Human Resources Final

What is social security?

(in the US) a federal insurance program that provides benefits to RETIRED people and those who are unemployed or disabled.

Examples of pay for time not worked

-Unemployment insurance -Vacations and holidays (Legal aspects, Sick leave, Cost-reduction tactics) -Tracking sick leave -Parental leave and the Family and Medical Leave Act (FMLA) -Severance pay -Supplemental unemployment benefits

Examples of insurance benefits

-Workers' compensation (Determining benefits, Controlling costs) -Hospitalization, health, and disability insurance (Coverage) -Long-term care -Life insurance -Benefits for part-time and contingent workers

Why do companies use surveillance to monitor what employees do?

-employee theft, such as stealing of merchandise, supplies, or equipment -the selling of customer information, trade secrets. -Monitoring quality control -ensuring the safety of employees -eliminating the amount of time employees spend on the web and doing personal business on company time

What can help with the adjustment to international work/assignments for expatriate (expat) managers?

-language fluency -having preschool age children rather than school-age or no children -a strong bond between spouse and expat partner.

Why do international assignments fail?

-personality clashes with assignments -the person's intentions -non-work factors -Family pressures

What are the steps for employers in establishing pay rates?

1) Determine the worth of each job in your organization through job evaluation (to ensure internal equity). 2) Conduct a salary survey of what other employers are paying for comparable jobs (to help ensure external equity). 3) Group similar jobs into pay grades. 4) Price each pay grade by using a wage curve. 5) Fine-tune pay rates.

What are the characteristics of European labor practices?

1) centralization 2) employer organization 3) union recognition 4) content and scope of bargaining.

How do inter-country differences affect HRM?

A company operating multiple units abroad does not have the luxury of dealing with a relatively limited set of economic, cultural, and legal variables.

Transnational corporation

A company that conducts research, operates factories, and sells products in many countries, not just where its headquarters or shareholders are located. A firm that attempts to balance local responsiveness and global scale via a network of specialized operating units

What is the trait approach?

A performance evaluation method based on people's characteristics continue to be used despite their subjectivity (e.g., graphic rating scales, forced-distribution and essay methods). Attempts to identify personality characteristics or interpersonal attributes that can be used to differentiate leaders from followers.

What is the results method?

A performance evaluation method which focuses on the measurable contributions that employees make to the organization (e.g., MBO)

What is the behavioral approach?

A performance evaluation method which provides more action-oriented information to employees (e.g., critical incident, behavioral checklist methods, BARS)

What is workers compensation?

A publicly sponsored system that pays monetary benefits to workers who become injured or disabled in the course of their employment. Workers' compensation is a type of insurance that offers employees compensation for injuries or disabilities sustained as a result of their employment.

According to an AMA report more than _____ of employees have been fired for misusing email and internet.

A quarter (1/4th, 25%)

What is the definition of a compressed workweek?

A reduced work arrangement that allows employees to work fewer days, but still earning the same number of hours per week as the employee would if working a standard work week. Compressed workweeks may consist of four 10-hour days, three 12-hour days, or other such combinations.

What are Employee Stock Ownership Plans (ESOPs)? (Long Term Incentives)

A system where employees are given company stock as a form of compensation -Can be a great way for the company to save money (Microsoft Example) -Is risky for the employee, they bear all the risk

What are the advantages and disadvantages of merit lump sum bonuses?

ADVANTAGES: •Cheaper than using merit pay adjustments •Can be tightly tied to desired behaviors- very powerfully motivating DISADVANTAGES: •Sends message that bonuses must be earned every year- doesn't reward past performance •Some employees recognize this as a cost-cutting measure

What are solutions to the Agency Theory/Problem?

Align self-interest with organizational interest, then people's inherent "selfishness" actually benefits the organization. For example, We set up compensation systems to align the interests so that people do act as "agents" of the organization- variable pay and incentives are means of doing this.

What is a benefit? (In Employee/Employer Relationship)

An indirect financial and non-financial payment given to an employee or group of employees as a part of organizational membership. •Benefits comprise between 30% - 40% of total payroll costs •Recent surveys estimate benefits to cost about $20,000 per employee per year •Total benefits cost in the US estimated at $4 trillion per year •Health care costs are the highest

What is a pension plan? (Long term incentive)

Compensation systems that defer presently earned compensation for later use during retirement to supplement Social Security payments

Definition of whistle blowing

Complaints to governmental agencies by employees about their employers' illegal or immoral acts or practices

What are inter-country differences?

