Human Resources MGMT Chapter 8: Compensation and Benefits

Direct compensation

Consists of monetary payments based on time worked or results achieved, including both base and incentive pay.

The final step in developing a pay structure is:

establish pay grades

In a national survey,____________ of employees rated direct financial compensation as "very important" or "extremely important" to motivation. When stratified by age group there was statistically insignificant difference between Baby Boomer, Gen X and Gen Y on this point

54%

FLSA's recordkeeping requirements include all of the following except:

Disposing of records after an inspection

intrinsic rewards

Intrinsic rewards are internal and reflect an individual's interests, values and aspirations. An intrinsic reward is intangible; it might be the sense of satisfaction you get from mastering a new skill or the successful completion of a complex project or from working on a project that has personal significance or meaning.

Which of the following is not a best practice to close the pay gap?

Promoting based on time employed

Higher compensation for an employee who can fill a critical position is an example of which factor?

Supply and demand for labor

Industry ability to pay

There is a significant gap in what a technology company like Facebook can pay and what a non-profit, small business or start-up can afford to pay. The compensation differential may be offset by the sense of purpose or the opportunity to build a small business.

The appropriate first step for developing a pay structure is to:

conduct a job analysis

Compensation is generally broken down into two primary types:

direct and indirect

A false statement regarding intrinsic and extrinsic motivation would be:

intrinsic motivation occurs when you act with an external reward in mind

An electrical technician has been offered a position for 34% more than what he has been making at his current company. He asks the competitor why they are willing to pay him so much more, and they respond with "We've had an open position for the last 4 months, and haven't been able to find anyone qualified to fill it." Which factor explains this higher compensation?

supply and demand for labor

Labor Unions

Wages are one of a union's mandatory collective bargaining issues. As we'll discuss in Module 13: Union-Management Relations, employers who are subject to collective bargaining agreements tend to have higher wage and benefit costs than similar employers without union representation-

The gender pay gap is correctly explained by which of the following?

Women are paid approximately 80% of what their male counterparts make

Which of the following is a correct statement regarding pay?

Women are paid approximately 80% of what their male counterparts make

Developing a pay structure involves

evaluating jobs and establishing associated salary ranges and grades based on market data and the company's compensation policy. The relative value of different roles is based on factors including responsibility, experience and education, key skills, effort/impact, and working conditions. A well-designed and transparent pay structure should help an organization attract and retain talent be perceived as fair and equitable.

Which of the following is not a factor that affects compensation?

education expenses

Benefit trends include:

employers becoming increasingly family friendly

Compensation is determined by

the interplay of internal and external market and regulatory factors

Indirect Compensation

includes costs incurred for benefits, including vacations, health insurance, retirement plans, federally required protections (e.g., disability and unemployment insurance), and other employee benefits.

State, federal, and local laws mandate the minimum amount of compensation legally allowed in an area. This is due to the factor of:

legislation

intrinsic motivation

a desire to perform a behavior for its own sake and to be effective intrinsic motivation occurs when we act without any obvious external rewards. We simply enjoy an activity or see it as an opportunity to explore, learn, and actualize our potentials." Intrinsic motivation is personal; for example, you may be intrinsically motivated to learn about or create a whole new world (think: Harry Potter), to improve the world or our experience of it, or to participate in a game or other activity. When individuals are intrinsically motivated, they typically perform at relatively high levels

Which of the following is a violation of the Equal Pay Act?

A company pays a male employee more than a female employee because the company believes the female employee will take more days off

A friend of yours asks you for advice in evaluating competing job offers. What would your recommend she consider as part of her compensation?

Cash, benefits and the value of intangibles such as growth potential

________________ determines the minimum amount of compensation legally allowed in an area.

Legislation

Aside from compensation, the biggest motivator for employees is:

dependent on the individual

Which of the following would NOT be a consequence of unequal pay?

disparities in vacation time

Your company is reviewing its compensation policy and you have been tasked with researching the connection between compensation and motivation. What do you expect the research to show?

