Alternative Rewards in Unionized Environments

Abstract

For a reward system to work in unionized work environments, union acceptance is essential. A study of 150 unionized firms and 350 nonunionized manufacturing and service firms was conducted to show the conditions under which various alternative reward strategies are likely to be acceptable to unions. The study developed a framework with the following components: external influences, organizational dynamics, performance measures, collective bargaining and the pay system.The findings show that unionized organizations are more likely to use skill-based pay, gainsharing, goalsharing and stock sharing than nonunionized organizations. They are also more likely to design alternative reward plans with objective, group-based performance measures. Nonunionized organizations tend to use subjective, individual performance measures. To enhance union acceptance of a reward system, management should be willing to share information openly about the competitive position of the organization and willing to involve union representatives in the strategic decision-making process.

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