Project Materials







1.1 Background of the research

In every market, there is commerce involving the purchase and sale of products and services. And the labor market is no exception; buyers and sellers on the labor market are employers and workers, respectively. A market consists of the conditions under which employers utilize labor services. In labor markets, employees may be hired to perform a certain task for a predetermined amount of time. Typically, the term job refers to an ongoing relationship between an employer and an employee.

The wage issue stands prominently on the agenda of collective bargaining sessions as a subject of paramount importance. It is also represented directly or indirectly in actions such as labor reductions, wage cuts, and outsourcing by companies to enterprises, regions, or countries with cheaper wages. It should be mentioned, however, that the wage issue merits careful thought if companies wish to cultivate a highly skilled workforce and if businesses seek to improve the performance of their employees and increase their workplace dedication. A fair and equitable compensation structure is also required for boosting employee morale, fostering a positive organizational culture, and establishing good ties with labor unions. The construction of a strong compensation management system is a crucial human resource management function that leads to effective management practices and the satisfaction of all parties' needs. It also contributes to the attainment of economic competitive advantage in international trade.


Our planet is evolving. This transformation compels all systems and societies. The human factor is the driving driver of this development. First and foremost, human evolution is of interest. The process of development in the evolution of humans also constitutes the dynamics of social transformation. Associations, unions, and political parties must serve as the change's driving force. However, they face obstacles in this process. This approach may pit organizations and individuals against one another as adversaries.


In addition to these companies, the labor market also consists of the individuals who work within them. The labor market requires an of labor demand and supply. On the demand side, there are employers whose employment decisions are influenced by conditions in product, capital, and labor markets (Ehrenberg, 2003, p. 424). On the supply side of the labor market, workers and potential workers determine where they will work. The majority of individuals have pursued the objective of earning money by engaging in some form of labor. Consequently, workers' talents can also be viewed as assets, given that they can be rented to employers for a fee. It is vital to indicate the quantity and cost of labor employed. The of labor unions is to alter the conditions of labor supply and the labor market's environment. According to Segal (1964:96), “people consider unions as the primary mechanism by which working people might improve their economic condition in accordance with the principle of equality.” Combining unionization and human resource management with the strategies espoused by employer consultants. Union procedures, notions of fairness, and wage rates all have an impact on nonunion firms. Ehrenberg (2003:425) argues that unions do not establish salaries alone; collective bargaining is bilateral. Therefore, it is essential to analyze the unique characteristics of union salaries and employment practices.


Nevertheless, union power has been shifting. Sloane and Whitney (2004: 12) state that despite the management's hostility, unionism has not demonstrated any significant propensity to recede. However, it is true that organized labor has lost members in recent years, both in absolute and relative terms, mostly due to the penetration of evolving technology and the resultant loss in employment, as well as to shifting market needs affecting the industrial sector. And, despite claims that the rapidly expanding white-collar industry will become more amenable to collective bargaining in the near future, it is also true that union participation in this sector has fallen well short of its potential. As the nature of the labor force changes globally, collective bargaining and labor unions are here to stay, regardless of the issues that may arise.


If one party is confused of the other's primary goals, it may feel compelled to investigate the connection. If management's concerns were not put to the test by the union's reaction at the negotiating table, the employer could be tempted to push the subject to an impasse. Thus, everything that causes uncertainty regarding bargaining positions raises the likelihood that negotiations may be interrupted. The potential consequences of a stalemate in collective bargaining might be high for both parties.


The objective of the collective negotiating process is to determine the likely division of expenses and benefits between management and employees; using particular criteria, a union can obtain a concession from management during collective negotiation. In my dissertation, I will attempt to define and clarify the impact of collective bargaining criteria on wage determination.

Once a relationship has formed, it would be impossible for workers and management to agree on specific formulas that will determine wage payments in perpetuity. There may be an expectation that future wage determinants will be equitable if wage policies are standardized. By refusing to negotiate, management can reduce its susceptibility to exploitation, but this generates uncertainty. What might be more objective and equitable in the viewpoint of employees and management are salary decisions made by other employers or CPI fluctuations (Consumer Price Index).

The fairness requirement may be defined not just by wage determination criteria, but also by the preferences for flexibility in employment and working hours above merely wage adjustments in response to cyclical shifts in demand. The factors usually by wage determination authorities fall into three major categories: I to sustain worker's actual income; (ii) the employers' ability to pay; and (iii) wages or incomes elsewhere in the economy and the growth in national output.

In order to provide light on the effectiveness of wage determination in attaining its goals, wage determination authorities must its repercussions more closely. Actual wages given have an effect on productivity and production costs, which are reflected in price fluctuations and the distribution of income. Obviously, these changes will have an effect on the standard of living of wage earners.


Firms are essential to numerous labor market theories. The production's value has significant implications for public policy and indicates how inflation affects a 's profitability and employment. This impacts the relative significance of employers and employees in wage determination.

The most major effect of collective bargaining in unionized enterprises is wage setting. The relevant authorities, as well as workers and employers, must rigorously assess the repercussions of wage adjustments, taking into account the specific objectives of interested parties and the national economy. This thesis's research will investigate the extent to which labor unions and employers consider objective negotiation criteria in wage determination. Conventional wisdom holds that the pay outcome is primarily determined by the parties' bargaining power, as opposed to national and objective parameters such as the inflation rate, labor productivity, comparable wages, etc. The primary value of the proposed study lies in revealing the relationship between such criteria and actual pay outcomes in Turkey. Collective bargaining has an effect on the standard of living of wage earners, the health of the company, and the economy.

In addition to the “Introduction,” which provides a summary of the research issue, the study consists of four chapters. The second chapter is a review of the relevant literature, followed by a description of the study methods, the results, and finally a conclusion and set of suggestions.





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