Enterprise Bargaining, Approach to Productivity and Workplace Reform - Coursework Example

Enterprise bargaining Students name: University affiliation: Introduction In the recent times, various organizations have experienced a significant number of economic challenges. Key among the challenges experienced by these organizations is work related. In particular, the differences that exist between the employer and the employees often lead to challenges that may adversely affect the operations of the organization. Employees often make frantic efforts to have better remunerations while employers make efforts geared toward ensuring that the organization incurs minimal costs. More often than not, the cost reduction initiative is implemented through reduced wages to the employees. Consequently, the employer and the employees often disagree openly on the issue of remuneration. Employers seek representatives in the form of unions to fight for their rights while the employees seek legal help to protect the profitability of their enterprises. The stalemate that often occurs between employees adversely affects the operations in various sectors of the economy. For instance, it reduces the total output in the economy thus leading to poor development levels in various countries. However, frantic efforts are often made to deal with the challenges between workers and employers. The fundamental reason for making efforts to resolve these problems is to ensure that the normal operations of a given enterprise return to normalcy. The differences between employees and employers are often triggered due to changes in some social-economic factors. For instance, a drastic change in economic conditions of a given country often triggers trade unions to champion for appropriate adjustments to the working conditions. In Australia, enterprise bargaining often entails working conditions and wages negotiated at the level of individual organizations and other stakeholders. The negotiations often lead to an enterprise bargaining agreements that binds the employees and their employer. A critical analysis of the case of Aged Care industry in Australia reveals various factors that contribute to an enterprise bargaining agreement (MORGAN, 1994). The period of the 19th century was characterized by different economic aspects that led to the increased disagreements in the labor market. In particular, different sectors of the economy were labor intensive, and any efforts by the private sector to formulate policies to specific economic goals faced a significant number of challenges. In particular, the government policy in the 19th century significantly altered the ways in which the private sector delivered the health care services. The structural arrangements of the government were geared toward encouraging or compelling the private sector health workers to seek better remunerations through savings at the enterprise level. However, the private hospitals had to make frantic efforts to counter the increasing costs of operation through reduced wages. In particular, they formulated strategies that were geared toward ensuring that all workers’ wage increment was based on the productivity index. However, after the enactment of the Fair Work Act in 2009 saw a drastic change in the ways of resolving disputes between employers and their workers. The act was geared toward ensuring that the dispute resolution process was based on facts and not assumptions. While workers are justified to seek better wages from their workers, the Act requires them to use a better approach to the issue. The fundamental reason for this argument is the fact that employers pay workers from the profits they get from their businesses. In particular, the wages of the workers should be based on their productivity in the organizations. Worker’s productivity often leads to increased profitability of the organizations and thus workers are justified to ask for wage increase only when their productivity increases. On the other hand, the Act requires employers to be fair to their workers. The employers should formulate appropriate strategies to reward the efforts of their workers. The Act stipulates the appropriate measures of rewarding workers in a much better way that satisfies all the stakeholders. An analysis of the enterprise bargaining in the private hospital and aged care sector after the enactment of the Fair Work Act in 2009 will reveal the employer and trade union bargaining strategies (DI MATTEO, 2014). The basic approaches revealed in the negotiations involve; productivity that is performance oriented and cost reduction or minimization approach. Private hospitals often try to increase their productivity by reducing operational costs. Reduced operational costs often lead to increased profitability of the private hospitals. A significant portion of the operational costs in often associated with the wages of employees. Thus, while reducing the operational costs of the hospitals adversely affects the wages paid to the employees. Consequently, the employee’s conditions are compromised in that they feel that their right has been violated. They react by joining trade unions where they can articulate their views and have a chance to bargain with their employers in a fair manner. However, the effort to get the attention of the employers often seem futile as they fail to get their facts right. In particular, employees often seek wage increment without having their productivity improved. They fail to understand that their productivity positively affects the profitability of the organization thus creating an incentive for an increase in their wages (GARDNER et al, 2002). Thus, it is necessary to have a proper understanding of the factors that should be known during an enterprise bargaining process. Industrial relations The private health and aged care industry was characterized by a profit-oriented private hospitals and non-profit sector representatives. The non-profit groups included churches and nursing homes as well as community-based groups. As much as these groups shared a common goal of providing health services to the society, they had opposing philosophical commercial interests. In particular, one wing was to offer their services with an aim of making a profit while the other wing was to fulfill their humanitarian goal of providing proper health care in the society. Moreover, the industry was dominated by two different funding arrangements. These funding arrangements were based on different commercial philosophies. The fundamental reason for the differences in the funders’ commercial philosophies was due to the difference of the objectives of the businesses. Moreover, the business models embraced by each side was quite unique and thus they had to adopt commercial philosophies that were relevant to their business