Exercise: The following information is to be used in answering the questions below. Massive Industries Amalgamated ("MIA) has 1000 unionized workers represented by the Society of Organized Labour ("SOL") including 10 truck drivers, 40 office staff, 30 lead hands and the rest are general labourers. The salaries for the workers are as follows: Category Initial Rate Truck Driver $27.00/hour Office worker $21.00/hour General labourer $25.00/hour Lead hand $30.00/hour Rate after 1 year Rate after 2 years Rate after 3 years $27.54/hour S28.08/hour $28.62/hour $21.42/hour $21.84/hour $22.26/hour $25.20/hour $25.40/hour $25.60/hour $30.60/hour $31.20/hour $31.80/hour The number of people in each pay category and step is as follows: Initial Rate Rate after 1 year Rate after 2 years Rate after 3 years 2 0 0 8 Category Truck Driver Office worker General labourer Lead hand 3 2 2 33 130 95 73 622 22 3 3 2 As well, the contract specifies that the employees get 2 weeks vacation after one year and 3 weeks after 3 years. Finally, the benefits include a life insurance policy for full time workers of 3 times annual pay to a maximum of $50,000. The cost of this benefit for the average office worker is $27 per month. All workers are full time and work 40 hours per week - 8 hours on each weekday. In addition to the vacation, they get 10 statutory holidays each year. You may assume that there are 260 weekdays during the year. This assignment is worth 5% of your final grade but will be marked out of 20. Question I will be worth 12 marks, and the other 2 worth 4. There is a possibility of 2 bonus marks available for a specific answer that shows a greater understanding of the dynamics of negotiation. You must do all questions. When answering the questions, please indicate how you came up with the answer and what your rationale was in doing your calculation. For question 1, it is sufficient to provide the new grid without explanation of the calculations, but you must state what your general approach was and why. It will be graded based on the closeness to a fair result from the general labourer's perspective and the perspective of other members. Question 1. MIA has offered a one year contract with an across the board increase of 4% on the first day of the new agreement to all steps and all categories. The SOL is not happy with that proposal as the majority of their members think the salary scale is unfair - specifically, the increments given to the general labourer category and the fact that the increment size is far less than the 2% the other categories get. Design a new salary grid that fixes the problem so that the increment size for the general labourers is a close as possible in terms but also costs the employer roughly the same amount of money. Question 2. What is the effective type of cost for the life insurance benefit? And how much would it cost to change the benefit from "3 times annual pay to a maximum of $50,000" to "3 times annual pay to a maximum of $150,000"? Question 3. The SOL has proposed that vacation be increased by one week for all staff. What is the cost of that proposal as a percentage of actual wages paid to 2 decimal points? If you make any assumptions for any of the above answers, please state them. Exercise: The following information is to be used in answering the questions below. Massive Industries Amalgamated ("MIA) has 1000 unionized workers represented by the Society of Organized Labour ("SOL") including 10 truck drivers, 40 office staff, 30 lead hands and the rest are general labourers. The salaries for the workers are as follows: Category Initial Rate Truck Driver $27.00/hour Office worker $21.00/hour General labourer $25.00/hour Lead hand $30.00/hour Rate after 1 year Rate after 2 years Rate after 3 years $27.54/hour S28.08/hour $28.62/hour $21.42/hour $21.84/hour $22.26/hour $25.20/hour $25.40/hour $25.60/hour $30.60/hour $31.20/hour $31.80/hour The number of people in each pay category and step is as follows: Initial Rate Rate after 1 year Rate after 2 years Rate after 3 years 2 0 0 8 Category Truck Driver Office worker General labourer Lead hand 3 2 2 33 130 95 73 622 22 3 3 2 As well, the contract specifies that the employees get 2 weeks vacation after one year and 3 weeks after 3 years. Finally, the benefits include a life insurance policy for full time workers of 3 times annual pay to a maximum of $50,000. The cost of this benefit for the average office worker is $27 per month. All workers are full time and work 40 hours per week - 8 hours on each weekday. In addition to the vacation, they get 10 statutory holidays each year. You may assume that there are 260 weekdays during the year. This assignment is worth 5% of your final grade but will be marked out of 20. Question I will be worth 12 marks, and the other 2 worth 4. There is a possibility of 2 bonus marks available for a specific answer that shows a greater understanding of the dynamics of negotiation. You must do all questions. When answering the questions, please indicate how you came up with the answer and what your rationale was in doing your calculation. For question 1, it is sufficient to provide the new grid without explanation of the calculations, but you must state what your general approach was and why. It will be graded based on the closeness to a fair result from the general labourer's perspective and the perspective of other members. Question 1. MIA has offered a one year contract with an across the board increase of 4% on the first day of the new agreement to all steps and all categories. The SOL is not happy with that proposal as the majority of their members think the salary scale is unfair - specifically, the increments given to the general labourer category and the fact that the increment size is far less than the 2% the other categories get. Design a new salary grid that fixes the problem so that the increment size for the general labourers is a close as possible in terms but also costs the employer roughly the same amount of money. Question 2. What is the effective type of cost for the life insurance benefit? And how much would it cost to change the benefit from "3 times annual pay to a maximum of $50,000" to "3 times annual pay to a maximum of $150,000"? Question 3. The SOL has proposed that vacation be increased by one week for all staff. What is the cost of that proposal as a percentage of actual wages paid to 2 decimal points? If you make any assumptions for any of the above answers, please state them