Human Resource Management

role organizational culture plays in a viable pay-for-performance system

-whether a pay program fits the culture -If the culture of the organization is more traditional, with rules and procedures, an incentive program probably would be bad. -A plan that has worked well for one company will not necessarily work well for another. -For an incentive plan to work, it must be linked to the objectives of the organization, its financial resources, and its desired performance results.

403B

A 403(b) plan is a tax-advantaged retirement savings plan available for public education organizations, some non-profit employers (only US Tax Code 501(c)(3) organizations), cooperative hospital service organizations and self-employed ministers in the United States.

HMO

A health maintenance organization (HMO) is an organization that provides or arranges managed care for health insurance, self-funded health care benefit plans, individuals and other entities in the United States as a liaison with health care providers (hospitals, doctors, etc.) on a prepaid basis. The Health Maintenance Organization Act of 1973 required employers with 25 or more employees to offer federally certified HMO options if the employer offers traditional health-care options.

tax deferred annuities

Annuities available for purchase by employees of certain non-profit and public education institutions as described in IRC §501(c)(3). Money used to purchase the annuity is not taxable as income until annuity payments begin, usually at retirement. Also known as a Tax-Sheltered Annuity (TSA).

minimize abuse of Holiday Pay

As an abuse-control measure, employers require employees to work the last scheduled day before a holiday and the first scheduled work day after a holiday to be eligible for holiday pay.

What is required of both parties in order to fulfill their obligation to 'bargain in good faith

Both employers and union bargaining representatives negotiate in good faith. The parties agree to send negotiators who have the power to commit their side to a decision, in order to be more effective. Meetings should be professional and address issues. Refusing to bargain,scheduling meetings at absurdly inconvenient hours, and using other conflicting tactics could lead to employers or unions filing complaints with NLRB

legal issues employers face regarding retiree pensions and health care

Employee Retirement Income Security Act 1974 (ERISA): regulate private pension plans so that employees who put money into them or depend on the pension for retirement funds actually receive the money when they retire. Retirement Equity Act 1984: changed the ERISA to use unisex mortality tables that do not reflect gender differentiation. Affected women, guaranteeing them access to benefits, prohibited pension-related penalties due to absence from work such as maternity leave, and lowered vesting age. Qualified Domestic Relations Order (QDRO): agreement made by a divorcing couple that identifies who gets the retirement plan. Provides protection of both individuals and children in the marriage.Also provides some beneficial tax provisions

bargaining unit

Employees eligible to select a single union, which will later represent them as the collective bargaining agent. To be eligible, employees must sign a union authorization card. At least 30% of the workforce must sign the authorization card in order for an election to be called, and for the bargaining unit to be necessary.

weingarten rights

Employees have a right to union representation at investigatory interviews Rule 1: The employee must make a clear request for union representation before or during the interview. The employee cannot be punished for making this request. Rule 2: After the employee makes the request, the employer must choose from among three options. The employer must: grant the request and delay questioning until the union representative arrives and has a chance to consult privately with the employee; deny the request and end the interview immediately; or give the employee a choice of having the interview without representation or ending the interview. Rule 3: If the employer denies the request for union representation, and continues to ask questions, it commits an unfair labor practice and the employee has a right to refuse to answer. The employer may not discipline the employee for such a refusal.

non-piracy

Former employees are barred from soliciting business from former customers and clients for a specified period of time

community of interest

Major criterion in deciding the composition of a bargaining unit. ie. at a warehouse distribution firm, delivery drivers, accounting clerks, computer programmers, and mechanics. Employees with mutual interest in the areas of: Wages, hours, and working conditions Traditional industry groupings for bargaining purposes Physical location and amount of interaction and working relationships Supervision by similar levels of management

positive discipline

Managers focus on fact finding and guidance to encourage desirable behaviors instead of penalizing undesirable behaviors.

