HR Test 4
Define pay grades and pay ranges.
A pay grade is a grouping of jobs of similar worth for pay purposes. A pay range is an assigned range of permissible pay, with a minimum and a maximum for each pay grade.
Define compensation
Compensation refers to all the extrinsic rewards employees receive in exchange for their work.
Explain the purposes of the Employee Retirement Income Security Act (ERISA) and the Retirement Equity Act.
Congress passed ERISA in 1974 in an effort to ensure the fair treatment of employees under pension plan. The law was designed to ensure the solvency of pension plans by restricting the types of investments that can be made with the plan's funds and providing general guidelines for fund managers. The overall impact of the Retirement Equity Act, which was passed in 1984, was to liberalize the eligibility requirements, vesting provisions, maternity/paternity leaves, and spouse survivor benefits of retirement plans.
Slotting
The evaluator "slots" a new or revised job into an existing job structure.
Job Ranking
The evaluator ranks whole jobs from the simplest to the most difficult.
Is job satisfaction an intrinsic or extrinsic reward?
The manner in which the extrinsic rewards are dispersed can affect the intrinsic rewards (and satisfaction) of the recipients.
Explain the three basic types of employee assistance programs (EAPs)
The most common type of EAP employs a coordinator who evaluates the employee's problem sufficiently to make a referral to the proper agency or clinic for diagnosis. In a second type, the organization hires a qualified person to diagnose the employee's problem and then refers the employee to a proper agency or clinic for treatment. Under a third type of EAP, diagnosis and treatment of the problem are provided directly by the organization.
Offer several suggestions for promoting safety in the workplace.
-Make the work interesting -Establish a safety committee -Feature employee safety contests -Publicize safety statistics -Hold periodic safety meetings -Post safety-related pictures, cartoons, and sketches on bulletin boards
Know when the Equal Pay Act went into effect...
1963
Distinguish between an IRA and a Roth IRA.
An IRA is a type of individual pension plan that can be used to make tax deductible contributions up to a limit of $4,000 per year per person. When withdrawals are subsequently made up from an IRA they are taxable as ordinary income. With a Roth IRA non-tax-deductible contributions of up to $4,000 per year per person can be made. When withdrawals are subsequently made, they are tax-free.
Define base wages and salaries and state the objective of any base wage and salary system.
Base Wages and salaries are the hourly, weekly, or monthly pay that employees receive in exchange for their work. The primary objective of any base wage and salary system is to establish a structure for the equitable payment of employees based on their jobs and their levels of job performance.
What is the largest portion of an employee's total compensation?
Base wage and salary
Define Benefits
Benefits are rewards employees receive as a result of their employment and position with an organization.
What is the general-duty clause?
Covers situations that are not addressed by specific standards
List several pieces of government legislation that have had a significant impact on organizational compensation.
Davis-Bacon Act Walsh-Healey Act Fair Labor Standards Act (FLSA) Equal Pay Act Federal Wage Garnishment Law Lilly Ledbetter Fair Pay Act
Job Classification
Defines certain classes or grades of jobs on the basis of differences in duties, responsibilities, skills, working conditions, and other job-related factors.
Unemployment compensation
Designed to provide funds to employees who have lost their jobs through no fault of their own and are seeking other jobs.
Point
Develops a quantitative point scale for the jobs being evaluated. Jobs are broken down into certain recognizable factors, and the sum total value of these factors is compared against the scale to determine the job's worth.
Define employee benefits.
Employee benefits, sometimes called fringe benefits, are those rewards that organizations provide to employees for being members of the organization. 1. Legally required 2. Retirement related 3. Insurance related 4. Payment for time not worked 5. other
Who are private pension plans funded by?
Employee chooses the program and the company is accommodating
Describe the two basic requirements of an effective incentive plan.
For an incentive plan to be effective, employees must believe their performances and the performances of others are accurately and fairly evaluated and that the incentives (rewards) are based on performance.
Define Incentives
Incentives are rewards offered in addition to the base wage or salary and are directly related to performance.
Distinguish between intrinsic and extrinsic rewards.
Intrinsic rewards are rewards internal to the employee and are normally derived from involvement in certain activities or tasks. Extrinsic rewards are directly controlled and distributed by the organization and are more tangible than intrinsic rewards.
Define job satisfaction.
It's an employee's general attitude toward the job. Morale refers to how a person feels about the organization he or she is working for. Morale is the by-product of a group, whereas job satisfaction is more of an individual state of mind.
the five basic conventional methods of job evaluation
Job Ranking Slotting Job Classification Point Factor Comparison
Define job evaluation.
Job evaluation is a systematic determination of the value of each job in relation to other jobs in the organization.
Explain the concepts of key jobs and compensable factors.
