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Review Questions [INSERT HERE] [INSERT YOUR HERE] Review Questions Chapter 8 Review Questions Companies can reduce health care costs during negotiation by promoting a healthy lifestyle; healthy employees keep costs low. Requiring pre-employment and random drug and alcohol testing, offering smoking cessation assistance, and providing discounted gym memberships will help to ultimately keep health care costs low. All of these factors can potentially give the negotiator the upper hand during the negotiation process.

Insurance companies do not like to pay claims, by promoting a healthy lifestyle for employees, and conveying that ideal to the insurance company, the lower the premium will be for the company and by extension the lower the cost to the employee. 2. When investment returns and interest on accounts spirals, and concurrently profits are down, as was the case for most organizations in the last ten years or so, the cost to maintain, much less increase, funding of private pension plans is extremely costly. 3. Workers must be participants in a private pension plan through their company.

Those belonging to unions are significantly more likely to receive funds from a pension plan when they retire, since unions often negotiate pensions as part of the collective bargaining agreement (CBA). 4. The employee may be required to work on the holiday to get holiday pay. In most cases, the employee must work the last scheduled shift before, and the first scheduled shift after the holiday in order to be eligible for holiday pay. 5. Unions typically try and negotiate wage employment guarantees to account for the estimated cost of living increases over the life of the contract, and SUBs to protect employees in the event their hours are reduced. 6. The employer is responsible for legacy costs.

It is important that organizations be very careful when dealing with legacy costs as there was a huge problem in the automobile industry, when GM was paying approximately 25 dollars more per hour, compared to its non-unionized competitors like Toyota, due to legacy costs (Jarvis, 2011). 7. Typically, group PPO plans are negotiated. Under PPO plans, the employee is able to see any doctor, whether in or out of the network. No referral is needed for the employee to see a specialist, and generally, the employee does not require pre-authorization to have a procedure.

With an HMO, the plan is cut and dry. The plan is a health insurance plan that offers the employee a limited number of physicians and healthcare facilities that are in the network. If the employee has services rendered at an out-of-network provider, the claim is denied. Most, if not all, tests and surgeries must be pre-authorized or the claim will be denied, unless it is an emergency. The purpose of the HMO is to control healthcare costs by providing strictly monitored services. Ultimately, the cost to the employer and employee are lower, because the costs are lower to the insurance company, because services are rendered within the network. 8. With the rising costs of the employee’s share of healthcare, high gas prices, reduced workforce leaving the same amount of work to be spread amongst fewer employees, employees are exhausted and need every dollar they earn.

Monday holidays often mean employees lose a day of pay, unless paid time off compensates for the lost hours. Monday is the first day of the workweek, when organizations are closed for holidays, they are losing revenue. Providing flex days or some form of paid time off that can be used in place of the lost day of work will minimize employee issues. 9. Typically, employees are provided paid sick leave and paid vacation. In some states, employees may also be eligible to receive paid time off for FMLA or paid family leave, but the labor agreement may require vacation time to be used during the waiting period, so the employee does not lose any compensation. 10. Pyramiding of overtime allows the employee to calculate the same hour of work for daily overtime as well as weekly overtime.

This costs the company more money for hours that were already compensated to the employee. For example, if an employee works 1.5 hours overtime and is compensated for it, that 1.5 hours cannot be calculated for overtime for working more than 40 hours in the workweek; the employee has already been compensated at the overtime rate for working in excess of 8 hours in a single day. Chapter 9 Review Questions 1. Seniority is considered a critical issue, because employees are ranked based on length of service with the company.

Advantages include bidding for time off, promotional opportunities, and scheduling. For those higher in seniority, they may not have to worry about being laid off due to a lack of work, since typically lay-offs are based on seniority. Disadvantages to employers include the laying off good employees, because they rank lower in seniority than more dedicated or perhaps even more qualified individuals. 2. An employee’s seniority is based on their hire date in relation to the hire dates of the other union employees at the given location.

The last employee hired is lowest in seniority. 3. Typically, labor agreements allow the company to select an employee to promote based on seniority, from a qualified group of candidates. The candidate must be able to perform the duties of the position. From the group of eligible candidates the individual with highest seniority would be promoted. 4. Seniority is often used in layoff and recall actions, because the last employee hired has is the lowest ranking as far as seniority. Therefore, that employee would be the first one laid off.

When recalling laid-off employees, the first person laid off is the first person recalled. There are clauses in most contracts that require the employer to contact the employee during a recall, and wait a certain amount of time for a response before contacting the next person in line for recall. Reference Carrell, M. R. & Heavrin, C. (2009). Labor relations and collective bargaining, 9th edition. Prentice Hall. Jarvis, D. (2011). NFL legacy costs a huge concern in CBA negotiations. Rocket Sports and Entertainment.

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