What rights do unionized employees have after a strike

Post-strike rights depend on the type of strike. If it was over unfair labor practices, strikers get their jobs back. If the strike is over 'economic issues,' i.e., wages, hours or working conditions, the employer can permanently replace them. A few other variants are covered on p. 566, but this is the most frequently drawn distinction.

conciliation

Process by which a third party assists union and management negotiators to reach a voluntary settlement. This helps release both sides from deadlock and continue negotiation.

mini medical plan

Provides limited health benefits coverage for employees. In the past, these plans have been used for part-time and lower wage level employees. A typical mini-medical plan limits the number of doctor visits per year to fewer than 10, covers only certain prescription drugs, provides limited hospital coverage, and caps total annual health benefits costs at $10k or less.

organizational incentives

Reward people according to the performance results of the entire organization. This approach assumes that all employees working together can generate improved organizational results that lead to better financial performance, and aims to create cooperation throughout the organization. Common incentives are profit sharing and employee stock plans. Employees can become concerned if management is disclosing accurate financial information for profit sharing, and employee stock purchasing plans do not guarantee success to employees who become investors.

red circled employee

an incumbent who is paid above the range for the job -management usually tries over a year or so to bring the employee's range into the grade

illegal bargaining issues

collective bargaining issues that would require either party to take illegal action Examples: giving preference to union members when hiring employees or demanding a closed-shop provision in the contract *If one side wants to bargain over an illegal issue, the other side can refuse

minimize abuse of Paid Time Off Plans (PTO)

combines all sick leave, vacation time, and holidays into a total number of hours/days that employees can take off with pay. PTO reduces absenteeism and allows for a more effective scheduling of time off to reduce costs of unexpected absenteeism.

Cost of living adjustments (COLA)

common pay raise practice, often led by a change in the consumer price index or some other generic economic measure -many studies revealed that the CPI overstates the actual cost of living and COLA increases do little to recognize employees for their relative contribution to the organization

individual incentives

incentives given to reward the effort and performance of individuals, i.e. sales commissions and individual bonuses, or merchandise. With individual incentives, employees may focus on what is best for them personally, which may inhibit the performance of other individuals with whom they are competing. For this reason, in some situations, group/team incentives may be more appropriate.

progressive discipline

incorporates steps that become progressively more stringent. Certain serious offenses are exempt from progressive discipline and require immediate termination. Ex: First offense (verbal caution) -> Second offense (written reprimand) -> Third offense (Suspension)

living wage

involves earnings that are supposed to meet the basic needs of an individual working for an organization, including food and shelter

trade secrets

is a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers

internal equity

means that employees receive compensation in relation to their knowledge, skills, and abilities (KSA's) they use in their jobs as well as their responsibilities and accomplishments

gainsharing

system of sharing with employees greater than expected gains in profits and/or productivity

Pay equity or comparable worth

the concept that the jobs requiring comparable KSA's should be the same even if the actual job duties and market rates differ significantly -just showing differences in pay has not been sufficient evidence for legal cause

financial issues employers face regarding retiree pensions and health care

- In an effort to keep costs under control, some companies have been cutting benefits, including making retirees pay for any increased costs in health care and freezing health care benefits for many retirees.

ethical issues employers face regarding retiree pensions and health care

- Once the company has promised its retirees retirement benefits, it only makes sense that they would be held accountable for those payments. - Disgruntled employees have filed lawsuits because they worked for the company for 25+ years and put off retirement in order to secure Medicare coverage, but instead are rewarded by having to pay more for their health care.

Other organizational or job features that must be considered in choosing a particular incentive plan

- does the plan reward appropriate actions and is the plan administered properly -Variable pay systems should be tied as much as possible to desired performance. Employees must see a direct relationship between their efforts and their financial and nonfinancial rewards. -Because people tend to produce what is measured and rewarded, organizations must make sure that what is being rewarded is clearly linked to what is needed. -A variable pay plan may be complex or simple, but it will only be successful if employees understand what they have to do to be rewarded.

key differences between independent contractors and employees

-behavioral control: business training and business instructions given to the worker -financial control:unreimbursed business expenses, providing work to other firms, how the business pays the worker, if the worker can make profit or loss -relationship type factors: written contracts, extent to services offered. (If benefits are offered then they are most likely an employee)

who is eligible to receive workers compensation and are there any extents to employer liability

