comp and benefits
commitment of top management and design
Two factors compensation professionals should consider before endorsing the use of merit pay systems
PDA - Pregnancy Discrimination Act (1978)
is an amendment to Title VII of the Civil Rights Act of 1964. The PDA prohibits disparate impact discrimination against pregnant women for all employment practices.
incentive pay or variable pay
is defined as compensation, other than base wages or salaries, that fluctuates according to employees' attainment of some standard (e.g., a preestablished formula, individual or group goals, or company earnings).
hourly pay
is one type of base pay. Employees earn hourly pay for each hour worked.
midpoint pay value
is the halfway mark between the range minimum and maximum rates. Midpoints represent the competitive market rate determined by the analysis of compensation survey data.
american disability act of 1990
jennifer works as a clerk in a company. the essential functions of her job is typing on a keyboard. if she develops crippling arthritis that interferes with
generalist
may be an executive, performs tasks in a variety of HR-related areas. The generalist is involved in several, or all, of the compensation functions such as building job structures, market competitive pay systems, and merit pay structures
ADA of 1990 americans with disabilities act
prohibits discrimination against individuals with mental or physical disabilities within and outside employment settings, including public services and transportation, public accommodations, and employment.
ADEA (Age Discrimination in Employment Act)
protects older workers age 40 and over from illegal discrimination.
retirement programs
provide income to individuals and beneficiaries throughout their retirement. Also called pension plans.
Job duties
a section in job descriptions, describe the major work activities and, if pertinent, supervisory responsibilities.
exclusion provisions
are the particular conditions that are ineligible for coverage. For example, most disability insurance plans do not provide coverage for disabilities that result from self-inflicted injuries.
working conditions
are the social context or physical environment in which work will be performed.
human capital
as defined by economists, refers to sets of collective knowledge, skills, and abilities (KSAs) that employees can apply to create value for their employers. Companies purchase the use of human capital by paying employees an hourly wage or salary and providing benefits such as paid vacation and health insurance. See also human capital theory.
core compensation
describes the monetary rewards employees receive. There are seven types of core compensation: two forms of base pay hourly pay (or wage) and salary, seniority pay, merit pay, incentive pay, cost-of-living adjustments (COLAs), and pay-forknowledge and skill-based pay.
decrease
Wei is the HR manager of a manufacturing facility that has used the cross departmental system and has noticed that absenteeism rates have been significantly lower since implementing this system as a result
boureslan v aramco
a Supreme Court case in which the Supreme Court ruled that federal job discrimination laws do not apply to U.S. citizens working for U.S. companies in foreign countries
Atonio v. Wards Cove Packing Co.
a Supreme Court case, ruled that plaintiffs (i.e., employees) in employment discrimination suits must indicate which employment practice created disparate impact and demonstrate how the employment practice created disparate impact (intentional discrimination).
eeoc v madison community unit school district no 12
a circuit court ruling, sheds light on judging whether jobs are equal based on four compensable factors: skill, effort, responsibility, and working conditions.
eeoc
a federal government agency, oversees and enforces various employment laws that guard against illegal discrimination including Title VII of the Civil Rights Act of 1964.
occupation
a group of jobs, found at more than one company, in which a common set of tasks are performed or are related in terms of similar objectives, methodologies, materials, products, worker actions, or worker characteristics.
skill blocks model
a kind of pay-for-knowledge program, applies to jobs from within the same job family. Just as in the stair-step model, employees progress to increasingly complex jobs; however, skills do not necessarily build on each other in a skill blocks program.
team based incentive plans
a small group of employees shares a financial reward when a specific objective is met.
critical incident technique (CIT)
a specific kind of behavioral system, requires job incumbents and their supervisors to identify performance incidents—on-the-job behaviors and behavioral outcomes—that distinguish successful performance from unsuccessful performance. The supervisor then observes the employees and records their performance on these critical job aspects.
person focused pay plan
a system of rewards for employees for specifically learning new curricula.
comparison system
a type of performance-appraisal method, require that raters (e.g., supervisors) evaluate a given employee's performance against other employees' performance attainments. Employees are ranked from the best performer to the poorest performer.
bennett amendment
allows employees to charge employers with Title VII violations regarding pay only when the employer has violated the Equal Pay Act of 1963.
compensable time
an employee attending an employer mandated training is this type of work activity
differentiation strategy
apple uses this type of competitive strategy
behaviorally anchored rating scales
are a specific kind of behavioral system based on the critical incident technique (CIT). These scales are developed in the same fashion with one exception. For the CIT, a critical incident would be written as "the incumbent completed the task in a timely fashion." For the BARS format, this incident would be written as, "The incumbent is expected to complete the task in a timely fashion."
behavioral systems
are a type of performance appraisal method that requires raters (e.g., supervisors) to judge the extent to which employees display successful job performance behaviors.
