MGMT 373 EX 3

Distributive Bargaining

"Divide pie into 2"

Integrative Bargaining

"Win, win solution"

How is the purpose of an HRM audit similar and different from HR analytics?

- HRM audit using customer-orientation approach - HRM analytics using economic approach

HRM Technology (HRM's Contribution to High Performance)

- automation and collaboration: using equipment and information processing to perform activities that had been performed by people and facilitating electronic communication between people - automation has improved HRM by reducing the number of people needed to perform routine tasks

What are the needs of those customers?

- committed employees - competent employees

Information Systems (Elements of a High Performance Work System)

- enable organizations to share information widely - hr take advantage of this technology to give employees access to information about benefits, training opportunities, job openings, etc.

Reward Systems (Elements of a High Performance Work System)

- encourage people to strive for objectives that support the organization's overall goals - include performance measures - hr develops and administers reward systems

Outcomes of High Performance Work Systems

- higher productivity - efficiency - high product quality - great customer satisfaction - low employee turnover

People (Elements of a High Performance Work System)

- hr help the organization recruit and select people with the needed qualifications - training, development, and career management ensure that these people are able to perform their current and future jobs with the organization

What are the HRM functions that contribute to high performance work systems?

- job design - recruitment and selection - training and development - performance management - compensation - HRM technology

Job Design (HRM's Contribution to High Performance)

- jobs must be designed appropriately for the organization to benefit from teamwork and employee empowerment - job design aimed at empowerment includes access to resources such as information technology

Who are HRM's customers?

- line managers - strategic planners - employees

Elements of a High Performance Work System

- organizational structure - task design - people - reward systems - information systems

Performance Management (HRM's Contribution to High Performance)

- performance management should be related to the organization's goals - managers need to understand the process of employee performance to do this - how to make the performance management system support organizational goals: 1. define and measure performance in precise terms 2. link performance measures to meeting customer needs 3. measure and correct for the effect of situational constraints

What can HR do to meet those needs?

- qualified staffing - performance management - rewards - training and development

Recruitment and Selection (HRM's Contribution to High Performance)

- recruitment and selection aim at obtaining the kinds of employees who can thrive in this type of setting - looking for employees who are enthusiastic about and able to contribute to teamwork, empowerment, and knowledge sharing

Compensation (HRM's Contribution to High Performance)

- reinforce compensation by linking it to performance measures - compensation systems can help to create the conditions that contribute to high performance - organizations can increase empowerment and job satisfaction by including employees in decisions about compensation and by communicating the basis for decisions about pay

Conditions That Contribute to High Performance

- teams perform work - employees participate in selection - employees receive formal performance feedback and are actively involved in the performance improvement process - ongoing training is emphasized and rewarded - employees' rewards and compensation relate to the company's financial performance - equipment and work processes are structured, and technology is used to encourage maximum flexibility and interaction among employees - employees participate in planning changes in equipment, layout, and work methods - work design allows employees to use a variety of skills - employees understand how their jobs contribute to the finished product or service - ethical behavior is encouraged

guarantee that when employees become participants in a pension plan and work a specified number of years, they will receive a pension at retirement age, regardless of whether they remained with the employer

vesting rights

state programs that provide benefits to workers who suffer work-related injuries or illnesses, or to their survivors

workers' compensation

The service industry (finance, insurance, real estate) is rapidly growing in the economy and in the south were unions are not as big.

Change in the structure of the economy for union memberships.

Communication

Communication demonstrates that the pay plan is fair. When employees understand the incentive pay plan's requirements, the plan is more likely to influence their behavior as desired. Important when changing the pay plan.

Arbitration

Conflict resolution in which 3rd party determines a binding settlement.

Mediation

Conflict resolution in which third party hears both sides and facilitates the negotiation but has no formal authority to dictate a resolution.

piecework rates: cons

Cons - Most jobs, including those of managers, have no physical output, so it is hard to develop an appropriate performance measure.

a federally mandated program to minimize the hardships of unemployment through payments to unemployed workers, help in finding new jobs, and incentives to stabilize employment

unemployment insurance

Compa Ratio

Pay relative to average pay. This system gives the biggest pay increases to the best performers and to those whose pay is relatively low for their job. Reward more valuable by relating to economic conditions.

