Types of pay structure

Pay structures can be distinguished by two key characteristics: the number of grades,

levels or bands; and the width or span of each grade. For example:

1. narrow-graded pay structures, often found in the public sector, typically

comprise ten or more grades, with jobs of broadly equivalent worth in each grade.

Progression is by service increments, although due to narrow grades employees can

reach the top of the pay range relatively quickly, potentially leading to ‘grade drift’

and jobs ranked more highly than justified

2. broad-graded structures have fewer grades, perhaps six to nine, and greater scope

for progression that can counter ‘grade drift’ problems

 3. broad-banding involves the use of an even smaller number of pay bands (four or

five). Designed to allow for greater pay flexibility, typical broad -banding would

place no limits on pay progression within each band, although some employers have

introduced a greater degree of structure

4. job families group jobs within similar functions or occupations, with separate pay

structures for different ‘families’ (e.g. sales or IT staff). With around six to eight

levels, similar to broad-grading, job family structures allows for higher rates of pay

for sought-after specialist staff

5. career families extend the metaphor with a common pay structure across all ‘job

families’ rather than separate pay structures for each family. Career families tend

to emphasise career paths and progression rather than the greater focus on pay of

job families.
The Collective Bargaining Process
What Is Collective Bargaining?

 Both management and labor are required by law to negotiate wages, hours, and terms and
conditions of employment “in good faith.”

What Is Good Faith Bargaining?

 Both parties communicate and negotiate.

 They match proposals with counterproposals in a reasonable effort to arrive at an

agreement.

 Neither party can compel the other to agree to a proposal or to make any specific
concessions.

The Collective Bargaining is the process wherein the unions

(representatives of employees or workers), and the employer (or their
representative) meet to discuss the issues related to wage, the number of
working hours, work environment and the other terms of the
employment.
 There are four types of Collective Bargaining classified on the basis of
their nature and the objectives, and can be practiced depending on the
different situation requirements.

Types of Collective Bargaining

1.
Conjunctive or Distributive Bargaining: In this form of collective
bargaining, both the parties viz. The employee and the employer try to
maximize their respective gains. It is based on the principle, “my gain is
your loss, and your gain is my loss” i.e. one party wins over the other.

The economic issues such as wages, bonus, other benefits are discussed,
where the employee wishes to have an increased wage or bonus for his
work done, whereas the employer wishes to increase the workload and
reduce the wages.

2. Co-operative or Integrative Bargaining: Both the employee and the

employer sit together and try to resolve the problems of their common
interest and reach to an amicable solution. In the case of economic crisis,
such as recession, which is beyond the control of either party, may enter
into a mutual agreement with respect to the working terms.

For example, the workers may agree for the low wages or the
management may agree to adopt the modernized methods, so as to have
an increased production.

3. Productivity Bargaining: This type of bargaining is done by the

management, where the workers are given the incentives or the bonus
for the increased productivity. The workers get encouraged and work
very hard to reach beyond the standard level of productivity to gain the
additional benefits.

Through this form of collective bargaining, both the employer and the
employee enjoy the benefits in the form of increased production and the
increased pay respectively.

4. Composite Bargaining: In this type of collective bargaining, along with

the demand for increased wages the workers also express their concern
over the working conditions, recruitment and training policies,
environmental issues, mergers and amalgamations with other firms,
 pricing policies, etc. with the intention to safeguard their interest and
protect the dilution of their powers.

Thus, the purpose of the Collective Bargaining is to reach a mutual

agreement between the employee and the employer with respect to the
employment terms and enjoy a long term relationship with each other

Process

1. Preparation: At the very first step, both the representatives of each

party prepares the negotiations to be carried out during the meeting.
Each member should be well versed with the issues to be raised at the
meeting and should have adequate knowledge of the labor laws.

The management should be well prepared with the proposals of change

required in the employment terms and be ready with the statistical
figures to justify its stand.

On the other hand, the union must gather adequate information

regarding the financial position of the business along with its ability to
pay and prepare a detailed report on the issues and the desires of the
workers.

2. Discuss: Here, both the parties decide the ground rules that will guide
the negotiations and the prime negotiator is from the management team
who will lead the discussion. Also, the issues for which the meeting is
held, are identified at this stage.

The issues could be related to the wages, supplementary economic

benefits (pension plans, health insurance, paid holidays,
etc.), Institutional issues(rights and duties, ESOP plan), Administrative
issues(health and safety, technological changes, job security, working
conditions).

3. Propose: At this stage, the chief negotiator begins the conversation with
an opening statement and then both the parties put forth their initial
demands. This session can be called as a brainstorming, where each
party gives their opinion that leads to arguments and counter arguments.
4. Bargain: The negotiation begins at this stage, where each party tries to
win over the other. The negotiation can go for days until a final
agreement is reached. Sometimes, both the parties reach an amicable
 solution soon, but at times to settle down the dispute the third party
intervenes into the negotiation in the form of arbitration or adjudication.
5. Settlement: This is the final stage of the collective bargaining process,
where both the parties agree on a common solution to the problem
discussed so far. Hence, a mutual agreement is formed between the
employee and the employer which is to be signed by each party to give
the decision a universal acceptance.

Thus, to get the dispute settled the management must follow these steps
systematically and give equal chance to the workers to speak out their
minds.

Prerequisites of Collective Bargaining:

(i) Both parties (employer and employees) should realise the
need of collective bargaining.

(ii) Both parties should try to solve the problems through

negotiations sincerely and honestly.

(iii) A single plant bargaining is considered better than a

multiple plant bargaining. In single plant bargaining, there is
a bargain between a single employer and single union.

(iv) Both parties should present facts and figures on the

discussion table. Their approach should be constructive in
order to resolve the problems.

(v) The management should pay reasonable wages and any

unfair labour practice should be avoided.
(vi) If any agreement is reached, it must be a written
document.