models. The private hospital was heavily funded through contractual arrangements majorly through private insurance funds. On the other hand, the aged care sector was predominantly funded through government institutions. Consequently, the ways in which the two sectors collected revenue were quite different. The government restricted the aged care sector, and it had to make frantic efforts to ensure that the government's policy was not violated while it offered its services. In particular, the sector had to ensure that the fees charged were in tandem with the government’s policy of making health care services accessible to all citizens. On the other hand, the private hospital wing embraced the different approach of collecting revenue. The fact that this sector was being financed by private insurance firms meant that they had to seek enough revenue to refund the funds as well as meet their operational costs. Consequently, the private sector made frantic efforts to minimize their operational costs. Key among the strategies was to reduce the wages of their employees (BURGESS, 2003). Thus, the employee resolved to seek alternative means to have a better bargaining power in the sector. Thus, the nature of the industry played a significant role in determining the ways in which employees relate to their employers. While employers were embracing particular strategies geared toward meeting certain predetermined goals, the employees were adopting specific measures that could ensure that they had a better bargaining power in the industry. However, various factors had to play their role to have an enterprise bargaining agreement. Productivity measures and workplace reform The conflicting goals of the employees and their employers necessitated an analysis of various aspects of the economy. For instance, the employers preferred a working condition where the employees’ productivity is impressive. It was chiefly through increased productivity that employers could be willing to raise the wages of their employers. Increased productivity of workers meant that the organization could make high profits, and this could be channeled to increasing the wages of the employees. Thus, productivity measurement and performance standards were associated with the private health sector. However, budgetary pressure and varying expectations from the community had a contradictory influence in the health sector. In particular, the expectations of the community and employees imposed financial constraints. Moreover, the health sector had emphasized on the quality of the services. Thus, the private sector based their bargaining on the productivity of their employees. If employees are to increase their productivity, it could be easy for the employers to accept the wage increment urge. Productivity bargaining in the private health sector was meant to ensure that the health services could be based on the market variations in the industry (STANTON, 2005). Thus, any successful enterprise bargaining could make effort to focus on reducing the constraints on employers. Employees were required to have a better workplace flexibility thus leading to increased efficiency. Economic theory attests that the productivity of employers of a given organization often results in increased productivity of the entire organization. The revenue of the organization increases tremendously thus leading to improved profitability. However, situations where employees’ productivity drastically reduces become tough for the survival of the organization. Employees often become unproductive when they engage in factors that may not positively contribute to the output of the organization. For instance, engaging in strikes and social unrests as a way of seeking audience from their employers often reduces the productivity of the organization. Thus, the productivity of the employees plays a significant role in influencing decisions that affect the working conditions of the workers. After the enactment introduction of the Fair Work Act in 2009, the private health sector had to follow the regulations set by employee welfare and working conditions. On the other hand, the trade unions that often represent workers in negotiations ought to follow the regulations of the Act. The act stipulates that any negotiations between the employee and the employer should be based on facts. In particular, the employees should not impose demands that may cause financial constraints to the employers. On the other hand, the employer should make frantic efforts to ensure that the working conditions of the workers are catered for. The workers should be appreciated especially when their productivity is satisfactory (HARRIS, 2006). However, the continued conflict between the two groups may adversely affect the health sector thus leading to reduced health services in Australia. Apart from the productivity of the workers, the economic aspects should be considered by various stakeholders before making any decision. For instance, inflationary factors should feature in the enterprise bargaining in the health sector. Increased inflation often leads to an increase in the inputs of the hospitals. Consequently, pricing policy of the services ought to be adjusted accordingly to make it easy for the hospital to attain its goals. The increased cost of inputs drastically reduces the productivity of the private hospitals. Thus, any bargain from the trade union seeking an increase in the wages of employees should consider thus a fact. However, in most scenarios, the trade unions ignore this fact thus making it difficult to arrive at an enterprise bargaining agreement. Approach to productivity and workplace reform Various stakeholders often use a different approach to productivity and workplace reform. Whereas employers base productivity on the organization’s output, the trade unions adopt a different method of measuring productivity. However, an agreed method of measuring productivity is often based on specific attributes. In particular, the productivity of employees is measured on the level of professionalism and administrative skills. Further, it can be based on technical and operational skills of the employees (DI MATTEO, 2014). The primary reason for enterprise bargaining is to seek parity in the wages and related ties between the private and public sectors. In particular, the differences in the wages in the private and public hospitals often need to be reduced. Thus, the trade unions introduced the classification and remuneration system with an aim to rationalize public sector wages and the employment conditions. The private sector was to set up wages based on the skills of each employee thus making it easy to standardize the wages of all workers in the health sector. Thus, the wage discrimination was to be based on the skills that a person has. Moreover, performance