How unions impact on the state of the psychological contract to facilitate the adoption of new work practices

Carol Gill, Melbourne Business School

Abstract

This article draws together extant knowledge from the psychological contract, trust, union and new work practices (NWP) literature to develop a model on how union presence impacts on the effective adoption of NWP. It proposes that the strength of unions, coupled with the quality of industrial relations, determines whether unions will have a positive or negative impact on NWP. Unions can have a positive impact on the adoption of NWP by reducing the gap between management rhetoric and reality through employee voice and workforce stability. This builds trust between management and employees creating a virtuous cycle that can mitigate contract breaches which threaten the employee commitment so essential to NWP success. This article also finds that management attitude plays a significant role in determining the quality of industrial relations. This has significant implications for theory and practice, particularly in anti-union institutional contexts that are focused on union avoidance, suppression and substitution. In particular it informs management decision making on the implementation of NWP and unions.