Chapter 15: Union Role in Wage and Salary Administration

4 areas of union impact

1) Impact on general wage and benefit levels 2) Impact on structure of wages 3) Impact on nonunion firms (aka spillover effect) 4) Impact on wage and salary policies and practices in unionized firms

4 explanations for the decline in Union Memberships

1) The structure of American industry is changing, and declining industries are the most heavily unionized, whereas growing industries are less so. 2) Workers don't view unions as a solution to their problems 3) Union organizing efforts have declined 4) Management is taking an increasingly hard stance against unions in general and against union demands in particular

Automatic progression

Movement through a wage range, with the contract specifying the time interval between movements

Two-tier pay plans

Wage structures that differentiate pay for the same jobs based on hiring date. A contract is negotiated that employees hired after a stated day will receive lower wages than their higher-seniority peers working on the same or similar jobs

Deferred wage increase

negotiated at initial contract with timing and amount specified

Single-rate agreements

Do not differentiate wages on the basis of either seniority or merit. Workers with varying years of experience and output receive the same rate.

Spillover effect

Employers seek to avoid unionization by offering workers the wages, benefits, and working conditions won in rival unionized firms. The fact that improvements obtained in unionized firms "spill over" to nonunion firms seeking ways to lessen workers' incentives for organizing a union aka Threat effect

Lump-sum awards

One-time cash payments (bonuses) to employees that are not added to an employee's base wages They are variable pay

Pay-for-knowledge plans

Pay employees more form learning a variety of different jobs or skills

Cost-of-living adjustment (COLA)

Periodic adjustments based on changes in the consumer price index

Reopener clause

Specifies that wages, and sometimes nonwage items (pension and benefits) will be renegotiated at a specified time or under certain conditions

Bureau of Labor Statistics

The government organization responsible for regularly gathering data about the economic status of the population.

3 major wage adjustment provisions

wage adjustment provisions specified in multiyear contracts 1) Deferred wage increases 2) Reopener clause 3) Cost-of-living adjustments (COLAs) aka escalator clauses