Countries differ widely in their cultures, which are based on values to which their citizens adhere. Cultural differences from country to country necessitate corresponding differences in management practices among a company's subsidiaries.

What are Long Term Incentive Plans?

Defined as additions to base pay that operate over longer than a single year period.

How do economic inter-country differences effect business?

Differences in economic systems translate into differences in HR practices. In Europe, for example, variances in HR practices affect minimum European Union wages, working hours, and employee representation. In China, there are relatively scarce employment services, and there is an active union movement. Sporadic labor shortages are fairly widespread.

What is wrongful discharge?

Discharge, or termination of an employee that is illegal -Suits challenge an employer's right under the employment-at-will to terminate employees -Exceptions to the employment-at-will doctrine •Violation of public policy •Implied contract •Implied covenant

International corporation

Domestic firm that uses its existing capabilities to move into overseas markets

How does DuPont use surveillance?

DuPont use long distance cameras to watch employees on its loading docks.

Expatriates or home-country nationals

Employees from the home country who are on international assignment

What is the argument between employers and employees concerning privacy rights?

Employees strongly defend their rights to privacy. Meanwhile, employers defend their rights to monitor employees' activities when they directly affect a business, its productivity, workplace safety and morale. So who is right - employees or employers? Laws and court cases related to workplace privacy attempt to balance an employee's legitimate expectation of privacy against the employer's need to supervise and control the efficient operation of the organization.

Psychological contract

Employees tend to regard their jobs as a right that should not be taken away without "just cause" (good reason). Although employees might believe they have a right to their jobs, there are no laws in the US guaranteeing them as much. Nonetheless, workers have certain expectations about the employment relationships they have with their employees. This expectation is referred to as the _______ and it consists of an employer and an employee's beliefs about the mutual obligations they have toward one another.

Third-country nationals

Employees who are natives of a country other than the home country or the host country

Host-country nationals

Employees who are natives of the country where an overseas subsidiary is located.

How can employers improve expatriate (expat) retention rates?

Employers need to value their (expatriate) experience more highly and provide a systematic repatriation program.

What are the protections for whistle blowers?

Federal and state laws protect whistleblowers such as the Sarbanes-Oxley Act, passed in 2002 protect whistleblowers in public traded companies and there is also a Whistleblower Protection Act.

Global corporation

Firm that has integrated worldwide operations through a centralized home office

Multidomestic corporation (MDC)

Firm with independent business units operating in multiple countries

What are privacy rights?

Freedom from unwarranted government or business intrusion into one's personal affairs -Involves the individual's right to be given personal autonomy and left alone

Can employers search employees' work lockers, desks, suitcases, work areas without their knowledge?

Generally speaking, the answer is yes. However, random searches of employees' personal belongings without probable cause should be avoided.

Example of Point Factor Plan Method

Jobs skills are classified in "factors". Each factor is then divided into levels or degrees (Factor 1= 10% weight, Factor 2= 25% weight, Factor 3= 40% weight, Factor 4= 25% weight) which are then assigned points. Each job is rated using the job evaluation instrument. The points for each factor are summed to form a total point score for the job. Factor 1 = 100 x 10% = 10 pts Factor 2 = 200 X 25% = 50 pts Factor 3 = 150 x 40% = 60 pts Factor 4 = 100 X 25% = 25 pts Total pts = 145 pts

What are the rights which employees generally lack?

Legal scholars recognize that the protection of employee privacy rights extends only so far; federal and state courts generally view the privacy rights of employees as minimal. For example, it is legal to install cameras in the workplace (except in bathrooms and locker rooms) as long as employees are informed about them.

What are employee rights?

Guarantees of fair treatment that employees expect in return for their services to an employer.

Off-shoring

Having local employees outside the home country perform jobs that the firm's domestic employees previously did in-house. Offshoring can occur, for example, if some of a product is created in the U.S., completed in Mexico (or an overseas firm) and then returned to the U.S.