The connection between compensation and motivation depends on an individuals financial and developmental situation

FLSA (Fair Labor Standards Act) establishes

Minimum wages, overtime pay, record-keeping, and youth employment standards for all American workers

Mucha identifies all of the following benefit trends, EXCEPT: The question has been evaluated. Your choice is incorrect.

Promoting the "one size fits all" benefits package

Drilling down into US census data, the statistics are even more stark. Here's the amount women earn, by race, for every dollar their white male counterpart earns:

- Asian women: 85 cents - White women: 77 cents - Black women: 61 cents - Pacific Islander women: 62 cents - Native American women: 58 cents - Hispanic women: 53 cents

In an article titled "Compensation Doesn't Drive Motivation," author Kevin Howell titles one of the sections "Compensation Isn't Enough."

And that's a key point. Equitable compensation isn't enough to drive high levels of motivation, it's a minimum expectation. Forbes writer Ken Sundheim puts the compensation question in perspective, noting that research has shown that for employees to be motivated, basic minimums need to be met, including pay, working conditions and job security. Sundheim notes that "low compensation can not only hinder motivation and performance, but can actually create vengeful employees. When human beings feel they are being inadequately paid, they will tend to shift the majority of their focus on the unfairness of the situation.

You have been tasked with developing a new pay structure for your office. What is the first step you would suggest?

Conduct a job analysis

EPA Violations

In EPA cases, the burden of proof is on the plaintiff. In Gordon v. U.S., the court held that "To state a claim of an EPA violation, an employee must show the employer: - Paid employees of opposite sexes different wages; - For substantially equal work; - In jobs that require substantially equal skill, effort, and responsibility; and - That are performed under similar working conditions. Once those elements have been established, "the burden shifts to the employer to prove the pay disparity is justified under one of four affirmative defenses: (1) a seniority system; (2) a merit system; (3) a pay system based on quantity or quality of output; or (4) any factor other than sex."

Compensation and Motivation

In their 2019 Compensation Best Practices Report, PayScale notes that "some survey results show that money is the biggest motivator driving employees to seek other jobs, while others show career growth to be the primary incentive. Secondary reasons overall include issues related to benefits, fit with the organization or the job, and relationship problems with direct supervisor or managers."

Conducting regular, objective pay audits might help to close the pay gap in that:

It would allow the company to see how males are compensated in relation to their female counterparts

Additional benefits

Paid parental leave. Ikea offers up to four months of paid parental leave to both part-time and full-time employees with at least one year of experience at the company On-site fitness. Reebok encourages employees to reach their personal fitness goals by providing an on-site gym with Crossfit classes. Gender reassignment surgery. Goldman Sachs offers coverage for gender reassignment surgery. Pet health care. Scripps Health offers its employees' health insurance for cats and dogs. Flexible schedules. Insurance company Swiss Re's "Own the Way You Work" program encourages employees to embrace flexibility with their schedules and work remotely.

How might conducting regular, objective pay audits help to close the pay gap?

Regular, objective audits would allow a company to see what female employees make in relation to their male counterparts

Minimum wage laws mandate:

The employee will receive the highest pay between local and federal minimum wage

Which of the following is true about minimum wage laws?

The employee will receive the highest pay between local and federal minimum wage

You are preparing a legislative briefing for your local Chamber of Commerce. One of the laws you will be covering is the Fair Labor Standards Act. Which of the following points should you emphasize?

