*INDIRECT FINANCIAL

COMPENSATION
*LABOR UNIONS AND
COLLECTIVE
BARGAINING
Presented by “HR - Group 2”
INDIRECT
FINANCIAL
COMPENSATION
CONTENT
 Life Insurance and Disability Insurance
 Paid Time Off
 Employee Service Benefits
 Employee Benefits Legislation
 Customized Benefit Plans
 Workplace Flexibility (Work-Life Balance)
LIFE INSURANCE AND
DISABILITY INSURANCE
 Life insurance

protect the financial health of employees’ families upon the employee’s death
 Disability insurance
pay out to the employee if he/she becomes disable to work as a result of a work- related accident or
dismemberment claims

 Benefit Period
1. Term life insurance (providing monetary payments to an employee’s beneficiaries upon
the employee’s death during a limited period based on a specified number of years or
maximum age.)
2. Whole life insurance (do not terminate until payment is made to the beneficiaries during
employees’ employment and into the retirement years.)
PAID TIME-OFF
 Employers recognize that employees need time away from the job for many purposes and
consider for providing payment for time not worked.

 Paid Time Off Policies (4 kinds)

1) Vacation
2) Sick Pay and Paid time off banks
3) Sabbaticals
4) Other Types of Paid Time Off
I. Vacation
 Paid vacations help workers to be more creative and productive, reduce stress, brings families and
friends closer, and improves job performance
 Paid vacation time typically increases with seniority
(Example, employees with 1 year of service might receive two weeks; 10 years’ service three weeks;
and 15 years’ service, four weeks)
II. Sick Pay and Paid Time Off Bank
Sick Pay - allocate to each employee a certain number of days of sick pay they may
use when ill
- the number of sick pay days often depends on seniority
At times, individuals have abused the system by calling in sick when all they really wanted
was an additional day of paid vacation. One approach in dealing with the problem of
unscheduled absences is paid time off banks.
Paid Time Off Banks - A certain number of days off provided each year that employees
can use for any purpose.
- With a PTO bank, all categories of time off such as sick leave, vacation, and personal
days are grouped together.
III. Sabbaticals
 Temporary leaves of absence from an organization, usually at reduced pay
 This time leave provides employees with the opportunities to travel and study outside of their regular
job role to advance their careers.
 Employees are still employed and may still be paid.
 sabbaticals help to reduce turnover and keep workers from burning out, hopefully returning revitalized
and more committed to their work.
IV. Other Types of Paid Time Off
 Although paid vacations, sick pay and PTO banks, and sabbaticals constitute the largest portion of
paid time off,40 there are numerous other types that companies use.
 in performing civic duties
 to take off during work hours to handle personal affairs without taking vacation time
 permit bereavement time for the death of a close relative
 coffee breaks, lunch periods, a rest break
EMPLOYEE SERVICE
BENEFITS
 A variety of benefits offered by organization – “Employee Service”

Six types of “Employee Service”

 child care,
 educational assistance,
 food services/subsidized cafeterias,
 scholarships for dependents,
 relocation benefits, and
 benefits for domestic partner and individuals in same-sex marriages
I. Child Care
 For parents who prefer a different arrangement,
 Company child-care arrangements tend to reduce absenteeism, protect employee productivity, enhance
retention and recruiting, promote the advancement of women, and make the firm an employer of choice
II. Education Assistance
 Corporation pays for an employee’s entire tuition and books up front
(nontaxable up to $5250 per year)
 To help the business advance professionally and become accomplished employees

III. Food Service/ Subsidized cafeterias

 offer free or subsidized lunches that most firms can get a high payback in terms of employee relations
 Keeping the lunch hour to a minimum
 Healthy choice of menus by providing calories list instead of prices

IV. Scholarship for Dependents

 provide scholarships for dependents of employees
 Scholarship programs can help boost employee recruitment and retention
V. Relocation
 Financial benefit that companies provide to assist new and current employees in moving form one
location to another because the job requires it.