What are Gain Sharing Plans? (Large Group Incentive Plans)

The systems where the "gains" from employee suggestions/involvement are shared between the company and the employees. These are formal "employee involvement" or "labor-management cooperation" programs Ex: Continuous Improvement programs, TQM or Six Sigma systems -All involve utilizing employee expertise/knowledge to make improvements that result in financial gains -"Improvements" might be cost-savings, productivity increases, innovations -"Expertise" can come in form of individual employee suggestions to committees that work on developing ideas for improvements

What are employer responsibilities?

Th employer is responsible to provide a safe workplace for employees while guaranteeing safe, quality goods and services to consumers Employers have to exercise reasonable care while: -Hiring -Training -Assignment of employees to jobs

What is one of the most worrisome issues with sending employees abroad for work assignments?

That 40% to 60% of employees will probably quit within 3 years of returning home.

What is the Agency Theory?

The idea that people act in their own selfish self-interests in order to maximize their own utility. This leads them to act in ways that might NOT be beneficial to the organization.

How does cheesecake factory use surveillance?

The restaurant chain uses video surveillance in kitchen, dining rooms to monitor how workers treat customers and each other.

"Employment at will" definition

The right of an employer to fire an employee without giving a reason and the right of an employee to quit when he or she chooses -Basic rule dominating the private-sector employment relationship

What is Merit Pay Adjustment? (Short Term Incentives)

an adjustment (usually increase) to base salary designed to reflect the individual employee's contribution to the organization and is designed to motivate people to perform at higher levels by rewarding better than average performance. Merit pay is based on the performance appraisal (PA) process, where adjustments to base pay reflect the performance evaluation results. •Usually comes in the form of a percentile (%) increase in base pay- i.e. 2% increase

What is severance pay?

an amount paid to an employee upon dismissal or discharge from employment.

Third-country nationals

are citizens of a country other than the parent or the host country

Locals

are citizens of the countries where they are working

Home-country nationals

are citizens of the country in which the multinational company has its headquarters

Expatriates aka EXPATS

are non-citizens of the countries in which they are working

How can employers make expatriate (expat) manager assignments more successful?

by providing realistic previews, facilitating self-selection, and using traditional selection procedures focusing on traits such as openness.

Kidnapping and Ransom (K&R) Insurance

covers several costs associated with kidnappings, abductions, or extortion attempts. These costs might include: hiring a crisis team or the actual cost of the ransom.

Short Term Incentives

defined as additions to base pay that operate within a time-frame of (roughly) a single year or less •Main purpose is to motivate behavior in the short-term and increase performance to support organizational goals

Polycentric

firms that staff foreign subsidiaries with host-country nationals. They believe they are the only ones that can really understand the culture and the behavior of the host country market

Geocentric

firms that staff foreign subsidiaries with the best people for key jobs regardless of nationality. They believe that the best manager for any specific position anywhere on the globe may be in any of the countries in which the firm operates.

Ethnocentric

firms which staff foreign subsidiaries with parent-country nationals. They believe that home country attitudes, management styles, and knowledge are superior to the host country.

Neglient Hiring Lawsuits

have forced managers to take extra care in the employment and management of their workforce.

What is Flextime?

is an arrangement allowing employees to have flexibility in scheduling their workday around core hours, employees are required to work a specific number of hours per week but are free to vary those hours.

What is supplemental pay?

money given to employees in addition to their regular wages. Supplemental wages include bonuses, commission pay, overtime pay, payments for accumulated sick leave, severance pay, awards, prizes, back pay, retro pay increases, and payments for nondeductible moving expenses.

What is a 360 degree performance appraisal?

performance measurement that combines information from the employee's managers, peers, subordinates, self, and customers. Gives you a more holistic evaluation of performance & can help overcome biases or errors of a single rater.

What are the Methods of Addressing Equity Issues?

-Area wage and salary surveys -Job analysis and job evaluation -Performance appraisal and incentive pay -Communications, grievance mechanisms, and employees' participation

Why/What for are performance appraisals used for by organizations?

