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If the organisation has reached the limit of its

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If the organisation has reached the limit of its mandate, it needs to weigh the direct cost of downtime (hours not worked) as well as the long-term effect of a prolonged and ugly strike on the industrial climate and productivity, against the cost of a larger wage increase and the impact of this on future negotiations. The union will make similar judgements, weighing the cost of lost wages and jobs against the benefits of higher pay and the psychological victory of forcing management to give in to its demands. If the negotiators are of the opinion that the mandate should be raised, the remuneration department can play an important part in ensuring that the new mandate is tenable in respect of the labour market rates and internal
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MNH306-K/101 15 conditions (financial position of the organisation). The new mandate must be agreed upon with general management and the negotiation continued until agreement is reached. New rates and conditions of service are then implemented for the bargaining unit on the date and for the period agreed upon during the negotiation. The final involvement of the remuneration department is to assess the impact of the negotiated pay and conditions of service on other workers outside the bargaining unit. As can be deduced, the ramifications of negotiations are widespread, and it is essential that the remuneration and industrial-relations departments work together very closely during the entire negotiation process to ensure that the organisation maintains a balanced and harmonious pay structure for both unionised and non-unionised employees. QUESTION 3.2 Evaluate each of the above mentioned demands and indicate how you would deal with each. (10) (1) General inflation linked salary increases of 8% The practice of awarding across-the-board percentage increases is one of the most unfair practices. One of the reasons why across-the-board increases should be avoided is that the same percentage does not mean the same rand amount. For instance, 10% of R1200 is R120-00, and 10% of R3000 is R300. The person earning the higher salary is thus favoured by the salary increase. This leads to an increase in the earnings gap between higher and lower income groups. So too should inflation and increases never be linked because inflation does not affect everybody in the same way. What people spend their money on determines the extent to which they are affected by inflation. If a person spends most of his disposable income on livelihood items he will be worse off than someone not spending the same proportion of his income on these items. In addition the spiral effect of inflation linked salary increases should also be taken into consideration. (2) Redefining the meaning of A dependent @ Insuretrust should first determine what the purpose of this demand is. If it is to make provision for the coverage of extended family members (parents, children of family members and so forth) under a single medical plan, then Insuretrust should carefully consider the financial implications.
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