Discrertionary benefits
are benefits that employers offer at their own choice. These benefits fall into three broad categories: protection programs, paid time off, and services.
line employees
are directly involved in producing companies' goods or service delivery. Assembler, production worker, and sales employee are examples of line jobs
behavioral encouragement plans
are individual incentive pay plans that reward employees for such behavioral accomplishments as good attendance or safety records..
compensable factors
are job attributes (e.g., skill, effort, responsibility, and working conditions) that compensation professionals use to determine the value of jobs
merit pay
are programs that assume that employees' compensation over time should be determined, at least in part, by differences in job performance as judged by supervisors or managers.
legally required benefits
are protection programs that attempt to promote worker safety and health, maintain family income streams, and assist families in crisis. The key legally required benefits are mandated by the following laws: the Social Security Act of 1935, various state workers' compensation laws, the Family and Medical Leave Act of 1993, and the Patient Protection and Affordable Care Act of 2010.
skill (knowledge) blocks
are sets of skills (knowledge) necessary to perform a specific job (e.g., typing skills versus analytical reasoning) or group of similar jobs (e.g., junior accounting clerk, intermediate accounting clerk, and senior accounting clerk).
vertical skills
are those skills traditionally considered supervisory skills (e.g., scheduling, coordinating, training, and leading others).
knowledge
based on Equal Employment Opportunity Commission guidelines, refers to a body of information applied directly to the performance of a function. Similarly, according to O*NET, knowledge refers to organized sets of principles and facts applying in general domains.
Skill
based on Equal Employment Opportunity Commission guidelines, refers to an observable competence to perform a learned psychomotor act.
education
based on Equal Employment Opportunity Commission guidelines, refers to formal training.
internally consistent compensation systems
clearly define the relative value of each job among all jobs within a company. This ordered set of jobs represents the job structure or hierarchy. Companies rely on a simple, yet fundamental, principle for building internally consistent compensation systems: Jobs that require greater qualifications, more responsibilities, and more complex duties should be paid more highly than jobs that require lesser qualifications, fewer responsibilities, and less complex job duties.
job based pay
compensates employees for jobs they currently perform.
early retirement programs
contain incentives designed to encourage highly paid employees with substantial seniority to retire earlier than they planned. These incentives expedite senior employees' retirement eligibility and increase retirement income. In addition, many companies include continuation of medical benefits.
health insurance
covers the costs of a variety of services that promote sound physical and mental health, including physical examinations, diagnostic testing (X-rays), surgery, and hospitalization. Companies can choose from four broad classes of plans: fee-for-service plans, managed care plans, point-of-service plans, and consumer-driven health care.
Portal-to-Portal Act of 1947
defines the term hours worked that appears in the FLSA.
stakeholders to compensation function
employees, line managers, executives, unions, us government
lilly ledbetter fair pay act
enables a female employee to file a charge of illegal pay discrimination within 180 days following receipt of a paycheck in which she feels that she may be discriminated against.
patient protection and affordable care act of 2010
enacted on March 23, 2010, is a comprehensive law that requires employers to offer health insurance to employees (the employer mandate). If individuals do not have insurance through employment, they are required to purchase their own insurance (the individual mandate). In either case, monetary penalties are assessed for failure to meet the law's insurance mandates. Since the act's passage, the employer requirements have been implemented in phases. Full implementation will be completed by 2018.
occupational safety and health act of 1970
ensures safe and healthful working conditions for working men and women by authorizing enforcement of the standards under the act.
davis-bacon act of 1931
established employment standards for construction contractors holding federal government contracts valued at more than $2,000. Such contractors must pay laborers and mechanics at least the prevailing wage in their local area.
differentiation strategies
focus on product or service development that is unique from those of its competitors. Differentiation can take many forms, including design or brand image, technology, features, customer service, and price.
federal constitution
forms the basis for employment laws.