-people who become injured or ill on the job -requires employers to give cash benefits, medical care, and rehabilitation services to employees -to get workers compensation, employes give up being able to give legal action -employers are only responsible for injuries or illness that happens during employment

Minimum wage provisions of the Fair Labor and Standards Act (FLSA)

-sets a minimum wage to be paid to the broad spectrum of covered employees -actual minimum wage can only be changed by Congressional changes -lower minimum wage is set for "tipped" employees but the difference must be compensated by the average of the tips -if states minimum wage is higher than federal, state must go by state rules

Flexible spending account under Section 125 of the Internal Revenue Code

A type of savings account available in the United States that provides the account holder with specific tax advantages. Set up by an employer for an employee, the account allows employees to contribute a portion of their regular earnings to pay for qualified expenses, such as medical expenses or dependent care expenses. However, while HSAs and HRAs are almost exclusively used as components of a consumer driven health care plan, medical FSAs are commonly offered with more traditional health plans as well. In addition, funds in a health savings account are not lost when the plan year is over, unlike funds in an FSA.

Roth IRA

An individual retirement account allowing a person to set aside after-tax income up to a specified amount each year. Both earnings on the account and withdrawals after age 59½ are tax-free

using managed care

Consists of approaches that monitor and reduce medical costs through restrictions and market system alternatives. Managed care plans emphasize primary and preventive care, the use of specific providers who will charge lower prices, restrictions on certain kinds of treatment, and prices negotiated with hospitals and physicians. -PPO (Preferred Provider Organization): a health care provider that contracts with an employer or an employer group to supply health care services to employees at a competitive rate. -HMO (Health Maintenance Organization): provides services for a fixed period on a prepaid basis.

What motivates American workers to unionize? Is there one major factor? What about public sector workers, professionals and contingent workers? What would each group find appealing about unions?

Employees join unions for 2 reasons. First, they are dissatisfied by how they are treated by their employers, and are trying to find an equitable, fair solution. Second, they believe that unions can improve their work situations. Unions are made more desirable by: Working conditions - inadequate staffing, mandatory overtime, and poor working conditions Compensation - noncompetitive pay, inadequate benefits, and inequitable pay Management style - arbitrary decision making, use of fear and intimidation, lack of recognition Employee treatment - job insecurity, unfair discipline and policies, lack of response to complaints, harassment and abusive treatment Public sector workers are very common. 40% of government workers are represented by unions. They like unions because they grant better job security and can make greater strides in the area of wage and benefits decisions. Professionals have been evasive to unions. However, managed care is experiencing growth and unions can help navigate areas concerning the societal drive to lower healthcare costs (thus, wages). Contingent workers can use unions to lower the amount of contingent work to be used. This means that any one worker gets more work because he does not have to divide his time with multiple other contingent workers. They are seen more as a future target.

Who is eligible to receive unemployment compensation? Social Security benefits?

Employees who are out of work but are looking for employment receive up to 26 weeks of pay, at the rate of 50-80% of normal pay. Workers who are fired for misconduct or not actively seeking employment are ineligible.

What rights do employers have to monitor employee communications? What other rights to workplace monitoring do private sector employers enjoy?

Employers have the right to monitor what is said and transmitted through their systems. They should monitor only for business purposes and strictly to enforce the policy. Employers can monitor and discipline internet use if a policy is in place. They can guard against porn sites because if found by law enforcement, employers can be accused of aiding and abetting illegal behavior.

minimize abuse of vacation pay

Employers often use graduated vacation-time scales based on employees' lengths of service and a "use it or lose it" policy whereby accrued vacation time cannot be carried over from year to year. Employees are often required to work the day before and the day after vacation time off.

What are the exceptions to employment-at-will?

Employment-at-will (EAW) is a common-law doctrine stating that employers have the right to hire, fire, demote, or promote whomever they choose, unless there is a law or a contract to the contrary. Conversely, employees can quit whenever they want and go to another job under the same terms. National restrictions on EAW include provisions against the use of race, age, sex, national origin, religion, and disabilities as bases for termination.

