There are a number of disadvantages to a unionized workforce from a compensation and benefits perspective. While unions do contribute to raising wages, which in turn increases employee happiness and motivation, this can also have a detrimental impact.
As an illustration, if a union representative bargains with an employer for greater salaries, the firm might need to increase the standards for hiring (Gerhart, 2022). This means that the business will hire people who are more productive to pay them the higher compensation that was negotiated. Over time, the less productive workers who were safely employed by the company before unionization will be fired afterward. As a result, the business will decrease the number of workers to cut costs associated with wages, which increases the strain on individual employees and harms productivity.
Moreover, the recent changes to union laws only streamline the removal of poor-performing employees (“Where do unions,” 2019). As a result, while a union is able to enhance the pay and benefits that an organization offers to its employees, the company might have to reduce the number of employees and deal with reduced productivity.
The Impact of Unions on Wage and Salary Administration
Additionally, unions have a significant role in the administration of wages and salaries in businesses. In essence, the agreement between a union and a company outlines how unions are to handle remuneration (Gerhart, 2022). For example, it can state the basis of pay for the workers. The majority of contracts stipulate that certain occupations will be paid hourly and that overtime pay will be issued after a predetermined number of hours. Additionally, the agreement may specify the hourly pay for various jobs and the differences in wages for different posts.
Finally, wage bonuses based on experience and merit might be discussed in the union contract. The great majority of contracts provide that advancement through the range is based on seniority. This is called automatic progression, and the contract will generally outline the intervals between movements. Alternately, advancement can be made by merit, in which case employees who perform above or below average receive raises or promotions more quickly (Gerhart, 2022). As a result, labor unions can influence wage administration through agreements with employers that typically stipulate hourly compensation, occupational salary differentials, and wage incentives based on merit and experience.
Reference
Gerhart, B. (2022). Compensation (14th ed.). McGraw Hill Education.
Where do unions stand in the U.S. now? (2019). Site Name. Web.