Compensation Chapter 15

For management wage tiers can be used:

-As a cost control strategy to allow expansion or investment -as a cost cutting device to allow economic survival

What impacts unions?

-General wage and benefits levels -The structure of wages -Wage and salary policies and practices in unionized firms -Nonunion firms (known as spillover effect)

Periodic adjustments based on changes in the consumer price index

Cost of living adjustment (COLA)

Negotiated at initial contract with timing and amount specified

Deferred wage increase

A company under intense competition may control base wage by giving employees part ownership

Employee stock ownership plans (ESOPs)

Align workers and management to streamline operations and cut cost

Gain sharing plans

One time case payments not added to base wages. One third of contracts offer these awards. Given over merit, which are more costly

Lump sump awards

Pays employees more for learning a variety of different jobs or skills. Unions may favor these as they make each worker more valuable and less expandable

Pay-for-knowledge plan

Savings and creating a rapidly becoming a top priority of

Profit sharing plans

Specifies wages will be renegotiated at a specified time or conditions

Reopener clause

The fact that improvements obtained in unionized firms carry over to non-union firms seeking ways to lessen workers incentives for organizing a union.

Spillover effect

Cost savings in unions are split between?

The organization and the workers

Differentiate pay based on hiring date

Two-tier wage pay plan

A changing stance of unions is?

Two-tier wages

Means higher expenditures, 213% higher pension, and 113% higher insurance

Unionization

What is outlined primarily in a contract through the role of a union?

1. Basis of pay 2. Occupation-wage differentials 3.Experience/merit differentials 4. Other differentials 5.Vacations and holidays 6.Wage adjustment provisions

What are the four explanations for the decline in unions?

1. Declining industries are unionizes, growing industries less so 2. Workers do not see unions as a solution 3.Reduced union organizing efforts 4.Management is taking an increasingly hard stance against unions in general and union demands in particular.

What are 3 wage adjusted provisions?

1. Deferred wage increase 2.Reopener clause 3.Cost of Living adjustment (COLA)

Top nine reasons for unions favoring gain sharing?

1. Increased recognition 2. job security 3. Increased involvement with job activities 4. More money 5. Increased feeling of achievement or contributing to the contribution 6. Increased influence of union 7. Greater contributions to the nation's productivity 8. Compatibility with union goals 9. Fewer grievances

What are the top 9 reasons for unions opposing gain sharing?

1. Management may try to substitute it for wages 2. Management cannot be trusted 3. Peer pressure to perform may increase 4. Bonus calculations are not understood 5. Union influence is undermined 6. Increased productivity may reduce need for jobs 7. Grievances may go unprocessed 8. Gain sharing is incompatible with union goals 9. Employees really do not want more involvement

Two dimensions of the union impact on the structuring of wage packages include:

1. The division between direct wages and employees benefits 2. The evolution of two-tier wage pay plans

Workers show strong interest interest in joining a union when:

1. Workplace relations are bad 2. Management is not trustworthy 3. Workers feel they have little influence over decisions affecting them

Union employees in the public sector earn about how much more than non union workers?

22%

Unions add how much to benefits?

30-40%

20% of collective bargaining agreements permit?

Alternative Reward Systems