Stock Option

Rights to buy a certain number of shares of stock at a specified price. Traditionally, stock options have been granted to executives.

NLRA Section 7

Sets out the rights of employees, including the "right to self organize", to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining.

1. Stock Option 2. Employee Stock Ownership

What are 2 types of ownership programs for stock ownership?

1. Profit 2. Stock Price

What are 2 ways organizations measure their performance?

1. Gainsharing 2. Bonuses 3. Team Awards

What are 3 types of pay for group performance?

1. Financial 2. Customer 3. Internal 4. Learning and growth

What are 4 categories of a balanced score card?

Not rolled into base pay. Must re-earn them during each performance period. Bonus is a one-time reward. Linked to objective performance measures, rather than subjective ratings.

What are 4 characteristics of Performance Bonuses?

1. No physical output, hard to develop 2. Doesn't work for complex jobs 3. May not reward employes for focusing on quality 4. May not encourage employees to learn 5. Poor incentive if wants to encourage teamwork

What are 5 disadvantages of Piece rate?

1. Piecework Rates 2. Standard Hour Plans 3. Merit Pay 4. Individual Bonus 5. Sales Commissions

What are 5 forms of pay for individual Performance?

Group Bonuses

Bonuses for group performance tend to be for smaller work groups. These bonuses reward the members of a group for attaining a specific goal, usually measured in terms of physical output. Team members to cooperate so that they can achieve their goal.

Corporate Campaigns

Bringing public, financial, or political pressure on employers during union organization and contract negotiation.

Considerations for Setting Up a Profit-Sharing Plan

1. Get supervisors on board with the plan. 2. Make sure employees understand how the plan works. 3. Identify behaviors and results that contribute to greater profits. 4. Make sure managers understand that they contribute to profit-sharing goals by encouraging their employees and keeping them focused on their goals. 5. Consider linking rewards to the department's or division's performance, if profits can be assigned to the group. 6. Make rewards big enough to matter. 7. Time the profit-sharing payments for maximum effect. Time lag is detrimental.

10 conditions for effective gainsharing

1. Management commitment 2. Need for change or commitment to continuous improvement 3. Management acceptance and encouragement of employee input 4. High levels of cooperation and interaction 5. Employment security 6. Information sharing on productivity and costs 7. Goal setting 8. Commitment of all parties to process of change & improvement 9. Performance standard and calculation that employees understand and consider fair and that is closely related to managerial objectives 10.Employees who value working in groups

Effective Incentive Pay Requirements

1. Performance measures are linked to the organization's goals. 2. Employees believe they can meet performance standards. 3. Organization gives employees the resources they need to meet their goals. 4. Employees value the rewards given 5. Employees believe the reward system is fair. 6. Pay plan takes into account that employees may ignore any goals that are not rewarded.

four categories of a balances scorecard include:

1. financial 2. customer 3. internal 4. learning and growth

Performance Bonus

Can be extremely effective and give the organization great flexibility in deciding what kinds of behavior to reward. organizations also may motivate employees with one-time bonuses.

Fact Finder

3rd party to collective bargaining who reports the reasons for a dispute, the views and arguments of both sides, and possibly a recommended settlement, which the parties may decline.

1. Employee discusses problem with supervisor and supervisor and union steward decides whether problem was resolved or violated the contract. 2. Written grievance is submitted to superintendent or other line manager and manager puts response in writing. 3. Union appeals grievance to top line management and decisions of appeal are put into writing. 4. Union decides whether to appeal unresolved conflict to arbitration or not.

4 Steps to Grievance Procedure

Union Shop

A clause in a collective bargaining agreement that requires new employees to join the union, usually 30-60 days after being hired, or they will be fired.

Strike

A collective decision by union members not to work until certain demands and conditions are met. Those who don't want to have to anyways if part of the union.

Balanced Scorecard

A combination of performance measures directed toward the company's long- and short-term goals and used as the basis for awarding incentive pay. Customize according to their markets, products and objectives. Combine the advantages of different incentive pay plans. The organization shows employees information about what its goals are and what it expects employees to accomplish.

