Wage Survey: Cost of Living Adjustment

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Table of Contents

The wage issues
The cost of living adjustment
Pyramiding
Wage survey
Changes in the contract
The roll-up costs
The front-end load
The two-tier system
Works Cited

The wage issues

Two of the wage issues that union brings to the table are pay equity so that employees are paid an equal salary for equal work, and the presence of rewards for service and performance. Two wage concerns that managers raise during negotiations are maintaining competitive policy by producing products successfully, and the effect of wage change on production and pricing (Carrell and Heavrin 248, 252).

The cost of living adjustment

The cost of living adjustment (COLA) is an increase in salary that complies with the price of living. It is applied to salaries, wages, benefits, and includes executive contracts and union agreements. The government uses COLA more than the companies that hire employees and promote them based on their achievements and not on the cost of living adjustment. Profit-sharing replaced COLA because it is financially stable as the company makes payments only if it profits (Amadeo).

Pyramiding

The me-too agreement implies that if a company can increase payment for one group, it can also do that for another group. Pyramiding is a payment that takes place if the same working hours fit both weekly and daily overtime payments. Arena bargaining is a meeting between management and spokespeople from all bargaining units to discuss challenging financial issues. This negotiation method is particularly useful in public sectors where stakeholders can listen to outside experts (Carrell and Heavrin 253, 255, 266).

Wage survey

A wage survey collects data from different economic sectors that are used to identify the average salary for various positions. Wage surveys can be effectively used in collective bargaining by providing information for negotiators. Employers can use this data to compare working salaries, benefits, and conditions in other companies and bring it to the employees (Carrell and Heavrin 273).

Changes in the contract

Changes in the contract may result in a direct or indirect long-range cost to the institution. The types of changes that can increase cost are seniority determination, layoff provisions, and subcontracting. It is essential to accurately evaluate the cost of the wage proposal to be beneficial for both sides of negotiations. The proposal also allows for a value comparison of different contracts and arrival to the agreement (Carrell and Heavrin 274).

The roll-up costs

The roll-up costs are an increase in wage as a result of negotiations that directly affects the benefits as they are tied to the pay of the employees. An agreed-on percentage related to the roll-up is usually determined by the negotiators, which is calculated by dividing the increased benefit by increasing the wage rate (Carrell and Heavrin 276).

The front-end load

The front-end load is a sales charge that is applied after the initial investment purchase was made. It is paid as compensation for the best matches in risk tolerance, needs, and client goals. Union negotiators opt for front-end loaded deferred wage increases because they allow them to get additional wages and increased payment in the first year (Segal).

The two-tier system

The two-tier system, according to which a newly hired employee receives less salary performing the same amount of work as current employees. The system’s basic idea is to provide cost-saving and prevent layoffs by cutting the current employees’ wages (Carrell and Heavrin 262). The main advantage is to allow workers to thrive for a better position and higher salary by improving their performance and productivity. However, the drawback is that the system contradicts the historically established concept of pay equal. There is a concern that the poor will become weaker, and the rich will become richer (“The Pros and Cons of the Proposed Two-Tier System”).

Works Cited

Amadeo, Kimberly. “Cost of Living Adjustment, How Its Calculated, and Its Importance”. The Balance, 2019, Web.

Carrell, Michael R., and Christina Heavrin. Labor Relations and Collective Bargaining. 10th ed., Pearson, 2013.

Segal, Troy. “Front-End Load”. Investopedia, 2020, Web.

“The Pros and Cons of the Proposed Two-Tier System”. ESPN Cricinfo, 2016, Web.

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