When an employer is subject to more than one minimum wage law, the higher/highest rate applies

In cases regarding the Equal Pay act, the burden of proof to show_________________________________________________________falls on the plaintiff, not the employers

a company paid employees of opposite sexes different wages for substantially equal work

extrinsic motivation

a desire to perform a behavior to receive promised rewards or avoid threatened punishment In contrast, when a person is extrinsically motivated, his or her activity or behavior is a means to an end rather than an end in itself

Which method of developing a pay structure includes using market data to set a salary range?

benchmarking

Which type of compensation best describes base salary/hourly wage, cash bonuses, and annual incentives?

direct compensation

You have already done extensive research related to the development of your company's new pay structure. What is your final step in determining the new structure?

establish pay grades

Extrinsic rewards

extrinsic reward is something that comes from an external source—for example, your instructor at school or your manager at work. Extrinsic rewards can be financial (a bonus, incentive, or commission) or non-financial (praise, a training badge, a development opportunity, or a coveted project assignment). Extrinsic rewards can also include intangibles such as the ability to work remotely or an invitation to participate in a mentoring program

Which of the following statements is false, relating to intrinsic and extrinsic motivation?

extrinsic rewards are personal

Workers' Compensation Insurance

is insurance that covers medical expenses and a portion of lost wages for employees who become injured or ill on the job.

The following are all characteristics of intrinsic motivation, except:

money

Which of the following is NOT a characteristic of intrinsic motivation?

money

The most discussed and divisive pay equity issue in America is considered to be:

the gender pay gap

What is the most discussed and divisive pay equity issue?

the gender pay gap

______________compensation includes: greater autonomy, flexible work schedule, and the ability to work remotely.

Intangible

You are responsible for ensuring the Equal Pay Act of 1963 is being followed. Which of the following items would you look for in your company's records?

Men and Women earn the same pay for the exact same work

Affimative defenses

Permitted pay differentials include those based on seniority, merit, quantity or quality of production, or other non-gender based factors. These factors are referred to as "affirmative defenses"; the employer has the burden of proving that their stated rationale applies. Finally, pay differentials can only be corrected with an increase; no employee's pay may be reduced.

Minumum wage

The initial minimum wage was $0.25/hour, rising, over the period of 71 years, to the current federal rate of $7.25 per hour (since July 24, 2009). On July 18, 2019, the House passed a bill raising the federal minimum wage to $15.00 per hour and extending the $15.00 per hour minimum to tipped workers, who are currently paid a minimum of $2.13. However, ABC News reports that "the bill has almost no chance [of passing] in the Republican-controlled Senate." States, cities, and counties can set their own minimum wage laws. When an employer is subject to multiple minimum wage laws, the higher minimum wage prevails.

Minimum Age Standards For Employment

Under 14—May not be employed in non-agricultural occupations covered by the FLSA. Permissible employment includes acting, delivering newspapers, minor chores around private homes, or casual baby-sitting. 14-15: May be employed outside school hours in a variety of non-manufacturing and non-hazardous jobs for limited periods of time and under specified conditions. 16-17: The basic minimum age for employment. May be employed for unlimited hours in any occupation other than those declared hazardous by the Secretary of Labor. 18—No longer subject to youth employment provisions.

Which of the following is an extrinsic reward?

receiving a raise

An employee makes a large discovery, and his employer takes the credit for it. The employee is upset that he did not get credit for this ground-breaking discovery, and decides to seek employment elsewhere. What is the motivating factor for this employee to seek other employment?

recognition

You are responsible for briefing your company's leadership on what millennials want from their benefits packages. Which of the following would you avoid discussing?

retirement benefits

Barbara Frankel picks up on the next steps point, stating that

"pay equity is about more than just leveling salaries . . . [it] means creating equal opportunities for high-paying positions, evaluating areas of bias that may prohibit hiring and promotions, and factoring in work accommodations that could slow pay progress, such as flexible work arrangements and time off for family leave

Although intrinsic motivation is personal, its characteristics are universal and include:

1. Autonomy: the person has control over how they activity is accomplished 2. Mastery: there is an element of progress and increasing competence or growth 3. Relatedness: there is a sense of community with others who are engaged in the activity 4. Purpose: the activity is perceived as meaningful A manager can't prompt intrinsic motivation or provide an intrinsic reward, since the motivation flows from the employee's interest in and value for a particular type of work. A manager does, however, have control of situational factors. Management consulting firm Hay Group (acquired by Korn Ferry) reports business results can vary by up to 30% based on differences in the work climate created by a manager.

