Section Six
In addition to these major issues, there are several other
aspects of compensation that should be evaluated for their
contribution to the strategic goals of the company. These may
include subjective measures of the extent to which the
compensation system provides for internal equity; con-forms to
legal requirements for race, gender, and age; and provides pay
satisfaction. Objective measures of compensation system
effectiveness may include overtime utilization, payroll
complaints, and comparisons of the company’s wages for
various jobs with those in relevant labor markets.^66
Labor and Employee Relations
It is important for unionized companies to evaluate the
effectiveness of their labor relations functions and line
managers’ conduct of labor relations. For unionized companies,
there are numerous indicators of labor relations effectiveness,
such as the frequency or length of work stoppages, degree to
which collective bargaining agreements are restrictive, degree
of cooperation between the union and management,
managerial flexibility in work assignment, ability to impose
reasonable work rules, other management prerogatives,
discretion to promote or lay off on the basis of ability or merit,
ease of administering the labor agreement, and the company’s
grievance experience. In the case of grievances, caution must
be used in drawing inferences of effectiveness, because there is