Bargaining Alternative Payplans
Bargaining Broadband Pay Rules
Managers exploring broadband pay adjustments for their employees should be aware of the role and rights of unions in negotiating pay. Most of us are familiar with some common collective bargaining procedures, such as contract negotiations or a grievance. But some managers have been surprised by the fact we have to negotiate broadband pay plans with unions prior to implementation.
As more agencies pursue broadband pay plans, more managers are raising good questions about union involvement. Taking the time now to address these questions could prevent complications or frustrations down the line.
Why do we negotiate with unions over broadband pay rules?
The collective bargaining laws require public employers to bargain with union representatives over pay, hour, and certain other conditions of work. An agency's broadband pay rules govern how that agency will set pay within the agency. The union representatives must negotiate with agency representatives about those rules to either adopt them or make changes to them for their bargaining unit, since those rules will determine how pay is set for the term of the collective bargaining agreement.
If union agents are employees' bargaining representatives, who is management's representative?
Management's spokesperson for collective bargaining is the chief of the State Office of Labor Relations in the Department of Administration (39-31-301, MCA and Governor's Executive Order No. 40-2008). Office negotiators serve as an extension to your agency's human resource functions to help achieve your management goals and objectives in a collective bargaining environment.
How do we begin the appropriate discussions with the union about broadband pay?
At the point you're interested in proposing or exploring new pay options in a unionized workplace, your agency should contact your representative in the State Office of Labor Relations. We will work with your human resource professionals and managers to help develop a management proposal and a bargaining plan. Labor Relations staff will contact the union representative at the appropriate time and help coordinate the necessary labor-management communications.
What if we hire an outside consultant to help develop competencies and broadband pay components - is the process any different?
The process is the same. Contact the State Office of Labor Relations at the point management starts developing pay proposals in a unionized work environment. Consultants can help agencies identify employee competencies and improve performance appraisal tools, but they can't negotiate with unions. An agency can't implement a broadband pay plan until the state bargains the subject with union officials. The State Office of Labor Relations is the only authorized bargaining agent for state management.
What aspects of "broadband pay" are negotiable in a unionized workplace?
All aspects of pay are negotiable, meaning they are mandatory subjects of bargaining under state law. Pay ranges for each job, including market rates, minimum rates, and maximum rates must be addressed through collective bargaining. Either labor or management can propose a market rate, and both sides are obligated to consider counter-proposals in good faith. The selection and application of all pay components available in the broadband system are negotiable (e.g., market-based pay, competency-based pay, results-based pay, situational pay, strategic pay, etc.).
Are performance appraisal tools subject to bargaining?
If management wants to link pay to performance, be prepared to bargain the appraisal tool and procedure. Traditionally management could revise the performance appraisal tool without unions showing much interest, because the appraisal did not affect pay. But performance standards that determine pay could very well constitute the type of pay standards and criteria that would be deemed "mandatory subjects of bargaining." Refusing to bargain a mandatory subject constitutes an illegal unfair labor practice (ULP). It could trigger a ULP charge, investigation, hearing, and order from the Department of Labor and Industry to "cease and desist" from the action that triggered the charge. It's best to avoid such lengthy, costly, and disruptive disputes. Bargaining the performance appraisal tool and procedure doesn't mean management must build the tool by negotiating it step-by-step with the union. It simply means we must be prepared to present the tool at the bargaining table and consider any feedback or counter-proposals the union might submit in response. Failure to reach agreement on the tool, however, could preclude management from paying employees for competencies or performance.
Do unions categorically oppose pay that's tied to employee performance or other types of pay?
Some unions have been supportive of competency-based efforts and other types of broadband pay. The majority of actual pay results achieved under broadband to date, including competency-based pay, have occurred in unionized workplaces. Unions base their positions on the desire of each bargaining unit. If a majority of unit members are reluctant to pursue certain pay changes, the union's position on pay issues for that unit is likely to reflect the majority sentiment.
Are we unique or unusual in the fact we have to bargain broadband pay plans with unions?
No. All of Montana's public employers are subject to the same requirements. Moreover, private-sector employers nationwide have virtually the same bargaining obligations with unions under federal law that public employers have under state law. The American Compensation Association (ACA) calls the presence or absence of a union one of the most important factors in planning for broadband pay. In a national journal the ACA advises employers: "Management must carefully design reward systems that are likely to be acceptable to a union. Understanding how union members view alternative rewards and how collective bargaining laws operate is necessary to design, administer, and use alternative reward strategies to improve organizational effectiveness."
How do union members view broadband rewards?
There is no universal union "position" on broadband pay, but some concerns seem to recur throughout our pay explorations in state government. Two questions seem almost inevitable before labor and management will agree on a new pay plan. First, labor will want to know whether management can guarantee that all employees in the "new" pay plan will receive, at a minimum, the same raises that other employees in the "old" plan stand to receive. Second, labor will want to know how employees can appeal or grieve a pay decision in the new plan. The more management can give on the first issue, the more the union will probably give on the second issue. Proposals are much more palatable for unions and employees when they have less to lose by exploring new pay. Your labor negotiator in the State Office of Labor Relations will provide some options for proposals to exempt individual pay decisions from the union contract's final and binding arbitration provision.
Aside from the legal duty to bargain, is there any benefit from union involvement in the development of a broadband pay plan?
Most experts agree that a new pay system works best when employees have a substantial role in its development. They view the benefits of employee buy-in and ownership in the new system as highly desirable. In a unionized environment, employee involvement eventually takes the form of a union bargaining team and management bargaining team sitting down together to negotiate the details of a broadband pay system. Union involvement is indeed "the law", but it's also a good idea if the reality is you are in a work place that has already organized a union. Employees and unions are more likely to accept new ideas for broadband pay if they have a role in developing them.
Tags: Labor Relations and FAQs