The University of the South PacificServing the Cook Islands, Fiji, Kiribati, Marshall Islands, Nauru, Niue, Samoa, Solomon Islands, Tokelau, Tonga, Tuvalu, and Vanuatu.

FACULTY OF BUSINESS AND ECONOMICS

School of Management and Public Administration

MG 106: INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

FINAL EXAMINATIONS UPDATE

Section a Short Answer Question

[40 marls]

This section is compulsory, consisting of 8 short answer questions and is worth 40 marks (that is. 8 x 5 marks). You will be required to write approximately three quarters of a page to answer each of the eight questions in this section. The following broad topics will be covered in this section of the paper.

1. How companies recruit job applicants using various recruiting source?

Recruitment - is the process of locating and encouraging potential applicants to apply for

existing or anticipated job openings.

Recruitment serves a buffer between planning and actual selection of new employees

Types of Recruitment

Internal recruitment – recruiting employee from within the organization, or employees who

currently hold positions within the organization

Organization recruit existing employees through Job Posting (bulletin boards, employee

publication and intranets)

Managers also identify candidates to recommend for vacancies

External Recruitment – recruiting potential candidates outside the organization

Direct Applicants – People who apply for a vacancy without prompting form the organization

Referrals - People who apply for a vacancy because someone in the prompted them to do so

Advertisements in Newspapers and Magazines –

These type of ads generally generate a less desirable group of applicants than direct applicants

and referrals

However, few employers can fill all their vacancies purely through direct applicants and referrals

so they usually need to advertise

The Person designing a job advertisement need to include:

1. Enough information to evaluate the job and its requirements, so that they can make a

well-informed judgement about their qualification

2. Specific type of people whom the ad is intended for in order to help the advertiser decide

where to place the ad

Ads placed in the classified section of the local newspapers are relatively

inexpensive yet reach many people in a specific geographic area who are

currently looking for work

On the downside, this medium offers little ability to attract skill levels. Typically,

many of the people ready classifieds are over qualified or are under-qualified for

the position

For reaching a specific part of the labour market, including certain skill levels

and more people who are employed, the organization may get better result from

advertising in professional or industry journals

Electronic Recruitment – involves posting career information at company websites to address

people who are interested in the particular company and posting paid advertisements at career

services to attract people who are searching for jobs

Companies are also searching networking sites such as LinkedIn and Facebook to find

job candidates.

Most large companies and even smaller ones make career information available at their

website

They may also register their website domain with a .job extension such as

www.stabucks.jobs for a link to information about career opportunities in Starbuck

To be an effective recruiting tool, corporate career information should move beyond

generalities, offering open positions and an easy way to submit a resume

Candidates also appreciate an e-mail response that the company has received the resume

– especially a response that gives a timetable about further communications from the

company

As application at the company website is not so successful for smaller and less well

known companies. These organizations may get better results by going to the website that

is set up to attract job seekers, such as Monsters, for smaller and less well known

companies. These organizations may get better results by going to the website that are set

up to attract job seekers, such as Monsters, Yahoo Job Hot Jobs

With both employers and job seekers submitting information to and conducting searches

on them, these sites can offer an efficient way to find matches between job seekers and

job vacancies

However, a drawback is that big job websites can provide too many leads of inferior

quality because they are huge and serve all job seekers and employers, not a select

segment

Companies can improve the effectiveness of online advertising by employing more

interactive tools, such as social networking

Evaluating the Quality of a Source

Employers should evaluate the quality of a source to determine the best recruitment

source by using the following methods

1. Develop and compare Yield Ratios for each source. A yield ratio expresses the

percentage of applicants who successfully move from one stage of the

recruitment and selection to the next. For Example, by comparing the yield ratios

of different recruitment sources, HR professionals can determine which source is

the best or most efficient for the type of vacancy to use

2. Cost-per-Hire – to compute this amount, the cost of using a particular

recruitment source for a particular type of vacancy must be determined. Then

divide the cost by the number of people hired to fill that type of vacancy. A low

cost per hire means the recruitment source is efficient; it delivers qualified

candidates at minimal cost.

