Comp & Ben Final Exam

What is the total for medical care as the remainder was paid as cash benefits for Workers Compensation?

$26.5 billion

Cost relative to benefits

* Current = Package Basis - packages are appealing and price doesn't matter. * Cost Centered = forecasting and evaluating benefits then use remaining budget. * Cost Sharing = budget amount made up and then can pick benefits to provide.

What are the three major ways wage may be adjusted under a union contract?

1. Deferred Wage Increases 2. Re opener Clauses 3. Cost of Living Adjustments

What is one of the Three Pillars of Japanese Employment Relationships?

1. Lifetime security in company 2. Seniority based pay and promotion systems 3. Enterprise unions

What are factors affecting employer choices of components of a benefit package?

1. Relationship to compensation costs 2. costs relative to benefits 3. Competitor Offerings 4. Role of benefits in Attraction, retention and motivation 5. Legal requirements

What are the different types of expatriates?

1. citizens of the employers parent or home country and living in another country 2. Citizens of neither countries and living and working in another country 3. Local Country nationals who are citizens of foreign country where parent employer operates

Why do certain groups received special compensation package?

1. special groups tends to be strategically important 2. positions tend to have built in conflict that arises because different faction place incompatible demands on members of the group

What protection does FMLA provide?

12 weeks of leave for all workers at companies that employee 50 or more people

How many more times does a top executive make than an average worker?

300%

What was the total cost of employee benefits in the U.S?

4 trillion dollars

What is the typical difference in pay between supervisors and those they supervise?

5%-30%

What has been the difference in benefit costs since 1959?

5.5%

What percentage is total compensation of operating expenses?

50 %

Employee International Compensation Systems are...

Attitudes/ Preferences, Knowledge/ Skills, Demographics

Competitor Offerings and best way to determine external equity is ...

Benefits have to be externally equitable and maintain in comparison to competitors... benefit survey

What flex plan allows for allocates a set dollar amount to employees and allows them to do what?

Cafeteria Style or flexible benefit plans

How do employers use software to assist them in communicating compensation with employees?

Communication Portals

Economic International Compensation Systems are...

Competitive market dynamics, capital flows and ownership, taxes

According to a recent study, employers are responding to increased benefit costs by doing what?

Considering which benefits are cost justified and increasing benefit costs to employees (Higher deductibles and copays)

What is the consumer price index?

Cost of Living Index measures changes in prices over time

Fair Labor Standards Act

Created time and a half on overtime pay

In general terms what has been the trend in Union Membership?

Decreasing

What is the Focus on Discrimination Cases?

Disparate Treatment and Disparate Impact

Disparate Treatment

Disparate or unequal treatment applies different standards to different emplolyees

What is the most common method of communicating benefits?

Employee Benefit Handbook

What job choice factor ranked least important in a recent MBA Student study?

Employee Benefits

Red Circle Rates

Employees paid above the maximum pay grade

Green Circle Rates

Employees paid below the minimum pay grade

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Employees who resign or are laid off through no fault of their own are eligible to continue receiving health coverage under employers plan at a cost borne by the employee

In 1990, what was the most common executive perk?

Executive Physicals

Social Security act

Has been designed and amended to provide a foundation of basic security for american workers and their families

Exporter

Headquarters knows best virtual opposites of localizes exporting a basic system makes it easier to move managers and professionals among locations or countries without having to change how they are paid

What are the Board of Directors are usually paid with?

Incentive Compensation

Trade unions and employer federations are examples of what international factors?

Institutional

Benefit Limitations

It is not uncommon to limit disability income payments to some maximum percentage of income and to limit medical/dental coverage for specific procedures to a certain fixed amount

What % do employees recall of their benefits?

Less than 15%

What are the three international compensation strategies?

Localizer, Exporter, Globalizer

Organizational International Compensation Systems are...

Managerial Autonomy, Information Flows, Technology Innovation Work Roles, Strategic Intent

What benefit do employees value the highest?

Medical/ Health Benefits

What is the biggest trend cost- containment

Out sourcing hiring vendors to administer their benefits programs

Tax Reforms of 1982

Permitted individual retirement accounts for eligible employees 401k, matched contribution, and retirement packages

What is a typical approach to top down budgeting?

Planned pay level rise

What are employees called when they are paid above the maximum of the pay grade?

Red Circle Rates

Maintenance Act

Required employers to offer alternative health coverage options to employees

Which benefit is federally administered?

Social Security

Re opener Clause

Specifies that wages, and sometimes such non wage items as pension and benefits, will be renegotiated at a specified time or under certain conditions

Localizer

Think Global, Act Local seek competitive advantage by providing products and services tailored to local customers work separate from headquarters

Globalizer

Think and Act Globally and Locally seek a common system that can be used as part of the glue to support consistency across all global locations

Institutional International Compensation Systems are...

Trade Unions Employer Federations Social Contract and Regulation Culture/ Politics

Cost Containment

Trying to control the rising cost of health care and achieving the maximum health benefit for every dollar spent.

What country is highly decentralized with little government involvement?

United States

What has been described as a major cost of doing business?

Workers Compensation

What are the three state or federally mandated employee benefits?

Workers compensation (State) Unemployment Insurance (Federal) and Social Security (Federal)

Employee Retirement Income Security Act (ERISA)

affects pension administration and internal revenue code

Legal Requirements

benefit package that complies with all aspects of the law

Discrimination legislation

benefits must be administered in a manor that does not discriminate against protected groups

Relationship to compensation costs

compensation manager considers employee benefit costs as part of total package, thinking "is there a better use for this money?"

Administrative Cost Containment

controlling costs through policies such as seeking competitive bids for program delivery

Employee Benefit Handbook

description of all benefits, including levels of coverage and eligibility requirements. Should be accompanied with group meetings and videos

Disparate Impact

differential effect on members of protected groups are illegal unless the differences are work related.

CoPay

employees pay a fixed percentage amount for coverage

Expatriate Pay

employees temporarily working and living in a foreign country

Employee retirement income Security Act

employer decides to provide a pension specific rules must be followed

Probationary Periods

excluding new employees from benefit coverage until some term of employment is completed

Role of Benefits in Attraction, Retention and Motivation and what is Work Life Balance?

goal is to retain employees - most commonly is through pensions and medical coverage - and maintain satisfaction ** Work/Life Balance

What are some of the trade offs considered in setting a compensation budget?

how much of an increase should be allocated according to employee contributions vs across the board increases

Why do companies choose to adopt flexible benefit plans?

increases employee awareness of the true costs of benefits and increases employee recognition of benefit value; cost and diversity in workplace now

Cost of Living Adjustments

involves periodic adjustments based typically on changes in the consumer price index

Deferred Wage Increases

negotiated at the time of initial contract negotiations with the timing and amount specifies in the contract

Employee Benefits

part of the compensation package, other than pay for time worked, provided to employees by payments

Planned pay level rise

percentage increase in average pay for the unit that is planned to ocurr

What is a Cafeteria Style Flex Plan?

permitted a set amount of money and get to put together their package.

Where do employees rank employee benefits in explaining job satisfaction?

ranked 2nd

Patient Protection and Affordable Care Act

required individuals to maintain minimal essential health insurance coverage or pay penalty unless exempted for religious beliefs or financial hardships

What occupational groups would be classified as eligible for overtime?

retail and hospitality firms

Pension Plans

retirement benefits provided by employers

What would motivate workers to join a union?

trustworthy management and the way management treats their employees