Application of Economic Management Levers of Labor Conflicts in Consumer Cooperation Organizations

The purpose of the research is justification of appropriate forms of labor remuneration which is an effective economic lever for settling labor disputes in consumer cooperation organizations. The proposed approach is based on the hypothesis expressed by Victor Vroom in his expectancy theory stating that financial incentives become a motivating factor only under certain conditions. The Research methods applied by the authors allow to link the amount of the payroll budget with not only the cooperative organization’s revenue growth but also with the financial result accumulated by the organization. In order to motivate highly productive labor and prevent conflict situations it is recommended to use the mechanism of social protection by including a mandatory part into the minimum wage fund. The article presents the results of the author's approach testing with reference to the wage fund raising and its distribution among the members of the staff with relation to the personal contribution of every individual, the application of which will help to reduce social tension among the staff. The authors suggested to change and systematize the structure of the estimated figures with the purpose to determine workers’ labor participation coefficient with due regard to 3 criteria groups: assessment of participation in achieving the overall work result; evaluation of the person’s participation in the labor process; assessment of the professional growth and organization’s loyalty. The advantage of the proposed system is in its allowing to strengthen the financial incentive for high-productive labour, cost reduction; promoting employee’s and staff’s responsibility for individual and overall performance; strategic focusing on the corporate awareness formation and employees’ professional growth. Conclusion: In the proposed consumer cooperative employees’ labour remuneration procedure there is an attempt to directly link the performance results of both the staff and each employee with the received wages, to make every employee's contribution transparent for assessment at any level and arouse every laborer’s interest in the cooperative organization’s increase in earnings and profit. The authors believe that the use of the developed remuneration system will significantly reduce social tension and contribute to the prevention of conflicts in cooperative organizations