Closed Shop

A firm that requires individuals to join a union before they can be hired. (illegal for those covered by the National Labor Relations Act)

Union

A formal association of workers that promotes the interest of its members through collective action.

HRM Audit

A formal review of the outcomes of HRM functions, based on identifying key HRM functions and measures of business performance.

Union Steward

A local employee elected by union members to represent them in ensuring that the terms of the contract are enforced.

Scanlon Plan

A popular form of gainsharing, The plan gives employees a bonus if the ratio of labor costs to the sales value of production is below a set standard.

Merit Pay

A system of linking pay increases to ratings on a performance ratings and appraisals. They make use of a merit increase grid. Disadvantage: -expensive -Makes assumptions that are misleading The system gives lowest paid best performers the biggest pay increases.

Differential Piece Rate "Rising and Falling Differentials"

A variation of straight piecework, in which the piece rate is higher when a greater amount is produced. If worker produces more than the standard output, the piece rate is higher. If worker produces at or below, the amount paid per piece is lower

Piecework Rate

A wage based on the amount workers produce. An incentive to work efficiently, some organizations pay production workers. The amount paid per unit is set at a level that rewards employees for above-average production volume. advantage of piece rates is the direct link between how much work the employee does and the amount the employee earns. This type of pay is easy to understand and seems fair to many people, if they think the production standard is reasonable

Stock Ownership

Actually makes employees part owners of the organization. Intended as a way to encourage employees to focus on the success of the organization as a whole. Some companies are trying to push eligibility for options further down the organization's structure.

Associate Union Membership

Alternative form of union membership in which members receive discounts on insurance and credit cards rather than representation in collective bargaining.

Card Check Provision

An agreement that if 50% or more of employees sign an authorization card, the employer will recognize their union representation.

Employee Stock Ownership "ESOPs"

An arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust. Most common form of employee ownership. popularity is that earnings of the trust holdings are exempt from income taxes. ESOPs raise a number of issues. They carry a significant risk for employees. By law, an ESOP must invest at least 51 percent of its assets in the company's own stock (in contrast to other kinds of stock funds that hold a wide diversity of companies

American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)

An association that seeks to advance the shared interests of its member unions at the national level.

Lockout

An employers exclusion of workers from a workplace until they meet certain conditions.

1. Proposals are presented and negotiations between union and management. 2. Each side makes a series of decisions. 3. Pressure for agreement increases (bargaining power for each party)

Bargaining Process

Short Term Incentive

Bonuses based on ROI, year's profits, or other measures related to the organization's goals. Actual payment of bonus may be delayed to gain tax advantages.

Task Design (Elements of a High Performance Work System)

Determines how the details of the organization's necessary activities will be group, whether into jobs or team responsibilities. - makes jobs efficient while encouraging high quality

Straight Commission Plan

Earn only commission. Some earn no commissions at all, but a straight salary.

Participation in Decisions

Employee participation in pay-related decisions can be part of a general move toward employee empowerment. Employee participation can contribute to the incentive plan's success.

federal law that increased responsibility of pension plan trustees to protect retirees, established certain rights related to vesting and portability, and created the pension benefit guarantee corporation

Employee retirement income security act

Consent Election

Employer and union arrive at an agreement stating the time and place of the election.

Attitudinal Bargaining

Establish trust between union and mgmt before negotiating.

Executive Order 10988

Established collective bargaining rights for federal employees

federal law requiring organizations with 50 or more employees to provide up to 12 weeks of unpaid leave after childbirth or adoption; to care for a seriously ill family member or for an employee's own serious illness; or to take care of urgency needs that arise when a spouse, child, or parent i the National Guard or Reserved is called to active duty

Family and Medical Leave Act (FMLA)

National Labor Relations Act (Wagner Act)

Federal Law that supports collective bargaining and sets out the rights of employees to form unions.

Labor Relations

Field that emphasizes skills managers and union leaders can use to minimize costly forms of conflict and seek win-win solutions to disagreements.

Incentive Pay

Forms of pay linked to an employees performance as an individual, group member, or organization member. Pay specifically designed to energize, direct, or control employees behavior. Influential because the amount paid is linked to certain predefined behaviors or outcomes. Disadvantage: can interfere with management goals To motivate employees to contribute to the organization's success, pay plans must be well designed.

