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Labor Relations, Employee Relations, and Global HR

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Unit 5 - Labor Relations, Employee Relations, and Global HR

Scenario One: You are a supervisor in a small manufacturing plant. The union contract covering most of your employees is about to expire. How do you prepare for union contract negotiations?

Scenario Two: As the supervisor of a small manufacturing firm, you need to construct a plan for reducing both accidents and stress on the plant floor. How would you proceed and why?

Scenario Three: One of your plant managers will be sent to your sister company in Bulgaria for a period of three years. Write an expatriation and repatriation plan for this employee.

Please help to explain this and, if possible, provide websites

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The labor movement believes that all employees deserve equal pay for equal work. To negotiate well, HR professionals must clearly comprehend the financial implications of labor-related decisions and know how to build consensus among employees, union representatives and management. While union membership has declined over the past 20 years, unions still are a staple of certain industries, such as airlines, education and automobile manufacturing. So, many HR professionals--especially those in certain industries--must continue to develop and maintain union negotiating skills.

Some HR professionals prefer to negotiate solo, but most have a team of at least three individuals: the HR professional, the attorney, and the plant manager or chief financial officer. On that team, the HR professional is often the best spokesperson, and he or she needs to possess certain qualities and knowledge to perform that role well, including patience, creativity, trustworthiness and an understanding of collective bargaining laws.

Regardless of whether you're the official spokesperson, you need to understand the National Labor Relations Act (NLRA) and how it's enforced. "The National Labor Relations Board (NLRB) interprets the NLRA," explains Taylor, who is 2005 chair of the Society for Human Resource Management Board of Directors. "But the NLRB changes composition based on who is in the White House. It's key for an HR practitioner to understand how the interpretation of the law changes" as board members change.

Developing a relationship with the union representative well before union negotiations begin is highly recommended. Invite that person to visit the plant and ask questions. Put yourself in their shoes and see what they are seeing and hearing. Most often, the union negotiator knows more about our business than we do; they're talking to our employees who are having problems. Craft a framework of collaboration, rather than contention. Establishing this relationship will also help give you another key in negotiations--credibility. The most important asset a negotiator has is credibility. Negotiators must be scrupulously honest. Know and trust at least one person on the other side of the table. If you trust your opponent, he or she can provide information about their priorities. It allows the organization to make better decisions about where to put capital to meet the greatest need."

Prepare for the Negotiation

Finding out the other side's key issues is all about being prepared. It's a lot of work to be on a bargaining team and also do your regular job. You have to balance the responsibilities and do your homework in advance."

To prepare, HR professionals must research:
- The company's needs and wants. Know what you want to accomplish in the negotiations. Identify any problems that have come up since the last negotiation,"
- It's important to include all levels of management in these discussions. Identify the parameters for monetary and non-monetary items with the plant management. Create a document you submit to senior management for approval
- Always prepare for the worst. Ensure that your operational management is prepared for the possibility of a work stoppage. It is almost impossible to have successful negotiations unless you are in a position to say 'no.'
- Develop a strategy and determine what is important
- See if there is a pattern of grievances filed. Talk with supervisors and union people. What kinds of changes does the union want to make?
- Ensure that your statistics about the workplace and benefits are accurate. Have supporting documents.
- Know the market condition and industry norms.

If the organization is in contract negotiations, it might be helpful to set up a domestic partnership benefits committee to make sure that any lesbian, gay, and bisexual and transgender employees have comparable benefits to their heterosexual counterparts. Adding domestic partner benefits to the collective bargaining agreement is a matter of economic justice. The denial of these benefits means that some of your members receive less pay for the same amount of work.


Creating a safe workplace will help reduce lost work time and the negative employee morale that accompanies an accident-prone work environment. Slip-and-fall and lifting accidents are common hazards that can be easily corrected with a strictly enforced safety program. Other workplace hazards include high noise levels and repetitive motion trauma. Many companies and agencies can assist you in developing a program to help prevent, minimize and cost control on-the-job injuries. OSHA and the National Safety Council are just two examples.