2. Role of interviewers in an interview process

The interview process brings together job applicants and representatives of the employer to obtain

information and evaluate the applicants qualification

The interviewers decision influences the selection process

Interviewers gather information from what job applicants tell them and also from how they

behave

Preparing for Interview

The interviewer should have a quiet place in which to conduct interviews without interruption

The interviewer should be trained in how to ask objective question and to avoid subjective

matter, and how to detect and handle his or her own personal biases or other distractions in order

to fairly evaluate candidates

The interviewer should have enough documents to conduct a complete interview, these should

include a list of the questions to be asked in a structured interview

The interviewer should schedule enough time to review the job requirements, discuss the

interview questions, and give the interviewee a chance to answer the questions

The interviewer should have a copy of the interviewees employment application and resume to

review before the interview and refer to during the interview

Employment Interview

The job interview provides both the interested parties with a chance to meet each other and know

each other well with the purpose of hiring and getting hired.

Poorly conducted interviews may yield very little useful information and may even damage

company’s reputation

In legal terms, the subjectivity embodied in the interview process often makes applicants upset,

particularly if they fail to get a job offer after being asked irreverent questions.

Interview Technique

Nondirective - the interviewer refrains from influencing the applicant’s remarks.

The applicant is allowed the freedom in determining the course of the discussion during the

interview session. This is achieved by the interviewer asking broad, open questions, such as ‘tell

me more about your experience with your last employer’, and by allowing applicant to talk freely

with minimum interruption

During the structured interview, the interviewer has a standardized list of questions to ask of all

candidates in the same order. The importance of structure in the interview lowers the possibility

of biases held by the interviewer, thus leading to a less differential impact on vulnerable groups

of women and minorities

The second dimension along which interviews can vary is whether they focus on past experience

or on a hypothetical future behaviour.

One such type is called a situational interview, which is a structured interview where the

interviewer describes a situation likely to arise on the job and asks the candidate what he or she

would do in that given situation. Example, An example of this type of interview question asked

to an applicant would be “Suppose one of your clients refuses to speak to you after you lost one

of his orders; what would you do to regain his business?"

Behavioural description interview is another method of interviewing where interviewers ask

candidates to describe actual experiences they have had in dealing with specific, job –related

issues or challenges. An example of this type of interview question would be “Thinking back to

your last job, tell me about a time when you resolved a conflict with a customer

What was the biggest difference of opinion you ever had with a co- worker?

The main difference between behavioral and situational interview is that behavioral interviews

focus on past experiences and behavior of the applicant, while situational interviews concentrate

on how the applicant will react when confronted with a given situation

Advantages of Interviewing

Face-to-face or direct interview provides evidence of communication and interpersonal skills of

potential job applicants.

Applicants are in a better position to clarify doubts and also ensure that their responses are

properly understood.

Respondents’ experiences of discomfort, stress and other problems can be detected through

frowns, nervous taping and other body language, unconsciously exhibited by any person. This

would be impossible to detect in a telephone interview.

Secondly, interviews allows employers to gain insight into candidates’ personality and

interpersonal style which otherwise may not be possible through any other method of selection

techniques.

Disadvantages

The main disadvantages of face-to-face interviews are the geographically limitations they may

impose on the surveys and the vast resources needed if such surveys need to be done nationally or

internationally.

The costs of training interviewers to minimize interviewer's biases for example differences in

questioning methods, interpretation of response are also high.

Another drawback is that respondents might feel uneasy about the anonymity of their responses

when they interact through face to face interviews. Interviews can also be unreliable and invalid

in most circumstances

3. Transfer of learning and Transfer of Training?

The goal of training is to enhance the skills, knowledge, and thinking and learning ability

of employees. But, even more important is the capability to apply the new information,

skills, or knowledge in the employee's job.

Training transfer is performing certain activities before, during, and after a training

session that enables employees to more effectively and quickly apply the skills learned in

training on the job.

Training transfer is the goal when employees are involved in any internal or external

training activity, session, seminar, or on-the-job training.

On the same note, transfer of learning refers to the use of knowledge, skills and

behaviors learned in training on the job.

