Collective Bargaining, as the name suggests, is a group action involving negotiation between the representative of employees and the management, on the matters relating to employment, so as to arrive at an agreement. The collective agreement is an understanding, on account of the terms and conditions under which the service is to be carried on.
Collective Bargaining Process
The terms of employment encompass items like working conditions, workplace rules, working hours, salaries, compensation, retirement benefits, overtime pay, and leaves with pay and so on.
The discussion takes place between union leader, who acts as the representative of the trade union and the representative of the employer. It incorporates the process of negotiation, administration and interpretation of the collective agreement. The functions of collective bargaining are:
- Formulating the rules of the workplace
- Ascertaining the form of compensation
- Standardizing compensation
- Determining priorities on each side
- Redesigning the machinery of bargaining.
Negotiation refers to a process which allows the people of different interest to arrive at a mutually acceptable agreement on an issue, but at the same time seeking to increase the benefit to be gained for their interest group. The basic objective of negotiation is to reconcile the differences between employer and employees and to suggest ways of fulfilling their expectations.
Negotiation is a common technique adopted by an ordinary human being, in the day to day life, such as, to negotiate for items like higher salary, solving a dispute with the coworker or settling business conflicts. There are four approaches to negotiation:
- Win-lose orientation: An approach adopted by competitive communicators that relies on the premises that only one party reach the goal while the other one loses.
- Lose-lose orientation: In this approach, the conflict takes place in such a manner that both the parties suffer damages and feels like a loser.
- Compromise: When the parties agree to settle at best obtainable outcome, it is known as compromise. In this approach, the parties think it better to compromise rather than fighting the battle.
- Win-win orientation: Last but not the least is a win-win orientation, which is collaborative in nature and satisfies the requirements of all the parties involved.
Key Differences between Collective Bargaining and Negotiation
The points given below are substantial so far as the difference between collective bargaining and negotiation is concerned:
- Collective Bargaining is a process through which the group of workers, haggle the contract with the employer to ascertain terms and conditions of employment, such as wages, working hours, health and safety. Conversely, negotiation is a process, in which people of different interest groups come together and reach a mutually acceptable outcome of a problem while maximizing the benefit to be obtained for their interest group.
- Collective Bargaining is competitive in nature, in the sense that either of the parties involved attempts to make the other party agree to their terms. Conversely, negotiation is cooperative in nature, such that it seeks to find out the best obtainable outcome for both the parties.
- In collective bargaining, the relationship between two parties is a win-lose relationship, wherein one party wins, and the other one loses. Unlike negotiation, there exists a win-win relationship between parties concerned, wherein both the parties gain something from the discussion.
- While collective bargaining tries to prove who is right, negotiation is all about proving what is right.