Pay grades
group jobs for pay policy application. Human resource professionals typically group jobs into pay grades based on similar compensable factors and value.
bias errors
happen in the performance evaluation process when the rater evaluates the employee based on the rater's negative or positive opinion of the employee rather than on the employee's actual performance.
the role of compensation as a strategic business partner
help leverage the value of employees for competitive advantage based on the design and use of various compensation practices
wage
hourly pay
employee benefits
include any variety of programs that provide paid time off (e.g., vacation), employee services (e.g., transportation services), and protection programs (e.g., life insurance).
Extrinsic compensation
includes both monetary and nonmonetary rewards.
consumer price index
indexes monthly price changes of goods and services that people buy for day-to-day living.
piecework plans
individual incentive pay programs, reward employees based on their individual hourly production against an objective output standard, determined by the pace at which manufacturing equipment operates. For each hour, workers receive piecework incentives for every item produced over the designated production standard. Workers also receive a guaranteed hourly pay rate regardless of whether they meet the designated production standard.
disparate treatment
intentionally treating women less favorably than men based upon their gender is
compensation survey
involve the collection and subsequent analysis of competitors' compensation data.
commission
is a form of incentive compensation, based on a percentage of the product or service selling price and the number of units sold.
CRA of 1964 (title VII) civil rights act
is a major piece of federal legislation designed to protect the rights of underrepresented minorities.
improshare
is a specific kind of gain sharing program that rewards employees based on a labor hour ratio formula. A standard is determined by analyzing historical accounting data to find the number of labor hours needed to complete a product. Productivity is then measured as a ratio of standard labor hours and actual labor hours.
specialist
may be an HR executive, manager, or non-manager who is typically concerned with only one of the areas of compensation practice.
free rider effect
occurs when employees of lower ability, skill, and effort benefit equally as employees of higher ability, skill, and effort in group incentive plans. The free-rider effect can lead to resentment and turnover of stronger contributors because weaker contributors are getting a "free ride."
federal government
oversees the entire United States and its territories. The vast majority of laws that influence compensation were established at the federal level.
profit sharing plans
pay a portion of company profits to employees, separate from base pay, cost-of-living adjustments, or permanent merit pay increases. Two kinds of profit sharing plans are used widely today: current profit sharing and deferred profit sharing.
company wide
profit sharing plans and employee stock option plans are incentives on this level
right to work laws
prohibit management and unions from entering into agreements requiring union membership as a condition of employment.
pension programs
provide income to individuals throughout their retirement.
horizontal skills
refer to similar skills (e.g., assembly skills applied to lawn mowers and assembly skills applied to snow blowers).
incentive effect
refers to a worker's willingness to work diligently to produce more quality output than simply attending work without putting in the effort
collective bargaining agreement
refers to a written document that describes the terms of employment approved by management and employees during negotiations. It codifies the terms and conditions of employment regarding rates of pay and pay adjustments, hours of work, or other working conditions of employees.
affirmative action
refers to a written document that states a company's goals to recruit and hire underrepresented minorities.
exempt
refers to an employee's status regarding the overtime pay provision of the Fair Labor Standards Act of 1938 (FLSA). Administrative, professional, and executive employees are generally exempt from the FLSA overtime and minimum wage provisions.
nonexempt
refers to an employee's status regarding the overtime pay provision of the Fair Labor Standards Act of 1938 (FLSA). Employees whose jobs do not fall into particular categories (e.g., administrative, professional, and executive employees) are generally covered by overtime and minimum wage provisions.
competency
refers to an individual's capability to orchestrate and apply combinations of knowledge and skills consistently over time to perform work successfully in the required work situations.
verticle knowledge
refers to knowledge traditionally associated with supervisory activities (e.g., performance appraisal and grievance review procedures).
horizontal knowledge
refers to similar knowledge (e.g., record keeping applied to payroll applications and record keeping applied to employee benefits).
baby boom generation
refers to the generation of people born between 1946 and 1964.
depth of knowledge
refers to the level of specialization, based on job-related knowledge, an employee brings to a particular job.
depth of skills
refers to the level of specialization, based on skills, an employee brings to a particular job.
distribution
refers to the payment of vested retirement benefits to participants or beneficiaries.
intrinsic compensation
reflects employees' psychological mind-sets that result from performing their jobs, for example, experiencing a great feeling from the belief that one's work matters in the lives of others.
market competitive pay systems
represent companies' compensation policies that fit the imperatives of competitive advantage. Compensation professionals build market-competitive compensation systems based on the results of compensation surveys.
services
represent discretionary employee benefits that provide enhancements to employees and their families (e.g., tuition reimbursement and day care assistance).
pay structures
represent pay rate differences for jobs of unequal worth and the framework for recognizing differences in employee contributions.
