorandum to all HHS employees, mirrored the President's belief. She explained that including the union in the basic business decision making process "will result in further improvements in the quality of employee work life and even better services and programs for the people we serve." The value of involving employees in determining critical work practices has been studied extensively in the private sector. Employees prefer to work in an environment in which they can influence how their work is performed, says professor Paul Osterman of the Sloan School of Management at the Massachusetts Institute of Technology in Cambridge, Mass. This is true regardless of whether employees share in the profitability that comes from their involvement, he adds. Osterman's and other research shows that even in the absence of reward sharing, employee involvement has a powerful effect on an employer's bottom line. Employees who are involved are more productive and generate greater customer satisfaction.

In April, Shalala adopted a recommendation from the HHS partnership council to elect to negotiate the numbers, types and grades of employees assigned to any organization work project or tour of duty as well as the technology, methods and means of performing the work. Although management is not legally bound to bargain over these work issues under U.S. Code Title 5, Section 7106(b)(1), it may choose to bargain. "We know we can produce better results by working on the (b)(1) issues in partnership," HHS Deputy Secretary Kevin Thurm says about the agency's self-imposed obligation to bargain. "You make better decisions when you involve your employees. You operate more effectively. You have more satisfied employees."

HHS is the first department to elect to bargain on these work issues and to use a comprehensive dispute resolution process, created by the agency's partnership council. Although the council is large and its members represent a wide variety of interests, it was able to reach consensus on this precedent-setting agreement. The council includes Thurm and 11 high-level HHS representatives from each of the agency's operating divisions-the National Institutes of Health, Food and Drug Administration, Office of the Secretary, Centers for Disease Control and Prevention, Health Resources and Services Administration, Administration for Children and Families, Substance Abuse and Mental Health Services Administration, Administration on Aging, Indian Health Service, Health Care Financing Administration and the Program Support Center. In addition, the council includes two representatives from the American Federation of Government Employees, two from the National Treasury Employees Union, two from the Laborers International Union of North America and one from the National Federation of Federal Employees.

The partnership council's support of the agreement is enthusiastic. "If we really want to accomplish our objectives, we have to come to grips with the 7106(b)(1) issues" because they are the most important issues to both management and the union, says FDA's representative, Robert Byrd, who is deputy commissioner of management and systems.

Robert Purcell, director of the Public Employee Department of LIUNA and a member of the HHS Partnership Council, believes better business decisions will be made because employees have a stake in the outcome. "Employees become invested in their agency," he says. "It is something they have an impact on."

Indeed, the goal of Clinton's 1993 executive order to establish partnership councils was "to identify problems and craft solutions to better serve the agency's customer and mission." The President said that in order to change federal agencies "into organizations capable of delivering the highest quality services to the American people," the following issues must be grist for the labor-management partnership council mill:

Agency strategic plans.
Annual operating plans.
Agency structures and proposed agency reorganization.
Changes in work processes.
The development and implementation of technology in the workplace.

Involving Employees

In the spirit of Clinton's executive order, the HHS agreement directs unions and operating divisions to establish a collaborative process that includes decisions by consensus and interest-based bargaining to resolve a broad range of agency business decisions, including Section 7106(b)(1) matters. "It ought be part of managerial expectations that we will do predecisional involvement, and we should recognize and reward those [managers] who do it well," Thurm says.

These partnership councils will include the highest-level management and union officials, those who are responsible for making and implementing business decisions. Historically, operating managers have been reluctant to involve unions in agency business matters. "It is often particularly difficult for managers whose identity is wrapped up in their authority to bargain on 7106(b)(1) matters," says Purcell of LIUNA. As a result, the labor-management relationship in many agencies outside HHS has been entrusted to labor-management specialists who have no impact on agency business decisions. Operations managers did not elicit employee and union ideas for change, and unions and employees felt impotent and marginalized. Some managers have been successfully negotiating (b)(1) issues but have been reluctant to acknowledge it. "We've been doing (b)(1) bargaining in many agencies outside HHS without naming it," says Kelley of NTEU. "We've been designing jobs, setting grades and determining the number of employees in each location. The agreement with HHS is important because it acknowledges what we have already been doing successfully."