What is the difference between an HR policy, a procedure and a rule? What is the purpose of each?

HR policy: general guideline that focus organizational actions; general in nature Procedure: customary methods of handling activities; specific to the situation; EX: policy: vacations according to service, procedure: specific method of authorizing vacation time without disrupting work Rule: specific guidelines that regulate and restrict the behavior of individuals; rules reflect management decisions; EX: vacation day may not be scheduled the day before or after a holiday

economic strikes

Happen when the parties fail to reach agreement during collective bargaining

401K

In the United States, a 401(k) retirement savings plan allows a worker to save for retirement and have the savings invested while deferring current income taxes on the saved money and earnings until withdrawal. This type of plan is also known as a "traditional" 401(k).

ombuds

Individuals outside the normal chain of command who act as independent problem solvers for both management and employees. Ombuds addresses employees' complaints and operate with a high degree of confidentiality. Any follow-up to resolve problems is often handled informally, except when situations include unusual or significant legal actions.

unfair labor practices

Interfering with, restraining, or coercing employees in the exercise of their right to organize or to bargain collectively Dominating or interfering with the formation or administration of any labor organization Encouraging or discouraging membership in any labor organization by discriminating with regard to hiring, tenure, or conditions of employment Discharging or otherwise discriminating against an employee because the employee filed charges or gave testimony under the act Refusing to bargain collectively with representatives of the employees

fact-finding

Investigation of labor-management disputes by a board, panel, or individual. A report is issued by the panel describing the issue in dispute, and may make recommendations for a solution.

wildcat strikes

Occur during the life of the collective bargaining agreement without approval of union leadership and violate a no-strike clause in a labor contract. Strikers can be discharged or disciplined.

What will the NLRB be looking for, before it conducts a certification election

Organizing campaign --> Authorization cards --> Representation election--> Certification --> Contract Negotiation At least 30% of the employees of the targeted group must sign authorization cards before an election can take place. These employees then select a bargaining unit (employees eligible to select a union). The bargaining unit must have mutual interest in the areas of wages, hours, and working conditions, traditional industry grouping, physical location and relationship, and supervision by similar levels of management.

health savings account

Plan that allows you to contribute pre-tax money to be used for qualified medical expenses. HSAs, which are portable, must be linked to a high-deductible health insurance policy.

What are the steps in progressive discipline? Under what circumstances might the process be speeded up?

Steps become progressively more stringent as inappropriate behavior occurs. It ensures that both the nature and the seriousness of the problem are communicated clearly to the employee. - First offense: Verbal caution - Second offense: Written reprimand - Third offense: Suspension - Fourth offense: Dismissal Offenses that might skip straight to dismissal include intoxication at work, alcohol or drug use at work, fighting, or theft.

good faith and fair dealing exception to employment at will

Suggests that a covenant of good faith and fair dealing exists between employers and at-will employees. If an employer breaks this covenant by unreasonable behavior, the employee may seek legal recourse.

What rights do employees have concerning the use of illegal substances? What about job applicants? What rights do employees have regarding legal off-duty behaviors?

The Drug Free Worker Act of 1988 requires contractors to take steps to eliminate employee drug use. Tobacco and alcohol are not regulated by this act, and off-the-job drug use is not included. Employers have the right to require applicants and current employees to take a drug test. If testing is done for probably cause, it needs to be based on measurable performance-related behaviors such as absenteeism or reduced productivity.

peer review panels

The act of employees appealing disciplinary actions to an internal committee of employees. This panel reviews the actions and makes recommendations or decisions. Peer review panels use fellow employees and a few managers to resolve employment disputes. Advantages of this method include fewer lawsuits, provision of due process, lower costs, and management and employee development. Peer review discussions can be made binding.

changing copayments and employee contribution

The copayment strategy requires employees to pay a portion of the cost of insurance premiums, medical care, and prescription drugs.