Gallup found that when employees are evaluating opportunities outside their current organization, they consider the following five factors most important:

1. the ability to do what they do best 2. greater work-life balance and better personal well-being 3. greater stability and job security 4. a significant increase in income 5. the opportunity to work for a company with a great brand or reputation

Compensation policy

An employer's position relative to the competition or market will affect the wages it offers. Generally, employers will take one of three positions: lead, lag or match. If an employer's policy is to lead the market, they will pay relatively higher wages than the competition. The rationale is that they will be able to attract a higher caliber of employees and see an offset in increased productivity and reduced training and turnover costs. Similarly, the face value employee cost savings of a "lag" practice may be offset by higher recruiting, training and turnover costs. A match policy is simply to set compensation at the market rate.

You've just discussed the business rationale for offering benefits with your HR staff and are reviewing key points. Which of the following points should you emphasize?

Businesses are required to pay social security, medicare, unemployment insurance and workers compensation insurance

Working Hours and Overtime

Employees covered by the Act must receive overtime pay at a rate of at least 1.5 times their regular rate of pay for any hours worked over 40 in a workweek. The Act does not require overtime pay for work on weekends or holidays unless the overtime hours are worked on those days. An employee's workweek does not need to coincide with the calendar week. It is, however, a fixed and regularly recurring period of 168 hours. The Act defines hours worked as "all the time during which an employee is required to be on the employer's premises, on duty, or at a prescribed workplace.

All of the following are additional benefits (not mandated by law) that employers offer to their employees, except:

Medicare

If your company is abiding by the Equal Pay Act, this means:

Men and women at your company are paid for the same work

The next law on your presentation agenda is the Equal Pay Act (EPA). Which of the following points should you emphasize?

The EPA requires that men and women be given equal pay for equal work

You are in charge of briefing leadership at your company about best practices in closing the pay gap. Which of the following is NOT a statement you should make?

The pay gap is a myth, and we have done everything we can already to ensure there has been no pay discrimination

Workers under 18

The youth employment provisions of the FLSA were enacted to ensure that when young people work, the work does not jeopardize their health, well-being or educational opportunities FLSA provisions applicable to nonagricultural occupations are summarized below Both Federal and State laws govern the employment of young workers; when both are applicable, the stricter standard applies.

Worker productivity

Theoretically, wages should increase when worker productivity increases. This is an economic calculation based on the market structure, costs of production, and market price and quantity.

In order to develop a pay structure, a company should:

Use market data as a basis for or reality check of your pay structure

Is there a reason for the pay gap?

1.Educational attainment (read: women are paid less because they have less education) - More women than men have earned bachelor's and masters (since the 1980s) and doctoral degrees (for the last 10 years) 2.Occupational segregation (read: women are paid less because they choose low-paying fields) - While women are more likely to work in lower-paying professions such as education and health care, the pay gap is also evident in these fields. 3.Work experience (read: women are paid less because they take time off to have children) - Women do experience a baby penalty, but the gap is also experienced straight out of college, where women with a similar GPA and working in the same field earns 93% of what their male peers earn.

Rewards are categorized as either intrinsic or extrinsic. Which of the following accurately illustrates the distinction?

A sense of accomplishment is an intrinsic reward; receiving a bonus for your achievement in an extrinsic reward

Intangible compensation

A third type of compensation is intangible. Intangible compensation includes non-financial rewards such as mentoring, awards or badging, recognition, and factors that impact quality of work or work/life balance such as greater autonomy, a flexible work schedule, or the ability to work remotely.

Maslow's Hierarchy of Needs illustrates that we are motivated by

Different things at different stages of our development. Given that there are five generations in the workforce, it's likely that employees will be at different levels of development. Economic and health factors can also determine where a person is in their development and what they value and therefore what motivates them. Finally, changes in the employee-employer relationship and the nature of work may affect employee expectations and what significance the work has to an employee.

