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In the US, two systems of wage bargaining and determination have evolved historically: union system and civil system (White & Druker, 2000). Currently, the majority of states is using the civil system while some states and some industries, usually well-established with historical background, are based on unions. The concept of union system is the following: wages are set by professional unions on the basis of bargaining (White & Druker, 2000); certain limits for wages are set, with job qualifications and categories clearly defined. Civil system, on the contrary, uses market mechanisms for wage determination (Hendry, 1995): wage level is set as the equilibrium for demand and supply at the chosen area.
On one hand, union systems provide greater stability and protect workers’ rights (Hendry, 1995). Meanwhile, all the cost of “excess” wages (from the point of view of market price) are included into production costs, and lead to distortion of economical balance in the given area, or in the whole region. Civil system provides flexible wages, allowing workers to correlate their salaries with their qualification level directly, and thus creating a stronger sense of responsibility compared to union system. At the same time, civil system protects the employer and presents challenges to such categories of workforce as freshmen, former graduates, disabled people, minorities etc.
Each of these systems poses certain changes to managers. In case of union systems, the managers have to increase workers’ motivation and monitor their career growth. Also, since union system provides space for individuals with low skill or low productivity, managers have to implement control of quality and ink it directly with career growth, avoiding the practice of career promotion on the basis of the length of service only. The task for HRM, for union systems, is to provide clear job responsibilities (Hendry, 1995) and develop indicators of quality. Also, human resource managers should avoid hiring people who pay little attention to results and consequences of their work, since union system provides space for the inefficiency of their work; thus, people with such qualities should be at least identified, and optimally – not accepted at all.
However, civil system poses more problems for managers: they have to determine a wage most close to market one, and hire the most appropriate person at this position. Hiring employees to positions that require more qualification than they possess, or offering positions with low qualification requirements and low salary to professionals will result in loss of productivity and in the dissatisfaction of employees. Also, the problem for managers is to monitor growth of personnel qualification, suggest appropriate correction of wages and optimize the human resource constantly. For civil system, HRM have to provide exact description of best candidate fro each job position, and clearly outline the perspectives of this position, both for managers and for employees. Also, HRM have to monitor market situation for each job position, provide timely correction of wages and develop a personal development plan for each employee. In general, civil system provides more problems for managers, but results in greater efficiency and productivity, and benefits to the whole economy in general.

 

 

 

 

 

 

 

 

 

 

References
Hendry, Chris. (1995). Human resource management: a strategic approach to employment. Butterworth-Heinemann.
White, Geoff & Druker, Jan. (2000).Reward management: a critical text. Routledge.

 



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