MGT 352 Final Exam
Point Method Process
1. develop a point manual 2. rate each job relative to the CFs in the point manual 3. add the total ponts across CFs to determine the job's worth 4. Total points can then be used to determine the compensation for that job
Family Medical Leave
1. employer must grant employee up to 12 workweeks of unpaid leave in a 12 month period for the specified reasons 2. They still retain their benefits while on leave 3. return to their job or an equivalent job
Labor Organization Process
1. workers seek collective representation 2. initial organizational meeting 3. formation of in-house organizing committee 4. collective bargaining for a contract 5. contract administration
Ways a union can be recognized and obtain exclusive bargaining agent status
1. Win a certification election 2. Voluntary recognition 3. NLRB grants the union recognition
Wage inversion
a higher skill job is paid less than a lower skill job example: Junior Accountant - $50,000 Senior Accountant - $48,000
Wage Compression
a lower skill/level job is paid at a rate similar to a higher skill/level job example: Junior Accountant - $45,000 Senior Accountant - $46,000
Employment-at-will
- EAW; 80% of workforce - EAW clause acts to limit employees' rights to their jobs - The right of an employer to fire an employee without giving a reason and the right of an employee to quit when he or she chooses. - EAW is governed by state laws and varies by state
Types of Strikes
- Economic - Wildcat - ULP - Secondary - Sympathy
Family Medical Leave Act (FMLA), issues (reasons you may take the leave, setting the 12-month period)
(1) the birth of a child and to care for the newborn child (2) the placement with the employee of a child for adoption or foster care and to care for the newly placed child (3) to care for an immediate family member with a serious health condition (4) when the employee is unable to work because of a serious health condition
Pension/Retirement Plans
- 401(k) playing a minor role in retirement - key sources: social security, pension, real estate - Pensions are going away (in the past 80% of ERs offered them, now about 20%) - two types of pension plans: defined-benefit, defined contribution plans
Pay Ranges
- Allow for variation in pay within grades (within max and min) - Differences such as tenure, education, performance, when learning the job, etc.
Equal Pay Act and its relationship to compensable factors (9)
- Amendment to the FLSA - This law is enforced by the EEOC - Law states that it is illegal to discriminate in terms of compensation based on gender for "equal work" where equal work is defined as work requiring the same skill, effort, responsibility, and working conditions.
Family Medical Leave Act (FMLA)
- An employer must grant an eligible employee up to 12 workweeks of unpaid leave in a 12-month period - employees on leave retain their benefits - have the right to return to their job or an equivalent job
Benefits cost
- Around WWII, employers could not increase employees pay to control inflation. Therefore, they increased benefits - Today the average benefit cost is 40% of total labor costs Present - union influence - increase in benefits legislation
Goals of Compensation (9)
- Attraction: Motivation to join - Retention: Motivation to stay - Motivation: Motivation to perform
Job Classification
- Classifying jobs into categories so they can be benchmarked internally and externally - Jobs are classified and grouped according to a series of predetermined wage grades. Example: Job grade 7 Min $12/hr Max $17/hr Job grade 8 Min $15/hr Max $20/hr Pros - Relatively easy to develop - Inexpensive - Easier for people to slot jobs into grades than to rank order them Cons - Grade descriptions must be broad enough to fit multiple jobs, yet they have to be specific enough that jobs don't appear to fit into more than one grade
Individual Equity
- Comparisons with others inside the organization in the same job
Positive Discipline (13)
- Discipline that focuses employee taking responsibility for correcting the problem
Permanent vs temporary replacements during different types of strikes
- Economic strike: temp or permanent replacement - wild cat strike: illegal can fire employees - ULP strike: temp replacement only - Sympathy strike: - secondary strike: illegal can fire
Fair Labor Standards act provisions
- Enforced by the department of labor Four primary provisions: 1. minimum wage: Mandated a federal minimum wage 2. overtime: Requires that employers pay their employees time and a half their regular pay for hours worked in excess of 40 per week. Employees are exempt or nonexempt for overtime. 3. child labor: Forbids children under 16 to work except for parent among other issues 4. equal pay: Equal Pay Act (1963)
Which factor will most likely set the "floor" for wages?
- External Labor Market Conditions
Taft-Hartley Act & Right to work laws
- Gave states permission to pass Right-to-Work Laws - Amendment to Wagner (NLRA) twelve years after Wagner was passed - Pro-Management legislation - Established Union ULPs (amended Section 8 of Wagner) - Once a year limit on certification elections - made closed shop illegal
Landrum-Griffin Act
- Govt. stepped in and started to regulate union business/internal union affairs 1. Mandated that unions must file yearly financial statements with the Dept of Labor (external auditor) 2. Established "Bill of Rights of Union Members" - Members may... 1. participate in union business 2. vote in union elections 3. run for union offices 4. Sue the union
Pay Grades
- Groups of jobs within a particular class that are paid the same rate.