Which of the following statements is true regarding benefit trends?

Employers are becoming increasingly family friendly

All of the following are examples of indirect compensation, except:

annual incentives

One of the most discussed and divisive pay equity issues is the __________________, or the difference between what men and women performing comparable work are paid

gender pay gap Fifty-six years after passage of the Equal Pay Act, women still earn approximately 80% of what a male peer makes. The National Women's Law Center calculates that this gap costs women who work full-time $10,169 annually; over the course of a 40-year career, that translates to $403,440 lost due to the pay gap

Pay grades can be based on

market prices, as mentioned above, or actual salaries or a combination of the two methods. For example, you could use market data to establish the salary range for a specific pay grade and use actual salaries to determine the midpoint in the range. To establish pay grades based solely on actual salaries, create groups based on levels in the organizational hierarchy. For example, managers and vice presidents would be two separate pay grades. Multiple roles with similar organizational value, requirements and salaries can be included in the same group. The midpoint of the average of the salaries in a group can form the midpoint of the range. The minimum and maximum of a range can be calculated from the midpoint or relative to a lower and higher grade to form a logical progression.

The Fair Labor Standards Act (FLSA) was designed to eliminate labor conditions detrimental to the maintenance of the minimum standards of living necessary for health, efficiency, and well being of workers. Which of the following was established as a result?

minimum wage laws

Although some dispute the link between compensation and motivation, it repeatedly

shows up in surveys as one of the primary determinants of human behavior.

Legally Required Benefits

social security, unemployment insurance, workers compensation Benefits are the elements of an employee's compensation package other than salary or wage. Some benefits are legally mandated; for example, Social Security, Medicare, unemployment insurance, and workers compensation insurance (which we'll discuss briefly below). Discretionary benefits include paid leave (for example, vacation, holidays, sick or personal days), health, dental and vision coverage, retirement plan, life and disability insurance, wellness benefits. Clarification: "large employers" are subject to the Affordable Care Act Employer Mandate that requires a minimum level of health care coverage.

All of the following are best practices to close the pay gap, except:

time-based promotions

Compensation legislation is intended

to address chronic issues of worker exploitation and pay inequity during (and since) the Industrial Revolution

Cost of Living

An increase in inflation results in a corresponding loss of purchasing power. Theoretically, wages should increase when the cost of living increases so workers are able to maintain their standard of living. There is also a geographic element to this factor. We see this in the variation in minimum wages set in cities and localities where the cost of living is relatively high.

Which of the following is NOT one of FLSA's recordkeeping requirements?

Any records that have been inspected by Wage & Hour Division representatives can be disposed of

Legislation

As discussed in Fair Labor Standards Act, laws such as the FSLA—including state and local variations—set a minimum standard for compensation.

Which of the following statements is the most accurate, in regards to current benefit trends?

Technology will personalize and streamline benefit selection and processing

In an article titled "Is Your Benefits Package Ready for the Future?" HR Morning writer Rachel Mucha cites research from Aon's Benefits and Trends Survey 2019 that found 37% of employers are changing or plan to change their benefits package in 2020 to better accommodate a multi-generational workplace. Mucha identifies the following 3 trends:

1. Millennials are disrupting the benefits game—health savings account (HSA), student debt repayment family benefits and flexible schedules all rate high with millennials. 2. Employers get innovative to rein in high healthcare costs—Employers are providing a range of wellness benefits, disease management programs and health screenings to combat chronic conditions and keep employees healthy. 3. Voluntary benefits are driving retention—According to SHRM's The Evolution of Benefits report, 72% of organizations increased their benefits offerings to retain employees in the last 12 months.

Your final research task was to identify compensation best practices. Which of the following points should you include in your findings?

