Executive Summaries » Labor Relations Audit is a Good Management Tool

Labor Relations Audit is a Good Management Tool

February 24, 2016

A labor relations audit by an outside source can reveal what employees really think when they have no fear of reprisal, without creating unrealistic expectations. This information can be used on a confidential basis by senior management to design a labor relations program that increases productivity by maximizing employee satisfaction and reducing absenteeism and turnover. Importantly, a report by outside counsel is subject to attorney-client privilege, so it remains confidential to those limited few who review it.

In a labor relations audit, outside independent persons who are sensitive to labor relations interview every member of management who has significant contact with employees. Interviewees are assured that they will not be identified as the source of any information. Thus, anonymity is preserved. The interview probes what the manager has heard about perceptions of subordinate employees on a wide range of subjects. When managers speak in confidence to the auditor they speak more freely than they would to their superior. Employees’ comments are not always based on facts or reality, but the interviewer makes no assessment of accuracy. If employees think there is a problem, then there is a problem.

A labor relations audit may also be used to provide a potential purchaser with information essential to determine whether to pursue an acquisition or merger. Purchasers who want to know the facts about a target’s employee relations make an audit a pre-condition of the transaction, as an additional verification regarding the potential of the new operation.

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