Despite the mounting determination from management bodies to smother the influence unions have over wage control, little has been achieved on that front. It is common to find managers adjusting rewards and wages upwards the moment union activity is detected. Presently, unions are experiencing increasing challenges as they strive to ensure employees have humane working conditions and fair compensation. There are four critical areas in which these unions have significant influence. They have asserted influence over general wage levels. Over the years, concessions in wages have gained prominence, particularly in unionized organizations, especially during periods of low economic performance. This is attributed to unions’ opposition to cuts in wages (Milkovich, Newman & Gerhart, 2011).
The second area in which unions have influence over is in the structuring of wage packages. A key area of concern under wage packages is the detachment existing between benefits and direct wages. Under unionized corporations, deliberate benefits total up to about 36.9% of an employee’s total package. Employees in nonunionized organizations take away 27.8% worth of similar benefits. As can be seen, not only is the package bigger under unionized firms, there is substantial share apportioned to benefit as well. In addition, unions have led to the evolution of what is commonly referred to two tier plans (Milkovich, Newman & Gerhart, 2011). This plan works on the idea that there should be varied wage structures depending on when employees were hired. There is an agreement to the effect that employees hired after a given period should receive a lower wage than their counterparts on the same job group. Unions championed for these plans as they considered them much fairer than wage freezes or salary cuts for existing employees (Trades Union Congress & Low Pay Network, 2003).
Although there has been a significant degeneration in wage settlement by unions over the years, it is worth noting their contribution to the spillover effect. Employers at nonunionized firms opt to offer good working conditions and wages that match those of employees in unionized firms. In return, they enjoy freedom from the interference by unions, which provides evidence of the influence unions have over wage control. Of greater interest to compensations administrators is the role the unions play in shaping wage and salary policy practices. Contracts from collective bargaining settlements specify that jobs should be remunerated on an hourly basis. Employees are subject to pay if they work beyond normal working hours (Milkovich, Newman & Gerhart, 2011).
Milkovich, G. T., Newman, J. M., & Gerhart, B. A. (2011). Compensation. New York: McGraw-Hill Irwin.