Management's Part in Personnel Relations

by R Randall Irwin
Manager, Industrial Relations
Lockheed Aircraft Corporation
In Part I [ HTML ] of this article the author told how Lockheed selects its men. Mr Irwin now shows the other half of a carefully worked out plan — and tells how employees' good will is maintained through a wise industrial relations program.

Having explained in a preceding article how Lockheed selects its employees with the utmost care, we now enter the second but equally important phase of our personnel program — that of employee-employer relationship.

We at Lockheed have been fortunate to have worked together in an atmosphere of harmony with a noticeable absence of internal strife. This situation, we believe, is attributable to, not only the comprehensive employee selection program previously discussed, but is also due to the general industrial relations program we are covering in this article.

No company is entirely free from individual injustices and grievances. These are inevitable in any rapidly-growing industry or individual factory. We have made our share of mistakes, but I would venture the opinion that the harmony existing between the employees and the management at Lockheed is accounted for by the employees' confidence in the sincere desire of management to do the right thing by them.

This policy was aptly expressed by Robert E Gross, president of the company, in his annual report to employees. "The years," he said, "have taught us that where there is understanding there is teamwork, and with the hope and belief that teamwork is with us and with us to stay, I respectfully render you my report."

Freely discussing the company's condition and problem, Mr Gross introduced his report as follows: "It is a privilege and a duty to tell you about our business during the year 1938. It is a privilege because I like to feel that discussion brings us closer together. It is a duty because I think you have a real right to know something of the problems which we have faced together — problems which as we solve them, make our company and our jobs more secure, and when unsolved, make our jobs and company less so."

Thus, at Lockheed we have proceeded on the theory that rank-and-file employees are just as eager as the management to keep the plant operating on a sound basis, and we have assumed that there is a mutuality of interest in keeping out those misunderstandings which might result in a disruption of work and loss of pay checks.

It is only natural that, having selected an intelligent, healthy-minded group of employees, we should have complete confidence in their ability to get along well with each other and to arrive at reasonable conclusions concerning matters affecting their own and the company's welfare.

It is because of this absolute confidence in the judgment and good sense of our employees that we can freely accept the principle of dealing with them collectively through representatives of their own choosing. During the 2½ years of operation under an exclusive agreement with a local of an international union, we have never failed to come to a mutually satisfactory settlement of a difference that appeared to exist.

This apparent harmony, however, does not "just happen." The union agreement provides a systematic plan for settling all grievances and differences. If an individual employee does not wish to present his own case to the management, he may refer it to the departmental representative of the union, who, in turn, will discuss the matter with the foreman or department head in an attempt to reach a satisfactory settlement. Failing in this, the problem is referred to the union's business representative and the company's manager of industrial relations. If the grievance is not settled at this point, it is submitted to a joint committee of seven representatives of the union and a like number of the management. Only twice in 2½ years have individual grievances gone as far as the joint committee, although this body meets regularly to discuss group problems pertaining to wages, hours, and working conditions.

While employees are represented by a bona fide union in matters directly pertaining to their work, the management recognizes the Lockheed Employees' Recreation Clubs as the sole employees' organization for dealing in all other matters, including organized sports, entertainment, welfare, and to a degree, education. Every Lockheed employee is a member of the "LERC" and has the right and privilege of voting and participating in all the club's activities. There are neither dues nor entrance requirements. The Lockheed Employees' Federal Credit Union, chartered by the Federal Government, is a unit of the LERC.

Although most of the activities of the LERC are on a self-supporting basis, the management occasionally assists in financial or other ways, as needed. This, however, never extends to the point of supervising employee activities. Throughout, the management maintains the policy that the employees should do everything they can for themselves. This policy, we believe, tends to develop a high type of leadership among the employees, and prevents the development of a relationship that smacks of paternalism.

An outstanding example of the practical application of this policy is the LERC canteen which dispenses foodstuffs, soft drinks, tobacco, and other merchandise. The company constructed a modern canteen building and turned it over to the employees to operate. The enterprise is now earning a net profit of approximately $1,000 per month. This the LERC devotes to recreational activities and to assisting employees who are in financial need.

Another self-supporting activity of the LERC is a monthly magazine known as the Lockheed Aircraftsman which carries non-controversial news of employee and company activities. The publication is supported entirely by local advertising.

To coordinate employee-management relations and to maintain uniform personnel policies in all departments, we have established an industrial relations, or personnel department. The primary functions of the industrial relations manager are to keep abreast of labor laws and regulations, advise management on labor relations policies, deal with the union officials, handle grievances and discipline and coordinate the policies and work of the three major divisions of the department, ie, Employment, Employee Service, and Education.

