To help them avoid unionization, companies employ many different strategies. One of them is that they have adopted two-tier pay scales, in which veteran employees make more than new employees
What is the system that the two-tier system replaced?
What will be an ideal response?
Answer: The two-tier system replaced pattern bargaining, in which unionized employees working in similar jobs for similar companies or industries get the same pay.
Explanation: Labor negotiations started out (in an activity known as pattern bargaining) negotiating similar wage rates for unionized employees working in similar jobs for similar companies or industries, but now that has changed. The pressure of deregulation at home and competition abroad has forced many unions to negotiate two-tier wage contracts, in which new employees are paid less or receive lesser benefits than veteran employees. Employing the two-tier pay scales is one way that companies can effectively undercut union power.
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Fill in the blank(s) with correct word
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Indicate whether the statement is true or false
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a. it enhances its ability to differentiate its products from competitors b. it lends credibility to its product c. it is expensive d. it avoids conflict with large OEMs e. it is not advantageous for small OEMs to cobrand