Ch 18 Key terms

nonexempt

A federal government descriptor of employees under the Fair Labor Standards Act who get an hourly wage and time-and-a-half for overtime.

exempt

A federal government descriptor of employees who are exempt from the Fair Labor Standards Act and are generally paid salaries.

nepotism

A management philosophy of selecting and promoting people based on family ties.

meritocracy

A management philosophy of selecting and promoting people based solely on their being the most capable person for the job.

employee referral

An underused, low-cost method for finding workers that rewards your employees for recommending potential candidates who would be a great employee fit.

open-book policy

Concept that key employees should be able to see and understand a firm's financials, that they should have a part in moving the numbers in the right direction, and that they should have a direct stake in the strategy and success of the firm.

job description

Defines and discusses all the essential knowledge, skills, and abilities that are needed to fill a position.

Internet recruiting

Method of recruiting that allows you to search a résumé database or post a job description to the web; a small business owner who knows exactly what he or she wants can use filters to search vast numbers of résumés with pinpoint accuracy.

psychological contract

Refers to employees' beliefs about the promises between the employee and the firm. These beliefs are based on the perception that promises have been made (e.g., competitive wages, promotional opportunities, job training) in exchange for certain employee obligations such as giving of their energy, time, and technical skills.

living wage

The amount needed for a person (or family of a particular size) to meet the basic necessities of life from a single job.

probationary period

Trial period in which an employee has temporary status before a formal offer to work full time is presented.

Fair Labor Standards Act (FLSA)

A federal law which establishes minimum wage, overtime pay eligibility, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector (including small businesses) and in federal, state, and local governments.

advisory board

A group of formal or informal people offering advice and a sounding board to the owner or manager of a business. Unlike boards of directors, advisory boards (or single advisors) do not have legal or fiduciary responsibilities for the business.

virtual employee

An independent contractor who provides specialized business services or support from a distance, through the Internet, telephone, fax, or another method of communication.

on-the-job training

Delivered to employees while they perform their regular jobs; techniques include orientations, job instruction training, apprenticeships, internships and assistantships, job rotation, and coaching.

employee fit

The match between the needs, expectations, and culture of the small business with the expectations and the skills of the individual employee.