The principal function of the employment division, that of selecting new employees, was treated extensively in the first article of this series [ HTML ]. In addition, the division is the clearinghouse for all transfers, promotions, periodic employee ratings, wage and salary increases, and terminations. Before any change is effected in an employee's status, his entire record is reviewed by the employment division, and additional tests are often administered as an aid in arriving at a decision.

Through such careful consideration of each change, favoritism and discrimination in promotions and wage increases are reduced to a minimum. Through the employee service division the company maintains its close cooperation with the LERC and conducts a broad program for serving the personal needs of the employees. Although employees who are in trouble usually come to the division head voluntarily, there are occasions when an employee is approached and urged to "unload" his problem. This is done when some outside influence obviously is interfering with his work, or when a garnishment or threat of attachment of wages is received. Advice or legal aid is offered when an employee's case needs such service. Each situation is handled upon a basis of the urgency of the need. Sometimes an employee must be warned to "get his own house in order" so that his personal affairs will not interfere with his work or relations with the company.

To meet emergencies, a cash fund, administered by the employee service division, extends prompt aid in event of accident, death or other pressing necessities among employees and their families. Through a group plan, employees may participate in life, health, and accident, accidental death and dismemberment, medical reimbursement, and surgical and hospitalization insurance. The insurance section, in addition to handling group insurance, supervises workmen's compensation insurance problems, in conjunction with the medical section of the employee service division.

Staffed by competent doctors, first-aid attendants and a visiting nurse, the medical section conducts periodic physical examinations, gives medical advice and treats industrial injuries. A visiting nurse follows the progress of every employee on a prolonged illness or accident disability.

Other functions of this division are safety inspection and education, and the maintenance of a housing service. Rentals are listed and advice is provided on home financing and construction.

An important phase of the company's counseling program is conducted through the education division, which, because of the acute shortage of competent workmen, was established under the direction of Svend Pedersen, former chief tool designer of the company. Based upon the results of temperament, intelligence, and aptitude tests, the staff of this division is able to assist each employee in finding the vocation in which he is apt to achieve the greatest degree of success. Provisions have been made whereby the employee may continue his training so that through self-improvement he will be ready for promotion to higher positions. Through the cooperation of the State Department of Education, Lockheed has been instrumental in the establishment in the Burbank School System of a wide range of trade extension classes covering a field from mechanical preparatory work to advanced engineering subjects. The response is so enthusiastic that nearly one-third of all Lockheed employees attend these classes regularly. Current enrollment is approximately 2,000 students.

To provide a supply of semi-skilled workmen, during periods of accelerated production, the education division conducts a full-time class to train new employees in the fundamentals of certain production jobs. During the first five months of 1939 nearly 2,000 employees were given from two days to three weeks of full-time training in this class. A new employee must demonstrate in the class his ability to perform acceptable work before he is put on production.

Because of its experience in trade extension and job training work, Lockheed recently was able to respond promptly to a plea by President Roosevelt that aircraft manufacturers establish apprenticeship training programs in order that this country's aircraft industry will be able to meet any national emergency. Within a few weeks after this call the Lockheed company and the local union had drafted and signed an apprenticeship agreement with the cooperation of the Federal Committee on Apprenticeship. The program provides for four years of training in any one of several trades.

Other phases of the educational program include the maintenance of a library, development and administration of trade tests, as well as the sponsorship of foremanship and supervisory training.

In working with supervisors the industrial relations department has been careful not to assume any of the responsibilities that rightfully belong to them. Rather, we have impressed them with the fact that the development of a comprehensive personnel program adds to, rather than detracts from, their responsibilities. The various divisions of the industrial relations department are strictly service units which relieve supervisors of many details that would take their attention away from their primary functions of developing and producing airplanes.

Much of the credit for success of the industrial relations department in coordinating its work with that of production departments of the factory is due to placing of the department under the direct supervision of Mr R A VonHake, vice president and works manager, who has been most sympathetic towards the development of the industrial relations department. Under less happy supervision it is possible that the system as outlined above would not function so well.

This article is the second of a pair of articles. It was originally published in the March, 1940, issue of Aviation magazine, vol 39, no 3, pp 32-33, 109.
The original article includes 4 photos of employees in various activities.
Photos are not credited, but are certainly from Lockheed.
The companion first article of the pair, "Turning the X-RAY on the Hiring Line" [ HTML ] was published in the January, 1940, issue.