VI. Domestic Partner Benefits and Same-Sex Marriage

 DPB are an important step toward equal pay for equal work
 Provide a safety net for employees, enabling employee to focus more on their work
 Provide a basis for comparison of policies, legal hurdles, coverage, and costs
 The employer support same-sex couples lawfully married to receive the same federal benefits as
heterosexual couples, such as possible tax advantages by filing jointly, benefits for veterans’ spouses,
and inheritance-tax exemptions.
PREMIUM PAY , HAZARD PAY , SHIFT
DIFFERENTIAL AND VOLUNTARY BENEFITS
 Premium Pay
 Compensation paid to employees for working long periods of time or working under dangerous or
undesirable conditions
 Payment for overtime is legally required for nonexempt employees who work more than 40 hours in a given
week.
 Hazard Pay
 Additional pay provided to employees who work under extremely dangerous conditions

 Shift differential
 Additional money paid to employees for the inconvenience of working less-desirable hours.

 Voluntary Benefits (Supplemental Benefit)

 Benefits that are 100 percent paid by the employee but the employer typically pays the administrative cost
 To increase job satisfaction, decrease time off and reduce stress
 Four categories: health (Gym membership) , wealth accumulation (Legal service), security (theft protection)
and unique personal interests or requirements (flexible work hour)
EMPLOYEE BENEFITS
LEGISLATION
 There are seven pieces of important federal legislation related to employee benefits.
 They are -
1) Employee Retirement Income Security Act
2) Consolidated Omnibus Budget Reconciliation Act
3) Older Workers Benefit Protection Act
4) Health Insurance Portability and Accountability Act
5) Family and Medical Leave Act
6) Pension Protection Act
7) Patient Protection and Affordable Care Act
I. Employee Retirement Income Security Act
 Was established in 1974 to protect employee benefits rights
 Companies must provide their employees with straightforward descriptions of their employee
benefit plans, updates when substantive changes to the plan are implemented, annual synopses on
the financing and operation of the plans, and advance notification if the company intends to
terminate the benefits plan
 ERISA gives participants the right to sue when there is a breach of fiduciary duty

II. Consolidated Omnibus Budget Reconciliation Act

 Was established in 1985
 To give employees the opportunity for continuing group health insurance coverage for employees
and their families after termination, layoff, or other changes in employment status.
 The act applies to employers with 20 or more employees.
 For up to 18 months after their employment ceases
 There are also certain qualifying events can extend this coverage for up to 36 months
 The individual must pay full cost of insurance plus small administrative premium.
III. Older Workers Benefit Protection Act
 Was established in 1990 to offer older workers (who are 40 or over 40) benefits that are the same
with the benefits offer to young workers
 It acts as a safety net to ensure older and vulnerable workers aren’t unfairly laid off from work and
don’t experience age discrimination
IV. Health Insurance Portability and Accountability Act
 Was established in 1996
 To provide protection for Americans to make health insurance portable and continuous for
employees and to eliminate the ability of insurance companies to reject coverage for individuals
because of a pre-existing condition.

V. Family and Medical Leave Act

 was established in 1993 to help employees balance work demands and personal needs
 FMLA guarantees that health insurance coverage is maintained during the leave and the employee
has the right to return to the same or an equivalent position after a leave
 The Act applies to provides employees up to 12 weeks a year in specified situations.
 FMLA rights apply only to employees who have worked for the employer for at least 12 months
 Some examples: leave opportunities for the military, time allowing to see doctors if an employee
has chronic health condition
VI. Pension Protection Act
 Was established on August 17, 2006
 To make sure that workers would receive the pensions that they were promised and
 To improve options for funding their own retirement [ 401(k) plan ]
 401(k) plan – a defined-contribution, retirement savings plan that is sponsored by one’s employee