Best practices companies not only address pay equity but also bias and work accommodations

Types of legally required benefits

- Social Security. Established in 1935 by the Social Security Act, social security is a social insurance program that provides retirement, disability and survivors' benefits for workers, who contribute to the system by paying Federal Insurance Contributions Act (FICA) taxes withheld from most paychecks. - Medicare. Medicare is the U.S federal health insurance program for people who are 65 or older, among others. - Unemployment Insurance. Unemployment Insurance is a joint state-federal program that provides cash benefits to eligible workers who are unemployed through no fault of their own. All states follow the guidelines established by federal law, but each state sets its own additional requirements for eligibility, benefit amounts, and length of time benefits can be paid. In general, benefits are based on a percentage of your earnings over a recent 52-week period.[2] - Workers Compensation Insurance. Workers' compensation insurance is insurance that covers medical expenses and a portion of lost wages for employees who become injured or ill on the job.[3] Each state has its own unique set of workers' compensation laws that employers must follow. Workers compensation insurance is paid by employers; premiums are calculated back on employee classification (type of work) and the rate associated with that classification. *A budgeting rule of thumb is to estimate that employee benefits will cost 30% of an employee's salary. Although that's clearly a significant cost, benefits can also be a critical differentiator in a competitive labor market. Employer research and salary site Glassdoor reports that 57% of job seekers consider benefits among their top criteria in evaluating a new job*

Developing a Pay Structure

1. Conduct a job analysis. As discussed in Module 5: Workforce Planning, a job analysis involves identifying the essential tasks and responsibilities of a job, including knowledge skills and abilities. 2. Conduct a job evaluation. Determine the relevance and value of the job to the organization. This involves comparing or evaluating roles based on criteria such as the required education and experience, skills, effort, level of responsibility or authority and potential revenue impact. In order to avoid introducing bias, the role should be evaluated based on the job criteria, not a specific employee in that role. 3.Determine the basis for your pay structure. Use one o r both of the following methods to do so: - Market Pricing (or benchmarking). Setting a salary range based on market data. Note that job titles and descriptions aren't necessarily consistent across companies and industries. When conducting research, consider job details or descriptions to select appropriate salary benchmarks. - Pay grades. Establishing salary ranges for job groups. Pay grades are salary ranges established for groups of jobs with a similar value to the organization. For example, multiple sales roles may be included in the same grade if they require the same education, experience, skills and responsibility. In practice, then, the salaries of every sales person in the same grade would fall between the minimum and maximum of the range. It's common to use benchmarking to establish pay grades and then fine-tune from there. Websites such as Glassdoor, Salary.com and PayScale provide minimum, midpoint, and maximum salaries that can form the basis for a pay range. Additional sources of market salary data include the following:

Benefit Trends

Employers will get increasingly family-friendly. Human resource consulting firm Mercer's national practice leader Simon Camaj notes that "state and local laws, the war for talent and changing social expectations will lead more employers to implement or enhance paid-parental-leave programs and consider adding paid caregiver leave for family-related absences." Voluntary benefits will become more personal. Mercer's voluntary benefits leader Tim Weber sees benefit offerings becoming more personal, with employers using "data-driven approaches to tailor [benefit] information and guidance, all wrapped in an engaging employee experience." Emotional health will move to the forefront. Benefits specialists expect increased access to behavioral health services. President and CEO of the nonprofit National Business Group on Health (NBGH) Brian Marcotte anticipates employers improving access to services to address a range of emotional, behavioral and mental health issues, including stress and anxiety, addiction, depression and other mental disorders. Benefits technology will simplify employees' decision-making. Business technology provider Businessolver's CEO Jon Shanahan expects benefit automation to help employees "learn, understand, and navigate the benefits process based on their specific needs." He also anticipates process improvements, noting that "HR managers say they lose 14 hours a week due to lack of automation."

