CH 10

finding wage information in marketplace to set pay

market pricing

employees perceive that their position is treated fairly within a pay program in relation to other jobs within the organization

internal equity

establishes a specific number of levels or grades within which all jobs must be placed

job classification

process of determining the relative worth of a job within the organization

job evaluation

a group of jobs having the same basic nature of work (e.g., clerk, teacher, engineer) but requiring different levels of skill, effort, responsibility or working conditions (e.g., entry versus senior level).

job family

Hypothetical place in which all sellers of labor with certain characteristics meet with the buyers of labor to make deals

labor market

Requires a pay structure that is based on an internal assessment of job worth through job evaluation; It is proposed as a means of eliminating gender and racial discrimination in the wage-setting process.

pay equity or comparable worth policy

Employees paid on basis of either (1) degree of specific knowledge they possess or (2) an inventory of skills

pay for knowledge

Most frequently used method of job evaluation: Does not rank jobs but rather establishes standards and assesses the degree to which a particular job fits a set standard for a factor

point-factor methods

According to the Bureau of Labor Statistics from 2004, women earn 78.5 cents for every dollar earned by a man.

wage gap

Survey of wages paid in relevant labor market for benchmark jobs

wage surveys

Includes such activities as weight control and exercise activities and anti-smoking assistance.

wellness programs

Major provisions of act cover hours of work, minimum wage, child labor, and equal pay. The federal minimum wage for covered nonexempt employees is $5.15 an hour.

Fair Labor Standards Act

Federal law granting eligible workers up to 12 weeks unpaid leave for specified emergencies.

Family Medical Leave Act of 1993 (FMLA)

provides current and former employees temporary extension of health benefits.

Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

Guarantee a specific payment based on a percentage of pre-retirement pay.

Defined-benefit pension plans

Typically provide counseling, diagnosis, and treatment for substance abuse, family and marital problems, depression, and financial and other personal difficulties.

Employee Assistance Programs (EAPs)

requires that men and women be given equal pay for equal work in the same establishment. The jobs need not be identical, but they must be substantially equal. It is job content, not job titles, that determines whether jobs are substantially equal

Equal Pay Act

Unemployment compensation, social security, and workers' compensation.

Federally mandated benefits

most popular point-factor plan for evaluating jobs

Hay Plan

Proposed to amend the Equal Pay Act; It emphasizes on "equal pay for equivalent work" and requires employers to explain/justify any wage gaps between male and female employees. It also amends the very broad definition of affirmative defenses in the Equal Pay Act.

Paycheck Fairness Act

Requires that pregnancy and pregnancy-related disabilities be treated the same as other disabilities

Pregnancy Discrimination Act of 1978

Davis-Bacon, Walsh-Healey, and Services Contract Acts require employers to meet prevailing wage levels when doing business with the federal government.

Prevailing Wage Laws

Exceptions in the Equal Pay Act; specifying that pay differentials are legally permitted when based on seniority, merit, quantity or quality of performance, and other factors (such as credentials, education, experience, market demands...)

affirmative defenses

using well known and strategically important jobs (e.g. many incumbents) with available external market data

benchmarking

consolidates existing pay grades into fewer, wider bands

broadbanding

Enables an employee to select a benefit package from a list of available options.

cafeteria-style benefit plans

cash received as in wages and salary and/or contingent upon performance

cash compensation

refers to all forms of financial returns and tangible benefits that employees receive as part of an employment relationship

compensation

Employer provides specific amount (usually percent of base pay) to be deposited in employee's account. Employee "owns" the vested portion of the account. Amount paid is the amount in the account (no guaranteed amount).

defined-contribution pension plans

The process of pricing jobs, that is, determining the market values of jobs; Involves identifying the total compensation provided by other organizations for jobs similar to the jobs under study.

external equity

indirect compensation; employee benefits beyond salary

fringe benefits

Matched to where an organization is located to find the geographic pool for best candidates.

relevant market

Principle tools to determine external equity

salary surveys

eligible employees covered by federal program of retirement, survivor, disability and health benefits (Medicare).

social security

Any form of compensation contingent on group membership or team results

team pay