Reward Negotiation and the Means of Resolution - Coursework Example

Running head: Analysis of Reward Negotiation Name Course name Professors’ name DateIntroduction Many countries across the world have experienced politicians pressing for more salaries while majority of the population contend themselves with minimum wage rates. Kenyan legislators receive huge salaries yet they do not pay taxes. On the contrary, workers who struggle to increase output levels earn meagre incomes and subsequently pay more taxes irrespective of their economic abilities. A good example is Value Added Tax levied on common consumer products. While politicians struggle to reach self actualization level of Abraham Maslow’s hierarchy of needs, the poor majority population revolve round physiological needs and never get a chance to move up the ladder. Nevertheless, Brazil and USA supports a position that high salaries motives attract quality politicians who brings real reforms. It is therefore important to investigate processes involved when negotiating rewards including salaries and other allowances pursed by political class in Australia. Institutional setting Overtime, federal politicians who represent the people in parliament have shown dissatisfaction with their salary package and allowances. A list prepared by labour and coalition parliamentarians clearly demands a remuneration of $ 27,000 meant to compensate them for time spent in Canberra working. This is a good illustration that surviving in political environment is a difficult task given many responsibilities and roles. After being rendered Jobless by citizens through policy reforms, MPs demand assistance in finding new job. The support will be in form of retraining allowance, a severance payment, and a five month salary. Demand came in a six-page submission to the Parliamentary Entitlement Review Committee which was given responsibility of examining parliamentary remuneration. In order for negotiation to take place, government and coalition whips teamed up with an objective of fighting for generous entitlement. Their main point of concern was that federal MPs ought to be treated with dignity like every day workers as a result given allowance covering ‘sick and long service’ leave (Chalmers, 2010). At the same time, MPs campaign to be given a choice between an electorate car and equivalent cash of $19,500. Another extreme is a claim for entitlement corresponding to three month’s salary to those who have served for less than 10 years as legislators. Federal members of parliament believe that they should be treated like average worker thus offered redundancy payment in times of job loss. The payment must reflect time spent giving the service and standards in the community. According to MPs, there is a need for an extension of the 12 week resettlement allowance meant for overthrown parliamentarians to cover an extra two months. So as to be ‘job ready’, members of parliament insist on taxpayers’ assistance to re-enter the general workforce with a capped allowance (Chalmers, 2010). The reason behind this is that MPs would require retraining or engagement with previous professionals in their respective fields. The remuneration tribunal appointed to negotiate rewards agree with MP’s suggestions that electorate allowance be rolled into existing salary but superannuation to be calculated using base salary only. With respect to nights spent at Canberra, the tribunal support the view that legislators receive annual fixed allowance of up to $30,000 to substitute the current rates of $230. The tribunal is further considering reviewing salaries received by shadow ministers who have greater responsibilities. A measure to harmonise salaries is a proposal to abandon lucrative Life Gold Pass enjoyed by long serving MPs and former prime ministers. Another equalising measure assumed by MPs is giving up yearly right of first class airfare and receive $7,000 payment as a reimbursement. In an article by Boyle, (2010) the Senate praised a move by tribunal to increase electoral allowance by $4700. While liberal and labour senators unite to give themselves hefty salary, they are at the same demanding that wages for workers should be frozen due to economic down turn. Salary increment proposed by federal members affects directly and indirectly economic variable like employment and wage. When the Australian Council of Trade Unions made an appeal for a $21 minimum wage increment, employer’s organization called for a freeze of wage. The $21 rise would have raised weekly federal minimum wage to $564.78. Whereas recent federal budget recognised increased pension for aged and people with disability, unemployed, single parents, young people and students were sidelined. Socialist Alliance argues that wages given to employee should reflect changes taking place in the economy. While the cost of food, power and rent rise, over time, wages must consequently expand respectively. At the moment, many residents in Australia are making effort to survive on a scale of $185 to $226 a week which is classified under international standards as below poverty line. Normally, a federal politician is paid $127, 036 in addition to $32,000 covering electorate expenses. They are as well provided with free domestic air travel, good superannuation and other forms of benefits. Analysis of income received by prime minister and opposition leader indicate great disparity in income since their earning exceeds 10 times that of unemployed person. Politicians argue that their payment should be compared with earnings received by corporate executives. The intensity of inequality in the system is evident where CEO of biggest corporation receives up to 63 times average earnings of a full-time employee in Australia. A question which should be born in the minds of politicians is the experience encountered by citizens who spend more than half of their wages on physiological needs. Inflation marked by increased prices of food, rent and transport affects directly the bigger population and not the politicians or the executives. Political reforms are necessary