Josephs, Leslie
CNBC.com
Posted 11/16/2023
Key words and Definitions
Human resources department – the organizational unit charged with recruiting, screening, hiring, and retaining employees that fit the organization's needs.
Labor union – an organized association of workers that are typically in the same profession engages in collective bargaining with employers on behalf of union members.
Employee retention – an organizational goal to keep productive workers content so they do not want to leave the organization.
Summary: Key Points of the Article
Southwest Airlines' pilots have reached a tentative agreement with the air carrier over wages. The new agreement will give the aviators a 50% increase in overall pay over the life of the five-year contract. The head of the Southwest Airlines Pilots Association stated the deal was worth $12 billion in additional compensation. The union members will still need to ratify the deal that has been years in the making.
The pilots are slated to get an immediate 29.5% raise after the contract is signed. The total contract increase would make the hourly pay rate for a captain with 12 years of experience $368.47 an hour by 2028. Southwest expressed that it was "pleased" with the contract that will cover almost 11,000 pilots. Southwest Airlines was the last major air carrier to finally reach an agreement with its pilots.
News Topic
#09 Human Resources
Exercise 1 Multiple Choice Questions
- Which of these are common employee benefits at most organizations?
a. Health insurance
b. Retirement plans
c. Life insurance
d. all of these
Answer: Health insurance, retirement plans, and life insurance are commonly provided benefits at most organizations with over 100 employees. - __________ is a theory that states that individuals compare their job inputs and outcomes to those of others and adjust their behavior accordingly.
a. Distributive justice
b. Equity theory
c. Procedural justice
d. none of these
Answer: Equity theory is a theory that states that individuals compare their job inputs and outcomes to those of others and adjust their behavior accordingly. Distributive justice is the perceived fairness of the amount and allocation of rewards among individuals. Procedural justice is the perceived fairness of the process used to determine how rewards are distributed. - By 2028 Southwest Airlines' pilots will make over $360 an hour if the deal is ratified.
True
False
Answer: The pilots will receive about 50% more in pay over the life of the 5-year contract.
Exercise 2 Critical Thinking Questions
- Why is it important to retain employees?
Answer: In most cases it costs far more to recruit and train new employees than it does to keep the ones you have. In this case pilots are in short supply, and it would be difficult to replace them without paying as much or more than the new contract wages. - What do labor unions do for their members?
Answer: Labor unions engage in collective bargaining on behalf of their members to get higher pay, better benefits, safer and more comfortable working conditions, and other needs their members would like to see addressed. Since they speak for all employees they carry more clout and can typically achieve at least part of their objectives, particularly in a tight labor market. - What would likely happen if Southwest did not agree to the new contract?
Answer: All of Southwest's competitors have completed deals giving pilots substantial pay raises. Southwest would soon be losing pilots to other air carriers if they did not compensate their pilots based on market wages given the current pilot shortage.
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