Gainsharing

Organizations that want employees to focus on efficiency, adopt a program which measures increases in productivity and effectiveness and distributes a portion of each gain to employees. Knowing they can enjoy a financial benefit from helping the company be more productive, employees supposedly will look for ways to improve and work more efficiently. Addresses challenges of identifying appropriate performance measures for complex jobs. Frees employees to determine how to improve their own and groups performance. Broadens focus beyond individual interest

Training and Development (HRM's Contribution to High Performance)

When organizations base hiring decisions on qualities like decision-making and teamwork skills, training may be required to teach employees the specific skills they need to perform the duties of their job.

a health care plan that requires patients to receive their medical care from the HMO's health care professionals, who are often paid a flat salary, and provides all services on a prepaid basis

Health Maintenance Organization (HMO)

Grievance Procedure Criteria: Fairness

Whether the process threats employees equitably and gives them a voice during the process.

Ballot election, then the NLRB certifies, no additional election for one year, after contract negotiations occur then no election for 3 years.

How does the election and certification process work for unionization?

Grievance Procedure Criteria: Effectiveness

How well the procedure resolves day to day contract questions

Competition for scarce human resources can lead employers to offer much of what employees traditionally sought through union membership.

Human Resource Practices for Union Memberships

Stipulation Election

If the parties cannot agree on a time and place for the election, then the NLRB dictates a time and place.

Profit

In competitive marketplace, result when an organization is efficiently providing products that customers want at a price they are willing to pay.

forms of pay linked to an employee's performance as an individual, group member, or organization member

Incentive Pay

Profit Sharing

Incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary. May encourage employees to think like owners. More likely to cooperate Evidence is not clear whether profit sharing helps organizations perform better. Given the limitations of profit sharing plans, one strategy is to use them as a component of a pay system that includes other kinds of pay more directly linked to individual behavior. This increases employees' commitment to organizational goals while addressing concerns about fairness.

Straight Piecework Plan

Incentive pay in which the employer pays the same rate per piece, no matter how much the worker produces.

Long Term Incentive

Include stock options and stock purchase plans. Rationale is that executives will want to do what is best for the organization because that will cause the value of their stock to grow.

Types of incentive pay

Individual Piecework Rates Standard Hour Plan Merit Pay Individual Bonuses Sales Commissions Group Gainsharing (Scanlon Plan) Group-related (group rewards or awards) Organizations Stock Ownership (Options or ESOP) Profit Sharing

health care reform law passed in 2010 that includes incentives and penalties for employers providing health insurance as a benefit

Patient Protection and Affordable care act

rights to buy a certain number of shares of stock at a specified price

stock options

Obtain pay and working conditions that satisfy their members. Giving members a voice in decision that affect them. Influence the way pay and promotions are determined.

Labor Unions Goals for Unionization

Industrial Union

Labor union whose members are linked by their work in a particular industry. (try to work in as many employees with a wide range of skills as possible)

Craft Unions

Labor unions in which all members have a particular skill or occupation.

U.S. producers are having a hard time competing with companies (with unions)that have an entirely different pay scale, putting U.S. companies at a disadvantage.

Management Efforts to control Costs for union memberships

Making decisions that will increase the organizations profits. Decrease costs while increasing output. (sees unions as a threat to these goals)

Management Goals for Unionization

Sales Commission

Pay calculated as a percentage of sales. Some earn a commission in addition to a base salary. Commission rates vary tremendously from one industry and company to another. Paying most or all of a salesperson's compensation in the form of salary frees the salesperson to focus on developing customer goodwill. Paying most or all of a salesperson's compensation in the form of commissions encourages the salesperson to focus on closing sales. Directly influence how they spend their time, how they treat customers, and how much the organization sells. Affects the kinds of people who will want to take and keep sales jobs with the organization. assumes that the organization wants to attract people with some willingness to take risks

incentive pay in which the employer pays the same rate per piece, no matter how much the worker produces

straight piecework plan

Work rules and limitations on workloads & lost production due to strikes and work slowdowns.

Negative Effects of Unions on Productivity

Collective Bargaining

Negotiations between union representatives and management representatives to arrive at a contract defining conditions of employment for the term of the contract and to administer that contract.

