Two Tier Wage System The Article I Found Was In The

651 words - 3 pages

Two-Tier Wage System The article I found was in the European Industrial relation On-line website. However this is the only article I was able to find on-line. The compensation topic I will discuss is the Two-tier wage system. I feel two-tier wage system is a growing concern for many organizations as well as many individuals entering into the labor force today. Organizations are competiting globally against one another and trying to reduce labor cost anyway the can. We are starting to realize the organizations are paying employees two different rates for individual who are doing the same work.On 30 April 1997, Volkswagen a German based car manufacture announced the creation of several hundred temporary jobs. According to an agreement between the company and the IG Metal trade union, the new temporary staff, although being hired on the terms of the current company agreements, will be paid 10% less than core employees. This agreement establishes a two-tier wage system at Volkswagen in Germany.In the 1997 collective bargaining round, Volkswagen aims to cut costs and increase workforce flexibility so it can compete globally against other car manufactures. The German economic crises has slowed down car manufacturing so Volkswagen is trying to implement a two-tier wage system so it can compete in North American Markets.In April 1997, Volkswagen failed to create an internal temporary employment agency with employees who would have received compensation according to the current metalworking agreement, and below the rate of the current company agreement. The IG Metal Union demanded the creation of new jobs, backed by the threat of boycotting overtime.On 9 May, Volkswagen announced the creation of several hundred jobs at its regional subsidiary Volkswagen Sachsen, Germany.Bargaining issues currently under negotiation at Volkswagen are working time flexibility, employment guarantees, sick pay, pay for part-time work for older workers, general pay increases, and a new collective agreement...

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