Who uses FMLA, and why

The law requires that employers allow eligible employees (those who live within 75 miles of the workplace and who have worked at least 12 months and 1,250 hours) to take a total of 12 weeks' leave during any 12 month period for one of 3 situations: -Birth, adoption, or foster care placement of a child -Caring for a spouse, child, or parent with a serious health condition -Serious health conditions of the employee A significant percentage of employees take family and medical leave for the obvious above reasons.

What sorts of steps do employers take to control healthcare costs?

The most prominent steps that employers take to control healthcare costs include changing copayments and employee contributions, using managed care,switching to mini-medical plans or consumer-driven healthcare plans, and increasing health preventive and wellness efforts.

How does union organizing typically begin?

The union needs to mount an organized campaign to persuade individuals to join. Persuasion efforts can be mailing materials to employees' homes, holding special meetings away from the company, and publicizing the advantages of union membership. They also establish websites etc. to try to get people to sign authorization cards. Authorization cards are signed by employees to designate a union as their collective bargaining agent. Those who sign authorization cards are then allowed to vote for whether or not the union can exist.

What sorts of contract clauses do employers use to protect themselves from employees who leave the firm with important proprietary information, contacts or other intellectual property?

Theft of trade secrets and intellectual property is a federal crime. There is a common-law copyright for works and other documents prepared by employees for their employers, which means any property made in the name of the employer is protected. Employers can have employees bring business opportunities to the employer before pursuing them. There is also the right to keep trade secrets confidential. These rights are federally protected.

group/team incentives

When an organization rewards an entire group/team for performance, i.e. gainsharing or goal sharing plans, in which the employees on a team that meets certain goals, as measured against performance targets, share in the gains. Such programs focus on quality improvement, cost reduction, and other measurable results. However, issues can occur with regards to rewarding team members equally and equitably. Employees may feel that some group members do not deserve equal rewards (such as a poor performer) which can lead to less satisfaction.

arbitration

a process that uses a neutral third party to make a decision, thereby eliminating the necessity of using the court system. This process is common in union contracts, but must be carefully set up for nonunion situations. Because employers often select the arbitrators, and because arbitrators may not be required to issue written decisions and opinions, many see the use of arbitration as unfair.

benefit retiree plan

a retirement program in which employees are promised a pension amount based on age and service o If the funding for this plan is insufficient, the employer may have to make up the shortfall o Unionized employees participate to a greater extent in this plan than any other job category

contribution benefit plan

a retirement program in which the employer makes an annual payment to an employee's pension account o The key to this plan is the contribution rate; employee retirement benefits depend on fixed contributions and employee earning levels o Types include: profit-sharing plans, employee stock ownership plans (ESOPs), and 401(k)s -- These plans hinge on investment returns, therefore they are less secure and predictable - sometimes preferred by younger, short-service employees

mini medical plan

as a plan that offers insureds $250,000 or less in total annual benefits. These plans are designed to help pay smaller, more common claims for medical services the majority of insureds tend to use the most

Entitlement philosophy

assumes that individuals that have worked for another year are entitles to pay increases with little regard toward performance differences -seniority based compensation -across the board increases -pay scales increase annually -industry comparison of pay increases only -holiday bonuses given to all employees -usually given thru automatic increases usually thru cost of living increases -holiday bonuses given to all employees -receive up to the same percentage of increases each year w/o regard to performance

mandatory bargaining issues

collective bargaining issues identified specifically by labor laws or court decisions as subject bargaining. discharge of employees grievances work schedules union security and dues checkoff retirement and pension coverage vacations and time off rest and lunch break rules safety rules profit-sharing plans required physical exam

permissive bargaining issues

collective bargaining issues that are not mandatory and that relate to certain jobs. Examples: benefits for retired employees, product prices for employees, and performance bonds

variable pay plans

compensation linked to individual, group/team, and/or organizational performance. attempts to provide tangible rewards (incentives) to performance beyond expectations Every employee reacts differently to variable pay plans. A positive view that many employees may have of variable pay may not be shared by all workers. If individuals see incentives as desirable, they are likely to put forth the extra effort to attain the performance objectives that trigger the incentive payouts. However, not all employees believe that that a rewarded when doing a good job, and not all employees are motivated by their employer's variable pay incentives.