VII. Patient Protection and Affordable Care Act

 Was enacted on March 23, 2010 and is also called “Obama Care”
 To expand the Medicaid program to cover more people with low income
 Some of the major features of the bill:
1. All individuals are required to have health insurance coverage.Those who choose not to have insurance
will pay a penalty.
2. Employers are required to offer employees affordable health insurance by offering wage-based
premiums where lower-wage earners pay less than who are highly paid.
3. Children can stay on their parents’ policy until they are 26.
4. Insurance companies cannot cancel a policy if the insured gets sick.
5. A person cannot be denied insurance simply because of a pre-existing condition.
6. There is no maximum limit on insurance coverage.
7. There is no waiting time with regard to coverage for pre-existing conditions.
CUSTOMIZED BENEFIT PLANS
 Customized benefit plan - Benefit plan that permits employees to make yearly selections to
largely determine their benefit package by choosing between taxable cash and numerous
benefits.
 With four generations of workers now in the workplace, customization and flexibility become
important in developing a benefits package that meets the needs of everyone.
 Customized plans permit flexibility in allowing each employee to determine the compensation
components that best satisfy their needs and also effectively communicate to them the cost of
their benefits.
 But organizations cannot permit employees to select all their benefits. At the time, they must
provide the benefits required by law
GLOBAL CUSTOMIZED
BENEFITS
 There are three basic groups of global benefits: government-provided, government-mandated, and
voluntarily provided by the company.
 Government-provided benefits are administered and provided directly by the government. Typically
they consist of health care and retirement benefits.
 Government-mandated benefits are those provided by employers because the law requires them to
do so.
 Voluntary benefits are provided at the discretion of the employer.
 The first thing that a firm must do when considering a benefit package in the global environment is
to establish a global corporate benefits strategy and determine what the company identity should be.
 Global companies must recognize that a standardized benefits program for all employees may be
impractical and unsuccessful in achieving key benefits objectives.
 Employers must understand the culture of each country because the culture will have a major
impact on the benefits workers desire.
SUMMARIZE THE ISSUES OF
COMMUNICATION INFORMATION ABOUT
BENEFIT PLANS
 Employee benefits can help a firm recruit and retain a top-quality workforce.
 And, organizations spend millions of dollars each year for benefits.
 Yet, many do not do a good job of communicating the value of this investment to the
employees.
 Some firms have to apply seven pieces of federal legislations for employee benefits.
 The trend in the United States is to customize benefit plans and not offer a uniform package
that generally reflects a typical employee because going global has its challenges with regards
to total rewards.
WORK-LIFE BALANCE
 Effective work–life balance programs focus on solving any personal issues that can detract
from an employee’s work.
 For employers, creating a balanced work–life environment can be a key strategic factor in
attracting and retaining the most talented employees.
 By providing such an environment, employees are better able to fit family, community, and
social commitments into their schedule.
 Some corporations provide five options that give employees flexibility on when, how, and
where they work.
 These include flextime, compressed workweek, job sharing, two-in-a-box, telecommuting,
and part-time work.
 Flextime
 Practice of permitting employees to choose their own working hours, within certain limitations.
 In a flextime system, employees typically work the same number of hours per day as they would on a
standard schedule a bandwidth, the maximum length of the workday.

 Flextime is not suitable for all types of organizations. For example, its use may be severely limited in
assembly-line operations and companies using multiple shifts.
 Compressed Workweek
 Any arrangement of work hours that permits employees to fulfill their work obligation in fewer days than
the typical five-day workweek.
 A common compressed workweek are four 10-hour days and four 9-hour days and a half day on Friday.
 the compressed workweek offers the potential for better use of leisure time for family life, personal
business, and recreation
 Job Sharing
 Two part-time people split the duties of one job in some agreed-on manner and are paid according to
their contributions.
Example: Rocco and Levine are joint program manger for Explorer Crossover.
Rocco worked Monday, Wednesday, and Thursday, and Levine worked Tuesday, Wednesday, and
Friday. Both worked about 40 hours a week each.

 Job sharing also provides a means of encouraging older workers to remain on the job past retirement
age. Sharing jobs has potential benefits that include the broader range of skills the partners bring to
the job
 Two-in-a-Box
 Some companies are giving two executives the same responsibilities and the same title and letting
them decide how the work is to be divided. Unlike job sharing, it is a fulltime job for both executives.
 A major advantage of this approach is that it can ease transition, permitting a newer manager to learn
from a more experienced manager.
 Problems certainly can occur as the egos of two executives meet.
 Telecommuting
 Work arrangement whereby employees are able to remain at home and perform their work using computers
and other electronic devices that connect them with their offices.
 Telecommuting has become more popular in recent years because of traffic congestion and frustration with
commuting and high gas prices.
 Employees can accomplish both training and job duties without losing either efficiency or quality by using
the Internet.
 Telecommuting can eliminate the need for office space.
 Finally, telecommuting is being used as an alternative for executives who are unwilling to relocate. If the
company is willing to permit the executive to not work out of headquarters, telecommuting may be the
answer.
 Part-Time Work
 Historically, part-time employees have been viewed as basically second-class citizens.
 These were the workers who reluctantly accepted a low-paying job until a full-time career break occurred.
 Today, increasing highly educated professionals are choosing part-time opportunities in their fields to
address both job and personal needs.
 Therefore, part-time work is also an alternative for ones who focuse not just on career targets but also on
larger life goals.