Retention Bonuses

Organizations involved in acquisitions, in which a one-time incentives paid in exchange for remaining with the company—to top managers, engineers, top-performing salespeople, and information technology specialists.

Reduce turnover by giving employees a route to resolve conflict & maintaining emphasis on pay systems based on seniority.

Positive Effects of Unions on Productivity

a health care plan that contracts with health care professionals to provide services at a reduced fee and gives patients financial incentives to use network providers

Preferred Provider Organization (PPO)

NLRA Section 8

Prohibits certain activities by employers as unfair labor practices. Employers cannot interfere with employees who join labor unions.

piecework rates: pros

Pros - Direct link between how much work the employee does and the amount the employee earns. It is easy to understand and seems fair to many people, if they think the production standard is reasonable

Exercising

Purchasing the stock is called ___ the option

Standard Hour Plan

Quantity oriented incentive for production workers, in which it pays workers extra for work done in less than a preset "standard time" These plans are much like piecework plans. They encourage employees to work as fast as they can, but not necessarily to care about quality or service.

Landrum Griffin Act

Regulates unions actions with regard to their members, including financial disclosure and the conduct of elections. Protects the right to nominate candidates for union office, participate in union meetings and secret ballot elections.

Agency Shop

Requires employees who do not join the union to pay fees for unions representation services. (prevents free loaders from getting benefits without doing any work)

Maintenance of Membership

Requiring workers to remain members of the union for the period of the labor contract (usually 3 years)

Grievance Procedure Criteria: Efficiency

Resolving issues at a reasonable cost and without major delays

Team Awards

Similar to group bonuses, but more likely to use a broad range of performance measures: -Cost savings -Successful completion of a project -Meeting deadlines Disadvantage:, competition among individuals may be replaced by competition among groups

To ensure that workers have a voice in how they are treated by their employers. Drives laws and regulations that affect labor unions.

Society Goals for Unionization

Right to Work Laws (Taft-Hartley Act)

States that prohibit contacts requiring employees to join unions as a condition of obtaining or continuing employment like union shops, agency shops and maintenance of membership.

Employee Neutrality Provision

The employer pledges not to oppose organizing attempts elsewhere in the company

Check Off Provisions

The employer, on behalf of the union, automatically deducts union dues from the employees paychecks.

Stock Price

The owners' investment in a corporation. When it is rising, the value of that investment is growing.

Grievance Procedure

The process of resolving union-management conflicts over interpretation or violation of collective bargaining agreement.

High Performance Work Systems

The right combination of people, technology, and organizational structure to make full use of resources and opportunities in achieving their organizations' goals.

report that describes pension plan's funding, eligibility requirements, risks, and other details

summary plan descriptions

Organizational Structure (Elements of a High Performance Work System)

The way the organization groups its people into useful divisions, departments, and reporting relationships. - promotes cooperation, learning, and continuous improvement

Labor Relations Level of Decisions: Administering Contracts

These decisions involve day to day activities in which union members and the organization's managers may have disagreements. (Violations of work rules, or workers treated unfairly, etc.)

Labor Relations Level of Decisions: Negotiating Contracts

This decision involves things like pay structure, job security, work rules, workplace safety, and other issues in a contract.

Labor Relations Level of Decisions: Labor Relations Strategy

This decision is influenced by outside forces such as pubic opinion and competition and involves whether the organization will work with unions or develop nonunion operations.

Performance measures are linked to the organization's goals. Employees believe they can meet performance standards. Organization gives employees the resources they need to meet their goals. Employees value the rewards given. Employees believe the reward system is fair. Pay plan takes into account that employees may ignore any goals that are not rewarded

What are 6 requirements that effective incentive pay plans need to meet?

Get supervisors on board with the plan. Make sure employees understand how the plan works. Identify behaviors and results that contribute to greater profits. Make sure managers understand that they contribute to profit-sharing goals by encouraging their employees and keeping them focused on their goals. Consider linking rewards to the department's or division's performance, if profits can be assigned to the group. Make rewards big enough to matter. Time the profit-sharing payments for maximum effect.

What are 7 steps to setting up a profit sharing plan that motivates employees?