Transfer of learning in influenced by: Climate for transfer, Technological support,

Manager Support, Peer support, etc.

4. industrial strikes

is a collective decision of the union members not to work until certain demands or

conditions are met

Causes

In most cases negotiators are unable to reach an agreement. Therefore a bargaining

impasse (deadlock) occurs.

In these situations, several alternatives, better known as industrial actions, are used by the

employees and employers to break the deadlock.

Consequences

Employees on strike lose wages and Employers lose production

Loss of productivity and revenue for the organization

The conduct of each party during the strike can do long lasting harm to labor-

management relations

Violence by other sides or threats of job loss or actual job loss went to replacement

workers can make future relations difficult

Other Forms of Industrial Conflicts

Picketing

A key aspect of a strike is a picket line where strikers, their leaders, and their supporters

march outside the employer’s location to publicize their dispute; convince the public not

to support the business and workers not to cross the picket line.

Picketing usually takes place at the plant or company entrances. It can result in severe

financial losses for the firm and can eventually lead to a shutdown of the plant. Picket

lines can become very emotional at times; especially when employees or replacement

employees attempt to cross them. These people may become the target of verbal insults

or even physical assault

Slowdown

The whole idea behind slowdowns is to pressure on the employers by imposing costs

through lowered productivity, but without employees leaving their jobs and going on a

strike.

Perhaps the most creative way to work slowly is by exactly following the employer’s

rule. For example, if there is a safety rule that all machines must be inspected before use,

a worker can spend half an hour at the start of the shift thoroughly checking every nut

and bolt the machine. And perhaps the machine will need to be inspected again after

being switched off for lunch.

Lockouts

A lockout is similar to an economic strike in that it is a work stoppage that results from a

bargaining dispute.

A lockout is initiated by the employer rather than the employees. It is basically shutting

down of operations, usually in anticipation of a looming strike. The lockout can also be

used to fight unions slow – downs, damage of the property, or violence within the

workplace.

Dispute Resolution Process/Alternative to strikes

Mediation - Mediators are called in to review the dispute who attempt to open up

communication channels by suggesting compromise solutions and concessions.

Fact- Finding -fact finding process of dispute resolution is also non- binding on the

parties. However, fact finding is more active than mediation services in the way that by

establishing a set of unbiased settlement terms, the fact- finding report can help the

negotiators reevaluate their positions to an acceptable compromise settlement.

Arbitration -Arbitration is a legal technique for the resolution of disputes .The parties to

a dispute refer their dispute to a person called the arbitrator or more persons known as an

arbitrational tribunal. Arbitration as a form of binding dispute resolution is equivalent to

litigation in the courts

5. 360-degree PMS appraisal process?

Is a form of appraisal system which involves various stakeholders in an evaluation

process compared to the traditional method of appraisal where the employer appraises an

employee

It is a versatile form of appraisal compared to the traditional approach

Why carry out Appraisals?

Through appraisals organizations collect information and provide feedback to employees

about their behavior, communication, style and skills

Used for development purposes – whereby the rater would identify an area of behavior as

a strength of that employee or an area requiring further development

The results presented to the employee show how he or she was rated on each item and

how self evaluation differ from other raters evaluations

The individual reviews the results, seeks clarifications from the raters and sets specific

development goals based on the strengths and weaknesses identified

Identify causes of the performance discrepancy and develop plans for improving

performance

Benefits

Organizations are able to collect multiple perspectives of managers performance ,

allowing employees to compare their own personal evaluations with views of others

This method also establishes formal communications about behaviors and skill

ratings between employees and their internal and external customers

Greatly improves the performance and behavior of participants in a 360 degree

appraisal feedback system

Limitations

Demands a significant amount of time for raters to complete the evaluations

If raters, especially subordinates or peers provide negative feedback, some managers

might try to identify and punish them

A facilitator is needed to help interpret the results

Finally, simply delivering ratings to a managers does not provide ways for the

manager to act on the feedback

Performance Appraisal –process through which an organisation gets information on how well

an employee is doing his or her job

6. Pay structure

Pay structure consists of the relative pay for different jobs within the organization.

