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What is Wage-Bargain Effort?

What do you understand by the term 'Wage-Effort Bargain'? To what extent does it inform your understanding of the ways in which Management controls the Workforce and the Workforce may resist?

Bargaining is the concept that can be defined as the argument made between the two parties with different chokices to take out the final conclusion. This essay argues about the bargaining concept in effort and wages decision of the employees at the workplace. This essay describes the basic element of the wage-effort bargain theory along with the information that has been provided by the theory to the management and the resistant behaviour of the workers.

Definition: The wage- bargain effort is theory that is introduced to have a bargaining relationship between the employees and the company. According to this theory, the employees and the company bargain with each other for the wages and also for the efforts that has been made by the employees in the company.


Relationship between wage and efforts of the workers is very common. It has been analysed that this relation is based on the wages that has been given by the employer to the employees who works for the company. This relation brings the conflict between the employer and the workers regarding the wage provided to the employees in terms of the continuous efforts they are doing for the employer (Daley, 2012.). Effort bargain is the concept that suggests that employees always wants to hold back the rewards that they are getting for the efforts they are making in their job but it has been identified that bargaining has developed between the employees and the employer because there exists the inequalities between the two of them. Time and motion study is conducted in order to understand the actual concept behind the effort wage theory. It analysed that the fair standard of hours have been set by the employer or the employees. This is the time in which the employees can make average efforts to give average performance. The employers hope that this effort is increased by the employees to provide more efficient performance. The conflict that rises in this situation is that the employer thinks that employees are not doing well and the employees think that they are doing well. Better in-depth knowledge of the topic can be understood by studying the two dimensions of the production process. The production process is taken as the example because it results in better understanding of the dimensions (Rossi, Luinstra and Pickles, 2014). The first dimension of the production process is number of workers that are being employees in the process and the second dimension is the level of efforts the employees exert. This helps in understanding of the impact of unionisation. No individual employees conduct the activity of bargaining but it is done by the worker’s union. It has been analysed that the union can only have the power to bargain over the wages when there is less supply of employees (Zoller and Fairhurst, 2007). It has been identified from the concept that union representatives of the company or form focuses on conducting bargain on wages as well as on efforts. Either they want to be provided with higher pay or want to be provided with lesser work. This conflict between the employers and the employees is very general and obvious. The reason behind this conflict is that the managers and the employees have different set of minds regarding the efforts and the wages for those efforts. Employees try to get more wages over fewer efforts and the managers try to make the employees work for more hours in less pay (LaJeunesse, 2009). Earlier, when the organization used to have union labour, this problem is resolved by the unions and the employers but now a day many institution of government are intervening in this issue of wages and bargaining. So, the bargaining is not only the concern of the employers and the employees but it has also become the concern of the government to remove the unethical practices by the employers to exploit the employees by paying them low wages for more efforts.

Relationship between Wage and Efforts of Workers

Definition: Collective bargaining can be defined as the process of negotiation in which the wages and the other factors in of the business and the company is negotiated between the employees and the employers in order to get the win-win situation for both the parties. This negotiation is done in order to develop fairness in the processes. It is the concept that needs to be studied in order to understand the elements of wage-effort bargaining. This is because this concept is very much reacted to this theory of wage effort bargaining.


Collective bargaining is the term that can be used to define the bargaining functions between the employers and the employees. It has been analysed that bargaining is the important element of the relationship between the employer and the employees. It has been identified that there are difference in the practices of the countries regarding the wage effort bargaining, this is because of different types of workers and the difference in the interference of the regulatory in the bargaining concept (Kaufman, 2007). If the example of Germany is considered, it has been analysed that there is confusion in the bargaining concept as there is dual system. The system considers worker representative and codetermination as well. The UK case is even more interesting, In UK, the union leader trend has not completely diminished with the introduction of collective bargaining by the employers but the trade unions have changed their roles into monitoring of the working processes.

The work-effort bargain is the theory that also provides the information about the management and the workers relation with each other and the functions of the management in order to handle the workers at that time (Chan and Hui, 2014). As manager is the one who needs to deal with the workers, there exist two situations. The first situation is when there is more supply of workers. In such cases, management have more control on workers. This is because there is more supply of workers in the market and the management of the company can easily get the workers. Thus at this time the workers needs to agree on the wages decided by the management. This is because the bargaining power is in the hands of the management (Lee and Rupp, 2007). At this time, the workers may also need to make more efforts for earning less and the criteria of earning incentives are also not there. If the side of the concept is discussed, it has been analysed that it is the case when the bargaining power is in the hands of the workers. This is because the supply of workers is less in the market and the management has to get ready on the wages that are decided by the workers association. At this time workers can also get the chance to earn incentives if they make more efforts (Gertler and Trigari, 2009). They can even ask for the extra benefits if they are making more efforts for the company. It has been analysed that in both the cases only one of the part has the power to bargain. The development of trade unions results in easy communication between the mangers and the trade union representatives. as only one person needs to communicate and represent the whole union of workers to the management. It helps the management also to know about the wishes of the workers which should be considered by the management of companies in order to make the decision over wages and efforts (Brüggen and Strobel, 2007). Manage has the limited control over the workers in this case as the union leader of the company has great powers because of interference of the government regulatory in the wages decision. The pieces have been released for the regulating of the wage-effort bargaining between the employees and the employers so that no unethical practice can be coincide from any of the side. Management has to manage the workers in different ways. Sometimes, they have to consider their views especially in the case when the supply of workers is low. They have to provide them other benefits also to retain n them in the company.

