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Mnh306 k101 13 appendix b answers to as assignment 03

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MNH306-K/101 13 ASSIGNMENT 03 QUESTION 3.1 Discuss how you would prepare for future pay negotiations, coordinating negotiations and lastly deal with the real negotiation process. (15) Market research The first step is to obtain market data. Insuretrust can obtain market data either from external surveys or by conducting its own surveys. There are a number of valuable and relevant surveys on the market, and Insuretrust should conduct its own survey only where it needs very specific market data. The following information needs to be provided by such surveys: # A comparison of Insuretrust = s wage rates and employee benefits offered to employees in similar industries, in the same geographical location, and represented by the same union. # Recent demands and settlements obtained by --- the union currently involved --- other unions in the same industry or area # Information on cost of living expenses, inflation rate, and historic and anticipated market pay movements. On the basis of this information Insuretrust can ascertain the strength of its current market position, anticipate possible demands by the union and determine a settlement package that is likely to satisfy union demands. Costing Having obtained this market information, Insuretrust needs to cost out various options in terms of wage and benefit movement. For this costing to be accurate, Insuretrust must have accurate and up-to-date information on, inter alia # the number of employees per grade covered by the union agreement # the average basic wage per grade # the number of employees in each grade # the average cost of any other benefit being negotiated By using this information, Insuretrust should build up a "what if" model, showing the current cost of basic pay and benefits, and illustrating the impact of wage increases, overtime rates, shift allowances and any other benefits to be negotiated. This model will illustrate the influence of various increases in basic wage and benefits on the payroll. If Insuretrust considers, for example, an overall pay increase of 8 percent, the "what if" model will show a number of ways in which this can be achieved. Obtaining a mandate A mandate for pay negotiation is usually agreed upon by senior management, and represents the maximum increase in pay and benefits which an organisation is prepared to consider. When considering a mandate proposal, the remuneration department should work closely with the labour relations department. After examining the market data and the unions' demands, the mandate should be set in line with comparable market increases and a figure which the company can reasonably hope to settle at.
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MNH306-K/101 14 The second factor that should be examined is the various options management can consider when meeting the demands of trade unions. Insuretrust should be careful when granting an increase. For example, a pay increase will also influence overtime payment, bonuses, contributions to pension funds et cetera. After all the facts and information have been taken into account, the HR department must submit a mandate
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