Unions

labor union influence of specific compensation decisions

basis of pay, rate vs. range, seniority vs. merit, wage differentials, wage adjustments

unions and alternative reward

20% of US collective bargaining agreements permit some alternative reward system.

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. differentials (occupation, geography, part-time vs full-time), wage adjustment provisions: deferred wage increases, re-opener clauses, cost-of-living adjustments (COLAs) or escalator clauses

structure of wage packages

division between direct wages and employee benefits, evolution of the two-teir process

compensation in non-union firms: the spillover effect

employers seek to avoid unionization by offering workers wages, benefits, and working conditions won in rival unionized firms.

outcomes of spillover effect

nonunion mgmt continues to enjoy freedom from union "interference" in decision making, workers receive "spillover" of rewards obtained by unionized counterparts

two-teir pay plans

phenomenon of the union sector: contract differentiates pay based upon hire date, employees hired after a target date will receive lower wages than their higher-senoritiy peers in similar jobs. From management's view, wage tiers are a form of cost control, from union's view, less painful than job cutes, wage freezes,

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

collective bargaining

the process of negotiation between the labor union and the organization. Prohibited, permissive, and mandatory issues. # of mandatory bargaining issues: wages, vacations, benefits, retirement and pensions, bonuses, insurance plans, etc.

Union impact of general wage levels

unions do make a difference in wages, size gap varies from year to year (during periods of higher unemployment impact of unions is larger, and vice versa

summary

unions have influence of wages, both union and non-union, though membership still has important effects on compensation in some industries

Labor Union Influence on Compensation

wage levels, structure of wage packages, reward systems, and compensation for nonunion employees