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Employee And Labour Relations: American Industry

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Question:

Describe about the Employee and Labour Relations for American industry.

 

Answer:

About City of St. Albans

City of St. Albans was founded in the year 1894. It has grown steadily over the years and serves an area of approximately 3.6 sq meters (Saxon, 2014). There are a total of 24 police officers in the department. It is a full service and community oriented police department. It is located in Franklin Country (Saintalbanspolice.com, 2016). There are a number of important tasks played by the department, such as bike patrol, drug investigation, special enforcement unit and others (Saintalbanspolice.com, 2016). The other officers are entitled the responsibility of administrative duties.

Background

The City of St. Albans has a trade union consisting of the police force. The employees are facing serious issues due to which they are demanding a contract renewal. The cost of living in the United States of America is increasing at a rapid rate. The cost of bare necessities as well as the luxuries is increasing day by day (Winters, 2013). The citizens need to have more income in order to enjoy a secure and modest lifestyle. The cost of food, housing, healthcare, transportation and others is rising at a steady rate. The approximate average cost for a single adult is $4520 and the annual cost of living expenses for the same adult is $54,240 (Bls.gov, 2016). The average monthly expenditure of a married couple is $56, 406 (approx.) (Bls.gov, 2016).  This implies that the police officers should earn a considerable amount of money in order to sustain in a country like USA.

The Issue

The primary issue is the lack of pay hike in the last 10 years for the police officers. We are having the same compensation structure over the years, which is making us difficult to sustain our family. In a country like the USA, it is not possible to meet the increasing expenses with this outdated compensation structure (Brock, 2013). We have also found out that our compensations are below the national levels. Our  peers are earning a salary which is far above than ours. We have the same skills, expertise, experience and identical job roles. The only differentiating factor is our remuneration. Even after demonstrating excellent work performance, our remuneration is not competitive and is far below the market average (Brock, 2013). This is an area of concern to us and we would like you to probe into this matter.

Present compensation structure

The average salary of Police Officers at St. Albans is $36,368 (Saintalbanspolice.com, 2016). The salary package of new Police Officer is approximately $30,457 (Saintalbanspolice.com, 2016). There is an increase in the hourly pay rate or salary structure after gaining sufficient work experience, usually applicable to all the industries. However, this is not the case in St. Albans. We are working for several years in this organizations, still we do not receive a competitive salary. It is estimated that the average income of the police officers after several years of service would be $43,528, however, we are receiving a much lower compensation package (Bls.gov, 2016).

National compensation structure

The national compensation package of the police officers in the United States of America is $61, 270 with the mean hourly wage being $29.45 (Bls.gov, 2016).

Employment 

Employment
RSE

Mean hourly
wage

Mean annual
wage

Wage RSE

 

653,740

 

0.6 %

 

$29.45

 

$61,270

 

0.8 %

Fig: Compensation Structure of Police Officers in U.S.A

Source: Bls.gov 2016

It is evident from this chart that our peers are drawing a huge amount of salary as compared to us. The difference between our salaries and the national average in very high, which is a disturbing trend.

Need for competitive salary

It is a common belief that giving compensation to the employees is a huge burden for the organization. However, this is not true. You should not perceive the salary as an expenditure, but rather as an investment. The human resource of an organization is the most important aspect of a organization (Armstrong & Taylor, 2014). It decides the success or the failure of an organization. It is not important whether the organization is included in the Fortune 500 list or it is a newly conceived organization. The important factor in organizational effectiveness is the competitive salary offered to the employees (Mowday, Porter & Steers, 2013). The salary of an organization is the reflection of the skills possessed by the employees of the organization. There should be a transparency in the compensation structure so that the employees feel motivated in the professional environment. It is important for the organization to design a compensation structure which is equivalent or more than the similar organizations in the market (Wong, Gygax & Wang, 2015). This would help the organization to retain talented employees in the system. It is essential for the human resource manager to design suitable salary package for each individual job description. The salary package should not be based on the skills, expertise and experience of the police officers, but it should be based on the level of complexity of the job position. If you are hiring a specialized skill set, then the employees would be engaging in salary negotiations (Snell, Morris & Bohlander, 2015). You should realize the importance of compensation and benefits in the organization and for this purpose it is important to gather sufficient amount of knowledge. One of the primary reasons of the competitive salary package is the increased cost of living in the United States (Van Parijs & Vanderborght, 2015). It is the most expensive country in the world and hence we need sufficient salary to sustain in the country.

Benefits of salary hike

There are several benefits of competitive salary package- employee engagement, lower attrition rate, enhanced employee satisfaction rate, increased productivity, greater co-operation in the workplace and others (Osibanjo et al., 2014). The designing of suitable salary package would result in higher level of employee engagement as it would act as a motivating factor for the employees. If the employees observe that they are getting competitive salary package, then they would be inspired to perform their job in a better way. It would increase the productivity of the employees. This would lead to increased reputation of the organization. One of the most significant benefits of a salary hike is the lower attrition level (Terera & Ngirande, 2014). The employees would prefer to stick to the organization for a longer period of time (Chang, Wang & Huang, 2013). They would not search for job in other organizations. The cost of hiring a new employee is much more than retaining an existing employee (Javed & Javed, 2013). The increased job satisfaction leads to greater co-ordination in the workplace between the employees.

