HRM Exam 4
16. What is a union? Understand HR-related issues that are important to unions and where unions typically stand on these issues.
organizations that represent employee's interests to management on critical HR issues Improve working conditions Prefer stability and equality of wages Worker-management relationships are affected by unions Virtually all HR decisions are subject to collective bargaining Americans support of unions is down Union membership in the U.S. has dropped substantially
24. Understand what occurs when an employee believes that the labor contract has been violated.
*Grievance procedure - stipulated in the labor contract How the grievance will be initiated Number of steps in the process Who will represent each party Number of working days that grievance will take Resolution of Grievances Most are expressed to the supervisor Most are settled early Next step is taken to higher level; company & union representatives Arbitration Process Should be last resort Is typically binding *Selection of the Arbitrator - Union and employer generally must agree The Arbitration Process - each party informs arbitrator of the issue, facts, evidence, & arguments. Basis for Arbitrator's Decision & Award - based upon the labor contract; Arbitrator usually writes an opinion that summarizes all of the facts, the decision made, and justification
14. Understand the different pay for performance plans, including their pros and cons
-Individual Merit pay plans Incentive Plans Piece Rate/Standard Hourly Rate Sales Incentives Bonus -Group Profit Sharing Gain Sharing Stock Plans
through what mechanisms do unions and employers exert their power?
-Striking— a refusal on the part of employees to perform their jobs NLRB v. Mackey Radio & Telegraph (1938) permitted the permanent replacement of strikers with new workers Risky - lost wages and can leave a window for replacement employees to vote the union out Picketing— used by employees on strike to advertise their dispute with management & discourage others from entering or leaving the premises (may require security firms to protect nonstriking & replacement workers) Boycotting—refusing to patronize an employer by refusing to buy or use products or services primary boycott— union refuses to allow members to patronize a business where there is a labor dispute; can be fined heavily for doing so secondary boycott— occurs when a union induces third parties such as suppliers & customers to refrain from any business dealings with an employer with whom it has a dispute -Use of organizational capital close down a plant or certain operations within a plant, transfer operations to another location, subcontract out certain jobs Must be sure this is done in a way that is not interpreted by NLRB as attempting to avoid bargaining Hire replacement workers Lockout - shut down operations, usually in anticipation of a strike Intended to fight union slow-downs, damage to property, or violence Many states allow employees to draw unemployment benefits during lockouts, weakening its power
3. Understand the five objectives of effective compensation systems
1. Enables an organization to attract & retain qualified, competent workers 2. Motivates employee performance, provides direction to their efforts & fosters a feeling of equity 3. Supports, communicates, & reinforces an organization's culture, values, and competitive strategy 4. Cost structure reflects the organization's ability to pay 5. Complies with government laws and regulations
18. Under what conditions are workers likely to join unions?
1. Perceptions of the Work Environment Job dissatisfaction, working conditions, perceptions of inequity 2. Perceptions of Influence Desired influence, difficulty in influencing conditions 3. Belief of unions Image & expectations about unions
1. What is compensation? What are the different parts/components of compensation? Explain each.
All forms of financial returns & tangible benefits that employees receive as part of an employment relationship. 1. Cash compensation ($$) Base pay (Salary) Contingent pay (Stock options, bonuses) 2. Fringe compensation (benefits) Govt. Mandataed programs, retirement plans, time off employee services
Taft-Hartley Act
Amended the NLRA by describing what constituted unfair labor practices by unions Restricted the usage of the strike Must provide 60 days notice, prohibited federal employees from striking Unions cannot discriminate against non-striking workers Restricted unions from coercing employees to join Provided states the option to enact "Right-to-Work" legislation declaring that union security agreements requiring membership as a condition of employment are illegal
team pay
Any form of compensation contingent on group membership or team results Useful when: The team is ongoing/relatively permanent The work is truly interdependent The team shares responsibility for its own work-related decision making Little is known about the best ways to go about compensating teams, but a combination of broadbanding and profit-sharing (next chapter) has been recommended by some experts.
