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Labor relations and collective bargaining
Challenges of a collective bargaining agreement
Labor relations and collective bargaining
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Introduction GMFC is a manufacturing company facing rising levels of health care costs for its unionized employees. In the last year, health care costs per employee increased by 11%, despite benefit reductions to which the Local 384 union had previously conceded. The mounting health benefit costs, coupled with pricing pressures from foreign producers, has made it increasingly difficult for GMFC to manage its health benefit costs and remain competitive. As a result, GMFC is considering subcontracting workers or hiring part-time workers who would not be eligible for health care benefits. Neither option will be welcomed by the Local 384. As a new labor contract is being negotiated, GMFC management must propose an agreement to contain or reduce health care costs which Local 384 is willing to accept. GMFC Statement on Impact of Employee Health Care Costs GMFC is dedicated to providing its valued employees with quality health care coverage. However, according to data reported by Fossum (2012), health care cost inflation has increased at a much higher rate than overall inflation, pushing up the relative costs of employer-provided health care. In industries with relatively stable, high consumer demand for the product, employers can increase product prices to help cover rising costs of wages and benefits with little negative effect on a company’s employment levels (Fossum, 2012). However, in situations such as GMFC’s in which foreign competition is driving prices down, passing cost increases on to the consumer is not a viable strategy. As such, unions are less likely to demand high wage increases in industries with significant foreign imports (Fossum, 2012). For that same reason, it is not reasonable for Local 384 to expect that GMFC can continue to manage the increasing cost of health care for its employees with declining product prices and resulting lower
Commonly associated with pay for employees, benefits is the second biggest obstacle for management. Like Volkswagen starts employees off at the basic pay the unions would achieve, a similar benefits program should be implemented (Greenhouse, 2014). The passing of the Affordable Health Care Act has made it possible for many citizens to receive coverage but it is basic at best. GMFC should create a plan based off of the Health Care Act and unionized plans and allow for extras to be added on. This allows for employees to pick the benefits package that works best for them.
The purpose of financial measurement in healthcare is to provide the community with the services it needs, at a clinically acceptable level of quality, at a publicly responsive level of amenity, at the least possible cost. This is done by providing healthcare finance managers with accounting and finance information to help accomplish the purpose of the organization (Nowicki, 2015). When making accounting decisions about budgeting and inventory control, an understanding of economics, statistics, and operations research is needed. Major Financial Measures
As companies look to expand operations and hire new employees, many economic and environmental factors are taken into consideration. The cost of labor is one of the primary concerns as labor generally constitutes a large part of company budgets. The organization of labor by unions further increases this concern. The wages of unionized workers are significantly higher than the wages of nonunion workers in almost every industry (Fossum, 2012). Higher wages generally result in reduced company profits, lower share prices, and reduced shareholder returns (Fossum, 2012). Unionization also reduces the employer’s flexibility with regards to hiring, transferring, or promoting employees (Fossum, 2012). Productivity may be negatively impacted by unionization because merit is often eliminated as a criterion for wage increases or promotions (Fossum, 2012). As a result of these negative impacts, employers are motivated to oppose unionization.
In the planning process, the health care organization’s first step should be to identify alternative expense reduction measures that can be implemented. Marshall and Broas (2009) and McConnell (2006) state that measures such as hiring freezes, reduced work hours, reduced salaries or bonuses, early retirement, limited use of temporary workers and discrepancy spending should be explored first before resorting to mass reduction in the workforce. Given the numerous legal cases in which employees have accused companies of lavish spending during layoff processes, a company should consider taking expense reduction measures. This would show that the company had explored another alternative before resorting to a RIF, and it would also help employers dismiss employees claims that the RIF was not necessary or discriminatory ( Marshall & Broas,2009) .Whatever alternative expense reduction measures were taken by the company along with the reasons for doing so should also be documented( Marshall & Broas,2009).Documenting the reason for the RIF, should be the next step.
Investor's, B. D. (2014, Janurary 8). Health Reform Wal-Mart's Way. Investors Business Daiky, p. A14.
For the last five years of my life I have worked in the healthcare industry. One of the biggest issues plaguing our nation today has been the ever rising cost of health care. If we don't get costs under control, we risk losing the entire system, as well as potentially crippling our economy. For the sake of our future, we must find a way to lower the cost of health care in this nation.