Pay level is the average amount; including wages, salaries, and bonuses the organization

pays for a particular job.

Job Structure is the relative pay for different jobs within the organization

Together, pay structure and pay levels help the organization achieve goals related to

employee motivation, cost control, and the ability to attract and retain talented human

resources

Issues in Developing a Pay Structure

(Identifies factors that influence the development of an organization’s pay structure).

Employers must not base differences in pay on an employee’s age, sex, race, or other

protected status.

Any differences in pay must be tied to such business-related considerations as job

responsibilities or performance.

The goal is for employers to provide equal pay for equal work

Job and Pay Structure

Issues in Developing a Pay Structure, identifies factors that influence the development of

an organization’s pay structure.

Employers must not base differences in pay on an employee’s age, sex, race, or other

protected status.

Any differences in pay must be tied to such business-related considerations as job

responsibilities or performance.

The goal is for employers to provide equal pay for equal work

A typical way of measuring job worth is to perform an administrative procedure called

job evaluation

Job evaluations includes input from a number of people such HR specialist or

consultants. The most widely used method to evaluate jobs is known as point -factor or

point-rating system.

Under this system, the evaluation committee identifies each job’s compensable factors,

meaning the characteristics of a job that the organisation values and chooses to pay.

Compensable Factors - The characteristics of a job that the organization values and

chooses to pay for: Experience ,Education, Complexity ,Working conditions and

Responsibility

Legal Requirements of Pay;

Minimum Pay:

the lowest amount that employers may pay under the legislation or state law, stated as an

amount of pay per hour

The Wages Council Act (2008) establishes a minimum wage and requirements for

overtime pay and child labor.

The Wages Council Act (2008) awarded a 20 percent pay increase to garment workers

compared to the old rate of $1.48 per hour. In the same vein the printing industry wage

rate has been upgraded from $1.70 to $2.20 an hour for learners and $2.12 to $2.65 an

hour for other workers working in the industry

Overtime Pay

Employees who are covered by the WCA’s overtime provisions are eligible for a time

and half rate for work done exceeding nine hours on any working day, including the

public holidays and weekends.

Furthermore, an employee is entitled for twice his hourly rates of remuneration in the

case of him working continuously without having eight consecutive hours off duty break

Child Labor:

The Fair Labour Standards Act (FLSA) of 1938 in USA defines child labour as any

economic activity performed by an individual under the age of 15.

The provision under the Act forbids employing minors under the age of 14 in

nonagricultural jobs , restricts hours of work, and limits occupations for 14 and 15 year

olds.

The Employment Relations Promulgation, (2007) prohibits children from working in

hazardous occupations or in any environment which can subject a child to physical harm

or an environment that does not foster the health, self respect and dignity of a child.

Children are also not permitted to work for more than 8 hours during daylight hours

under this regulation.

Economic Influences on Pay:

Products Markets

The organization’s product market includes organizations that offer competing goods and

services.

Organizations compete on quality, service, and price.

The cost of labor is a significant part of an organization’s costs.

Labor Markets

Organizations must compete to obtain human resources in labor markets.

Competing for labor establishes the minimum an organization must pay to hire an

employee for a particular job.

Example, if there is currently a strong demand for nurses in the labor market. Hospitals

will have to pay competitive wages and other perks to attract and retain staff.

Formation of Pay Structure;

Pay Rates:

If the organization’s main concern is to match what people are earning in comparable

jobs, the organization can base directly on market research into as many of its key jobs as

possible

Organization obtains pay survey data for its key jobs.

Pay policy line is established.

Pay rates for non-key jobs are then determined.

Pay policy line – a graphed line showing the mathematical relationship between job

evaluation points and pay rate

Pay Grades:

Pay grades – sets of jobs having similar worth or content, grouped together to establish

rates of pay

A large organization could have hundreds or even thousands of different jobs. Setting a

pay rate for each job would be extremely complex

Therefore, many organization group jobs into pay grades

Drawbacks

Grouping jobs will result in rates of pay for individual jobs that do not precisely match

the levels specified bythe market and organization’s job structure

For Example the organization groups together analysts (with a job evaluation of 270

points) and its senior accountants (255 points) but for simplicity’s sake the organization

pay the same rate for the two jobs because they are in the same pay grade.