22. Understand the different types of bargaining.
Distributive Bargaining- zero-sum; one side wins and the other loses Integrative Bargaining- attempt to understand interests and concerns of each part and arrive at a mutually beneficial solution Concessionary Bargaining- union giving back some previous gain (usually prompted when labor leaders recognize the need to assist employer in reducing operating costs in order to prevent layoffs or bankruptcy)
pay for knowledge/skills,
Employees paid on basis of either degree of specific knowledge they possess or an inventory of skills Advantages Cross-training and acquisition of knowledge can create a flexible workforce Reduces need for supervision as employees improve knowledge & skill Fosters sense of individual empowerment about pay Disadvantages May increase pay costs Unused skills may get rusty Perspective that organizations should pay for outputs (i.e., productivity) rather than inputs (i.e., knowledge, skills)
12. Understand expectancy theory.
Expectancy - Perception about the likelihood that working harder will lead to higher performance Instrumentality - Perception about the likelihood that higher performance will lead to valued outcomes (e.g., more money) Valence - Perceived value of the outcome
6. Understand what is stipulated in the laws pertaining to compensation
Fair Labor Standards Act: Min. Wage, Overtime 1.5x hour for excess 40 hours a week, Child labor laws coves under 18, Equal pay act: prohibits pay differentials on the basis of sex Dodd-Frank Wall Street Reform and Consumer Protection Act: Public traded companies, shareholders get an advisory vote on exec pay, incentive pay based on misstated financial filings must be returned
19. Understand the following laws relevant to labor relations: National Labor Relations Act,
Formally recognized private sector workers' rights to organize and bargain collectively with representatives of their own choosing Defined employer unfair labor practices Interfere with employee representation & collective bargaining rights Dominate or interfere with the affairs of unions Discriminate in regard to any employment condition against workers who engage in union activity or who file unfair labor practice charges Refuse to bargain in good faith with employee representatives
9. Understand the employee welfare programs discussed in class. What value do employees place on these programs (specifically health care plans)? Understand the laws that regulate health care plans.
Health Care Plans 80% of employees value health benefits above all Tend to reduce benefits and shift costs to workers Many organizations are implementing employee wellness programs - saves money on premiums Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) Employees can extend coverage (at their own expense) for up to 18 months after coverage would have otherwise have been lost (e.g., termination) Patient Protection and Affordable Care Acts (PPACA) Requires employers with 50+ employees to provide heath insurance to their full time employees (defined as 30+ hours/week) Life Insurance - one of oldest & most common benefits Short and Long Term Disability
Understand individual and organizational factors that must be considered in order to develop an effective pay for performance system.
Individual Factors -Employee values the outcome -Size of reward -Employee must (a) be able to control the performance outcome and (b) believe that they can control the performance outcome -Must believe that increased performance will result in the reward -Performance outcome must be measurable Organizational Factors -Good performance appraisal system -Fair process -Adequate funding -Continual evaluation of system and make improvements
13. How should you determine if individual or group pay for performance systems should be implemented?
Individual, group, or company level PFP? Extent outcome controlled at group or individual level Whether individual contributions can be measured Preference for individual level systems Cooperation & teamwork encouraged by group plans When team-based PFP is used Should be part of a comprehensive team-based model of HRM & compensation (i.e., other processes should be team-based too) High achievers may go elsewhere Free- riders increase as group size increases
10. What are retirement plans? What is the difference between defined benefit and defined contribution plans?
Long term capital accumulation plans Defined Benefit plan - Pension; guarantees a specific retirement payment based on a % of preretirement income (generally ~50%), determined by age at the time of retirement and years of service Defined Contribution plan - Employer pays a specific dollar amount into an individual's account each period (e.g., 401k) Trend: replacing defined benefit w/ defined contribution
2. How does pay matter to both organizations and individuals?
Organizations: Pay accounts for 65-70% of U.S. firm expenses The amount and form of pay can motivate employees Plays a role in attracting and retaining top talent Individuals:Pay is both instrumental & symbolic to workers Pay satisfaction = when people perceive that they are paid appropriately in relation to others (equity) Pay satisfaction is related to organizational commitment, trust in management, absenteeism (-), turnover (-), and theft (-)
11.What is pay for performance? What is the purpose of pay for performance systems? What are the implications of such systems for organizations and employees?
