Unions

Section 7 of the NLRA: employees have the

"right to self-organization, 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."

Reasons for Decline in Union Membership

-Structural Changes in the Economy -Substitution with HRM -Worker Views -Increased Employer Resistance -Substitution by Government Regulation -Union Actions

National and International Unions

Based on industry or job skill Examples: National Education Association, Communications Workers of America

Labor Union Influence on Specific Compensation Decisions

Basis of pay Rate vs Range, Seniority vs Merit Wage Differentials Wage Adjustments

Role of Unions in Wage and Salary Policies and Practices

Basis of pay: hourly pay, overtime, etc., specifically outlined in contract Preferences for single rates (vs range) Preference for seniority based ranges

Wage adjustment provisions

Deferred wage increases Re-opener clauses Cost-of-living adjustments (COLAs) or escalator clauses

Structure of Wage Packages

Dimensions related to wage structure Division between direct wages and employee benefits Evolution of two-tier pay plans

Size of gap varies from year to year

During periods of higher unemployment, impact of unions is larger During strong economies, union-nonunion gap is smaller

National Labor Relations Board (NLRB)

Enforces NLRA

Union stipulations

Equity issue involves use of group-based measures with equal payouts Minimize bias Use of objective performance measures Use of measures based on past performance

Mediation

Has no formal authority to force a solution; acts as a facilitator for parties

AFL-CIO

Not a union but rather an association that advances shared interest of its member unions at the national level

Differentials

Occupation, Geography, Part-time vs Full time

Wage Structure: Division Between Direct Wages and Employee Benefits

Presence of unions adds 20-30% to employee benefits Greater percentage of total wage bill allocated to employee benefits

Arbitration

Process through which a neutral party makes a final and binding decision

Unions

Role in compensation decision-making Influence on wages, benefits, etc. Trends in membership

Unions do make a difference in wages

Union workers earn between 8.9% and12.4% more than nonunion

Local Unions

Usually local units of International/National Unions Responsible for contract negotiations and day-to-day contract administration, including grievance procedures

Labor Union Influence on Compensation

Wage Levels Structure of Wage Packages Reward Systems Compensation Nonunion Employees

Two-tier pay structures

a phenomenon of union sector Contract differentiates pay based upon hire date Employees hired after a target date will receive lower wages than their higher-seniority peers in similar jobs

Wagner Act of 1935 (National Labor Relations Act)

established collective bargaining for settling labor-management disputes

Two-tier pay structures: from union

less painful than job cuts, wage freezes

Labor Unions

seek to give workers formal and independent voice through collective action in setting employment terms and conditions

Lockouts

temporary work stoppage initiated by company

Collective Bargaining

the process of negotiations between the labor union and the organization Prohibited, Permissive, & Mandatory Issues

Two-tier pay structures: from management

wage tiers are a form of cost control

Strikes

work stoppage initiated by workers refusal to work