When one examines managed health care and the hospitals that provide the care, a degree of variation is found in the treatment and care of their patients. This variation can be between hospitals or even between physicians within a health care network. For managed care companies the variation may be beneficial. This may provide them with opportunities to save money when it comes to paying for their policy holder’s care, however this large variation may also be detrimental to the insurance company. This would fall into the category of management of utilization, if hospitals and managed care organizations can control treatment utilization, they can control premium costs for both themselves and their customers (Rodwin 1996). If health care organizations can implement prevention as a way to warrant good health with their consumers, insurance companies can also illuminate unnecessary health care. These are just a few examples of how the health care industry can help benefit their patients, but that does not mean every issue involving physician over utilization or quality of care is erased because there is a management mechanism set in place.
The cost and administrative burden of providing health care benefits to employees has grown rapidly in the last several years, and organizations have opted to cheaper means of doing this by resorting to CDHPs programs that are little bit cheaper when using deductible health insurance plans. This has led to the hope of healthier generation in the near future as the cost of health services would be manageable (Buntin, Damberg, Haviland & Kapur, 2006).
However, our system is based on money. The more money you have to spend, the better medical services you will receive. ?According to the Bureau of Labor education at the university of main (2003), America spends more money oh health care than any other nation, "$4,178 per capita on health care in 1998?, compared to the average of $1,783. (BLE., 2003, p.23). Still an estimated "42.5 million Americans are living without health insurance", which prevents them from receiving medical treatment. (Climan, Scharff, 2003, p.33). The numbers of un-insured Americans continue to rise. Tim Middleton (2002) states, ?insurance premiums grow at a rate greater than wages,? when you have a low-income job. (¶ 9). With our current economy recession, taxes are rising and small business employers are unable to purchase health plans for their employees. Employees are realizing that they are unable to gain insurance from their jobs and beginning to speak out about the high price of health care.
Employee health benefit plans flourished in the 1940’s and 1950’s. Unions bargained for better benefits, which included tax-free, employer-paid health insurance. When war hit between 1939 and 1945, government froze wages which led to an increase of group health care. Since employers were unable to attract employees with higher wages, employers decided to improve their benefits package by adding health care coverage. Gove...
2. The twin problems of the health care industry as viewed by society are cost and access. First of all, the cost of getting health care is very high and it is getting higher each day. This has been mostly caused by the combination of high cost and an increase in quantity of services provided to the communities. The other problem involves access to health care. American enjoy limited or no access to health care. Many efforts have been done to reform this, but still but still many people are left without access to the care. These two problems are related due to the fact that if the health care industry gets to high off course people no longer will be able to have any access to it. The higher prices are, the lower access people have to it.
I believe that the union and management did not fulfill their objectives and consequently reached a settlement that did not improve Zinnia’s future competitiveness in the market. Although the union and management initially agreed to focus on wages and health insurance, they bargained a contract that does not reflect their objectiv...
Then came the question, should the employer be the one responsible for providing health insurance. While everyone on the panel could agree that our health care system in 2008 was broken, most seemed opposed to the alternative solution of universal healthcare. There is an incentive to the company to offer health insurance to a human being that may receive the opportunity to receive health insurance from another company. However, taking health insurance responsibility away from the employer and making it the government’s responsibility would increase availability and possibly eliminate freedom of
Rising medical costs are a worldwide problem, but nowhere are they higher than in the U.S. Although Americans with good health insurance coverage may get the best medical treatment in the world, the health of the average American, as measured by life expectancy and infant mortality, is below the average of other major industrial countries. Inefficiency, fraud and the expense of malpractice suits are often blamed for high U.S. costs, but the major reason is overinvestment in technology and personnel.
Traditional literature in the field of labor relations has focused immensely on its benefit towards the employer and in the process equating it to working rules. This has been so despite the field being expected to cover the process of, labor management, union formation, and collective bargain; all which are anticipated to create a positive employer-employee relationship. This relationship is said to be positive if there exist a balance between employment functions and the rights of the laborer. Also important to note, is that this relation is equally important to the public sector as it is to the private one. Therefore, to ensure a mutually conducive labor environment exists, effective labor management process and inclusive negotiation program should be adopted (Mulve 2006; Walton, 2008).