indicators were to be used to measure the level of productivity of different employees both in the public and private health sectors. Consequently, the employees were to increase their productivity based on a set structure. The performance indicators were agreed by both the employers and the trade unions. Consequently, the productivity of the employees has significantly improved since. Increased employee productivity has led improvement in their working conditions. The primary factor or element in the bargaining process was the two sides’ agreement to develop an appropriate workplace performance indicators linked to wages. Thus, the traditional approach of seeking wage increment without a proportional increase in the productivity of employees was eliminated. Thus, both the employee and employers had a responsibility of realizing desirable working conditions for in the health industry. The enterprise bargaining agreement reached by the trade unions and employers in the private sector implied that the interests of the employees were reached in a better and amicable way. The private sector was to reduce the operational costs significantly without adversely affecting the working conditions of the employees. The cost reduction and employee productivity outcomes have resulted to improved working conditions for the workers as well as increased performance of the private hospitals. The industry has also improved significantly in that social unrest in the health sector has reduced significantly (DI MATTEO, 2014). The enterprise bargaining agreement between the two sides guarantees the private hospitals profitability in the short-term through reducing investment and training costs. Further, the private hospitals are required to embrace new technologies to replace labor costs and to increase the flexibility of employees in various hospitals. Adopting other working arrangements also could help in reducing the operational costs of the private hospitals. For instance, replacing full-time workers with lower wage part-time workers will reduce the operational cost of the private hospitals while maintaining the profitability of the hospitals. Moreover, productivity-oriented and value adding strategies will increase the performance of the private hospitals. In particular, the hospitals should specialize in training employees in specific areas relevant to their field of specialization. Further, the employers should adopt active management intervention to reduce employee turnover to maximize the ultimate return from training and experience of the workers. The employer should also embrace a collective and participative decision-making an approach. The employees will feel appreciated when they are involved in making decisions that affect the operations of the organization. Further, it will be easier for the employees to articulate pertinent issues affecting the operations in the private health sector (DI MATTEO, 2014). Consequently, the productivity of the workers will significantly increase leading to increased output in the private health sector. Views and positions of the different parties In the enterprise bargaining agreement between the trade unions and the private health sector, various parties will have to air their views. For instance, the government’s views will be geared toward supporting the stability of the private health sector. The fundamental reason for the support of the government is the fact that the private health sector plays a primary role in providing healthcare services in the country. In particular, the private sector plays a major role in contributing the much-needed revenue to the government. Further, it is the desire of the government to have a stable labor market, and thus that enterprise bargaining agreement will help realize this goal (BRAMBLE et al, 1997). Thus, the government will support the agreement reached between the private health sector and the trade unions. The legal institutions will also have a view on the agreement reached. In particular, the labor courts will have to give their opinion concerning the agreement of trade unions and the private health sector. It is evident that every labor tribunal seeks to ensure that their respective employees guarantee the rights of the workers (DI MATTEO, 2014). Since the agreement reached significantly addresses that challenge facing workers in various sectors, the labor courts will give a supporting opinion on the accord. Social and economic effects of the enterprise bargaining agreement The enterprise bargaining agreement between the two factors will lead to various implications. For instance, economic growth will significantly increase. The fundamental reason for this argument is due to increased productivity in the private sector. It is evident that increased productivity in the private sector often leads to positive externalities to the economy. For instance, increased output in the private sector often leads to a significant rise in the revenue of the government. The revenue will be used to provide public goods that have positive effects on the economy. Moreover, the social aspects of the society will significantly improve. The fact that the employees will be satisfied implies that there will be reduced social unrest in the society. Further, increased service delivery in the private health sector will result in an increase in the health conditions of the society (BRAY, 1993). Consequently, the quality of lives of many people in the society will significantly improve. Further, increased use of new technology will play a crucial role in improving the quality of services in the society. Hence, the country will be far much better off. Conclusion It is evident that enterprise bargaining plays a crucial role in bringing stability in a particular sector. In the recent past, the private health sector has experienced a significant number of challenges. The primary problem has been wage war between employees and employers. The workers have been seeking wage increment while employers have insisted that the employees’ productivity ought to increase to provide an incentive for a wage growth. Consequently, the workers have negotiated with their employers through trade unions, and they have reached a binding enterprise bargaining agreement. The agreement has significantly improved stability in the private health sector. Consequently, the social-economic conditions of the country have considerably improved. References AIRAANZ CONFERENCE, & BRAMBLE, T. (1997). Current research in industrial relations: proceedings of the 11th AIRAANZ Conference, Brisbane, Queensland, Australia 30 January - 1 February 1997. [Brisbane], Association of Industrial Relations Academics of Australia and New Zealand. BRAY, M., & HAWORTH, N. (1993). 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