Exempt vs Non-Exempt

FLSA regulations with regards to hours and overtime pay apply to non-exempt employees only. In some cases, the distinction between exempt and non-exempt is based on job classification. In other cases, the distinction is based on three factors, as outlined below: 1. Compensation test. If employees are paid less than $23,600 per year, they are considered non-exempt. 2. Salary test. Generally, if employees are paid on a salary basis—that is, they have a "guaranteed minimum" amount of money they can count on receiving for any work week in which they perform "any" work—they are exempt. 3. Work performed. Employees who meet the compensation and salary tests are exempt only if they also perform exempt job duties. Exempt job duties fall into three categories: "executive," "professional," and "administrative." For additional details and interpretation, refer to attorneys Chamberlain, Kaufman & Jones' discussion of FLSA coverage. Most employees must meet all three "tests" to be exempt

Record Keeping

FLSA's recordkeeping requirements including the following: - Employers must post an official poster outlining the provisions of the Act - Employers must keep records for each non-exempt worker that include specific identifying information, hours worked and wages earned. For details, refer to the U.S. Department of Labor Wage & Hour Division's FLSA Recordkeeping Fact Sheet. - Payroll and related records (e.g., collective bargaining agreements) must be retained onsite or in a central records office for 3 years - Supporting documentation (i.e., work and time schedules and records of any adjustments to wages) should be retained for two years - Records must be open for inspection by Wage & Hour Division representatives, who may ask the employer to make extensions, computations, or transcription

California Minimum Wage

For perspective, as of January 1, 2019, the minimum wage in California is $12.00 per hour, or $11.00 per hour for employers with 25 or fewer employees. The state minimum wage is scheduled to increase annually to $15.00 per hour in 2022 or 2023, if the employer has less than 26 employees. On July 1, 2019, the minimum wage increased in seven Bay Area cities, with new minimums ranging from $13.50 per hour in Alameda and Fremont to $16.30 per hour in Emeryville. San Francisco and Berkeley increased the minimum wage from $15.00 to $15.59 an hour *Note that the minimum wage is law; employee and employer or cannot negotiate a lower wage and the minimum applies to adults as well as minors—there is no distinction made between adults and minors when it comes to payment of the minimum wage. As stated on the California Department of Industrial Relations website, "The minimum wage is an obligation of the employer and cannot be waived by any agreement, including collective bargaining agreements.*

Equal Pay Act of 1963

Legislation that requires employers to pay men and women equal pay for equal work - In the early 1900s, women comprised less than a quarter of the workforce. However, when men joined the military to fight in World War II, women were recruited to take their place and by 1945, 37% of the civilian workforce was female. Since women had traditionally earned less for doing similar work, unions and male workers feared that this growing source of cheap labor would lower their wages. In order to avoid future wage cuts, unions started to advocate for equal pay - In 1942, the National War Labor Board also endorsed the idea of equal pay for equal work, issuing a "General Order supporting equal pay for men and women for work that was of 'comparable quality and quantity.'" Over two decades later, the Equal Pay Act of 1963 (EPA) was enacted as an amendment to the Fair Labor Standards Act of 1938

What does research show about the connection between compensation and motivation?

Money and career growth are the biggest motivators driving employees to seek other jobs

The following are best practice highlights based on Frankel interviews with executives:

Senior Leadership Commitment. L'Oreal's global leadership committed to equity and, specifically, not only equal pay but also a succession planning initiative to recruit and develop women leaders. Conduct Regular, Objective Pay Audits. Companies recommend regular audits—including audits to reflect acquisitions—and use of experts or certification providers such as EDGE for validity and credibility. Communicate Results. Clearly communicate results to make transparency a part of the culture. Define Performance Metrics. Frankel relays L'Oreal USA's head of Diversity & Inclusion Angela Guy recommendation to have "clear metrics on what defines good performance and [ensure], through unconscious bias training, that prejudices don't influence what defines good performance." The company also factors in the impact of maternity leave on performance and pay. Review Offer Process. Salary history questions should be banned, regardless of whether a company is subject to state or local laws. Collaborate & Share Learning. This was a requirement of the original White House Equal Pay Pledge, and it's critical to accelerating progress.