Collective Bargaining

Some of the sociologists have studied that wage effort bargaining theory has resulted in resistance by the workers. This is because it may create the confusion and some of the companies or the employer may force the worriers to make extra efforts on lower wages. Sunray is the biggest example where employee resistance has been seen (Clark, Masclet and Villeval, 2010). This may be because of other reason but wage effort bargaining is one of the reasons. Wage effort bargaining creates a situation of disputes among the employees mad the employers and there is the chance that employees are being exploited by the workers. Any miscommunication between the employs and the employer may bring the situation where the bargain decision gets wrong then the employees may not get the wages they want or according to the efforts they made (Antonczyk, Fitzenberger and Sommerfeld, 2010). This made them restrict to conduct his theory. This theory believes in argument between the employer and the employees and this argument leads to tension in the company. The union leader of the company can only bargain the wages or the efforts in case when there is less number of suppliers available (Rivas and Sutter, 2008). As in earlier days when the employees have to deal with the employers regarding the wages through some of the bargaining theories, most of the employers exploit the employees by providing them low wages. This restricts the employees to flow this in today’s world (Greiner, Ockenfels and Werner, 2011). The interference of regulatory in the wage and effort decision helps the companies as well as the employees to get the fair wages. According some of the polices like National Minimum Wage or regarding the working hours, the employer get bound to follow such policies and cannot exploit or force the workers to work. Even if the worker is working for longer hours or making more efforts then they have to be paid with the incentives.

Conclusion:

To conclude t can be said that wage effort theory is the concept that is reacted to the bargaining between the employees and the employer regarding the wage and the efforts that are being made by the employees at the company (Agell and Bennmarker, 2007). This bargaining results in the relationship between the employees and the employers where they argue about the wished of both the parties. One of the arguments wins the bargaining game and the wages and the efforts have been decide for the employees. It has been analysed from the study that management has to cooperate and handle the workers at the time of bargaining so that they may not leave the organization. On the other hand, the employee restrict from this concept to be conducted because they feel exploited when the bargaining does not results in their side. They feel like explored, interference of government bodies in the function can results in fair wages and efforts to the employer and also maintain the relationship between the employees and the employers or the management

References

Agell, J. and Bennmarker, H., 2007. Wage incentives and wage rigidity: A representative view from within. labour economics, 14(3), pp.347-369.

Antonczyk, D., Fitzenberger, B. and Sommerfeld, K., 2010. Rising wage inequality, the decline of collective bargaining, and the gender wage gap. Labour economics, 17(5), pp.835-847.

Brüggen, A. and Strobel, M., 2007. Real effort versus chosen effort in experiments. Economics Letters, 96(2), pp.232-236.

Chan, C.K.C. and Hui, E.S.I., 2014. The development of collective bargaining in China: From “collective bargaining by riot” to “party state-led wage bargaining”. The China Quarterly, 217, pp.221-242.

Clark, A.E., Masclet, D. and Villeval, M.C., 2010. Effort and comparison income: Experimental and survey evidence. ILR Review, 63(3), pp.407-426.

Daley, D.M., 2012. Strategic human resource management. Public Personnel Management, pp.120-125.

Gertler, M. and Trigari, A., 2009. Unemployment fluctuations with staggered Nash wage bargaining. Journal of political Economy, 117(1), pp.38-86.

Greiner, B., Ockenfels, A. and Werner, P., 2011. Wage transparency and performance: A real-effort experiment. Economics Letters, 111(3), pp.236-238.

Kaufman, B.E., 2007. The impossibility of a perfectly competitive labour market. Cambridge Journal of Economics, 31(5), pp.775-787.

LaJeunesse, R., 2009. Work time regulation as sustainable full employment strategy: The social effort bargain. Routledge.

Lee, D. and Rupp, N.G., 2007. Retracting a gift: How does employee effort respond to wage reductions?. Journal of Labor Economics, 25(4), pp.725-761.

Rivas, M.F. and Sutter, M., 2008. Wage dispersion and workers' effort (No. 2008-15). Working Papers in Economics and Statistics.

Rossi, A., Luinstra, A. and Pickles, J. eds., 2014. Towards better work: Understanding labour in apparel global value chains. Springer.

Zoller, H.M. and Fairhurst, G.T., 2007. Resistance leadership: The overlooked potential in critical organization and leadership studies. Human Relations, 60(9), pp.1331-1360.

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