Central Penn College
1. What is spillover? How does it lead to underestimation of the impact unions have on wages? From economic perspective spillover can be From economic perspective spillover can be referred to some economic advantage which comes across from non-planned and non-predicted incidents and results and sources in allowing some advantages to organizations or combination of organizations. This is otherwise also known as externality and could be positive or negative externalities. Union wage gain means the average gain that the average worker in the economy would gain after joining in the union. The union gap is percentage of wage difference between union jobs and non-union jobs for workers who have similar skills. But this is not correct measurement of union wage gain; therefore the union gap overestimates the union wage gain. The spillover effect exists when union is capable of increasing wage rates, which also cause a hardship to the firm or industry. Employment in the industries which have unions declines, because employers may feel that they should reduce union employment. The workers that are unemployed in the union sector will gravitate into the non-union sector. It will result in the increase of labor and a decrease in wages that demonstrates that the measured wage overstates the pure wage advantage. This becomes a threat to nonunion sector employees and they will raise wages to prevent unionization. This act results in wage advantage to understate the pure wage advantage. 2. Rank the factors in the global guide according to your belief in their importance for understanding and managing compensation. As the employee work in the company he/she look forward to right remuneration for the work done by him. This remuneration in total that is provided to the employee for the work done by him/her is termed as compensation. In any Human resource policy Compensation form one of the most critical part. Executive compensation has also been of great debate in corporations. After the recession of 2008, there has been debate in Wall Street that executives are paid highly and hence the compensation provided to them have been put in question. As per Dodd-Frank Act-2011, it is mandatory for the company to conduct an advisory voting on the compensation that is paid to executives. This consensus movement towards detail compensation analysis shows how important this agenda has become in corporate world. This new policies have been very effective in keeping the compensation debate alive for executives. It is very important to understand that HR policies regarding the compensation are very critical and important part of any human resource policy. We should understand that employees work for the company just because of the benefit which he/she derives which is named as compensation. At the same time company can’t throw around compensation like anything, there got to be certain method to all the work done in this process. Hence framing up compensation in the right manner is very important and organization need to make sure that it is done perfectly. Compensation policies are very critical and the standard should be fair throughout the company. Many companies face minimum wage and hour litigations and this are perfect examples of employee not feeling good about the kind of compensation that is paid to them. Compensation strategy of the company has capability to make or break companies and hence it is an important attribute of HR department to look into it very carefully. Compensation philosophy has been very old and people who work for organization look forward to the expected compensation. It is important to understand that fair standards of compensation are very critical in survival of the organization. All the employees who work in organization are looking forward to motivation for work. Monetary compensation is considered to be one of the biggest motivator for employee...
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