Three Equity Perception
- Internal - External - Individual Equity
Job evaluation methods for maintaining internal equity
- Job Ranking - Job Classification - Point Method
Reasons for decline in union membership
- Majority of new job creation is occurring in small organizations (100 or less employees - 3% of small ERs are unionized) - Change in workforce demographics - Increasing use of part time EEs (unionized at ½ the FT rate) - Legislation which protects employee rights and benefits - Ability to use permanent replacement workers during strike - Shift from manufacturing to high tech/service jobs - Globalization/offshoring of jobs - Right to Work laws (see later slides for this discussion)
Rights arbitration
- Occurs when a third party neutral is asked to interpret the meaning of the contract and rule on employee grievances - Extremely common in both public and private sectors
Workers Compensation Insurance
- Paid for by the employer (payroll tax) - the more often that ees are injured on the job at that organization, the higher the premium that ER will pay for WC insurance
Internal Equity
- Pay comparisons with others inside the organization
External Equity
- Pay comparisons with others outside the organization
Which factor is most likely to be used to set the maximum wages an employer is willing to pay?
- Product Market Competitors' Rates
Range Overlap
- Purpose is to permit employees with experience to earn as much as or more than a person with less experience in the next higher job classification - Maximum 50% overlap: Top of lower grade should be below midpoint of higher grade -Red circle jobs: jobs whose base wages exceed range and are frozen until ranges shift upward
Railway Labor Act
- Purpose of the act was to avoid service interruptions resulting from disputes between railroads and their operating unions. - Established mandatory mediation during labor disputes via the National Mediation Board - 30 day cooling off period during bargaining disputes - First major piece of LR legislation - Covered employees in the railway industry (and now airlines) - National Railway Adjustment Board is enforcement agency
Consolidated Omnibus Budget Reconciliation Act (COBRA) (11)
- Requires ERs to continue health care coverage to ees and their dependents upon termination of employment for a specified period of time (18, 24, 36 months) - Gives former ee and family insurance at a group rate - Former ee's pay 103% of cost of group rate
Patient Protection and Affordable Care Act (ACA)
- Since 2014, employers with 50+ employees must offer affordable health care - cover their children till age 26, no lifetime dollar limits, no copays or deductibles for preventive care
Employment Contract
- Terms of employment are specified (such as the start and stop dates; compensation, severance, etc.) - 8% of the workforce has an employment contract. It is often reserved for executives, senior management, etc.
National Labor Relations Act (NLRA) aka Wagner Act
- The most important piece of LR legislation - Covers most all private sector organizations (besides airlines and railway industries) - Protects employee rights to organize and bargain collectively through representatives of their choice. - National Labor Relations Board (NLRB) governs labor relations in the United States and enforce labor law. - Once contract expires, everything is fair game
ULP Strike
- Work stoppage precipitated by an employer unfair labor practice or an economic strike that is extended because of an ER ULP - If ER committed a ULP, employees can only be temporarily replaced during ULP strike (they have immediate reinstatement rights)
Point Method
- awarding points to each job based on the job's contribution to organizational objectives (i.e., the more value the job has, the more points it is awarded) _ Permits jobs to be evaluated quantitatively on the basis of factors or elements—compensable factors—that constitute the job. Pros: - valid and not easily manipulated ranking system
Internal Factors in determining wage mix
- compensation policy of organization - worth of job: Establishing the internal wage relationship among jobs and skill levels (job evaluation considerations) - employee's relative worth: Rewarding individual employee performance - employer's ability to pay
External factors in determining wage mix
- conditions of labor market: Availability and quality of potential employees (supply and demand) - market competitors rates: How much are our direct competitors paying for their labor? - area wage rates: Wage rates of local area employers for comparable jobs - cost of living: local housing and environmental conditions - collective bargaining: Unions bargain for real wage increases that raise the standard of living for their members. - legal requirements: Laws pertaining to compensation and benefits administration must be considered
lack of good faith and fair dealing/ implied covenant
- employer acts in bad faith - employer inflicts harms without justification and discharges employee
Power tactics in collective bargaining
- have been on decline since 1975 - 90-95% of CBAs (collective bargaining agreements) end without a work stoppage - We lose 10X as many work days to injuries/accidents than to strikes - Strikes
Determining "real" wages
- increases larger than rises in the consumer price index; that is, the real earning power of wages.