to bridge the gap between the poor majority and the elite who are controlling the system. Reward negotiation and the means of resolution In the political setting described above, the most important issue when negotiating on wages and salaries of different political class is to recognize interdependence between politicians and people served. The objective therefore is to set a comprising ground such that a solution found will meet the objectives of all parties. Nature of interdependence between politicians and the people defines the way negotiations are conducted and their outcome. Research done in Brazil reveals that higher salary motivates quality persons into politics. Higher salaries attracted more skilled and professional candidates to run for municipal offices. In addition, better paid Brazilian legislators were fast in submitting more bills and subsequently passed more laws. They were ranked high in provision of public services stretching from building schools to health clinics. If the findings in Brazil also apply to Australia, there is likelihood that the 2004 policy reform which saw abolishment of pension thresholds would build low quality legislators thus poor political decisions (Leigh, 2009). Effectiveness of negotiations depends on whether concerned parties are able to adjust and re-adjust positions. The politicians must understand that their hefty salaries are financed by taxes paid by the people who earn minimum salaries. On the other hand, citizens ought to understand that legislative responsibilities vested on the position of parliamentarians are intense. In such a situation, exchange of information enhances understanding and speeds up negotiation process. Furthermore, it is essential to look into the impacts of decisions on the wider economy. During September 24th 2009, Australian Greens leader Bob Brown chose to forego salary increment until Australia’s economy improved (Leigh, 2009). This is a clear signal that parties to negotiations are obliged to consider implications of decisions made in a wider perspective of the economy. Reward management Reward management entails formulation and implementation of policies that focus on rewarding employees fairly, equitably and consistently in respect of the value to the organization (Armstrong, 2007). The strategic aims of Reward management is to develop and implement reward policies, processes and practices needed for the achievement of success in an organization which in this case is the political institution . The institutions have to recruit skilled, competent, motivated and committed people so that it achieves its goal. It is the specific aim of reward management to reward employees for the value they create. Reward must also be directed to the right thing so that expected behaviour and outcomes are realized. In the political environment a culture of weighing individual’s ability with respect to performance is essential if integrity is to be maintained. At the moment, rewards does not only capture money but quality of work, opportunity for training especially in the technological changes, work - life balance, climate, reputation and values of political organizations, leadership, and recognition (Deutsch, 2000). Financial and non financial rewards Financial rewards are extrinsic in nature while non financial rewards are intrinsic. Integration of these kinds of rewards in management strategy gives the end result of job satisfaction. Variable pay is an example of a financial reward and is highly dependent on employee performance. In a nutshell, pay and benefits given to politicians represents financial rewards. In the news article titled Federal politicians awarded pay rise, tribunal looking into remuneration of politicians made a decision that parliamentarians were to be given a 3 % increment from the base salary. The increase converts to less than 3.9 % increase in average wage across the economy. On the contrary non- financial rewards may be in form of job satisfaction (Deutsch, 2000). If an employee is not satisfied, performance is directly affected. Recognition of hardworking individuals through a process of giving them more responsibility and autonomy has a consequence of realizing non financial rewards. Politicians may be given training on new technology so that they are not rendered obsolete by the information age. In deliberation of non-financial rewards, Special Minister of State considered establishing an independent panel to discuss on ways of reviewing entitlement meant for legislators. Indirect financial rewards To resolve conflicts in the political system, indirect financial reward comes in handy. This is that part of the total reward package given to employees in addition to the base pay. Rewards such as private health care and pension plans are indirect financial rewards available to parliamentarians. There are many indirect financial rewards meant to supplement on the needs of MPs. These rewards therefore act as source of incentive to work even harder. Critique of the procedure There is need for standardization of procedures followed when negotiating rewards. A clearly outlined series of steps avoids protest and conflict in resolving contentious issues. Salary package and other entitlement for MPs should be entrenched in the constitution and strict measure taken in case of violation. Moreover, salaries of all public servants should be harmonised and revised periodically. This will ensure that employees are satisfied and motivated to work. Conclusion This paper gave a clear illustration that better results are realized when employees are given quality rewards. Success of reward negotiation is highly dependent on communication between concerned parties. Formulation of an independent tribunal was an effective approach to settle remuneration and entitlement issues. From the case of Brazil and United States, kind of remuneration describes quality of public servants elected into the local authorities. If a better pay package is attached to various political positions, there is a possibility that high quality decisions will be made. Read More