Questions to consider:

- Do your workplace(s) follow applicable federal and state regulations?
- Have you established a company wide safety program that rewards employees for adhering to the program?
- Are the tools and equipment that employees use regularly inspected for safety?
- Are there systems in place to encourage and reward employees for reporting and identifying unsafe work conditions?
- Do you thoroughly investigate all accidents and identify any trends?
- Are your offices designed with ergonomics in mind?
- Does your worker's compensation premium pay for reporting and identifying unsafe work conditions?
- Do you thoroughly investigate all accidents and identify any trends?
- Are your offices designed with ergonomics in mind?

Workmen's Compensation

Workers compensation insurance, a state-mandated coverage, is an important benefit for many employees because when they are injured on the job it pays for their medical costs and a substantial portion of their lost wages. Under this coverage, it is not necessary to prove negligence on the part of the employer. In many cases, workers compensation insurance is one of the largest expenses incurred by business owners. According to the National Council on Compensation Insurance, in 1994, American business paid workers compensation premiums in excess of $28 billion dollars.

Workers compensation premiums are used by insurance companies to pay for the two basic parts of a workers compensation policy- medical expenses and lost wages. All 50 states have laws and regulations that govern workers compensation. Knowing the employer requirements of the workers compensation laws in your state is the first step toward improving your control over costs. Workers compensation premiums pay for the medical expenses and lost wages are sometimes referred to as direct costs. There are additional or indirect costs associated with industrial accidents (and all other claims) that are typically not covered by an insurance policy. Some of these indirect costs include the overtime cost to replace the injured employee, your time spent filling out accident forms, and equipment or inventory damaged as a result of the accident, and lost productivity after the accident. The National Safety Council estimates that the indirect cost of accidents is between three and five times the actual direct cost. In 1994, the average direct cost of a workers compensation claim was $18,700. This means that the approximate indirect cost to the business for each accident was $74,800, which is not covered by insurance and thus reduces profit. Although both the direct and indirect cost of workers compensation often constitutes a major component of your expense, a practical and functioning loss prevention program can decrease them.


Today, workers compensation accounts for about 50 percent of all medical care costs, and that number is expected to rise. Aggressive management of workers compensation cases through a managed care program (where allowed by state law) not only helps companies reduce medical care costs, but can also help the injured employee make a speedier recovery and return to work sooner.

Fraud has become much more common in workers compensation cases. Careful management of workers compensation cases, including close monitoring of the claimant's activities and a review of all medical bills and physician's diagnoses (where necessary), can help eliminate fraudulent workers compensation claims and reduce associated costs.

If one of your employees does have a work-related accident, there are several steps you can take to contain medical costs and help the individual recover quickly. These steps are not meant to minimize or jeopardize the quality of medical care your employee receives. But they assist you and your employees in better managing their medical care for everyone's benefit by getting them back to work sooner.

A. Pre-Loss Strategies Checklist

1. Where state laws permit, use a managed care organization, such as preferred provider organizations (PPO) or health maintenance organizations (HMOs), for workers compensation cases. These established networks of member hospitals and physicians provide a high standard of medical care to help return employees to work while agreeing to prearranged discounts for their services.

2. Develop a program for reporting on- the-job injuries as soon as possible, and communicate it to employees.

B. Post-Loss Strategies Checklist

1. Encourage employees who have been injured on the job to seek prompt, professional medical care.
2. Should an employee become injured while on the job, report the incident promptly, usually within 24 hours, to your agent or ...

Solution Summary

This paper-style solution provides background and material for each of the scenarios in the problem in 5800 words with references.