Unemployment Insurance
- paid for by the employer based on the employer's experience rating with laying off employees - the more they lay off/terminate employees the higher their unemployment insurance premiums will be
Job Ranking
- rank the value of jobs from highest to lowest Pros OK job evaluation method for smaller organizations with small # of jobs Cons - Does not provide a precise measure of each job's worth - Final job rankings indicate the relative importance of jobs, not extent of differences between jobs. (#2 v. #5?) - Method can used to consider only a reasonably small number of jobs (<20) - Doesn't allow for jobs of equal worth - Middle range jobs are difficult to differentiate
Lockout
- the exclusion of employees by their employer from their place of work until certain terms are agreed to - management's primary weapon against union's ability to strike
Differences between RLA and Wagner (NLRA)
1. Coverage RLA - railway & airlines NLRA - all other private employers 2. Certification elections RLA - Union must win majority of eligible voters (mail-in ballot) NLRA - Union needs majority of those who voted (secret ballot) 3. Strike/Lockout RLA - Union can't strike and er can't lock out until all impasse resolution procedures have been expended (mediation, presidential 30 day cooling off period) NLRA - once contract expires everything is fair game
Basic Standards of discipline
1. Due Process - Ees right to be heard, fair investigation - If no due process, then discipline can be overturned 2. Communication of rules - Publish widely, remind, signed statements - Unenforced rules cannot be enforced without notification 3. Documentation of facts - Proper documentation of misconduct prior to disciplining ee 4. Right to appeal disciplinary action 5. Consistent response to rule violation - Doesn't need to be identical responses, circumstances may justify different responses to same misconduct
Constructive discharge doctrine
An employee voluntarily terminates his or her employment because of harsh, unreasonable employment conditions placed on the individual by the employer ERs covertly getting someone to quit to avoid having to pay unemployment benefits or severance Courts have generally adopted a "reasonable person" standard for upholding constructive discharge claims
Union Shop
BU employee must join the union within 30 days of employment or be terminated *legal in non-right to work states
Agency Shop
BU employees must pay membership dues to the union (usually a reduced rate) but are not required to join the union *legal in non-right to work states
Role of HR and supervisor in employee discipline
Develop (with top mgt approval) disciplinary policies and procedures Ensure that policies and action taken comply with labor agreements and current law
Primary Boycotts
Direct appeal to consumers not to purchase "struck goods" - i.e., don't do business with company the union is currently having a dispute with *Legal
Open Shop
Employees are not required to join a union as a condition of employment * legal in right to work states
Employment Rights (13)
Guarantees of fair treatment from employers - Employment Contract - Collective Bargaining Agreements - Employment-at-will
Secondary Strike
ILLEGAL Work stoppage by ees who have no dispute with their employer but are striking to support another union
Overtime provision Nonexempt employee
IS covered by the OT provision and must be paid 1 ½ for all hours worked over 40 in a week.
Duty of Fair Representation/exclusive bargaining agent status
If Union wins, it becomes the exclusive bargaining agent of all ees in the bargaining unit via the Duty of Fair Representation: The union has the legal right and responsibility to represent ALL bargaining unit members equally, regardless of whether employees join the union or not.
Secondary Boycotts
Illegal (as noted by Taft Hartley) - Asking consumers not to buy goods/services from a neutral employer not involved in the labor dispute
Wildcat Strike
Impromptu strike unauthorized by union during an active collective bargaining agreement (in defiance of union) - Typically there is a no-strike clause in the CBA (or a grievance procedure which is a de facto no-strike clause) - Management can fire employees who engage in a wildcat strike and may sue the union for damages
Difference between mediation, interest, and rights arbitration?
