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Blau (1964), [6] and Emerson (1976) [7] were the key theorists who developed the original theories of social exchange. Social exchange theory approaches bargaining power from a sociological perspective, suggesting that power dynamics in negotiations are influenced by the value of the resources each party brings to the exchange (a cost-benefit analysis), as well as the level of dependency ...
Collective bargaining consists of the process of negotiation between representatives of a union and employers (generally represented by management, or, in some countries such as Austria, Sweden, Belgium, and the Netherlands, by an employers' organization) in respect of the terms and conditions of employment of employees, such as wages, hours of ...
When labour supply exceeds demand, salary faces downward pressure due to an employer's ability to pick from a labour pool that exceeds the jobs pool. However, if the demand for labour is larger than the supply, salary increases, as employee have more bargaining power while employers have to compete for scarce labour. [5]
Economic Conditions: Economic factors such as unemployment rates, economic growth, and industry composition can influence the bargaining power of workers and unions. In times of economic prosperity, workers may have more leverage to negotiate for better wages and working conditions, leading to higher collective bargaining coverage.
Employees work in return for wages, which can be paid on the basis of an hourly rate, by piecework or an annual salary, depending on the type of work an employee does, the prevailing conditions of the sector and the bargaining power between the parties. Employees in some sectors may receive gratuities, bonus payments or stock options. In some ...
The contract is between an "employee" and an "employer". It has arisen out of the old master-servant law, used before the 20th century. Employment contracts rely on the concept of authority, in which the employee agrees to accept the authority of the employer and in exchange, the employer agrees to pay the employee a stated wage (Simon, 1951).
Thus, bringing about unions and, in turn, collective bargaining. Collective bargaining is a right for workers and can bring about many benefits, including limiting biases and equity gaps. Thus, ensuring all workplaces are fair. Collective Bargaining has been proven to lower the wage gap and establish more equality in workers and wages. [11]
Sectoral collective bargaining is an aim of trade unions or labor unions to reach a collective agreement that covers all workers in a sector of the economy, whether they wish to be a part of a union or not. It contrasts to enterprise bargaining where agreements cover individual firms.