Key jobs represent jobs that are common throughout the industry or in the general locale under study. -The idea is to select a limited number of jobs that will represent the spectrum of jobs being evaluated with regard to responsibilities, duties, and work requirements. Once on the key jobs have been evaluated, other jobs can be compared to them. -Compensable factors are those characteristics of jobs that the organization deems important to the extent that it is willing to pay for them. -The degree to which a specific job possesses compensable factors determines its relative worth.
What are major categories of benefits?
Legally required Retirement related Insurance related Payment for time not worked Other
What are incentive plans?
Procedures and methods used to appraise employee performance Incentives are required to be based on performance
Define organizational rewards.
Organizational rewards include all types of rewards, both intrinsic and extrinsic, that are received as a result of employment by the organization.
What is the role of the human resource manager in the overall organizational reward system?
Overall role: is to assist in its design and to administer the system.
What is the primary organizational variable that can be used to reward individuals and reinforce performance?
Pay
Define Pay
Pay includes only the actual dollars employees receive in exchange for their work.
What is a piece rate plan?
Pays one rate for all acceptable units produced up to some standard and then higher rate for all pieces produced if the output exceeds the standards.
What is workers' compensation?
Protects employees from: Loss of income Extra expenses associated with job-related injuries or illness Available in all states but vary depending on: Specific requirements Payments Procedures
Summarize the satisfaction-performance relationship.
Research evidence generally rejects the popular view that satisfaction leads to performance. The evidence does, however, provide moderate support for the view that performance leads to satisfaction. The evidence also provides strong indications that rewards constitute a more direct cause of satisfaction than does performance, and rewards based in current performance lead to subsequent performance. In general, the best estimate of the correlation between satisfaction and performance is relatively low.
Why have most employers dropped the word "fringe" from the term "fringe benefits"?
Rewards that employees receive for being members of the organization and for their positions in the organization Not related to performance
Factor Comparison
Similar to the point method except that it involves a monetary scale instead of a point scale.
Discuss the Hazard Communication role.
The Hazard Communication rule, also known as the right-to-know rule, is intended to ensure that employers and employees know what chemical hazards exist in the workplace and how to protect themselves against these hazards. The rule requires that certain chemicals be evaluated for danger and that the results be communicated to affected employers and exposed to employees.
What year was the Occupational Safety and Health Act passed?
The Occupational Safety and Health Act of 1970 is a US labor law governing the federal law of occupational health and safety in the private sector and federal government in the United States. It was enacted by Congress in 1970 and was signed by President Richard Nixon on December 29, 1970
List and briefly discuss at least three types of individual incentives.
The differential piece rate plan pays employees one rate for all acceptable units produced up to some standard and then a higher rate for all pieces produced if the output exceeds the standard. Incentive plans based on time saved give an employee a bonus for reaching a given level of production or output in less than the standard time. Under the commission plan, employees are rewarded, in part for their sales, volume.
State the purpose of the Occupational Safety and Health Act and discuss its major provisions.
The stated purpose of the act is "to assure so far as possible every working man and women in the nation safe and healthful working conditions." The act established the Occupational Safety and Health Administration (OSHA) to set up standards and to conduct workplace inspections. Many OSHA standards have special record-keeping and reporting requirements that companies must adhere to.
Social security
This is a federally administered insurance system. Under current federal laws, both employer and employee must pay into the system, and a certain percentage of the employee's salary is paid up to a maximum limit. (Grouped into retirement benefits, disability benefits, and health insurance)
Workers' compensation benefits.
Usually funded through taxes paid by employers; however, in some states employees also pay a portion of the tax. Meant to protect employees from loss of income and extra expenses associated with job-related injuries or illness. Coverage varies significantly among different states.
Explain the purpose of wage and salary surveys.
Wage and salary surveys are used to collect comparative information on the policies, practices, and methods of wage payment from selected organizations in a given geographic location or particular type of industry.
True or False: Most wage and salary systems establish pay ranges for jobs based on the relative worth of the job to an organization.
True
List several desirable preconditions for implementing a pay-for-performance program.
Trust in management Absence of performance constraints Trained supervisors and managers Good measurement systems Ability to pay A clear distinction among cost of living, seniority, and merit A well-communicated total pay policy A flexible reward schedule
Differentiate between a defined-benefit pension plan and a defined-contribution pension plan.
Under a defined-benefit pension plan, the employer pledges to provide a benefit determined by a definite formula at the employee's retirement date. A defined-contribution pension plan calls for a fixed or known annual contribution instead of a known benefit.
Describe how group incentives work.
Under a group incentive plan, all members of a specified group receive incentive pay based on the performance of the entire group. Many groups incentive plans are based on factors such as profits or reduction in costs of operations.
What is Medicare?
a single-payer, national social insurance program administered by the U.S. federal government since 1966
Employees should have their compensation based on what?
worth of position and importance of responsibilities