Interest: third part makes final decision rights: third party interprets meaning of contract mediation: third party facilitates and decision is agreed together
Linking the goals of compensation to equity perceptions
Internal equity --> retention External equity --> attraction Individual equity --> motivation
Maintenance of Membership shop
Requires that ees who voluntarily join the union remain union members throughout the life of the collective bargaining agreement *legal in ALL states
Sympathy Strike
LEGAL Work stoppage by a group of ees in support of their co-workers who are currently in a negotiation impasse with their employer (both groups of employees work for the same ER)
Which shop clauses are legal/illegal in right to work states (14)
Legal: Open Shop
Unfair Labor Practices (ULPS)
Management ULPS (Under NLRA) Union ULPS (Under Taft-Hartley Act)
Compa-ratio < 1
Managers paying less than the intended pay policy. Valid reasons may be... - Majority of ees are new or recent hires - Most ees are poor performers - Ees are promoted so rapidly that few are in a range long enough to get to the high end
Compa-ratio > 1
Managers paying more than the intended pay policy. Valid reasons may be... - Majority of ees with high seniority, high performance, low turnover, few new hires, low promotion rates
Winning a certification election under RLA vs. NLRA
NLRA - union needs majority of those who voted ( sercret ballot) RLA - Union must win majority of eligible votes (mail-in ballot)
Overtime Provision Exempt employee
NOT covered by the overtime provision and therefore not eligible for being paid overtime (generally all managers, supervisors, and white-collar professional employees)
Determining benefit strategy in terms of benefits mix and benefits cost (11)
Need to ask the question "Why are we offering XYZ benefit? - benefit mix helps determine what types of benefits are needed based on competitors and workforce demographics - benefit costs are 40% of the labor costs
Three Primary Phases of the labor relations process (14)
Organizing Bargaining Contract Administration
Social Security
Paid by both the employee and employer
Voluntary Benefits
Pensions/Retirement Plans Diff. between defined benefit vs. defined contribution plans
Employee Retirement Income Security Act (ERISA)
Private pension plans are subject to ERISA regulations; provides standards and controls for pension plans: 1. Communication standard - communicating in a way that is easily understandable 2. Minimum funding standards - employees must put a certain amount of money in fund each year 3. Vesting standards - employees have the right to their retirement money after certain number of years have been met (100% vested after 5 years OR 20% after 3 years, 20% each additional year until 100% vested)
Exceptions to employment-at-will
Public Policy Violation Implied contract Implied covenant/lack of good faith and fair dealing
NLRA (Wager act) MANAGEMENT Unfair labor practices (ULPs)
Section 8: Employer ULPs Wagner Act outlawed employer practices: 1. Interference with employees' rights to unionize 2. Domination/support of a union (e.g., company union) 3. Discrimination against union members 4. Discharge of union members because they file a ULP charge 5. Refusal to bargain in good faith with the union
UNION Unfair labor practices (ULPs) Taft-Hartley Act
Section 8: Union ULPs 1. Coercion of ees to join unions 2. Asking employers to discriminate against ees based on union status 3. Charging excessive or discriminatory fees 4. Specified prohibited activities - e.g., secondary boycotts, featherbedding 5. Refusing to bargain in good faith with the employer
Required Benefits
Social Security Unemployement Insurance Workers compensation insurance Family Medical leave Health insurance
Collective Bargaining agreements
Terms of employment are negotiated with a union. Just cause clause will specify reasons for termination. 12% of the workforce is under a collective bargaining agreement.
Implied Contract
The employer wrongfully discharges the employee contrary to the oral or written promise of employment
Union Security Clauses
Union security agreements (shop clauses) attempt to make membership in the union a condition of employment Closed shop Union Shop Agency Shop Maintenance of membership shop openshope
Benefits mix
What should the overall benefits package look like? Look at the labor market to determine the mix - What do the employees look like that we are competing for? - High tech firms --> young computer geeks, low average tenure - what benefits would interest this group?? - How diverse is the workforce? Different benefits will be attractive to different groups
Progressive Discipline
When applying corrective measures by increasing degrees, always be sure that employees: - Know what offenses they did exactly - Know what they are expected to improve - Understand what happens if improvement is not made
Economic Strikes
Work stoppage to put pressure on management during negotiations once the contract expires - Employers may replace strikers on a permanent or temporary basis - Can't fire striking employees but you can replace them - Strikers have "recall rights" to their jobs once their jobs come open if they were permanently replaced
Public Policy Violation
Wrongful discharge of an employee by an employer for refusal to commit an act that to violates the law.
Interest arbitration
having a third party neutral make the final decision for the two parties in contract negotiation - Primarily used in public sector labor disputes when striking is prohibited or restricted - Very powerful position to be the ultimate decision maker
Offensive lockouts
lock out employees to put pressure on the union to make concessions in bargaining Employers can hire temporary replacements only
Closed Shop
must be in a union to be employed *illegal in every state
Compa-ratio
reflects how managers pay employees in relation to range mid-points Average rate of pay/ Range midpoint Ratio < 1 avg. employees in a range are paid below midpoint ratio > 1 avg. employees paid above midpoint
Permissive Subjects
subjects that either side is free to bring up, but the other side is not mandated to negotiate over it (both sides must agree to let the subject come on to the table) - Anything other than wages, hours, and working conditions
Mandatory Subjects
subjects that if one party wants to bring up in negotiations, the other party must negotiate over it - deals with wages, hours, and working conditions
Illegal Subjects
subjects that violate law and would be a ULP to try to get onto the negotiation table - Asking ER to discriminate against women, asking for a closed shop provision in the CBA, featherbedding, etc.
Mediation
third party neutral comes in and acts as a facilitator between the two parties and they all work together to make a decision - Very commonly used in labor disputes (Federal Mediation and Conciliation Service—govt agency that supplies mediators)