The organization would have to pay more than the market requires for accountants or less

than the market rate for systems analysts

Pay Differentials

Pay differential – adjustment to a pay rate to reflect differences in working conditions or

labor markets.

Many businesses in the United States provide pay differentials based on geographic

location.

The most common approach is to move an employee higher in the pay structure to

compensate for higher living costs.

Current Issues in Pay

Work/ Life Balance (flexibility)

An increasing desire for a balance between home life and work is shaping the way people

work and how they value rewards.

From the employer’s perspective, changing views of work/life balance send a signal that

nonmonetary rewards will become increasingly important in next few years.

Along with monetary benefits, employers in future are likely to offer child care benefits,

elderly care benefits, scheduling benefits and domestic partner benefits to attract and

retain the best talents in the labour market

Executive Compensation

The equity of executive pay can affect more employees than, say, equity among

warehouse workers or sales clerks.

The pay of CEO’s remains a contentious aspect of performance/ compensation nexus.

Continued internationalization of the global economy will mean that the issue of

developing appropriate reward structures will become more complex as organisations

seek to attract, retain and motivate its key employees.

Organizations need to plan not only how much to pay managers, but also how to pay

them.

Alternatives to Job based Pay

Why is there a need to change the Pay structure?

The traditional approach to developing a pay structure focuses on setting pay for jobs or

groups of jobs. This emphasis on jobs have some limitations

Te precise definition of a jobs responsibilities can contribute to an attitude that some

activities “are not in my job description”, at the expense of flexibility, innovation, quality

and customer service

Also the job structure focuses on higher pay for higher status can work against an effort

of empowerment

Organizations may avoid change because it requires repeating the time consuming

process of creating job description and related paperwork

Another change related problem is that when the organization needs new set of

knowledge, skills, and abilities, the existing pay structure may be rewarding the wrong

behavior

Mitigation

Delayering:

Reduction in the number of levels in the organizations jobs structure

By combining job structure into a single layer, organizations give managers more

flexibility in making assignments and awarding pay increases. These broader groupings

are called broad bands

Broadband: This is an approach to base pay that is receiving considerable attention to the business

press.

In theory, broad banding is considered to more consistent with broader, downsized and

flatter organizations that exist today.

Broad banding involves consolidating existing pay grades and ranges into fewer wider

bands.

While a traditional pay range might be $ 30 000 - $ 45 000 (i.e. 50 percent spread from

minimum to maximum) a job band could be $ 25 000 - $ 75 000 (300 percent spread)

Broad banding provides greater flexibility in setting pay rates and it provides a

considerably more latitude in defining work and in moving people around in

organisations.

Companies like Northern Telecom and General Electric clustered more than 34 pay

grades into 10 and 5 bands respectively.

Skill Based Pay

Pay is determined according to employees level of skill and knowledge and what they are

capable of doing

Paying for skills make sense at organization’s where changing technology requires

employees to continually widen and deepen their knowledge

Supports efforts to empower and enrich jobs because it encourages employees to add to

their knowledge so that they can make decisions in their areas

A field study of a manufacturing plant found that skill based pay structure led to a better

quality and lower labor costs

Disadvantages

It rewards employees for acquiring skills but does not provide a way to ensure that

employees can use their new skills

The result maybe that the employer is paying the employee for skills that may not be

benefitting the employer

It does not necessarily provide an alternative to the bureaucracy and paperwork of

traditional pay structure, because it requires records related to skills, training and

knowledge acquired

Pay for Organizational Performance

Profit Sharing

Payments are a percentage of the organizations profits and do not become part of the

employees base salary

Example, General Motors provide profit sharing in its contract with its workers union

Depending on how large GM’s profits are for the year the workers receive 6% of the

company’s profits are divided among the workers

It encourages employees to think more like owners, taking a broad view of what they

need to do in order to make the organization more effective

It has the practical advantage of costing less when the organization is experiencing

financial difficulties

Drawbacks

Employees also may feel that small profit sharing checks are unfair because they have

little control over profits

Profit sharing have little impact on employee behavior

Stock Ownership

Make employees part owners of the organization

Intended as a way to encourage employees to focus on the success of the organization as

a whole

It may not have a strong effect on employee motivation

Comes in the form of stock options or employee stock ownership plans.

