Post on 25-Dec-2015
Mgmt 583
Chapter 9: Wage and Benefit BargainingFall 2008
Components of the CBA Wage Issues
Wage & effort. Benefits Premium Pay
Nonwage Issues Union security (level of compulsory membership) Individual security/ seniority Management rights Discipline/discharge
Components of the CBA Nonwage Issues (continued)
No strike/no lockout Contract term/duration Contract administration
Bases for Union Wage Demands Equity
Internal Equity- Unions expect to meet or exceed levels for nonunion jobs in the firm.
Unions expect uniformity in how much workers make doing the same jobs at other plant locations in the company.
Ability to Pay – if the company makes a profit, they can afford to pay more.
Standard of Living – unions expect the purchasing power of worker’s wages to be maintained. COLAs
Union’s Preparations for Wages Issues After certification (or recognition) the parties
begin preparations for contract negotiations. Union Preparations
Research management’s ability to pay. Research BU’s ability to strike.
Can they muster a strike vote? Does the national have a sufficient strike fund?
Union’s Preparations for Wages Issues
How well is management prepared for a strike? Data and information is collected to support
bargaining demands. Employer’s profitability. Employer’s sales growth. Industry-wide trends. National union’s agenda. Member’s agenda’s/desires.
Management Expectations Quid pro quo
Never give something without getting something in exchange.
Cost minimization Desire to remain competitive
Management’s Preparations for Wages Issues Management’s Preparations
Top level management establishes bargaining limits. Predict probable union demands. Anticipated demand will under go thorough cost analysis.
Three most important words in collective bargaining: Cost! Cost! Cost!
Management’s Preparations for Wages Issues
Data and information is collected to support bargaining demands.
Industry wage rates. Local labor market wage rates. Cost of living information. Cost of benefits. Cost of overtime. Industry/market trends. Other relevant economic information.
Wage Issues Wage and Effort Clause
Base wage Pay Scales and Pay Systems
Two-tier systems
Cost of Living Adjustments (COLAs) Not not forget effort!
Wage Issues Premium Pay
Overtime Rate Eligibility
Shift Differentials Holiday pay Hazardous duty pay
Wage Issues Contingent Benefits
Retirement Funded v. nonfunded Defined benefit v. defined contribution Vesting Eligibility to draw benefit
SUBs Severance pay
Supplemental Unemployment Benefits (SUB)
Employer supplements state unemployment benefits to ensure a guaranteed level of income. Example: A union negotiates an 80% SUB in the CBA. An employee made weekly salary of $500 (80% = $400) The maximum Weekly Benefit Amount (WBA) allowed in
Mississippi in 2008 is $230.00.
State Unemployment $230
SUB $170
$400
Salary $500
Wage Issues Contingent Benefits (continued)
Time off Vacations Holidays Military leave Jury duty Sick leave
Childcare/eldercare
Wage Issues Contingent Benefits (continued)
Health insurance Eligibility Dependent coverage Deductibles Co-payments
Dental insurance Life insurance
Wage Issues Pay Structure – the wage rates for different
jobs. Pay Form – how the compensation is to be
received. Cash Automatic deposit Insurance payments Deferred income
Wage Issues Pay System – establishes methods by which
it is determined what each individual employee will earn in his/her job. Premium pay Productivity bonuses Profit sharing Gainsharing SUBs
Wage Issues Pay System – cont’d
Pay for Time Not Worked Paid holidays Vacations Military leave Jury duty Paid sick leave
Longevity Pay