-Compensation, pay for performance (merit pay) -Training & Development, assessing training needs -Staffing & Selection, employee movement (promotions, demotions, lateral moves) -Part of Performance Management Process

•Management values and international staffing policy examples

-Ethnocentric practices -Polycentric practices -Geocentric practices

Examples of Flexible Work Schedules

-Flextime -Compressed workweeks -Workplace flexibility -Job-Sharing -Work-Sharing -Telecommuting

To understand local markets, HR managers can:

-Get to know the universities, technical schools, and primary schools in the area -Develop network in the business and government communities -Understand the employees of the firm's competitors

Motivation Theory

-Goal: Managers want to direct and control employee behavior to help achieve organizational success -Compensation is used as a tool to direct and control (i.e. motivate) desired behaviors -Managers set clear performance standards and reward good performance with compensation -Behavioral reinforcement at work- positive reinforcement through compensation

Direct or Indirect compensation is given based on:

-Increments of time (Hourly or Salaried) -Performance (Piecework or Commission)

What are some inter-country differences influencing international HR practices?

-Political -Cultural -Economic -Legal -Labor Relations

Repatriation Program

-Process of transition for an employee home from an international assignment -Designed to prepare employees for adjusting to life at home -Employees are given guidance about how much the expatriate experience have changed them and their families

What are some examples of employee rights?

-Protest unfair disciplinary actions -Question genetic testing -Have access to their personal files -Challenge employer searches and monitoring -Be free from employer discipline for off-duty conduct

Sources of Wage and Salary Information

-Self-Conducted Surveys -Consulting Firms -Professional Associations -Government Agencies -The Internet

Examples of retirement Benefits

-Social security -Pension plans (401K plans and other defined contribution plans)

Examples of Employee Benefit Plans

-Supplemental pay: sick leave and vacation pay -Insurance: workers' compensation -Retirement: Pensions -Employee services: child-care facilities

What are the two main types of pension plans?

1. Defined Benefit Pension ("Traditional" Pension) -Predetermined monthly benefit level based on some formula (Usually some variation of: Benefit = Earnings * Years of Service) -Benefit NEVER runs out- is present until death of individual or his/her beneficiary -Investment risk borne by employer- must adequately fund the "pool" of money • 2.Defined Contribution Pension ("401 (k)") -Predetermined employer contribution to an account (Often in the form of a "match" of employee money up to a certain $ amount or %) -Upon retirement employee retires with their "account" of money and can use it without restriction- lots of flexibility »Might run out prior to death or might not -Investment risk borne by the employee- they are responsible for managing money

What conditions must be met for merit pay systems to properly work in motivating employees?

1. Performance Appraisal (PA) system must be valid - actually reflect individual performance & contribution 2.Merit increases are only given to those who actually perform above average 3.Employees are clear about performance expectations- what is above average

What are the two kinds of Employee Stock Ownership Plans (ESOPs)?

1. Stock Grants- employees are given full shares of company stock •Has immediate value- the current price of a share of stock at time of grant •Ultimate value depends on when the employee sells the stock- time of sale 2.Stock Options- employees are given the "option" to purchase shares of stock at a predetermined price •Value of options depends on the difference between the "option price" and the value of stock at the time of "exercise date" (when options are used/cashed in) •Stock options are usually only valid for a fixed period of time •Options can be worthless if the "option price" is higher than the actual stock price -Known as your stock options being "under water"

Does pay for performance work?

1.Attract Talent- yes! •Pay Level is important- higher overall pay is generally more attractive •Pay Mix also important- employees want "fit" with personality & values 2.Retain Talent- yes! •Financial compensation does affect retention- pay satisfaction & fairness •Intrinsic/intangible factors are also strongly important 3.Motivate Talent to Develop KSAOs- depends •Yes, if development is rewarded through skill-based pay 4.Motivate Talent to Perform Better- yes! •Yes, if pay for performance system design & execution are done well •Problem is many systems are done poorly, so research conclusions are mixed

What is a flexible benefits program?

A benefit program that offers employees a choice between various benefits including flexible work schedules, cash, life insurance, health insurance, vacations, retirement plans, and child care. Although a common core of benefits may be required, you can choose how your remaining benefit dollars are to be allocated for each type of benefit from the total amount promised by the employer.

What are the steps to setting up a results/outcomes performance appraisal system?