Cost-of-living adjustment (COLA)
represent periodic base pay increases that are based on changes in prices, as indexed by the consumer price index (CPI). COLAs enable workers to maintain their purchasing power and standard of living by adjusting base pay for inflation
cost of living adjustments
represent periodic base pay increases that are based on changes in prices, as indexed by the consumer price index (CPI). COLAs enable workers to maintain their purchasing power and standard of living by adjusting base pay for inflation
interindustry wage differentials
represent the pattern of pay and benefits associated with characteristics of industries. Interindustry wage differentials can be attributed to a number of factors, including the industry's product market, the degree of capital intensity, the profitability of the industry, and unionization of the workforce.
compensation plans
represent the selection and implementation of pay level and pay mix policies over a specified time period, usually one year.
paid time off
represents discretionary employee benefits (e.g., vacation time) that provide employees time off with pay.
central tendancy
represents the fact that a set of data clusters around or centers on a central point. Central tendency is a number that represents the typical numerical value in a data set.
base pay
represents the monetary compensation employees earn on a regular basis for performing their jobs. Hourly pay and salary are the main forms of base pay
company stock
represents the total equity or worth of the company.
disparate impact
represents unintentional employment discrimination. It occurs whenever an employer applies an employment practice to all employees, but the practice leads to unequal treatment of protected employee groups.
FMLA 1993 Family and Medical leave act
requires employers to provide employees 12 weeks of unpaid leave per year in cases of family or medical emergency
Equal Pay Act of 1963
requires that men and women should receive equal pay for performing equal work.
group incentive programs
reward employees for their collective performance, rather than for each employee's individual performance.
merit pay programs
reward employees with permanent increases to base pay according to differences in job performance.
pay for knowledge
rewarding managerial, service, or professional workers for successfully learning specific curricula.
job analysis
s a systematic process for gathering, documenting, and analyzing information in order to describe jobs.
civil rights act of 1991
shifted the burden of proof of disparate impact from employees to employers, overturning several 1989 Supreme Court rulings.
fairpay rules
specify the criteria for distinguishing between work that is not exempt from the overtime pay provision of the Fair Labor Standards Act.
human resources strategies
specify the use of multiple HR practices to reinforce competitive business strategy. These statements are consistent with a company's competitive strategy.
job descriptions
summarize a job's purpose and list its tasks, duties, and responsibilities, as well as the skills, knowledge, and abilities necessary to perform the job at a minimum level.
strategic decisions
support business objectives
tactical decisions
support competitive strategy
staff employees
support the functions performed by line employees. Human resources and accounting are examples of staff functions.
job evaluation
systematically recognizes differences in the relative worth among a set of jobs and establishes pay differentials accordingly.
seniority pay
systems reward employees with permanent additions to base pay periodically, according to employees' length of service performing their jobs.
Strategic Compensation
the design and implementation of compensation systems to reinforce the objectives of both HR strategies and competitive business strategies
skill based pay
used mostly for employees who do physical work, increases these workers' pay as they master new skills.
severance pay
usually includes several months of pay following involuntary termination and, in some cases, continued coverage under the employer's medical insurance plan. Employees often rely on severance pay to meet financial obligations while searching for employment.
colaboration
when individuals work together on a task, constructing meaning and knowledge as a group through dialogue and negotiation is known as
downward
Antidiscrimination laws have contributed to some of this direction in union influence
compensation
Compensation budgets are blueprints that describe the allocation of monetary resources to fund pay structures
compensation
Compensation budgets are blueprints that describe the allocation of monetary resources to fund pay structures.
pervailing wages
Construction contractors working on government contracts valued at more than 2000 must pay their laborers and mechanics this type of local area based wage to be in compliance with the davis
effective communication
Effective performance appraisals are based on this
5 years
General rule of thimb is that short term company goals last less than
game sharing plan
Gunther rohn was rewarded for making a suggestion that saved ewe and eye electronics thousands of dollars. This type of incentive compensation plan works best
decrease
Pay raises not considered large enough may have this effect on motivation
do not control for influence of other variables
Pay rate differentials do not fully match relative pay differentials
job analysis
This practice enables HR professionals to develop performance measures
debt focused skills
This refers to the level of specialization or expertise an employee possesses in a particular job
compensation generalist
This type of professional involved in the compensations functions such as building job structures, market competitive pay systems and merit pay structures
comparison based
The xyz company ranks its employees from the best performer to the poorest performer and the employee with the best performance
impro share
The xyz manufacturing co uses gainsharing plan that gives incentives to employees to finish products rather than to incentivize dollar savings. Therefore this company measures productivity as the ratio of standard labor hours and actual labor hours. This is the kind of gainsharing program xyz manufacturing co uses.