external equity

employee's perceptions of the conditions and rewards of their employment compared with those of the employees of other firms

public policy exception to employment at will

employees can sue if fired for a reason that violates public policy. For example, if an employee refused to commit perjury and was fired, the employee can sue the employer.

implied contract exception to employment at will

employees should not be fired as long as they perform their jobs. Long service, promises of continued employment, and lack of criticism of job performance imply continuing employment.

independent contractors

employer does not have to pay for social security, unemployment, or workers compensation costs

pay compression

occurs when the pay difference between individuals with different levels of experience and performance become small usually when labor market pay levels increase more rapidly than current employee pay adjustment

lump sum bonus

one time payment that does not become part of the employee's salary

straight piece rate

pay systems in which wages are determined by multiplying the number of units produced by piece rate for each unit

differential piece rate

pays employees one piece rate wage for units produced up to a standard output and a higher piece rate wage for units produced over the standard

distributive justice

perceived fairness in the distribution of outcomes

distributive justice

perceived fairness in the distribution of outcomes to address the concerns about both types of justice, some organizations establish compensation appeals process

procedural justice

perceived fairness of the process and procedures used to make decisions about employees including their pay (based on the pay system used by the company)

equity

perceived fairness of what a person does (inputs) and what the person receives (outcomes) individuals judge equity in compensation by comparing their inputs (effort and performance) against the effort and performance of others and against the outcomes (rewards received)

health savings accounts (HSA)

plans combined with high-deductible insurance to cut employer costs. The key component of this plan is that employees get many more health benefit choices, but their insurance usually has higher annual deductibles.

mediation

process by which a third party helps the negotiators reach a settlement

constructive discharge

process of deliberately making conditions intolerable to get an employee to quit

arbitration

process that uses a neutral third party to make a decision

Equal Pay Act of 1963

prohibits using different wage pays for men and women who are working in the same job with sort of the same performance standards -pay differences can be based upon merit, seniority, quantity or quality of work, experience, or other factors not based on gender

consumer driven health plans (CDH)

provides employer financial contributions to employees to help cover their health-related expenses. AKA defined-contribution plans

social security act of 1935

provides old age, survivors, disability, and retirement benefits. There is a Federal payroll tax on the employee and the employer. Benefit payments are based on employee's lifetime earnings.

just cause

reasonable justification for taking employment-related action

due process

requirement that the employer use a fair process to determine employee wrongdoing and that the employee have an opportunity to explain and defend his or her actions

performance philosophy

requires that compensation changes be regarded toward performance differences among employees. -employers do not guarantee that you will get a pay increase with additional years of service. -broader industry comparisons -no increase for bad performance, additional years, pay linked to performance -helps with employee turnover and increases employment commitment, motivation, and retention -evaluated regularly to determine proper evaluation of performance -do not always lead to pay increases because of people being treated differently -more performance oriented personalities because pay is based on performance not just having a job ans showing up

competency based pay

rewards individuals for their capabilities they demonstrate and require -knowledge based pay -skill based pay -considerable time must be spent to figure out required competencies for various jobs -requires management to invest a lot of time and dedication to system -progression of employees must be possible -employees must be paid properly for their competencies -limitations on number of people who can receive competencies -training in competencies is important -notify and certify employees as they increase competencies and manage qualifications

management rights

rights reserved so that the employer can manage, direct, and control its business

market pricing

the use of market pay data to identify the relative value of jobs based on what other employers pay for similar jobs ADVANTAGES: -closely ties salaries to what the market is doing to eliminate distorted internal evaluations -gives the employer reason to pay them compared to market price and being fair rather than internal issues DISADVANTAGES: -job information may not be gathered correctly to give accurate salary pay -responsibilities can differ between job description at one company versus another versus what the market says for that specific job. too cookie cutter -salaries for market pricing can lead to many discrepancies based on fluctuations in the market and conditions of the market

base pay

two types (hourly) and salary

non-compete

which one party (employee) agrees not to enter into or start a similar profession or trade in competition against another party (employer)