1.Determine Major Responsibilities (Accountabilities) -Ex: a Manager is responsible for employee supervision, budget, production 2.Determine Objectives (Goals) -Ex: Supervise employees at an acceptable level & focus on employee development; creation and adherence to budget guidelines; supervise efficient, quality, on-time production processes 3. Determine Performance Standards -Ex: Receive managerial ratings of at least 3.5 out of 5 & create an employee development plan for all direct reports; reduce budget by 10%; increase production efficiency by 5%, have less than 3 late product deliveries

Examples of the levels pay for performance aka variable pay operates on

1.Individual- compensation tied to individual employee performance Ex: merit pay, individual incentives 2.Team- compensation tied to team/group performance Ex: team bonuses or other incentives 3.Business Unit- compensation tied to unit (i.e. location, division) performance Ex: division bonuses, profit-sharing/gain sharing based on business unit 4.Organizational- compensation tied to organizational performance Ex: profit-sharing plans, gain-sharing plans, stock options

Examples of Short Term Incentives

1.Merit Pay (% adjustments to base salary) 2.Lump-sum Bonuses & "Spot" Awards 3.Individual Incentive Plans 4.Team/Group Incentive Plans

Examples of Long Term Incentive Plans

1.Pension Plans 2.Employee Stock Ownership Plans (ESOPs) 3.Length of Service Incentives

What are some of the problems associated with performance appraisals?

1.Performance standards aren't clearly specified & communicated -Employees don't know/are confused about what they are being assessed on 2.Measures are subjective and thus don't accurately reflect performance -Measures are vague & generic and thus don't support accurate assessment 3.Objective measures are used that assess distal outcomes employees often don't have much control over -"Distal" outcomes rely on performance of multiple people, not just individual employee 4.Managers give inaccurate ratings of performance -Managers rate just about all of their employees as average or slightly above -Ratings don't accurately reflect individual variance in performance 5.PA isn't given the proper time or importance to do it well -Managers are not incentivized or held accountable for results -PA often gets completed in a rush right before the deadline

How is job performance multi-dimensional?

1.Task Performance (In-Role) •Performance of the "core" behaviors of the job typically found in a job description—what we normally think of as performance •Behaviors are job-specific 2.Contextual Performance (Extra-Role) •Performance of "behaviors that contribute to the organization's effectiveness by providing a good environment for task performance to occur" -Behaviors such as: showing up to work (on time), volunteering for extra activities, being a good teammate, making suggestions for improvements, resolving conflict •Behaviors are fairly similar across different jobs

What are some issues with the Behavioral Approach in Job Performance?

Behaviors can sometimes be difficult to assess- subjective: -Requires more time & energy to observe/measure -"Mental work" often hard to assess- only indicated by outcomes of process

What are family friends benefits?

Benefits that cover different policies and programs designed by the companies for helping its employees in addressing varied demands of work and family. Such as: •On-site/subsidized child care •Elder care •Fitness and medical facilities •Food services •Educational subsidies •Sabbaticals •Loan programs •Stock options •Trauma counseling

Example of Job Classification Method

Class 1- Executives Class 11- Skilled Workers Class 111- Semi-Skilled Workers

What is the Outcomes aka Results Approach in Job Performance?

Examines the results of the behavior of the employees. Results are often more "distal" indicators of performance because employees have less control over the results and results often depend on the performance of others/external factor. Outcomes/results are often easier to assess due to being more objective. The appraisal would focus on specific HR OUTCOMES: •Staffing- increased new-hire performance ratings •Compensation- increased productivity, lower labor costs •Employee Relations- lower employee turnover, fewer complaints/grievances •Training- fewer performance-based terminations, increased productivity

What is the Behavioral Approach in Job Performance?

Examines the specific behaviors of employees and how they do the job. Behaviors are a more "proximal" indicator of performance because employees usually have a great deal of control over their individual behaviors The appraisal would focus on specific HR BEHAVIORS •Staffing- attractive recruiting pitch, correct interviewing procedures •Compensation- proper Pay Structure design, correct execution of merit pay system •Employee Relations- empathy with employee problems, outreach to union leaders •Training- correctly identified training needs, created a dynamic training session

What is the difference between employee expectations and employee rights?

Expectations become rights when they are granted to employees by the courts, legislation, or employers/organization. Over the past 50 years, various legislation have secured basic employee rights and brought numerous job improvements to workers in the US.