Pay-for-performance = rewards = incentive systems All used interchangeably Establishes a close connection between meeting key requirements and compensation Facilitates controlling of labor costs and increased productivity Puts some portion of employee pay at risk Trend towards increasing prevalence of PFP
5. Understand the following "current trends" in compensation: broadbanding,
Replaces traditional narrow salary ranges (40-60 % spread) with fewer, wider bands (200-300 % spreads) e.g., 30k-45k vs. 25k-75k Advantages More consistent with flatter organizational structures that exist today Facilitates development, lateral moves, and cross-functional teams because salary differences are minimized Greater flexibility for managers in setting & managing pay Disadvantages Little research into effectiveness and may not be worth the cost of higher salaries
23. When labor contract negotiations reach a deadlock,
Resolving deadlocks Be prepared to offer concessions & accept alternative solutions Mediation by neutral third party
Landrum-Griffin Act
Response to US Senate hearings exposing union corruption Goal to protect workers by monitoring internal activity of unions Union officials became accountable for spending Required filing annual financial statements with DOL Mandated democratic practices within unions (requiring local and national officer elections)
8. Understand the government-mandated employee benefits.
Social Security Act 1963: Retirement, Survivor and medical benefits (medicare) Cost is shared equally by employees and employers FUTA: Unemployment insurance- provides emergency income for unemployed workers for up to 26 weeks Paid for by employer Workers Compensation: Employer must pay for medical expenses and pay due to lost work time where illness/injury is work related FMLA: 12 weeks of unpaid leave/year for specified family and medical emergencies
When are these PFP systems most likely to work?
Successful when Tailored to particular work situation Linked to long term strategic objectives
15. Understand the issues reviewed in class pertaining to managerial and executive pay
Total compensation rose 28% in 2010 Increase mainly due to incentive vs. base pay Tying executive comp to earnings has coincided with dramatic increase in inaccurate earning statements Plans continue to favor short vs. long term results "Pay for No Performance"- The Wall Street Journal article documents loss in linkage between executive pay & performance CEOs of seven troubled or collapsed financial institutions $464 million in performance pay from 2005 to 2008 (half in cash) Movement towards linking executive pay to the achievement of long term objectives is a favorable trend
20. Understand the process of forming a union, including union campaigns and tactics, management tactics, and the role of the NLRB in this process.
Union membership is solicited by the employees or the union might conduct an organizing drive At least 30% of employees must sign authorization card that states a certain union should be their representative when negotiating with management NLRB is petitioned to conduct an election NLRB sets an election date Secret ballot election is held; majority must accept
17. What effects do unions have on employees and organizations?
Wage differentials of 15-20%; fringe compensation differentials even higher Less voluntary turnover Lower profitability Union workers are less satisfied with their supervision and job content. Union member job satisfaction is driven by pay. Constrains HRM decisions Termination for cause only Higher compensation Staffing and performance management activities subject to collective bargaining
21. What is collective bargaining? What types of issues are usually subject to collective bargaining? What issues are required by the NLRA to be included in labor contracts?
When representatives of a labor union meet w/ management representatives to discuss employment-related policies & issues Collective Bargaining Issues Wage-related issues (cost of living adjustments, how pay scales are determined) Fringe compensation Administrative Issues (discipline & discharge procedures, health and safety, training) The Labor Contract Formal agreement between union & management Outlines terms & conditions of employment NLRA stipulates mandatory issues that must be included: anything pertaining to wages, hours, and working conditions
7. What is the gender wage gap and what are its causes?
Women make 78.5 cents for every dollar a man makes Causes: Across vs within job analysis: out of 26 jobs women and men were paid equally 1/26, remaining 25 women were paid more than men Self Selection: Performance for job for more flexibility and safety (men are more likely to work for jobs that a re more dangerous and get paid more)