Two of the eleven operating divisions had positive experiences negotiating Section 7106(b)(1) issues and helped convince their colleagues to adopt a departmentwide policy. Jim Corrigan, associate administrator for management and program support at the Health Resources and Service Administration, says managers in his organization feared unions would delay business decisions if managers agreed to bargain on Section 7106(b)(1) issues. "They have not been held hostage, experienced delay or suffered from outrageous union demands," Corrigan says. "People came to the table in good faith, reached agreement on important issues and achieved the desired results." Managers said they reached better decisions through partnership.

Similarly, Joe Carter, the representative of the Centers for Disease Control and Prevention on the HHS Partnership Council, pointed out that after negotiating 7106(b)(1) matters, "we have a better understanding and make better decisions."

In addition, Thurm pointed out that the HHS Partnership Council's experience of working on difficult issues as a team led the council to take its historic step. "It was a natural progression for us to find a way to tackle (b)(1)," he says. However, he adds, a comprehensive training effort is needed to help overcome the newly created partnership councils' lack of shared history. "We must train the partnership councils concerning our new expectations and the interest-based problem-solving process. And we must provide them with ongoing facilitator support."

Crafting Compromise

Although CDC, HCFA and some agencies outside HHS have agreed to negotiate Section 7106(b)(1) matters in their partnership councils, none has agreed to the process that submits an impasse to a final, binding decision by the Federal Service Impasses Panel. The HHS agreement is a compromise. It allows, but does not require, third-party binding decisions, and it provides for a final decision outside the operating division by the HHS Partnership Council. "We wanted to recognize that no matter our intention, we would reach impasse," says Robert Byrd of FDA. "And if we did, the worst possible thing would be going outside our agency to a third party who didn't understand our interests. We wanted a process internally decided."

In the event an operating division partnership council is unable to reach agreement, both parties may agree to refer the unresolved dispute to an outside arbitrator for a final and binding decision. Or, either party may refer an unresolved dispute to an outside arbitrator for a nonbinding decision. If a dispute remains unresolved, it may be presented to the HHS Partnership Council for a final, binding decision.

Managers believe the HHS impasse resolution procedure will work. FDA's Byrd believes that "the tone that has been set is one of understanding and cooperation. . . The relationship is so valued, the impasse will be resolved." Thurm expects that few, if any, unresolved issues will be presented to the HHS Partnership Council "because there is experience at the operation-division level in creative problem solving," and operating division managers will be reluctant to allow peers to make decisions for them.

It was the fear that impasses would not be resolved by the HHS Partnership Council that led council member Brian DeWyngaert, assistant to AFGE President Bobby Harnage, to be the last person to agree to the plan. Unions believe it is necessary to have Section 7106(b)(1) impasses resolved by the Federal Service Impasses Panel or other binding third-party arbitrators to fully realize the potential of 7106(b)(1) bargaining. Without a binding third-party decision enforceable through the unfair labor practice process, unions fear their proposals may be "talked to death" and never implemented, regardless of the intrinsic value of the proposal.

In explaining his reluctance, DeWyngaert says, "We could have argued for another year or more in an attempt to craft an agreement, but we decided to take a shot at a modified impasse-resolution process. Managers felt they didn't want to [expose] their inability to reach agreement before their colleagues, and I decided it was worth an experiment to see if it would work." He concludes that the HHS agreement "will be a good deal for taxpayers because it will give our people a larger voice in the important issues that have an impact on them and [employees] will have an opportunity to use their brains to solve problems."

The HHS agreement can be a model for agencies and unions. It requires bargaining on 7106(b)(1) issues and provides an internal dispute-resolution process. It guarantees the involvement of employees through their unions on important business decisions. The agreement will benefit HHS management, unions and the employees they represent, as well as taxpayers, by developing more productive employees who can better serve taxpayers.

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