Equal Pay Act (EPA)

The Equal Pay Act 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. Specifically, the EPA requires that employers cannot compensate men and women differently when they "perform jobs that require substantially an equal level of skill, effort, and responsibility and when those jobs are performed under similar working conditions within the same establishment.

Economic of the Pay Gap

The pay gap isn't just a women's problem, it's a societal and economic issue. The Institute for Women's Policy Research (IWPR) notes that women represent almost 50% of the workforce and are the sole or co-provider in half of the American families with children. Despite being paid less, women's earnings are critically important to the stability of individuals, families, and the extended family networks that women support. IWPR's analysis found that equal pay would: - Reduce the rate of poverty for working women by over half, from 8% to 3.8% - Reduce the rate of poverty for working single mothers by almost half, from 28.9% to 14.5% - Reduce the rate of poverty for working single women from 10.8% to 4.4% - Reduce the number of children with working mothers living in poverty from 5.6 million to 3.1 million - Increase GDP 2.8%

Supply and Demand for Labor

Theoretically, wages should increase when the demand for labor exceeds supply or, as is the case currently, unemployment is at a historical low. There may also be geographic variances in wages based on the local/regional availability of and competition for labor.

Best practices

Until changes are made to federal or state laws, progress on closing the pay gap will require business leadership and advocacy. And, based on their values or in response to employee expectations or both, a number of businesses are taking the challenge. In its 2019 Compensation Best Practices Report, PayScale notes that "It will prove increasingly difficult to attract and keep the right people without ensuring your compensation philosophy, strategy and practices are in close alignment with your values as an organization." As PayScale SVP of Marketing Tim Low notes "employees have become fed up when their organizations behave in ways that don't align with their personal values,"" referencing demonstrations and court cases based on perceived pay discrimination at Google, Nike and Oracle in 2018

Having delivering your findings on the connection between compensation and motivation, you move on to research pay equity issues. Your research shows that:

Using prior salary history in setting current pay and prohibiting employees from discussing their wages contributes to pay inequity.

Fair Labor Standards Act

Was designed to ''put a ceiling over hours and a floor under wages.'" More broadly, the intent was to eliminate "labor conditions detrimental to the maintenance of the minimum standards of living necessary for health, efficiency and well being of workers The act which provided for a minimum wage and restricted shipments of goods produced with child labor Signed into law in 1938, then-President Franklin D Roosevelt referred to the Fair Labor Standards Act as "the most far-reaching, far-sighted program for the benefit of workers ever adopted in this or any other country.

Pay Gap across the United States

Women fare best in California, D.C., and Florida California law, applicable to both private and public employers, prohibits requests for a candidate's pay history and, further, prohibits employers from using information if volunteered or otherwise known to determine a new hire's pay. Finally, the law requires employers to provide applicants with pay scale information if requested. Absent a state law regarding the discussion of wages, an employer may be restrained by either the National Labor Relations Act (NLRA) or Executive Order 13665, both of which support wage transparency.

In a case against your company, an employee claims there was an Equal Pay Act violation. Before your company is required to provide proof, the employee must provide which of the following information?

Your company paid employees of opposite sexes different wages for substantially equal work

The National Committee on Pay Equity (NCPE)

a coalition of women's and civil rights organizations, established Equal Pay Day in 1996 in an effort to raise awareness of this gap. Specifically, the organization declares a day in March to symbolize how much longer a woman would have to work to earn what a man made in the prior year. Or, how far women are "in the red" with their pay. Although the gender gap has narrowed since 1963, progress has been negligible since 2005.

Which of the following is not a legally required benefit for all employers?

health coverage

intrinsic vs extrinsic motivation

intrinsic motivation- your tendency to work on a task for your own satisfaction, rather than for rewards such as money or praise. Extrinsic motivation- motivated by external factors, to do things for tangible rewards or pressures, rather than for the fun of it.

What is NOT an example of the additional benefits employers offer to their employees that are not mandated by law? The question has been evaluated. Your choice is incorrect.

unemployment insurance

Which of the following is NOT an example of indirect compensation?

year-end bonus