**………………………………………………………………………………………**
LABOUR UNIONS
AND COLLECTIVE
BARGAINING
WHAT MEAN LABOUR UNION?
 Labour unions
Organizations that exist to represent the interests of employees
in the workplace and to ensure fair treatment when conflicts
arise between one or more employee and management.
 Collective bargaining
The process in which labour union leadership enters into good
faith negotiations with management representatives over terms
of employment such as work hours, pay and job security.
 Collective Bargaining agreements
Written documents that describe the terms of employment
reached between management and unions
WHY DO UNIONS EXIST?
 Thanks to the efforts of labor unions, workers have achieved
higher wages, more reasonable hours, safer working conditions,
health benefits, and aid when retired or injured.
 Labor unions were also instrumental in ending the practice of
child labor.
 They have exerted a broad influence on employees’ life, reshaping
the political and economic of the country.
 In 1991, the coalition of affiliated unions formed the Federation of
Trade Unions of Burma (FTUB) as an underground Labour
movement in Myanmar.
 In 2014, the union was renamed as the Confederation of Trade
Unions, Myanmar (CTUM).
 In July 2015, Myanmar's Ministry of Labour, Employment and
Social Security officially registered CTUM as a trade union.
WHY EMPLOYEES JOIN
UNIONS
 Individuals join unions for different reasons: job,
personal, social or political considerations.
 From HR professional’s standpoint, the issues
associated with employees’ dissatisfaction with
management are most relevant.
 Some of the common reasons that can cause
employees to join Unions
Compensation and employee benefits
Job Security
Attitude of Management
UNION STRUCTURE
 The Labour movement has developed a multilevel organizational structure.
 It is easiest to differentiate among three distinct levels within the labor movement: local
unions, national unions, and federations- the AFL-CIO and the change to wain Coalitation.
Local union
Through the local, individuals deal with employer on a day-to-day basis.
Two basic kinds of local unions: Craft and industrial
Its two important activities are administering the collective bargaining agreement and
representing workers in handling grievances.
Other functions-keep informed and promoting membership, maintain effective contact with
national union and negotiating with management at local level
National Union
A national union is composed of local unions and it is the parent organization to local unions.
The Service Employees International Union (SEIU) is the largest and fastest-growing national
union in North America.
The national union is governed by a national constitution and a national convention of local
unions.
The national union is active in organizing workers within its jurisdiction, engaging in collective
bargaining at the national level and assisting its locals in their negotiation.
Other functions- provide numerous educational and research services for its locals, dispense strike
funds, publish the union newspaper, provide legal counsel and actively lobby at national and state
levels.
Federations
A federation is an association of unions.
American Federation of Labor and Congress of Industrial Organizational(ALF-CIO)
The AFL-CIO is a voluntary federation of 56 national and international labor unions representing
12.5 million members according to its Web site, including about 3 million members in Working
America, its community affiliate.
The federation’s major activities focus on improving the image of organized labor and lobbying on
behalf of labor interests. Also, politically educating constituencies is crucial, as is resolving disputes
between national unions and policing internal affairs of member unions.
Change to Win Coalition
The Change to Win Coalition is a union federation consisting of unions that broke from the AFL-CIO
and formally launched a rival labor federation representing 6 million workers from seven labor
unions.
The coalition, led by the SEIU, focuses its energies on new membership growth and not as much on
lobbying.
PREVALENCE OF UNIONS
 There are possible reasons for declining in unionization and this book provides five of these.