HRM Analytics

Type of assessment of HRM effectiveness that involves determining the impact of, or the financial cost and benefits of, a program or practice.

Management commitment. Need for change or strong commitment to continuous improvement. Management acceptance and encouragement of employee input. High levels of cooperation and interaction. Employment security. Information sharing on productivity and costs. Goal setting. Commitment of all involved parties to the process of change and improvement. Performance standard and calculation that employees understand and consider fair and that is closely related to managerial objectives. Employees who value working in groups.

Under what 10 conditions is gainsharing most likely to succeed?

Authorization Cards >> Petition of Election >> Election Campaign >> Election and Certification

Union Organizing Process

30%

Union members must obtained signed authorization cards from at least _____ of employees

1. Individuals performance rating 2. Individuals Compa Ratio

What are 2 factors merit pay decisions are based on?

1. Participation Decision 2. Communication

What are 2 other factors that influence and control the way employee work is done?

They are dissatisfied with how they are treated by their employers and they believe unions can improve their work situation.

Why do employees unionize?

Intra-Organizational Bargaining

Women, minorities, blue collar, etc. - make sure all are heard.

a combination of performance measures directed toward the company's long- and short-term goals and used as the basis for awarding incentive pay

balanced scorecard

a benefits plan that offers employees a set of alternatives form which they can choose the yeps and amounts of benefits they want

cafeteria style plan

retirement plan in which the employer sets up an individual account for each employee and contributes a percentage of the employee's salary; the account earns interest at a predefined rate

cash balance plan

incentive pay calculated as a percentage of sales

commissions

federal law that requires employers to permit employees or their dependents to extent their health insurance cover-age at group rates for up to 36 months following a qualifying event, such as a layoff, reduction in hours, or the employee's death

consolidated omnibus budget reconciliation act (COBRA)

retirement plan funded by contributions form the employer and employee

contributory plan

pension plan that guarantees a specified level of retirement income

defined benefit plan

retirement plan in which the employer sets up an individual account for each employee and specifies the size of the investment into that account

defined contribution plan

incentive pay in which the piece rate is higher when a greater amount is produced

differential piece rates

compensation in forms other than cash

employee benefits

an arrangement in which the organization distributes shares of stock to all tis employees by placing it in a trust

employee stock ownership plan (ESOP)

a set of communications, activities, and facilities designed to change health-related behaviors in ways that reduce health risks

employee wellness program

Incentive pay is influential because...

the amount paid is linked to certain predefined behaviors or outcomes. --For incentive pay to motivate employees to contribute to the organization's success, pay plans must be well designed.

the number of employees a company has laid off in the past and the cost of providing them with unemployment benefits

experience rating

employee-controlled pretax earnings set aside to pay for certain eligible expenses, such as health care expenses, during the same year

flexible spending account

group incentive program that measures improvements in productivity and effectiveness and distributes a portion of each gain to employees

gainsharing

Gainsharing Addresses challenge of ...

identifying appropriate performance measures for complex jobs. Frees employees to determine how to improve their own and their group's performance by sharing knowledge and making suggestions.

short term disability insurance

insurance that pays a percentage of disabled employee's salary as benefits to the employee for six months or less

insurance that pays a percentage of a disabled employee's salary after jan initial period and potentially for the rest of the employee's life

long term disability insurance

a system of linking pay increases to ratings on performance appraisals

merit pay

retirement plan funded entirely by contributions from the employer

noncontributory plan

federal agency that insures retirement benefits and guarantees retirees a basic benefit if the employer experiences financial difficulties

pension benefit guarantee corporation

a wage based on the amount workers produce

piecework rate

incentive pay in which payments are a percentage of hte organization's profits and do not become part of the employees' base salary

profit sharing

a gainsharing Programm in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard

scanlon plan

the federal Old Age, Survivors, Disability, and Health Insurance (OASDHI) program, which combines old age (retirement) insurance, survivor's insurance, disability insurance, hospital insurance, and supplementary medical insurance for the elderly

social security

benefits required by law

social security, unemployment insurance, workers' compensation insurance, family and medical leave, health care

an incentive plan that pays workers extra for work done in less than a preset "standard time."

standard hour plan