Psychological Contract definition

Expectations of a fair exchange of employment obligations between an employee and employer -Led to the development of legal principles about the security of one's job

Forms of Compensation Equity

External equity Internal Equity Individual Equity Procedural equity

Employers failure to honor the rights of employees, can result in...?

Failure to protect the safety and welfare of employees or consumer interests can invite litigation -Costly lawsuits -Damaging the organization's reputation -Hurting employee morale

Define negligence

Failure to provide reasonable care when such failure results in injury to consumers or other employees

What is the ULTIMATE goal of pay for performance aka variable pay?

In order to increase organizational performance.

How do you measure job performance?

It can measured in two different ways: 1) Behavioral Approach (Focuses on the process of performance- how it is achieved) 2) Outcomes/Results Approach (Focuses on the outcome of performance)

What are the purposes of Long Term Incentives?

Long-term incentive plans have multiple purposes: 1.Motivate long-term value creation (based on increased performance) 2.Encourage employees to remain at company 3.Tax-breaks for employee and employer for deferred compensation •LTIs often have legal tax advantages for both parties

What is Variable Pay aka Pay for Performance?

Main goal is to tie individual earnings to performance over both short- and long-term time frames. Compensation is not an entitlement but should be earned by virtue of merit & performance.

What are some problems and criticisms of merit pay (short term incentive)?

Merit pay has been heavily criticized for NOT being motivational the main problem is the expectation of merit pay- employees expect to receive some sort of merit increase regardless of performance. -Merit pay doesn't actually reflect "merit", but just average performance & Basically becomes a de facto Cost of Living Adjustment (COLA) -Many companies have gone along with this expectation, and thus merit pay loses its effectiveness- doesn't actually reward merit Another issue is Performance Appraisal (PA) systems are often very poorly designed & executed.

Transnational Virtual Teams

More flexible expatriate assignments involving no formal relocation such as virtual teams are becoming increasingly popular and are aided by technological advances.

What is affecting the employer's ability to internationally import and export workers?

New federal anti-terrorism laws

Why do firms face resistance from employees who are reluctant to accept foreign assignments?

One surprising reason is that kidnappings have been on the rise, including short-term kidnappings until an ATM can be used for ransom demands.

What are the difference between performance management and performance appraisal?

Performance management: -Dynamic, continuous process. -Improves organizational effectiveness. -Strategic goals. Performance appraisal: -Periodic (usually annual) event. -Formal review. -Last step in performance management process.

What ties compensation to the amount of production (or number of "pieces") the worker produces, and is popular as an incentive plan?

Piecework and/or Commission pay For instance, you divide a worker's hourly wage by the standard number of units he or she is to produce in one hour. Then for each unit produced over and above this standard, pay the worker gets an incentive. Sales commissions are another example of performance-based (in this case, sales-based) compensation.

Example of Pay Grades

Points Grade Salary 100 - 150 1 $25,000 151 - 200 2 $30,000 201 - 250 3 $37,500 251 - 300 4 $46,500 301 - 350 5 $62,000

Example of Factor Compensation aka Factor/Planned Comparison

Points and factors assigned from the point factor method are then used to analyze each individual workers skills and match them with the appropriate task/job. For example in a hospital setting, if you score extremely high on communication but low on medical knowledge you may be suited as a secretary/receptionist. If you score high on both communication and medical knowledge you would be better suited as a nurse.

What is performance management?

Process of creating a work environment in which people can perform to the best of the abilities

What are examples of common HR practices in China?

RECRUITING - Because of governmental constraints on migration and other legal constraints, it is relatively difficult to recruit, hire, and retain good employees in China. Their Employment Contract Law requires that employers report the names, sexes, identification numbers, and contract terms for all employees they hire within 30 days of hiring. SELECTION - The dominant employee selection method involves analyzing the applicant's résumé and then interviewing him or her. APPRAISING - Employee appraisal is particularly sensitive to the cultural realities in China. The appraisal therefore needs to follow the formalities of saving face and avoiding confrontational, tension-producing situations. COMPENSATION - Although many managers endorse performance-based pay in China, many employers, to preserve group harmony, make incentive pay a small part of the pay package

What are the methods for job evaluation (evaluating the worth of jobs)?

Ranking Job Classification Point Method Factor Compensation

Example of Job Ranking Method

Ranking Order 1. Office manager $43,000 2. Chief nurse $42,500 3. Bookkeeper $34,000

Who is qualified to assess or rate the performance of employees?