1. In past decades, unions often intimidated workers to become members even if they did not care to
do so.
2. Historically, unions provided a voice to protect the rights of disadvantaged groups, including
women, older workers, and racial minorities. But, in the 1960s, antidiscrimination laws such Tilt
VII of the Civil Rights Act instituted Protections.
3. Globalization of business is believed to have contributed substantially to the decline in
unionization in a variety of ways.
4. Large companies are establishing new facilities in states where unionization rates are low.
Moreover, Right-to-work laws take effect in reduction of union members.
5. Unionization is substantially higher in the public or government sector than in the private sector.
Still, public sector unionization is being challenged throughout the country. Traditionally, there
was much less resistance to unionize in the public sector than in the private sector. But the tide is
changing.
ORGANIZED LABOUR
STRATEGIES FOR A
STRONGER MOVEMENT
There are the following strategies that had not been used for union membership to be lower.
 Strategically located Union members

The importance of the jobs held by union members significantly affects union power. The type of
firm that is unionized can also determine a union’s power. Through control of key industry, a union’s
power may extend to firms that are not unionized.
 Pulling the Union Through

One union that has worked effectively at times is to put pressure on the end user of a company’s
product to have a successful organizing attempt.
 Political Involvement

The political arm of the AFL-CIO is the Committee on Political Education (COPE). Founded in
1955, its purpose is to support politicians who are friendly to the cause of organized labor. The
union recommends and assists candidates who will best serve its interests. In presidential and
congressional elections, union support may have a significant impact
 Union salting

Union salting is the process of training union organizers to apply for jobs at a company and, once
hired, working to unionize employees. An employee who serves this role is known as a “union salt.”
There have been a variety of court cases regarding legal protections for union salts. There have been
a variety of court cases regarding legal protections for union salts.
 Flooding the Community

Flooding the community is the process of the union inundating communities with organizers to
target a particular business in an organizing attempt. With their flooding campaigns, unions
typically choose companies in which nonunionized employees have asked for help in organizing.
Generally, organizers have been recruited and trained by the national union.
 Public Awareness Campaigns

Public awareness campaigns involve labor maneuvers that do not coincide with a strike or an
organizing campaign to pressure an employer for better wages, benefits, and the like. Increasingly,
these campaigns are used as an alternative to strikes because more employers are willing to replace
their striking employees.
 Building organizing funds

To encourage workers to come together, the AFL-CIO often asks its affiliates to increase organizing
funds. The federation may also increase funding to its Organizing Institute, which trains organizers,
and even launches advertising campaigns to create wider public support for unions. National unions
also create organizing funds.
 Unions Partnering with High Schools

Some high schools are pairing up with labor unions to prepare students for a career. The goal of this
program is to bring people into the union at a younger age.
 Organizing Young Worker

A major strategy now being pursued by union organizers is to recruit younger workers, and it may be
coming at the right time because the lowest union membership rate is occurring among this group. In
the past, younger organizers were often considered second-class citizens.
 Organizing through the Card Check

The card check is an organizing approach by labor in which employees sign a nonsecret card of
support if they want unionization, and if 50 percent of the workforce plus one worker sign a card, the
union is formed. It permits workers to decide in a nonsecret election their union status
LAWS AFFECTING
COLLECTIVE BARGAINING
 A variety of laws influence the collective barraging process and outcomes.

National Labour Relations Act (Wanger Act)

Labour-Management Relations Act (Taft-Hartley Act)
Antidiscrimination Laws and Executive Orders
STEPS THAT LEAD TO
FORMING A BARGAINING
UNIT
 A bargaining unit consists of a group of employees, not necessarily union members,
recognized by an employer or certified by an administrative agency as appropriate for
representation by a labor organization for purposes of collective bargaining.
 When workers desire to become the bargaining representative for a group of employees,
several steps leading to certification have to be taken.
COLLECTIVE BARGAINING
 Once the NLRB certifies the union, labor and management can engage in collective
bargaining.
 The four major structures are one company dealing with a single union, several companies
dealing with a single union, several unions dealing with a single company, and several
companies dealing with several unions.
 The process can become quite complicated when several companies and unions are involved
in the same negotiations.
 However, even when there is only one industry involved and one group of workers with
similar skills, collective bargaining can be very difficult.
COLLECTIVE
BARGAINING
PROCESS
• The collective bargaining process is
fundamental to union and management
relations.
• Regardless of the current state of labor–
management relations, the general
aspects of the collective bargaining
process are the same and are illustrated..
• Regardless of the complexity of the
bargaining issues, the ability to reach
agreement is the key to any successful
negotiation.