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King pays at market rate and conducts a salary survey every three years to ensure the company remains competitive. Both practices served King well over the years, even with the growth in the number of full-time employees and an increasingly complex compensation system. Two years ago, Call restructured the compensation system by broadbanding 14 salary grade levels into a far simpler system of five levels. Call expected some resistance because there are always people who hate change, but he hadn't anticipated the outcry from some employees who claimed it was nothing but the loss of promotion levels and a manipulation of the system. He has spent a lot of time since then educating staff on the system, and in the two years that have passed, the outcry quieted a bit, but there are still claims of salary compression. Call knows there are managers who have abused the system, using the higher salary ranges to reward their favored few regardless of performance or longevity. He concedes the new system isn't perfect, though it is simpler to administer. Now, however, he spends more time worrying about results than he ever did in the past.
The merit bonus plan had been Honduras's baby. She thought it was a good way to link compensation to actual results, and it was a key compensation element in the early years, when Dean wanted to encourage innovation and creativity. It may have been effective early on, but Call now sees it as an expensive giveaway that creates employee anxiety. He has complained to Smith that it's not working and ought to be scrapped. "Whatever they get," he says, "it's never enough. They're always dissatisfied. I don't know why we bother."
Employee benefits are another issue. Benefits became increasingly expensive over time, and every piece of The King Company is under scrutiny for cost effectiveness. King offered fully paid health coverage to all full-time employees from the outset until 2006, when double-digit premium increases necessitated a change. Laying its cards on the table, King conducted information sessions with employees to ensure they understood the costs of insurance and the financial health of the organization. Cost-cutting was a given; the question was what to cut. An employee survey was conducted to determine what cuts would be most acceptable to employees. The focus was to determine if employees would accept less health coverage but continue with insurance fully paid by King or if they preferred to pay a portion of their premium and maintain the same benefit coverage as in the past. It was a contentious discussion before the decision was made to maintain coverage with employees paying a part of the premium. The employee-paid share has risen every year since, with complaints that it is nothing but a pay cut.
Despite some grumbling, Call thinks employees do well with King's benefits package. King supports retirement savings by matching employee contributions to their 401(k) accounts at 50 percent of the employee contributions up to a maximum contribution of 5 percent of the employee's annual salary.
Paid time off is available as vacation time and sick leave. After one year of full-time employment or the equivalent, employees receive 10 days of paid vacation, and sick leave benefits accrue at the rate of 12 hours (1½ days) per month worked. Both unused vacation time and sick leave time can be carried over from year to year. Vacation time carryover is limited to a maximum of 10 days while accrued sick leave can be carried over from year to year with no ceiling.
Those are just the major benefits. There are some other nice perks as well. Scholl lobbied hard to get Madison and Dean to agree to tuition reimbursement for work-related college courses. Despite having few employees using the program, Call thinks the benefit sends a positive message to employees that King supports educational development. Some employees work flexible schedules, and some telecommute a few days a week if it is appropriate to the job. Varn manages the wellness activities, and there is also an employee assistance program. Overall, Call thinks it is a good benefits package, but he knows change is coming.
The memo from Smith said that all compensation practices are on the table for discussion and that some significant changes would be forthcoming. With the bonus system in place, annual base salary adjustments have been kept low, generally at a 2 to 2.5 percent increase. Call suspects a salary freeze is in the offing, and he braces for the repercussions of disgruntled employees and the loss of some of King's best employees as their skills are lured away by higher-paying competition. He wonders if Dean and Smith really understand how important it is to stay competitive in this industry.

Please answer and discuss the following questions in a 4-5 page paper, with no less than 3 references from reputable sites.

1. Discuss broadbanding. What are its strengths and weaknesses? Is this a viable program for The King Company? If
not, what would you replace it with? Why?

2. Discuss the bonus system at King. How could it be improved? Or, should it be replaced? If so, what would you
replace it with? Why?

3. Discuss how FMLA fits in with other company leave policies. Is it better to have one "time off" policy (e.g., allowing a
set number of days missed) instead of individual absenteeism, sick-days, vacation, short-term leave, long-term leave
policies, and other policies granting time away from work? Why? Support your logic with research.

4. How should The King Company address the issue of the FMLA employee who was mistakenly terminated?

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