Raters should have intimate knowledge of the person's performance, but be careful as raters all have weaknesses & biases Possible raters (sources): 1.Direct Supervisor 2.Indirect Supervisors ("dotted lines") 3.Peers/Co-workers 4.Subordinates 5.Clients/customers 6.Self?

What is External Equity?

Refers to how a job's pay rate in one company compares to the job's pay rate in OTHER companies

What is Internal Equity?

Refers to how fair the job's pay rate is when compared to other jobs within the SAME company

What is Individual Equity?

Refers to the fairness of an individual's pay as compared with what his/her coworkers are earning for the same or very similar jobs within the company, based on each individual's performance

What is procedural equity?

Refers to the perceived fairness of the processes and procedures used to make decisions regarding the allocation of pay

What is a performance evaluation?

Result of an annual or biannual process in which a manager evaluates an employee's performance -Uses the information to show the person where improvements are needed and why

What are Spot Awards? (Short term Incentives)

Reward employees for outstanding performance on specific tasks/duties/activities as a part of regular job and/or a project where performance is so outstanding that it deserves extra reward. The focus is shorter-term performance on more finite tasks/activities opposed to looking for outstanding performance over a longer period of time There is no pre-set "target" or "standard" for performance just a reward for truly outstanding performance on some activity -Rewards might be small monetary bonuses, perks, and/or recognition •Ex: After closing the deal landing a big client, a support employee who worked long hours on the project and put together a great report that helped land the client is recognized in front of his/her peers and given a $250 cash bonus -Can be very powerful and effective! •Tightly tied to behavior, mix of financial & intangible rewards

How do firms select expatriate (expat) managers?

Selecting expatriate managers is similar to selecting domestic managers, but firms need to determine whether managers for foreign assignments can cope internationally.

What are Compensable Factors within a job evaluation?

Skills Effort Responsibility Working Conditions

What are some examples of legal considerations in compensation?

The Family and Medical Leave Act Title VII of the 1964 Civil Rights Act Fair Labor Standards Act (1938) Equal Pay Act (1963) Age Discrimination in Employment Act Americans with Disabilities Act

What is telecommuting?

The act of working at home through the use of phones, computer software, and the Internet in order to conduct business.

Describe the U.S. Healthcare Bubble

The cost of healthcare has surged in recent years, far outpacing wage growth and the overall rate of inflation in the 1980's and rising three times faster than wages in the past decade. During this time, struggling small businesses were slammed with a 180% increase in health insurance premiums. Individual premium rate hikes by health insurance companies have become incredibly audacious, such as Anthem Blue Cross of California's 68% increase in 2009 and 39% in 2010 even though the U.S. was experiencing its worst economic crisis since the Great Depression. With the unrealistically high and ever-climbing cost of healthcare, it isn't any surprise that 52 million Americans now lack health insurance, an alarming 40% increase since 2001.

What is job performance?

The desired behaviors of employees that contribute to the achievement of organizational goals and success •We distinguish between specific employee behaviors and results/outcomes of behaviors •Behaviors are "proximal" indicators, results/outcomes are "distal" indicators

What are some issues concerning the effectiveness of compressed workweeks?

The effectiveness of flexible work schedule arrangements may be questionable. Reviews indicate that they increase employee satisfaction and productivity. However, some critics are concerned that fatigue and accidents may increase. Ongoing measurement and tracking is the key here.

employment at will

The employment relationship has traditionally followed the common law doctrine of ______

What are merit lump sum bonuses? (Short term incentives)

These are one-time bonuses (used in place of % merit pay increases) given to employees to reflect above-average performance over a period of time. They function just like merit adjustments (reward consistently above average performance) but don't change an employee's base pay. -Could be awarded annually, semi-annually, quarterly, etc. •Are used as a cheaper alternative to merit adjustments to base pay -Bonuses must be earned each year- don't carry forward like merit increases

What are Pension Plans?

They are retirement plans that require an employer to make contributions to a pool of funds set aside for a worker's future benefit. The pool of funds is invested on the employee's behalf, and the earnings on the investments generate income to the worker upon retirement.

What are performance dimensions?