Stock Options

Refers to a right to buy to a certain number of shares of stock specified price (purchasing

the stock is called exercising the options)

Example, in 2005 a company’s employees received options to purchase the company’s

stock at $10 per share. The employees will benefit if the stock price rises above $10 per

share, because they can pay $10 for something (a share of stock) that is worth more than

$10. If in 2010 the stock is worth $30, they can exercise their options and buy stock for

$10 a share. If they want to , they can sell their stock for the market price of $30,

receiving a gain of$20 for each stock

Backdating options is unethical and may be illegal if found

Employee Stock Ownership

An arrangement in which the organization distributes the shares of stock to all its

employees by placing in a trust

Employees receive annual reports on the value of their shares, and when they leave their

shares they may sell they may sell their share to the company and if it is a publicly traded

company they may sell it on the open market

It is popular in that earnings in trust holdings are exempt from taxes

The major downside is that it is a very risky investment

Problems with the company can take away significant value from the ESOP

7. Personal selling and sales promotion (Managing the Sales force)

(Refer to MS PowerPoint handouts)

8. Importance of HRM in Public Sector Organisations

Deals with the delivery of goods and services by and for the government, whether

national, regional, or local.

For example, delivering social services, social security, administering urban planning,

organizing national defenses

Organizational forms include:

-direct administration through taxation

-publicly owned corporations

-partial outsourcing

Why HRM in Public Sector Management?

HRM in public sector has been ignored in previous research (due to definitional

’problems’, perceptions of non innovativeness)

There are well over 450 million people employed in the public sector throughout the

world .Today the share of public employment in developed market- economy countries

(such as Australia, Germany and Canada) is close to 22 percent of total employment; the

figure is around 40 percent in transitional economies (countries like Hungry, Poland and

Romania) and varies from 8 to 50 percent in developing countries like Fiji, Tonga and

Kenya.

The public sector has been at the centre of reform all over the world

Why HRM in Public Organization?

Governments have been more concerned on macro – economic issues aspect of HRM

such as reducing the size of civil service, implementation of compulsory retirement age

policy, outsourcing and reducing employee turnover rates.

Politicians and bureaucrats talking about the need for a motivated workforce,

compensation, performance feedback and training issues of HRM in the public sector.

Secondly, the establishment and implementation of all terms and conditions of civil

servants are centrally performed by the Public Service Commission.

Line managers and supervisors are virtually ineffective or have no influence over HR

issues in their jurisdiction.

HRM policies is confined to a very small group of experts located at central level, thus

giving no or very little scope for line managers to exercise flexibility in altering terms

and conditions of employment.

The centralised nature of HR policies in the public sector does not encourage

innovativeness, thus not attracting significant academic research in this area

New Public Sector Management

In a quest to move towards efficiency, service delivery, accountability and cost savings

and decentralization of services, a new paradigm, called the public sector reform started

taking shape in 1980s/90s era in UK.

New Public Management (NPM) is a label used to describe a management culture that is

a product of public sector reform programs. The focus of NPM is on citizens or

customers as well as on accountability for results.

NPM is a bundle of management practices and techniques borrowed from the private

sector to bring about change in structural, organizational and managerial areas of the

public sector

Section B: Essay Type Questions [45 marks]

Write approximately 2½- 3 pages to answer any three questions in this section. Each question is worth 15 marks.

Essay 1 – Employee Retention

Sources of job dissatisfaction and strategies for employee retention

Personal disposition

Interventions include:

Selection processes

Health maintenance and stress management programs

Organisational culture change

Employee assistance programs (EAPs)

Tasks

Task complexity

Physical strain and exertion

Task meaningfulness

Interventions include:

Job enrichment

Work teams

Job rotation

Job customisation

Roles

Role ambiguity

Role conflict

Role overload

Interventions include:

The role analysis technique.

