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Why are Labor Management Partnerships Formed?

Many of the partnerships of this type are formed by companies that provide critical community services. Employers, especially in the public sector, are faced with mounting challenges to improve performance and the quality of services while reducing costs. Unions have a stake in the ability of employers to meet these challenges, with the welfare of their members tied to their jobs. 

Labor management partnerships have emerged over the past 20 years as an innovative approach to management-union relations. According to Lisa Marie Voight, a researcher at Pepperdine University, “Put simply, a Labor Management Partnership is a collaborative arrangement between management and union representation that addresses a workplace issue negatively impacting organizational effectiveness. Labor Management Partnerships arise when the existing collective bargaining process is deemed inadequate to address workplace problems.”

Labor Management Partnership Example

While no two LMP’s are the same, one of the oldest and largest labor management partnerships was formed in 1997 at Kaiser Permanente, where about 75% of employees are union members. With growing discord between the health care organization and its unions, a coalition of union leaders approached management and suggested another way of working together. Currently, the partnership includes more than 150,000 employees, managers, and physicians.

Each organization forms a labor management partnership that addresses its most pressing issues. At Kaiser Permanente, unit-based teams have been formed as collaborative workgroups, including employees, managers, and physicians. These teams share the decision-making process and work on initiatives that improve services and address policy issues.

Labor Management Partnership Benefits

A labor management partnership doesn’t replace existing collective bargaining relationships between labor and management. Instead, the partnership typically addresses other types of issues specific to the business. When enough support is given, a labor management partnership has the potential to deliver many benefits, including:

  • Performance improvement. Studies have found that involving employees in decision-making and problem-solving can help organizations realize improvements in the performance and quality of products and services. 
  • Workplace quality of life gains. Employees can see the quality of their work-life improve under a partnership, with their gains including better workplace communication, more flexibility, and higher levels of trust. 
  • Embracing change. Participants in partnerships often experience a new appreciation for the views of others and an expanded mindset in relation to changes in the workplace. Groups who were once confrontational learn to work together and trust each other, breaking down many of the barriers to progress.
  • Improved labor relations. Although a partnership doesn’t involve itself directly in union negotiations, studies have found that they tend to de-escalate conflicts and foster a more positive environment for resolving disagreements without litigation. Some experts believe that all labor processes, including collective bargaining, should be integrated into the partnership.

Forming a labor management partnership is no guarantee of receiving all these benefits. The objectives of the partnership must be defined and communicated to all parties. Both management and union leadership must be willing to collaborate and share their power while retaining their autonomy. Besides needing ongoing resources and support, a partnership requires frequent evaluations to ensure that the benefits of the program outweigh the costs. To achieve success, all members of the partnership must feel that their group is receiving some benefit.

Besides shared governance, one of the most important components of a partnership’s success is a shared vision between labor and management. Without it, the partnership may not be able to overcome resistance to change. This vision must be communicated clearly and often, using business management software or some other tool for company-wide information sharing. The vision can be something as simple as improving customer satisfaction or something more complex tied to the organization’s mission. A clearly stated vision provides a driving purpose for all partnership members.


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