They are the specific "facets" of performance that you want to assess for each job (ie. Behaviors, Results/outcomes, Competencies, etc). They should be tailored to individual jobs/tasks, should be identified from job analysis/job evaluation, should be clearly communicated to employees.

The most popular form of employee compensation is....

Time-based pay (increments of time) is still most popular: Blue-collar workers get hourly or daily wages, for instance, and others, like managers or Web designers, tend to be salaried and paid by the week, month, or year.

How should transnational countries navigate legal differences in other countries?

U.S. law applies to U.S. citizens working overseas but local laws govern locals overseas. It is a good practice for transnational companies to adjust their procedures and practices to the local laws while respecting U.S. laws.

What are the difficulties associated with performance appraisals?

WORK TODAY IS MUCH MORE COMPLEX THAN IN THE PAST -Work is more "knowledge-based" & mental, not physical therefore it is harder to observe outcomes, so PA often relies on subjective measures of performance and the objective measures of performance are often not under complete control of the employee -Employees have a greater variety of duties which makes it harder to accurately assess all aspects and it is difficult to assess total performance based on performance "snapshots" EMPLOYEES OFTEN WORK IN TEAMS (INTERDEPENDENT WORK) -Can be difficult to distinguish individual contributions & performance from others -Can be difficult to account for how organizational & external factors impact individual performance MANAGERS HAVE A DIFFICULTY EFFECTIVELY ASSESSING EMPLOYEES -People have inherent psychological biases when evaluating others

The Iron Rule of Compensation

Watch out for the unintended consequences of incentivizing the workforce. Use incentives carefully- avoid incentivizing just one aspect of performance!! Think of performance in a more holistic manner

What is unemployment insurance?

a type of state-provided insurance that pays out when you lose your job and meet certain eligibility requirements. You will not receive unemployment benefits if you quit your job, are self-employed, or if you are fired for cause. The benefits are primarily paid out by state governments and funded by specific payroll taxes collected for that purpose.

Family and Medical Leave (FMLA)

provides certain employees with up to 12 weeks of unpaid, job-protected leave per year. It also requires that their group health benefits be maintained during the leave. -For the birth and care of the newborn child of an employee; -For placement with the employee of a child for adoption or foster care; -To care for an immediate family member (i.e., spouse, child, or parent) with a serious health condition; or -To take medical leave when the employee is unable to work because of a serious health condition.

What is the definition of workplace flexibility?

providing employees with technology so work can be accomplished wherever they are located.

Employee Compensation

refers to all forms of pay or rewards going to employees and arising from their employment. It consists of 2 parts: -Direct financial payments -Indirect financial payments

What is a performance appraisal?

the formal process by which an employee's actual performance is evaluated against clear performance standards set by the organization -usually done annually or semi-annually •Informal PA often occurs almost constantly through feedback, recognition, etc. -Most commonly occurs with supervisors rating their subordinates -Most commonly done on an individual level (ratings of individual performance) •Can be applied at the group level to rate the performance of teams -Lots of variation in occurrence, systems, and effectiveness

What is work sharing?

when a group of employees reduce their hours and split up their duties to prevent layoffs.

What is job sharing?

when two people share/split up one full-time job. Such a program can be useful for retirement-aged employees, allowing the company to retain the experienced employee while allowing him or her to have reduced work hours.

What are factors that influence pay?

•Legal considerations •Union membership •Company policy •Competitive strategy •Geography •Equity

What are the results or intensions of using variable pay?

•Motivates individual employees to perform above "normal" levels •Long-term incentives helps the retention of talent over time •Direct employee behaviors in desired ways to support business strategy

What are the goals of compensation policy?

•To reward employees' past performance •To remain competitive in the labor market •To maintain salary equity among employees •To mesh employees' future performance with organizational goals •To control the compensation budget •To attract new employees •To reduce unnecessary turnover

Exceptions to Employment at Will Doctrine

•Violation of public policy (ie. refusal to commit a crime, wrongdoing on behalf of employer) •Implied contract (ie. employees are discharged despite promise of job security) •Implied covenant (ie. employer acted with a lack of good faith and fair dealing. For example, terminating a salesperson to avoid paying a commission.)

Trends in Employer Health Care Cost Control

•Wellness programs •Claim audits •Limited plans •Outsourcing