Supervisors and co-workers

Strategies include:

Organisational culture of shared values

Social support

Clarification of goals and paths

HRM activities and strategies for Employee Retention

Selection and orientation programs

‘Employee-organisation fit’ is important.

Strategies include:

Involvement of new employees in social activities

Involvement of employees’ families in social activities

Involvement of senior managers in orientation

of new employees

Use of ‘mentors’ to assist new employees

Accountability of line managers for orientation of new employees.

Employee development and career management

Strategies include: Career counselling

Provision of supportive resources

Changing the image and perception of long-term (managerial) careers in

the organisation.

Pay and benefits

Strategies include: Higher pay levels

Fair pay structure

Bonuses and/or incentives

Non-financial rewards

Social ties and teams

Workers’ self-reports

Job Descriptive Index

Employee research

Annual surveys of employee attitudes and opinions

Exit interviews

Exit surveys

Essay 4 – Labour Relations – unionismRole of Unions

In most parts of the world, most workers act as individuals to select jobs that are

acceptable to them and to negotiate pay, benefits, flexible hours, and other work

conditions.

At times, workers believe their needs and interests do not receive enough consideration

from management.

One response by workers is to act collectively by forming and joining labor unions.

**Definition: a continuous association of wage earners for the purpose of maintaining or

improving the conditions of their employment (Webb and Webb 1894: 1)

Unions – organizations formed for the purpose of representing their members’ interests

in dealing with employers

Labor relations – field that emphasizes skills managers and union leaders can use to

minimize costly forms of conflict (such as strikes) and seek win-win solutions to

disagreements.

Also known as employment relations in modern times

Labor relations involves three levels of decisions

Labor relations strategy-

For management, the decision involves whether the organization will work with

unions or resort to non - union workplace.

This decision is influenced by outside forces such as public opinion and

competition.

For unions, the decision involves whether to confront changes in how unions

relate to the organization or accept new kinds of labor-management relationships

Negotiating contracts- :

Contract negotiations in a union setting involve decisions about pay structure, job

security, work rules, workplace safety, and many other employment related

issues.

These decisions have a significant impact on employer – employee relationship.

Administering contracts –

These decisions involve day-to-day activities in which union members and the

organization’s managers may have disagreements.

Issues include complaints of work rules being violated or workers being treated

unfairly in particular situations

Types of Union and its Affiliates

Unions are generally categorised according to their membership base - that is workers in

the same occupation, same industry or in the same company.

Industrial unions

Industry unions recruit all employees in an industry irrespective of the occupation of

those workers. The lecturers, accountants, and the administrative staff of the University

of the South Pacific have joined hands to form the University of the South Pacific Staff

Association (USPSA). The members of this union are linked by their work at the USP,

regardless of their occupation.

Craft or occupational unions

Craft unions are characterized by members who work in the same occupation rather than

members who work in the same company or industry.

For instance the clerks and supervisors from manufacturing, tourism and retailing

industries form an association, called the Clerks and Supervisors Association. Similarly

the electricians, carpenters and joiners working in various industries can form their own

unions at national level.

Company or Enterprise unions

Company or enterprise unions restrict their membership to the employees of one

company only, irrespective of the occupation of the employees.

This type of unions is usually sponsored by employers and at times referred to as “tame

cat” unions.

External Union Affiliates

Individual unions frequently join forces with other unions to create inter – union bodies at

several levels.

In Samoa for instance national unions are affiliated to the Samoa Trade Union Congress

(STUC) which in turn is allied to the International Trade Union congress. The Vanuatu

council of trade union has five unions as its affiliated members which are also allied to

the International Trade Union Congress.

In Fiji, the Fiji trade union congress (FTUC) is affiliated to the International

Confederation of Free Trade Unions and has close links with other regional and

international workers organization.

There are twenty-nine union affiliates of the Fiji Trades Union Congress with a

membership of approximately 33,000 thousand workers.

Trends in Union Membership

Trade union membership in many countries has significantly declined in recent years.

