ROLE OF TRADE UNION IN

EMPLOYEE COMPENSATION

BY : VARUN RATANPAL
NAVONIL NAG
DEFINITION OF A TRADE UNION

 A trade union may be defined as

an organisation of employees
formed on a continuous basis for
the purpose of securing a diverse
range of benefits .
OBJECTIVES OF TRADE UNION
 Steady employment
 Rationalisation of personal policies
 Voice in decisions affecting workers
 Recognition and participation
 Gaining legislative enactments
 Ensuring fair and just remuneration for all
WHY DO WORKERS JOIN UNIONS
 Economic benefits
 Platform for self expression
 Check on arbitrary functions of management
 Security
 Employer employee relation
 Sense of participation
 Sense of belongingness
 Background factors
 COMPENSATION
 Compenstion refers to a wide range of financial
and non financial rewards to employees for
their service rendered to the organisation. It is
paid in the form of wages, salaries and
employee benefits such as paid vacations,
insurance, maternity leave, free travel facility,
retirement benefits etc. Monetary payments are
a direct form of compensating employees.
 FACTORS AFFECTING
COMPENSATION
 Demand for and supply of labour
 Organistion’s ability to pay
 Cost of living
 Productivity of workers
 Labour unions
 Government
 Prevailing wage rates
 PROBLEMS FACED BY WORKERS

 Failure to inform employees regarding wage

plans and proposed procedures in establishing
incentives.
 Failure to have supervisors play a major role in
setting up of incentive plans.
 Failure to maintain standards and wage
incentives once they have been established
 The practice of setting temporary standards in
new plants or on new operations should be
kept to a minimum.
 ROLE OF TRADE UNION IN
EMPLOYEE COMPENSATION
 Ensuring that each and every employee get fair
wages for the work that he/she has done
 Informing the employees regarding change in
wage plans
 Have proper supervision in setting up of
incentive plans
 Recognise the caliber of talented people and
high level of competency required to establish
and maintain wage incentives properly.
 Trade unions should into account,
analyse, and try to establish standards
for spoilage or basis whereby there is a
clear understanding that incentives
payment applies only to the production
of acceptable work.
THANK YOU