business ethics
These are guiding principles that influence the way individuals and organizations behave within the society that they operate
european con market and pacific rim
These economies provide a higher quality of academic preparation and workplace learning for the non college portions of their workforces than the American economy
right to work laws
These laws prohibit management and unions from entering into agreements requiring union membership as a condition of employment
group incentive plans
These types of incentive plans reinforce teamwork, cultivate loyalty to the company, and increase productivity
project team
These types of teams consists of a group of people who are assembled to complete a one time assignment
employees and supervisors
They determine the particular objectives in a management by objectives appraisal system
signing bonuses
are monetary awards given to promote recruitment and job offer acceptance. These bonuses are particularly effective when coupled with a competitive wage or salary offer.
portal to portal act
this law defines hours worked
merit
A supervisor relying on demographic characteristics as the basis for awarding pay increases tells she is relying on factors other than this
strictness errors
this performance appraisal error reflects the tendency to rate every employee at the low end of the rating scale, regardless of actual performance
pay structure
this represents the pay rate differences for jobs and employee contributions of unequal worth to a company
knowledge based pay
this type of pay program rewards employees for successfully learning specific curricula
skill variety
In the garment factory of the XYZ co line workers are trained to work at different manufacturing steps such as grading, cutting, sewing, and assembling pressing etc. cos strategy of training is an example of
Stair step model
Jamie earned a raise in pay when he finished the training for the technician 2 position. He will receive another raise when he finishes the training for the tech 3 position. The company is probably using this type of model
deferred profit sharing
The xyz company pays a portion of company profits to its employees. The management offers this incentive
skills block model
Regarding person focused pay programs the stair step model addresses depth while this model emplasezes both horizontal and vertical
incentive pay
The criteria for judging an award tends to be objective, such as quantity produced in this type of pay system
sorting effect
This effect describes the concept that a hard working employee is likely to stay at an incentive pay position
fixed for scholar profits
This formula for determining the amount available for profit sharing uses a specific percentage of annual profits contingent upon the successful attainment of a specified profit goal
communication
This is the use of oral written and non verbal skills for multiple purposes
merit pay
This pay system is most commonly used in America pay
competitive business strategy
This refers to the planned use of company resources financial capital equipment capital and human capital to promote and sustain
meaningful pay increase
This term refers to the minimum pay increase that employees view as a significant change in their compensation amount
job enrichment
This term reflects an approach to job design that results in the development of more intrinsically motivating and interesting work
job based pay programs
This type of pay program applies to an organization wide context because employees earn base pay rates for the jobs they perform
market competitive pay systems
a company's compensation policy. It refers to the imperatives of competitive advantage and the key role in promoting recruitment and retention of talented employees
FLSA of 1938 (Fair Labor Standards Act)
addresses major abuses that intensified during the Great Depression and the transition from agricultural to industrial enterprises. These include substandard pay, excessive work hours, and the employment of children in oppressive working conditions
protection programs
are either legally required or discretionary employee benefits that provide family benefits, promote health, and guard against income loss caused by such catastrophic factors as unemployment, disability, or serious illnesses.
abilities
are enduring attributes of the individual that influence performance.
compensable factors
are job attributes (e.g., skill, effort, responsibility, and working conditions) that compensation professionals use to determine the value of jobs.
NLRA (1935) National Labor Relations Act
establishes employees' rights to bargain collectively with employers on such issues as wages, work hours, and working conditions.
building block of strategic compensation
extrinsic and core as well as nonmonetary compensation or employee benefits
strategic compensation
refers to the design and implementation of compensation systems to reinforce the objectives of both HR strategies and competitive business strategies. Compensation and benefits executives work with the lead HR executive and the company's chief financial officer (CFO) to prepare total compensation strategies.
competitive business strategy
refers to the planned use of company resources—financial capital, equipment capital, and human capital— to promote and sustain competitive advantage. The time horizon for strategic decisions may span multiple years.
capital
this enables companies to generate income, higher company stock prices, economic value, strong positive brand identity and reputation