Several factors have been identified which has contributed to the decline in trade

union membership in different countries.

One of the notable reasons for the decline in trade union membership is;

The role of the labour market and economic changes that has taken place in the

employment sector. Globalisation has contributed to a recent job growth among women

and youth in the service sector where women are less likely to join unions.

Furthermore, the growth in the proportion of non – manual service sector employees

combined with the significant expansion of part – time work and self employment

appears to be associated with declining membership figures

Management efforts to control costs

Employer’s opposition to unionisation has increased over years. Employers overtime

have adopted different tactics to avoid, divide, or even to frustrate unions.

For instance to control its costs, employers have been extra careful in recruiting workers

to avoid possible unionisation. In some cases management offer much more salary to the

employees than what employees sought through union membership, thus effectively

suppressing union presence at workplace

Government regulation

Governments have imposed new legislations that have restricted trade unionism at

workplace.

Policies such as increased penalties for industrial actions, the prohibition of union activity

at workplace and introduction of individual contracting are some strategies governments

have adopted to discourage unionism.

Politicians often argue that involving restricting trade union activities in organisations are

necessary for the promotion of economic growth in the country as it effectively protects

the employers from unnecessary disruptions at workplace.

Impact of Unions on Company Performance

Research indicates presence of trade unions leads to a decline in productivity, resulting

from work rules, limitations on workloads and lost production due to strikes and work

slowdowns.

On the positive side unionisation of employees tend to reduce employee turnover by

giving employees a route to resolve conflicts and maintaining an emphasis on pay

systems based on seniority.

Other studies have determined that unions tend to influence productivity in the workplace

than nonunion workers. One possible explanation is that unionized workers may be more

likely to voice concerns through channels provided by the union and less likely to quit, so

turnover is lower.

Goals of Labor Unions

Labor unions have the goals of obtaining pay and working conditions that satisfy their

members and of giving members a voice in decisions that affect them.

They obtain these goals by gaining power in numbers.

Unions want to influence the way pay and promotions are determined.

The survival and security of a union depend on its ability to ensure a regular flow of new

members and member dues to support the services it provides.

Unions place high priority on negotiating two types of contract provisions that are critical

to a union’s security and viability:

- Check off provisions

- Union membership or contribution provisions

Check off Provision - Contract provision under which the employer, on behalf of the

union, automatically deducts union dues from the employees’ paychecks

Collective Bargaining

Collective bargaining is a process where the representatives of the organisation and the

unions meet and attempt to work out a contract of employment.

“Collective” means that representatives from both sides attempt to negotiate an

agreement. Bargaining is the process of debating, discussing, cajoling, maneuvering and

even threatening in order to bring a favorable agreement for those being represented

In collective bargaining a union negotiates on behalf of its members with management

representatives to arrive at a contract defining: Management rights, Union security,

Compensation and benefits, Grievance procedure, employee security etc

Types of Bargaining

Distributive bargaining is the most common type of bargaining and involves a zero sum

negotiation. In order words, one side wins and the other side loses.

Integrative bargaining occurs when the two sides face a common problem, for example

high absenteeism among employees. Both parties can amicably seek a solution which is

mutually beneficial or provides for a win- win outcome

Attitudinal restructuring - This involves shaping and reshaping some attitudes like trust

or distrust, friendliness or hostility between labor and management. When there is a

backlog of bitterness between both the parties, attitudinal restructuring is required to

maintain smooth and harmonious industrial relations

Issues in Collective Bargaining

Wage related issues – These include such issues as how basic wages are determined,

cost of living adjustment, wage differentials, overtime rates, and wage adjustments

Supplementary economic benefits – these include such issues as pension plans, paid

vacations, paid holidays, health insurance plans, dismissal pay etc.

Institutional issues – these consist of rights and duties of employers, employees, union

security, check off procedures, and quality of work-life programs

Administrative issues – includes issues such as seniority, employee discipline and

discharge procedures, employee OHS issues etc

Essay 6 – Employee compensation (Refer to assignment and PowerPoint handouts)

On the Job-training Method: involves practical work and continually assessed by supervisors

who provide advice and correct mistakes