 

Designing a competitive pay package

The process of designing a competitive compensation structure is a great challenge for the organization (Gomez-Mejia, Berrone & Franco-Santos, 2014). The following procedures can be followed while devising a compensation scheme-

Job Analysis- This is the process of analyzing the vacant positions in the organization. This step involves the generation of the job description which includes a summary of the job tasks, job title, list of core responsibilities, required qualifications, experience and other key parameters of the particular job opening (Gomez-Mejia, Berrone & Franco-Santos, 2014).

Job Evaluation- This process involves the determination of the relative value of the jobs in a particular organization. The outcome of this step is the formulation of an internal structure or internal hierarchy of the jobs. There are three methods of job evaluation such as the ranking, classification and the point method (most popular one) (Gomez-Mejia, Berrone & Franco-Santos, 2014). This method is useful for aligning the pay structure in a strategic maner. This method also makes sure that the employees perceive the compensation structure to be fair and just.

Pay Policy Identification- The process of determining if the particular organization wants to stay ahead, lag or be equivalent to the current market standard is known as pay policy identification. This policy would affect the retention of the employees. The various pay policies usually varies across the job categories and the different job levels.

Pay Survey Analysis- This process involves the comparison of the various compensation data collected from various surveys. This process involves the collection of data from external sources which measures a number of parameters such as salary, bonus, benefits and others (Gomez-Mejia, Berrone & Franco-Santos, 2014). This makes sure that the organization has competitive compensation structure.

Pay Structure Creation- This is the final step which involves the merging of the internal compensation structure with the external market pay structures. A simple regression can be used to develop the final pay scale of the organization (Gomez-Mejia, Berrone & Franco-Santos, 2014). The final step should consist of incorporating parameters such as pay grade, pay range, scale of pay and others.

Power of Unionized Police force

The group of employees which is intended for the representation of the collective interests of the employees in terms of working hours, wages, working conditions, benefits and other issues is termed as labour unions (Ashford.edu, 2016). The labor unions lead to the collective bargaining power of the employees (Ashford.edu, 2016). This also gives a platform to the employees to communicate their grievances to the management. Our grievances are reviewed by the union representatives and the existence of the grievance is established. The union representatives have found out that the issue of the poor compensation structure is a legitimate one and hence it should be addressed by the management (Ashford.edu, 2016). Our grievance has been communicated to the union steward and he has fully supported us regarding the content of the grievance.

Proposition

We are proposing the following points to the Governing Board of the City of Albans. We hope that our grievances would be given sufficient importance-

  • Increase in the monthly compensation of police forces
  • Minimal annual compensation- $61, 270 (approx.)
  • Introduction of benefits and perks
  • Yearly increment
  • Cooperation of the management
  • Competitive compensation package

We are hoping for a positive reply from your side as our issues are genuine and needs your immediate attention. The management would decide the future course of action and it would greatly affect the performance of the human resource. Please consider the issue and we are looking forward to the best solution provided by you.

 

References

Armstrong, M., & Taylor, S. (2014). Armstrong's handbook of human resource management practice. Kogan Page Publishers.

Brock, J. (2013). The structure of American industry. Waveland Press.

Chang, W. J. A., Wang, Y. S., & Huang, T. C. (2013). Work design–related antecedents of turnover intention: A multilevel approach. Human Resource Management, 52(1), 1-26.

Gomez-Mejia, L. R., Berrone, P., & Franco-Santos, M. (2014). Compensation and organizational performance: Theory, research, and practice. Routledge.

Javed, L., & Javed, N. (2013). An empirical study on the factors that affect Employee Motivation and their relationship with job performance.International Journal of Management Sciences, 1(4), 114-24.

Mowday, R. T., Porter, L. W., & Steers, R. M. (2013). Employee—organization linkages: The psychology of commitment, absenteeism, and turnover. Academic press.

Online Colleges & Online University | Ashford University. (2016). Ashford.edu. Retrieved 30 August 2016, from https://www.ashford.edu

Osibanjo, A. O., Adeniji, A. A., Falola, H. O., & Heirsmac, P. T. (2014). Compensation packages: a strategic tool for employees' performance and retention. Leonardo Journal of Sciences, (25), 65-84.

Saint Albans Police Department. (2016). Saintalbanspolice.com. Retrieved 30 August 2016, from https://saintalbanspolice.com/

Saxon, S. (2014). Identify ways in which the St Albans community can increase their local food resilience in an ever increasing urban environment.

Snell, S. A., Morris, S. S., & Bohlander, G. W. (2015). Managing human resources. Nelson Education.

Terera, S. R., & Ngirande, H. (2014). The impact of rewards on job satisfaction and employee retention. Mediterranean Journal of Social Sciences, 5(1), 481.

U.S. Bureau of Labor Statistics. (2016). Bls.gov. Retrieved 30 August 2016, from https://www.bls.gov

Van Parijs, P., & Vanderborght, Y. (2015). Basic income in a globalized economy. Inclusive Growth, Development and Welfare Policy: A Critical Assessment, Nueva York, Routledge, 229-247.

Winters, J. V. (2013). Human capital externalities and employment differences across metropolitan areas of the USA. Journal of Economic Geography, 13(5), 799-822.

Wong, L. H. H., Gygax, A. F., & Wang, P. (2015). Board interlocking network and the design of executive compensation packages. Social Networks, 41, 85-100.

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